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2025-05-12 City Council Agenda Packet
CITY COUNCIL Regular Meeting Monday, May 12, 2025 Council Chambers & Hybrid 5:30 PM Palo Alto City Council meetings will be held as “hybrid” meetings with the option to attend by teleconference or in person. Information on how the public may observe and participate in the meeting is located at the end of the agenda. The meeting will be broadcast on Cable TV Channel 26, live on YouTube https://www.youtube.com/c/cityofpaloalto, and streamed to Midpen Media Center https://midpenmedia.org. VIRTUAL PARTICIPATION CLICK HERE TO JOIN (https://cityofpaloalto.zoom.us/j/362027238) Meeting ID: 362 027 238 Phone:1(669)900-6833 PUBLIC COMMENTS General Public Comment for items not on the agenda will be accepted in person for up to three minutes or an amount of time determined by the Chair. General public comment will be heard for 30 minutes. Additional public comments, if any, will be heard at the end of the agenda. Public comments for agendized items will be accepted both in person and via Zoom for up to three minutes or an amount of time determined by the Chair. Requests to speak will be taken until 5 minutes after the staff’s presentation or as determined by the Chair. Written public comments can be submitted in advance to city.council@PaloAlto.gov and will be provided to the Council and available for inspection on the City’s website. Please clearly indicate which agenda item you are referencing in your subject line. PowerPoints, videos, or other media to be presented during public comment are accepted only by email to city.clerk@PaloAlto.gov at least 24 hours prior to the meeting. Once received, the Clerk will have them shared at public comment for the specified item. To uphold strong cybersecurity management practices, USB’s or other physical electronic storage devices are not accepted. Signs and symbolic materials less than 2 feet by 3 feet are permitted provided that: (1) sticks, posts, poles or similar/other type of handle objects are strictly prohibited; (2) the items do not create a facility, fire, or safety hazard; and (3) persons with such items remain seated when displaying them and must not raise the items above shoulder level, obstruct the view or passage of other attendees, or otherwise disturb the business of the meeting. TIME ESTIMATES Listed times are estimates only and are subject to change at any time, including while the meeting is in progress. The Council reserves the right to use more or less time on any item, to change the order of items and/or to continue items to another meeting. Particular items may be heard before or after the time estimated on the agenda. This may occur in order to best manage the time at a meeting or to adapt to the participation of the public. 1 May 12, 2025 Materials submitted after distribution of the agenda packet are available for public inspection at www.paloalto.gov/agendas. CALL TO ORDER SPECIAL ORDERS OF THE DAY (5:30 - 5:50 PM) 1.Proclamations Honoring Ella Cohen – California Interscholastic Federation State Wrestling Champion, and Angelina Jiang – State Runner Up 2.Proclamation Recognizing National Police Week as May 11-17, 2025, and National Peace Officers' Memorial Day as May 15, 2025 3.Review List of Applicants and Select Candidates to Interview for the Architectural Review Board (ARB) Vacancies; CEQA Status: Not a project Supplemental Report added AGENDA CHANGES, ADDITIONS AND DELETIONS PUBLIC COMMENT (5:50 - 6:20 PM) Members of the public may speak in-person ONLY to any item NOT on the agenda. 1-3 minutes depending on number of speakers. Public Comment is limited to 30 minutes. Additional public comments, if any, will be heard at the end of the agenda. COUNCIL MEMBER QUESTIONS, COMMENTS, ANNOUNCEMENTS (6:20 - 6:30 PM) Members of the public may not speak to the item(s). STUDY SESSION (Item 4: 6:30 - 8:00 PM, Item 5: 8:00 - 9:00 PM) 4.FY 2026 Proposed Operating and Capital Budget - Finance Committee Update and Council Budget Discussion Late Packet Report added 5.Discussion of Strategies for the Use of Low Carbon Fuel Standard, Electric and Gas Cap and Trade, and Electric and Gas Public Benefits Revenues; CEQA Status - Not a Project CONSENT CALENDAR (9:00 - 9:05 PM) Items will be voted in one motion unless removed from the calendar by three Council Members. 6.Approve the Office of the City Auditor Quarterly Report for the Period of October - December 2024 2 May 12, 2025 Materials submitted after distribution of the agenda packet are available for public inspection at www.paloalto.gov/agendas. 7.Stanford University Medical Center (SUMC) Annual Report to Council for Fiscal Year 2024 (FY 24) 8.Approval of Professional Services Contract No. C25193532 with Biggs Cardosa Associates Inc. in an Amount Not to Exceed $750,000 for On-Call Structural Engineering Services for City Structures including Bridges, Buildings, and Other Structures over a Period of Three Years; CEQA status – Not a Project 9.Approval of Two Professional Services Contracts, No. C25192359A with the Embarcadero Media Foundation and C25192359B with San Francisco Daily dba The Daily Post, in an Amount Not to Exceed $425,000 in Total for Legal Advertising Services for a Period of 5 Years; CEQA Status - Not a Project CITY MANAGER COMMENTS (9:05 - 9:20 PM) BREAK (15 MINUTES) ACTION ITEMS (Item 10: 9:35 - 11:00 PM) Include: Report of Committees/Commissions, Ordinances and Resolutions, Public Hearings, Report of Officials, Unfinished Business and Council Matters. 10.FIRST READING: Adoption of an Ordinance Amending Various Palo Alto Municipal Code Chapters in Title 16 and 18 in Response to Direction from the California Department of Housing and Community Development (HCD) Regarding State Accessory and Junior Accessory Dwelling Unit Law. CEQA Status - Exempt From the Provisions of the California Environmental Quality Act (CEQA) Pursuant to Public Resources Code Section 21080.17 and CEQA Guidelines Section 15061(b)(3). ADJOURNMENT INFORMATION REPORTS Information reports are provided for informational purposes only to the Council and the public but are not listed for action during this meeting’s agenda. 11.Sales Tax Digest Q4 (Oct-Dec) 2024 OTHER INFORMATION Standing Committee Meetings this week 3 May 12, 2025 Materials submitted after distribution of the agenda packet are available for public inspection at www.paloalto.gov/agendas. Council Appointed Officers Committee May 12, 2025 Policy & Services Committee May 13, 2025 City/Schools Liaison Committee May 15, 2025 CANCELED Public Comment Letters Schedule of Meetings SUPPLEMENTAL / AMENDED AGENDA ITEMS 3.Review List of Applicants and Select Candidates to Interview for the Architectural Review Board (ARB) Vacancies; CEQA Status: Not a project Supplemental Report added 4.FY 2026 Proposed Operating and Capital Budget - Finance Committee Update and Council Budget Discussion Late Packet Report added 4 May 12, 2025 Materials submitted after distribution of the agenda packet are available for public inspection at www.paloalto.gov/agendas. PUBLIC COMMENT INSTRUCTIONS Members of the Public may provide public comments to teleconference meetings via email, teleconference, or by phone. 1.Written public comments may be submitted by email to city.council@PaloAlto.gov. 2.For in person public comments please complete a speaker request card located on the table at the entrance to the Council Chambers and deliver it to the Clerk prior to discussion of the item. 3.Spoken public comments for agendized items using a computer or smart phone will be accepted through the teleconference meeting. To address the Council, click on the link below to access a Zoom-based meeting. Please read the following instructions carefully. ◦You may download the Zoom client or connect to the meeting in- browser. If using your browser, make sure you are using a current, up-to-date browser: Chrome 30 , Firefox 27 , Microsoft Edge 12 , Safari 7 . Certain functionality may be disabled in older browsers including Internet Explorer. Or download the Zoom application onto your smart phone from the Apple App Store or Google Play Store and enter in the Meeting ID below. ◦You may be asked to enter an email address and name. We request that you identify yourself by name as this will be visible online and will be used to notify you that it is your turn to speak. ◦When you wish to speak on an Agenda Item, click on “raise hand.” The Clerk will activate and unmute speakers in turn. Speakers will be notified shortly before they are called to speak. ◦When called, please limit your remarks to the time limit allotted. A timer will be shown on the computer to help keep track of your comments. 4.Spoken public comments for agendized items using a phone use the telephone number listed below. When you wish to speak on an agenda item hit *9 on your phone so we know that you wish to speak. You will be asked to provide your first and last name before addressing the Council. You will be advised how long you have to speak. When called please limit your remarks to the agenda item and time limit allotted. CLICK HERE TO JOIN Meeting ID: 362-027-238 Phone: 1-669-900-6833 Americans with Disability Act (ADA) It is the policy of the City of Palo Alto to offer its public programs, services and meetings in a manner that is readily accessible to all. Persons with disabilities who require materials in an appropriate alternative format or who require auxiliary aids to access City meetings, programs, or services may contact the City’s ADA Coordinator at (650) 329-2550 (voice) or by emailing ada@PaloAlto.gov. Requests for assistance or accommodations must be submitted at least 24 hours in advance of the meeting, program, or service. 5 May 12, 2025 Materials submitted after distribution of the agenda packet are available for public inspection at www.paloalto.gov/agendas. California Government Code §84308, commonly referred to as the "Levine Act," prohibits an elected official of a local government agency from participating in a proceeding involving a license, permit, or other entitlement for use if the official received a campaign contribution exceeding $500 from a party or participant, including their agents, to the proceeding within the last 12 months. A “license, permit, or other entitlement for use” includes most land use and planning approvals and the approval of contracts that are not subject to lowest responsible bid procedures and have a value over $50,000. A “party” is a person who files an application for, or is the subject of, a proceeding involving a license, permit, or other entitlement for use. A “participant” is a person who actively supports or opposes a particular decision in a proceeding involving a license, permit, or other entitlement for use, and has a financial interest in the decision. The Levine Act incorporates the definition of “financial interest” in the Political Reform Act, which encompasses interests in business entities, real property, sources of income, sources of gifts, and personal finances that may be affected by the Council’s actions. If you qualify as a “party” or “participant” to a proceeding, and you have made a campaign contribution to a Council Member exceeding $500 made within the last 12 months, you must disclose the campaign contribution before making your comments. 6 May 12, 2025 Materials submitted after distribution of the agenda packet are available for public inspection at www.paloalto.gov/agendas. City Council Staff Report Report Type: SPECIAL ORDERS OF THE DAY Lead Department: City Clerk Meeting Date: May 12, 2025 Report #:2504-4548 TITLE Proclamations Honoring Ella Cohen – California Interscholastic Federation State Wrestling Champion, and Angelina Jiang – State Runner Up ATTACHMENTS Attachment A: Proclamation Honoring Ella Cohen Attachment B: Proclamation Honoring Angelina Jiang APPROVED BY: Mahealani Ah Yun Item 1 Item 1 Staff Report Item 1: Staff Report Pg. 1 Packet Pg. 7 of 349 HONORING ELLA COHEN WHEREAS, Ella Cohen, a freshman at Palo Alto High School, has demonstrated exceptional athletic ability and commitment to wrestling; and WHEREAS, Ella Cohen won the 2025 USA Wrestling Girls National High School Showcase tournament; and WHEREAS, Ella Cohen has achieved the remarkable feat of winning the California Interscholastic Federation State Wrestling Championship in the 105-pound division; and WHEREAS, this accomplishment is a testament to Ella Cohen’s hard work, skill, and the support she has received from her coaches, family, and the Palo Alto High School athletic program; and WHEREAS, Ella Cohen's achievement brings pride and recognition to Palo Alto High School and the City of Palo Alto. NOW, THEREFORE I, Ed Lauing, Mayor of the City of Palo Alto, on behalf of the entire City Council, do hereby recognize and congratulate Ella Cohen for her outstanding achievement in winning the CIF State Wrestling Championship. We commend her dedication, sportsmanship, and the positive impact she has on our community. Presented: May 12, 2025 ______________________________ Ed Lauing Mayor Proclamation Item 1 Attachment A - Proclamation Honoring Ella Cohen Item 1: Staff Report Pg. 2 Packet Pg. 8 of 349 HONORING ANGELINA JIANG WHEREAS, Angelina Jiang, a senior at Gunn High School, has shown exceptional athletic ability and commitment to wrestling; and WHEREAS, Angelina Jiang won the 2024 Brian Keck Preseason Girls National Wrestling Tournament; and WHEREAS, Angelina Jiang has distinguished herself as a runner-up in the 155-pound division at the California Interscholastic Federation State Wrestling Tournament; and WHEREAS, Angelina Jiang followed this up by winning the California Freestyle Wrestling Championship in Fresno; and WHEREAS, this accomplishment is a testament to Angelina Jiang's hard work, skill, and the support she has received from her coaches, family, and the Gunn High School athletic program; and WHEREAS, Angelina Jiang's achievement brings pride and recognition to Gunn High School and the City of Palo Alto. NOW, THEREFORE I, Ed Lauing, Mayor of the City of Palo Alto, on behalf of the entire City Council, do hereby recognize and congratulate Angelina Jiang for her outstanding achievement as a runner-up in the CIF State Wrestling Tournament. We commend her dedication, sportsmanship, and the positive impact she has on our community. Presented: May 12, 2025 ______________________________ Ed Lauing Mayor Proclamation Item 1 Attachment B - Proclamation Honoring Angelina Jiang Item 1: Staff Report Pg. 3 Packet Pg. 9 of 349 City Council Staff Report Report Type: SPECIAL ORDERS OF THE DAY Lead Department: Police Meeting Date: May 12, 2025 Report #:2410-3702 TITLE Proclamation Recognizing National Police Week as May 11-17, 2025, and National Peace Officers' Memorial Day as May 15, 2025 ATTACHMENTS Attachment A: Proclamation Recognizing National Police Week and National Peace Officers’ Memorial Day APPROVED BY: Andrew Binder, Police Chief Item 2 Item 2 Staff Report Item 2: Staff Report Pg. 1 Packet Pg. 10 of 349 NATIONAL POLICE WEEK, MAY 11 - 17, AND NATIONAL PEACE OFFICERS’ MEMORIAL DAY, MAY 15, 2025 WHEREAS, the United States Congress and the President of the United States have designated May 15, 2025, as National Peace Officers’ Memorial Day and the week in which it falls as Police Week; and WHEREAS, the members of the Palo Alto Police Department play an essential role in safeguarding the rights and freedoms of its citizens; and WHEREAS, it is important that all citizens know and understand the problems, duties, and responsibilities of their police department, and that members of our police department recognize their duty to serve the people by safeguarding life and property, by protecting against violence or disorder, and by protecting the innocent against deception and the weak against oppression or intimidation; and WHEREAS, the City of Palo Alto asks all citizens to join in honoring the police officers, past and present, who, by their faithful and loyal devotion to their responsibilities, have rendered a dedicated service to their communities and, in doing so, have established for themselves an enviable and enduring reputation for preserving the rights and security of all citizens. NOW, THEREFORE I, Ed Lauing, Mayor of the City of Palo Alto, on behalf of the entire City Council, do hereby proclaim the week of May 11th - 17th, 2025, as Police Week and urge all citizens of Palo Alto to observe Thursday, May 15th, 2025, as Peace Officers’ Memorial Day in honor of those peace officers who, through their courageous deeds, have lost their lives or have become disabled in the performance of duty. Presented: May 12, 2025 ______________________________ Ed Lauing Mayor Proclamation Item 2 Attachment A - Proclamation Recognizing National Police Week and National Peace Officers’ Memorial Day Item 2: Staff Report Pg. 2 Packet Pg. 11 of 349 City Council Staff Report Report Type: SPECIAL ORDERS OF THE DAY Lead Department: City Clerk Meeting Date: May 12, 2025 Report #:2504-4600 TITLE Review List of Applicants and Select Candidates to Interview for the Architectural Review Board (ARB) Vacancies; CEQA Status: Not a project RECOMMENDATION Staff recommends the City Council to review the list of applicants from the Architectural Review Board Extended Recruitment and select candidates to interview. An interview selection process for Boards, Commissions, and Committee (BCC) candidates will be considered by the City Council at the City Council Regular Meeting scheduled for May 5, 2025. A supplemental report will be published on May 8, 2025 with an update regarding City’s Council’s decision. BACKGROUND The Spring 2025 recruitment cycle for the Architectural Review Board aimed to fill Seats 1, 2, and 5, with terms beginning April 1, 2025, and ending March 31, 2028. The initial recruitment resulted in three (3) applicants, two (2) of whom were incumbents. At the Regular Meeting on March 10, 20251, the City Council voted to interview all three applicants. In addition, City Council directed staff to report to the Policy and Services Committee with a revised BCC interview selection process for all future BCC recruitments. The City Council is scheduled to consider the Committee’s recommendation at its May 5, 2025 meeting and will use whichever process is adopted to select interview candidates for this ARB recruitment. The thee (3) initial candidates were interviewed at the City Council Special Meeting on March 24, 2025.2 City Council expressed a desire to expand the applicant pool and directed staff to 1City Council, March 10, 2025; Agenda Item #1:SR #2502-4136 https://recordsportal.paloalto.gov/Weblink/DocView.aspx?id=83288 2City Council, March 24, 2025; Summary Minutes https://recordsportal.paloalto.gov/Weblink/DocView.aspx?id=43253 Item 3 Item 3 Staff Report Item 3: Staff Report Pg. 1 Packet Pg. 12 of 349 reopen the recruitment for the Architectural Review Board. The extended recruitment period was launched on March 27, 2025, with a revised application deadline set for April 30, 2025. Total Applications Received (12): •Ashutosh Gupta •Bei Xu •Daniel Benas •Danny Cao •David Hirsch (Incumbent) * •Grace Lee •Khelan Bhatt •Martin Jojarth •Matthew Kelly •Naveen Govind •Sema Yavuz * •Yingxi Chen (Incumbent) * *Interviews completed March 24, 2025 Simultaneously, staff presented a range of options to the Policy and Services Committee on April 8, 20253, aimed at addressing the City Council direction to improve the overall interview selection process. The Committee approved the recommendation below, which will be brought to City Council for consideration at the May 5, 20254 meeting MOTION: Vice Mayor Veenker moved, seconded by Councilmember Lu, to recommend the City Council adopt the following procedure to select BCC candidates to interview: The number of candidates to interview varies based on the number of vacancies. Councilmembers will vote on whom to interview, getting twice the number of votes as there are openings. The top vote getters are interviewed. •Interview all candidates if there are 6 or fewer applicants •Interview up to 6 candidates when there 1-2 openings •Interview up to 8 candidates when there are 3 openings •Interview up to 10 candidates when there are 4 openings MOTION PASSED: 3-0 3 Policy and Services Committee, April 8, 2025; Summary Minutes https://recordsportal.paloalto.gov/Weblink/DocView.aspx?id=40622 4 City Council, May 5, 2025; Agenda Item #11; SR#2504-4537 https://cityofpaloalto.primegov.com/Portal/viewer?id=0&type=7&uid=5a4dda36-269d-432b-bbed-f8e2e51aeff0 Item 3 Item 3 Staff Report Item 3: Staff Report Pg. 2 Packet Pg. 13 of 349 Membership Requirements At least three members shall be architects, landscape architects, building designers or other design professionals (PAMC 2.21.0102). This requirement is currently satisfied by Commissioners Mousam Adcock, Kendra Rosenberg, David Hirsch and Yingxi Chen. David Hirsch and Yingxi Chen’s terms are expiring, and their applications are included in this recruitment. City staff publicized the recruitment through the City’s Uplift Local community e-newsletter, City Clerk’s Office e-newsletters, the City’s website and the City’s social media channels. Recruitment information was also posted at Palo Alto libraries and City Hall and distributed by email to community-based organizations, businesses, individuals, and City subscription-based notification lists. The recruitment was also advertised in both print and online advertisements in Palo Alto’s local newspapers. Council action on this item is not a project as defined by CEQA because it an organizational or administrative activity that will not result in direct or indirect physical changes in the environment. CEQA Guidelines section 15378(b)(5). Attachment A: Architectural Review Board Initial & Extended Recruitment Applications - Redacted : Mahealani Ah Yun, City Clerk Item 3 Item 3 Staff Report Item 3: Staff Report Pg. 3 Packet Pg. 14 of 349 Architectural Review Board Application Submitted on 14 April 2025, 3:40pm Receipt number 82 Related form version 15 Name Ashutosh Gupta Cell Phone Number Home Phone Number Email Address Are you a Palo Alto resident?No Address City FREMONT Postal Code 94536 Do you have any relatives or members of your household who are employed by the City of Palo Alto, who are currently serving on the City Council, or who are Commissioners or Board Members? No Are you available and committed to complete the term applied for? Yes Fair Political Practices No Excluding your principal residence, do you or your spouse own real property in Palo Alto? No How did you learn about the vacancy on the Architectural Review Board? Email from the City Personal Information 1 of 3 Item 3 Attachment A - Architectural Review Board Initial and Extended Applications- Redacted Item 3: Staff Report Pg. 4 Packet Pg. 15 of 349 Read the code, and check only ONE option below:I request that the City of Palo Alto redact my home address, phone numbers, and email address from the attached Board and Commission Application prior to posting to the City’s website. Consent to Publish Personal Information on the City of Palo Alto Website Occupation Director of Design at OR Homes Please list your relevant education, training, experience, certificates of training, licenses, and professional registration. If describing work experience, please include company/employer name and occupation. .I hold a Bachelor's in Architecture, NCARB certification, and am a licensed architect. I'm also a LEED AP and have an MBA from the University of Illinois Urbana-Champaign. I founded and run a residential architecture firm focused on single-family homes, with extensive experience in Palo Alto and neighboring Bay Area cities—having designed hundreds of homes. In addition to my design practice, I bring a strong technology background, having led engineering teams as Director of Engineering in both Y Combinator-backed startups and large firms like Nielsen, NetApp, and Informatica. This unique blend of architecture and tech leadership aligns well with the innovation-driven culture of the Bay Area. Please describe your involvement in community activities, volunteer and civic organizations, including dates and any offices held. .I have volunteered with Habitat for Humanity and Friends of the Library, contributing time toward housing and literacy efforts. I'm also active in local animal rescue—fostering dogs and helping them find permanent homes. As an architect, I’ve worked closely with hundreds of homeowners, gaining insight into evolving community needs and values around housing, sustainability, and quality of life. My professional and volunteer work reflects a deep commitment to supporting and improving the communities I live and work in. Please select all that apply to you.Architect, landscape architect, building designer, other design professional Personal and Job Experience 1. Why are you interested in serving on the Architectural Review Board and what experience would you bring to the position? I bring a unique perspective through my background in architecture, technology, and business, as well as my LEED accreditation and entrepreneurial experience. Having grown up in India—a country with a rich architectural heritage—I value cultural diversity in design. I’m passionate about sustainable, people-centered spaces and believe Palo Alto can further embrace outdoor environments for casual gatherings, recreation, and community connection. With my cross-disciplinary background and deep understanding of both local housing needs and broader design trends, I hope to contribute to a vibrant, thoughtful built environment. 2. Please describe an issue that recently came before the Board that is of particular interest to you and describe why you are interested in it. While I appreciate the Board’s work on a range of design and planning issues, I’m particularly interested in how we shape spaces—both indoor and outdoor—to foster human connection. In today’s screen-driven world, it’s more important than ever to create environments that encourage real, in-person interaction, especially for children and families. I’m passionate about designs that build community, support well-being, and activate public and semi-public spaces as places for gathering, play, and casual engagement. 3. If you are appointed, what specific goals would you like to see the Architectural Review Board achieve, and how would I would like the Architectural Review Board to place greater emphasis on the thoughtful use of open spaces to strengthen community connection Application Questions 2 of 3 Item 3 Attachment A - Architectural Review Board Initial and Extended Applications- Redacted Item 3: Staff Report Pg. 5 Packet Pg. 16 of 349 you help in the process?and well-being. This includes supporting the integration of parks, informal gathering spaces, and areas for recreation and sports into new developments. I would contribute by advocating for designs that balance aesthetics with functionality and promote healthier, more engaged communities through well-planned outdoor environments. 4. Please identify a project (or projects) that you find to be examples of good architecture, and explain why. You may include samples, identify project addresses, or provide links. Some exemplary projects of good architecture include: Sangath (Ahmedabad, Gujarat) Jawahar Kala Kendra (Jaipur, Rajasthan) Tongva Park (Santa Monica, California) Menil Drawing Institute (Houston, Texas) In ancient cultures, architecture was a direct response to the environment and the needs of its inhabitants. When I moved to the U.S. 20 years ago, I noticed that homes, whether in Chicago, Texas, Florida, or California, were often quite similar despite vastly different climates. This lack of response to local environment and context stood in contrast to the thoughtful design seen in more traditional cultures, where buildings were shaped by their surroundings and purpose. 5. Architectural Review Board Members work with the documents listed below. If you have experience with any of these documents, please describe that experience. Experience with these documents is not required for selection, but will help you better understand the work of the board. I have experience working with zoning codes while designing homes in Palo Alto, ensuring compliance with local regulations and design standards. I am also familiar with CEQA (California Environmental Quality Act) and its implications in the planning and design process If you'd like to provide any additional documents, please upload below. Please confirm that you have read the Boards and Commissions Handbook. Yes Signature Name of signatory: Ashutosh Gupta Date Completed 04/14/2025 3 of 3 Item 3 Attachment A - Architectural Review Board Initial and Extended Applications- Redacted Item 3: Staff Report Pg. 6 Packet Pg. 17 of 349 Architectural Review Board Application Submitted on 18 April 2025, 6:00pm Receipt number 85 Related form version 15 Name Bei Xu Cell Phone Number Home Phone Number Email Address Are you a Palo Alto resident?No Address City Hayward Postal Code 94544 Do you have any relatives or members of your household who are employed by the City of Palo Alto, who are currently serving on the City Council, or who are Commissioners or Board Members? No Are you available and committed to complete the term applied for? Yes Fair Political Practices No Excluding your principal residence, do you or your spouse own real property in Palo Alto? No How did you learn about the vacancy on the Architectural Review Board? Email from the City Personal Information 1 of 3 Item 3 Attachment A - Architectural Review Board Initial and Extended Applications- Redacted Item 3: Staff Report Pg. 7 Packet Pg. 18 of 349 Read the code, and check only ONE option below:I request that the City of Palo Alto redact my home address, phone numbers, and email address from the attached Board and Commission Application prior to posting to the City’s website. Consent to Publish Personal Information on the City of Palo Alto Website Occupation Senior Architect Please list your relevant education, training, experience, certificates of training, licenses, and professional registration. If describing work experience, please include company/employer name and occupation. I hold a BA in Architecture and minor in Urban Planning from UC Berkeley and an MArch from Cornell University. I am a licensed architect in California, with LEED AP BD+C and WELL AP certifications. I currently work as a Senior Architect at Tesla Design + Planning. Prior to joining Tesla, I was a Lead Project Designer at DES Architects + Engineers and an Associate at Studios Architecture. Please describe your involvement in community activities, volunteer and civic organizations, including dates and any offices held. I was a summer intern at the Planning Department at City of Albany in 2008, then I continue my role as a volunteer through summer of 2009. Please select all that apply to you.Architect, landscape architect, building designer, other design professional Personal and Job Experience 1. Why are you interested in serving on the Architectural Review Board and what experience would you bring to the position? I am interested in serving on the Board because I believe in the power of thoughtful, well-designed architecture and planning, I want to take part in shaping a vibrant, sustainable, and inclusive community. With over 8 years of professional experience, I bring a strong understanding of design excellence, environmental stewardship, and community-focused development. My academic background laid a strong foundation in design theory and critical thinking. Professionally, I have designed and led a diverse range of projects, from proviate residentials to large-scale commercial developments. My LEED and WELL AP certifications reflect my commitment to sustainbility and wellness design. Having worked in both side of the induestry, I bring a balanced perspective that values innovation while respecting contextual and regulatory considerations. I’m passionate about contributing to a review process that upholds design integrity while encouraging creativity and dialogue among stakeholders. 2. Please describe an issue that recently came before the Board that is of particular interest to you and describe why you are interested in it. I am interested in the California Avenue Signage Program and Outdoor Activation Zone topic. I think it's a great way to engage commercial activities with community space, promoting more walkable and car-free urban blocks. Visual signage is also a powerful tool to define the character and function of the street. That said, I think there are many challenges that come with outdoor programs like this. It’s critical to learn from past projects and other cities, and to gather feedback from the businesses that will be operating in the space. 3. If you are appointed, what specific goals would you like to see the Architectural Review Board achieve, and how would you help in the process? If appointed to the Palo Alto ARB, my goals would be to promote design innovation, sustainability, and greater transparency in the review process. With experience on both the architectural and ownership sides of development, I recognize the importance of balancing the architect's design intent with the financial realities faced by the owners. As a Application Questions 2 of 3 Item 3 Attachment A - Architectural Review Board Initial and Extended Applications- Redacted Item 3: Staff Report Pg. 8 Packet Pg. 19 of 349 Item 3 Attachment A - Architectural Review Board Initial and Extended Applications- Redacted Item 3: Staff Report Pg. 9 Packet Pg. 20 of 349 Item 3 Attachment A - Architectural Review Board Initial and Extended Applications- Redacted Item 3: Staff Report Pg. 10 Packet Pg. 21 of 349 Item 3 Attachment A - Architectural Review Board Initial and Extended Applications-Redacted Item 3: Staff Report Pg. 11 Packet Pg. 22 of 349 Item 3 Attachment A - Architectural Review Board Initial and Extended Applications-Redacted Item 3: Staff Report Pg. 12 Packet Pg. 23 of 349 Item 3 Attachment A - Architectural Review Board Initial and Extended Applications-Redacted Item 3: Staff Report Pg. 13 Packet Pg. 24 of 349 Item 3 Attachment A - Architectural Review Board Initial and Extended Applications-Redacted Item 3: Staff Report Pg. 14 Packet Pg. 25 of 349 Item 3 Attachment A - 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Architectural Review Board Initial and Extended Applications-Redacted Item 3: Staff Report Pg. 39 Packet Pg. 50 of 349 Item 3 Attachment A - Architectural Review Board Initial and Extended Applications-Redacted Item 3: Staff Report Pg. 40 Packet Pg. 51 of 349 Architectural Review Board Application Submitted on 22 April 2025, 2:49pm Receipt number 88 Related form version 15 Name Daniel Phillip Benas Cell Phone Number Home Phone Number Email Address Are you a Palo Alto resident?Yes Address City Palo Alto Postal Code 94306 Do you have any relatives or members of your household who are employed by the City of Palo Alto, who are currently serving on the City Council, or who are Commissioners or Board Members? No Are you available and committed to complete the term applied for? Yes Fair Political Practices No Excluding your principal residence, do you or your spouse own real property in Palo Alto? No How did you learn about the vacancy on the Architectural Review Board? Email from the City Personal Information 1 of 3 Item 3 Attachment A - Architectural Review Board Initial and Extended Applications- Redacted Item 3: Staff Report Pg. 41 Packet Pg. 52 of 349 Read the code, and check only ONE option below:I request that the City of Palo Alto redact my home address, phone numbers, and email address from the attached Board and Commission Application prior to posting to the City’s website. Consent to Publish Personal Information on the City of Palo Alto Website Occupation Finance Professional Please list your relevant education, training, experience, certificates of training, licenses, and professional registration. If describing work experience, please include company/employer name and occupation. BS Business--UC Berkeley; MBA-UCLA. Active CPA licenses in California and Texas. Employer name is Business Wire-a Berkshire Hathaway Company. Head of Finance. Please describe your involvement in community activities, volunteer and civic organizations, including dates and any offices held. I have volunteered in the past through my religious affiliation and am also a docent for California St. Parks Please select all that apply to you.None Personal and Job Experience 1. Why are you interested in serving on the Architectural Review Board and what experience would you bring to the position? My experience relating to this area is financial and project related. As a finance professional, I have been involved in manufacturing and facilities build-outs, including wafer fabs. My value add would be mostly on the practical versus esthetic side where I have true deep experience versus opinions. 2. Please describe an issue that recently came before the Board that is of particular interest to you and describe why you are interested in it. The issue of second story overlay in the Eichler communities where I live. 3. If you are appointed, what specific goals would you like to see the Architectural Review Board achieve, and how would you help in the process? The dual goals of developing business in the community while retaining the current Palo Alto esthetic 4. Please identify a project (or projects) that you find to be examples of good architecture, and explain why. You may include samples, identify project addresses, or provide links. There have been numerous upgrades and rebuilds on my street. There were two across the street from me. One family took the care to build a two-story house while retaining the Eichler esthetic. Very thoughtfully done. The other house next door was just a McMansion that while nice, doesn't particularly fit within the neighborhood. People have the right to do what they want within the law, but I thought the prior example was more tasteful. 5. Architectural Review Board Members work with the documents listed below. If you have experience with any of these documents, please describe that experience. Experience with these documents is not required for selection, but will help you better understand the work of the board. I do not have working experience with these documents but reading legal and technical documents have been a part of my job for 45 years. Application Questions 2 of 3 Item 3 Attachment A - Architectural Review Board Initial and Extended Applications- Redacted Item 3: Staff Report Pg. 42 Packet Pg. 53 of 349 If you'd like to provide any additional documents, please upload below. Daniel Benas Resume.2.19.24.doc Please confirm that you have read the Boards and Commissions Handbook. Yes Signature Name of signatory: Daniel P Benas Date Completed 04/22/2025 3 of 3 Item 3 Attachment A - Architectural Review Board Initial and Extended Applications- Redacted Item 3: Staff Report Pg. 43 Packet Pg. 54 of 349 DANIEL BENAS, CPA (active) Palo Alto, CA 94306 Highly accomplished & results-driven, 30+ years of experience in scaling, ramping and monetizing companies, developing motivated finance teams, spearheading finance-related practices along with verifiable success in streamlining operations. Organizational scope includes Fortune 500, Controllership of three public companies and successful pre-IPO companies. Core Competencies include: Technical Accounting (US GAAP, SEC Reporting & Revenue recognition); ASC 606 Implementation; IPO Experience; Collaborative Leadership; Effective Recruiter, Talent Development and Mentoring, Building organizational capability; Financial Planning and Analysis; Scaling and Ramping Operations; M&A Diligence & Integration; Sarbanes-Oxley/ Processes and Procedures; ERP Implementation; Treasury & Bank Relationships; Successful leadership through public company restatements and SOX remediation; Legal Relationships; Multi-Disciplined Manager of: Human Resources, IT, Facilities and Production Control Depts. EXPERIENCE BUSINESS WIRE-A BERKSHIRE HATHAWAY COMPANY- Vice President-Finance 2020-Present • Finance Head reporting to CEO. Leading Finance portion of operational turn-around of media-tech company acquired by BRK • Reduced close by one week; numbers to management Day 3. Streamlined accounting processes; rebuilt accounting team • OTC process reengineering and automation. Implemented Esker OTC system and customer portal. DSO improved by 35 days • Facilitated 22% YoY revenue growth. Increased dividend cash flow to BRK by over 30%. Manage team of 35 PULMONX CORPORATION (LUNG), Redwood City, CA-Vice President-Controller 2019-2020 • Hired by late-stage pulmonary device manufacturer to lead company through S-1 process & to be public company Controller • Hired and built public company accounting team; took close from annual hindsight to 7 day monthly close in 6 months • First S-1 filing done within 5 months of hire and 2019 FY filing done in 54 days with public flip on February 28, 2020 • Minimal SOX deficiencies (non-reportable); IPO placed on hold due to COVID-19 • Developed full absorption cost accounting system for company’s Redwood City manufacturing plant SILEGO TECHNOLOGY (SLGO), Santa Clara, CA Vice President – Corporate Controller 2014- 2019 • Led late-stage semiconductor company through restatement process to complete confidential S-1 filing • Cured 18 MW over 18 months allowing Silego to file with zero MW’s • Led effort to early adapt Topic 606, Revenue Recognition within S-1 filing process; prepared road-show and IB packages • Drove implementation of Microsoft Dynamics AX ERP system • Built multinational finance team of 12 in the US, Taiwan, Ukraine and PRC; set up offshore tax structure (ETR 5%) • Developed audit worthy cost accounting reporting process, timely close and budgeting processes • Sale to Dialog Semi. (DLG.DE) for $300M; retained for integration as Top 25 performer. Achieved 99% of deal potential • Retained by Dialog to lead Finance for their World-Wide Operations Group (Manufacturing, IT, Quality, Procurement.) SOAProjects, Mountain View, CA; Technical Accounting Consultant (before/after Callidus) 2011- 2014 Positions included: 1) supporting a Singapore IPO IFRS filing for a US based Medical Device Firm; 2) supporting acquisition of two public company REIT’s with $18B market cap; 3) Interim Controller position supporting a QAD ERP installation and UK product launch for a pre-IPO medical device co; 4) Interim Controller for a public military contractor; 5) SEC filings for a semiconductor firm CALLIDUS CLOUD (CALD), Pleasanton, CA; Vice President – Corporate Controller 2011 – 2013 • Managed finance staff of 20 for an $100M+ public SaaS company directing all areas of accounting including revenue recognition • Performed financial due diligence and led integration for eight international acquisitions (combined purchase price of $40M+) in Serbia, India, New Zealand, and the UK; set up 200 person “in-sourced” entity in India saving company $5M in OPEX • Implemented financial segment of NetSuite ERP system CORSAIR COMPONENTS (formerly CORSAIR MEMORY), Fremont, CA 2009-2010 Vice President – Corporate Controller Recruited to restructure the worldwide financial organization of a $400M late-stage electronics company with sales in Europe, U.S., Russia, and Latin America and manufacturing in Taiwan and China. • Reduced audit costs by $1.1M (65%); Remediated four MW’s enabling Company to become IPO-ready • Shortened close from sixteen to four days resulting in a streamlined process for reporting • Rebuilt the financial staff through the recruitment of six key hires and termination of non-performers; managed a staff of eighteen in four worldwide locations • Coordinated the set up of the offshore trading company in Hong Kong and logistics center in South China • Signed off as principal accounting officer on Company’s S-1 filings which were completed on schedule • Revamped revenue process resulting in removal MW and an overall reduction in delinquent chargebacks of $2M Item 3 Attachment A - Architectural Review Board Initial and Extended Applications- Redacted Item 3: Staff Report Pg. 44 Packet Pg. 55 of 349 DANIEL BENAS Page Two MONOLITHIC POWER SYSTEMS (MPWR), San Jose, CA; Vice President – Corporate Controller 2006 – 2009 Recruited to turn around the financial organization of a $180M publicly traded firm facing numerous legal challenges and de- listment from NASDAQ. • Directed the successful 3-year restatement within two months of hire which enabled the company to avoid being de-listed • Successfully took company through Sarbanes-Oxley (SOX) remediation curing five material weaknesses and established normal financial operations with timely closes • Rebuilt the financial staff with the recruitment of 8 key hires and termination of non-performers; managed WW staff of 20 • Set up operations and hired financial staff for new manufacturing facility in Chengdu INFINERA CORPORATION (INFN), Sunnyvale, CA; Vice President – Finance/Corporate Controller 2001 – 2006 Employee number 37 in a telecom networking manufacturer utilizing proprietary semiconductor technology. Company created the first digital optical network reducing product size by 2/3 and cost by 50% • Secured a $30M debt package with Silicon Valley Bank. Package also contained working capital financing • Created two asset-backed loan packages totaling $10M which reduced operating burn by 10% • Raised $167M in Series B-E financing from venture, corporate, and international government investors • Coordinated auction procurement tasks enabling Indium Phosphide Fab to be built for $15M • Established an Indian subsidiary to perform software development saving $8M annually utilizing a government-sponsored tax holiday program; led site selection in Bangalore • Drove turnkey outsource-manufacturing process saving $10M+/yr. • Involved in setting up initial $140M revenue transaction with Level 3 which led to IPO • Led team that implemented Microsoft-Great Plains ERP system in preparation for IPO • Managed Human Resources, IT and Facilities departments in 2003-2004 CYPRESS SEMICONDUCTOR (CY), San Jose, CA 1989 – 2001 Vice President – Corporate Finance (1999 – 2001) Led a 42-person team in a $1.3B corporation. Managed Internal, External and SEC Reporting, Consolidations, Financial and Strategic Planning, Shared Services and Financial IT Systems. Coordinated the annual audit as well as interfaced with audit committee. Oversaw preparation for Board of Director’s meetings and analyst conferences. • Led overhaul of capital acquisition & planning processes resulting in the successful completion of over $1B in capital projects • Negotiated and integrated ten successful acquisitions (totaling $300M annual revenue) • Implemented new versions of Oracle and Ariba Travel and Expense system • Drove process improvements in finance transactional functions that enabled successful transfer to Cypress Philippines Director – Worldwide Sales and Marketing Finance (1998 – 1999) • Directed all financial planning and accounting activities in support of Sales & Marketing worldwide including revenue and distributor accounting, commissions, and A/R • Led multiple cross-functional process re-engineering teams including automating and streamlining the consignment process which led to channel growth of $60M in one year • Simplified and automated the Distributor Accounting system saving the Company $3M per year in false debits Finance Director – Worldwide Manufacturing (1996 – 1998) • Directed financial planning and accounting for all manufacturing entities- $16M improvement in profitability during tenure • Set up Finance department for the first 100% Cypress-owned Asian plant in the Philippines; part of site development team • Transferred most manufacturing, cost accounting, and transactional activities to the Philippines saving $400K/year Controller, Production Control Manager and Business Unit Manager-Datacom Division (1989-1995) • Member of management team that grew division from $6M to $250M becoming the most profitable in CY • On team that did initial offshoring at CY moving to assembly and test facilities in Thailand dropping product costs over 50% • Led production control team meeting or exceeding forecasts for eight consecutive quarters • Ran EOL business unit, profitably harvesting end of life products XEROX CORPORATION (XRX), Fremont and Santa Clara, CA 1982 – 1989 Senior Auditor /Manufacturing Financial Planning Manager/Memorywriter Controller OCCIDENTAL PETROLEUM (OXY), Houston, TX – Treasury 1981 – 1982 LAVENTHOL AND HORWATH CERTIFIED PUBLIC ACCOUNTANTS (Size-#10 worldwide) 1980 – 1981 EDUCATION / ACCREDITATIONS UCLA – ANDERSON SCHOOL OF MANAGEMENT, Los Angeles, CA, MBA – Finance UNIVERSITY OF CALIFORNIA (HAAS), Berkeley, CA, B.S., Business Administration – Honors CERTIFIED PUBLIC ACCOUNTANT – California (active) and Texas (active) PLATINA NETWORKS- Finance Technical Advisor- Santa Clara, CA-Series A networking company 2015-Present ATLAS MAGNETICS- Finance Advising CFO—Reno NV, L’viv-Ukraine—Series A semiconductor company 2021-Present Item 3 Attachment A - Architectural Review Board Initial and Extended Applications- Redacted Item 3: Staff Report Pg. 45 Packet Pg. 56 of 349 Architectural Review Board Application Submitted on 8 April 2025, 12:49am Receipt number 81 Related form version 15 Name Danny Cao Cell Phone Number Home Phone Number Email Address Are you a Palo Alto resident?No Address City San Leandro Postal Code 94579 Do you have any relatives or members of your household who are employed by the City of Palo Alto, who are currently serving on the City Council, or who are Commissioners or Board Members? No Are you available and committed to complete the term applied for? Yes Fair Political Practices No Excluding your principal residence, do you or your spouse own real property in Palo Alto? No How did you learn about the vacancy on the Architectural Review Board? Email from the City Personal Information 1 of 4 Item 3 Attachment A - Architectural Review Board Initial and Extended Applications- Redacted Item 3: Staff Report Pg. 46 Packet Pg. 57 of 349 Read the code, and check only ONE option below:I request that the City of Palo Alto redact my home address, phone numbers, and email address from the attached Board and Commission Application prior to posting to the City’s website. Consent to Publish Personal Information on the City of Palo Alto Website Occupation Architectural Designer Please list your relevant education, training, experience, certificates of training, licenses, and professional registration. If describing work experience, please include company/employer name and occupation. As an architectural designer with 15 years of experience, I bring a wealth of expertise in designing and constructing diverse projects, from aviation and tall towers to commercial, multi-family, and single-family custom residential developments. My educational background is rooted in the esteemed California Polytechnic State University in San Luis Obispo. Throughout my career, I have had the opportunity to collaborate with renowned firms such as PGAL, AGPS, BDE, and Woods Bagot. Currently, I am part of the talented team at Collaborative Design Studio in Dublin, where I continue to push the boundaries of innovative design and construction. My extensive experience has equipped me with a unique understanding of the complexities and nuances of various project scales, allowing me to deliver well-rounded and effective solutions that meet the needs of clients and stakeholders alike. Please describe your involvement in community activities, volunteer and civic organizations, including dates and any offices held. Through volunteering, I've had the privilege of designing and developing construction documents for various places of worship, including churches and Buddhist temples, both locally in the Bay Area and internationally. This experience has not only broadened my understanding of diverse faith communities but also allowed me to apply my skills in a meaningful way, contributing to the creation of sacred spaces that serve as hubs for spiritual growth and connection. By working on these projects, I've gained insight into the unique needs and requirements of each community, honing my ability to craft thoughtful and functional designs that cater to their specific needs. Please select all that apply to you.Architect, landscape architect, building designer, other design professional Personal and Job Experience 1. Why are you interested in serving on the Architectural Review Board and what experience would you bring to the position? I'm excited about the opportunity to serve on the Architectural Review Board because I'm passionate about preserving and enhancing the aesthetic and cultural character of our community. As an architectural designer with 15 years of experience, I bring a deep understanding of design principles, land use regulations, and community engagement. Throughout my career, I've worked on various projects, from commercial developments to custom residences, and I've developed a keen eye for balancing growth with preservation. My experience volunteering has also given me insight into the importance of respecting diverse architectural styles and community needs. 2. Please describe an issue that recently came before the Board that is of particular interest to you and describe why you are interested in it. One issue that recently caught my attention was a proposal for a new mixed-use development in a historically significant neighborhood, which aimed to balance preservation and innovation. I'm drawn to this issue because it highlights the complexities of navigating competing interests in urban development. On one hand, preserving the neighborhood's historic character is crucial for maintaining its unique identity. On the other hand, incorporating modern amenities Application Questions 2 of 4 Item 3 Attachment A - Architectural Review Board Initial and Extended Applications- Redacted Item 3: Staff Report Pg. 47 Packet Pg. 58 of 349 and sustainable design elements can enhance the area's livability and appeal. What resonates with me is the opportunity to find creative solutions that honor the past while embracing the future. As an architectural designer, I've worked on projects that blend old and new, and I believe that thoughtful design can reconcile seemingly conflicting goals. I'm interested in exploring how the Board can facilitate a discussion that considers multiple perspectives, ultimately yielding a solution that benefits the community as a whole. 3. If you are appointed, what specific goals would you like to see the Architectural Review Board achieve, and how would you help in the process? If appointed to the Architectural Review Board, I would like to see the Board enhance community character by ensuring new developments and renovations respect and enhance the unique character of our neighborhoods, while also promoting innovative and sustainable design solutions. I'd also like to see a balance between preserving historic buildings and allowing for thoughtful growth and development that meets the needs of our community. To achieve these goals, I would work closely with community members, developers, architects, and city staff to ensure diverse perspectives are considered and decisions reflect the community's values and needs. I would provide thoughtful and constructive feedback on design proposals, drawing on my experience as an architectural designer and understanding of design principles and land use regulations. I would also help develop clear guidelines and standards that are easy to understand, providing a framework for consistent and fair decision-making. 4. Please identify a project (or projects) that you find to be examples of good architecture, and explain why. You may include samples, identify project addresses, or provide links. One project that I find to be an example of good architecture is the de Young Museum in San Francisco's Golden Gate Park. Designed by architects Herzog & de Meuron, the building's design seamlessly integrates with its surroundings while also showcasing innovative and striking features. The deYoung Museum's copper-clad exterior is a nod to the park's natural surroundings. The building's undulating copper walls and textured surfaces create a sense of movement and visual interest, and help blending the structure into the park's landscape. What I find particularly compelling about the deYoung Museum is its ability to balance modernity with context. The building's bold design and innovative materials are thoughtfully integrated with the surrounding park, creating a harmonious relationship between architecture and nature. Overall, the deYoung Museum is a testament to the power of architecture to inspire, educate, and connect people with their environment. 5. Architectural Review Board Members work with the documents listed below. If you have experience with any of these documents, please describe that experience. Experience with these documents is not required for selection, but will help you better understand the work of the board. Although I haven't had the opportunity to contribute to these projects, I'm eager to explore them further in my own time. 3 of 4 Item 3 Attachment A - Architectural Review Board Initial and Extended Applications- Redacted Item 3: Staff Report Pg. 48 Packet Pg. 59 of 349 If you'd like to provide any additional documents, please upload below. Please confirm that you have read the Boards and Commissions Handbook. Yes Signature Name of signatory: Danny Cao Date Completed 04/08/2025 4 of 4 Item 3 Attachment A - Architectural Review Board Initial and Extended Applications- Redacted Item 3: Staff Report Pg. 49 Packet Pg. 60 of 349 Architectural Review Board Application Submitted on 21 April 2025, 2:27pm Receipt number 77 Related form version 15 Name David Hirsch Cell Phone Number Home Phone Number Email Address Are you a Palo Alto resident?Yes Address City Palo Alto Postal Code 94301 Do you have any relatives or members of your household who are employed by the City of Palo Alto, who are currently serving on the City Council, or who are Commissioners or Board Members? No Are you available and committed to complete the term applied for? Yes Fair Political Practices No Excluding your principal residence, do you or your spouse own real property in Palo Alto? No How did you learn about the vacancy on the Architectural Review Board? Community Group Email from the City Personal Information 1 of 4 Item 3 Attachment A - Architectural Review Board Initial and Extended Applications- Redacted Item 3: Staff Report Pg. 50 Packet Pg. 61 of 349 Palo Alto Weekly City Website Read the code, and check only ONE option below:I give permission for the City of Palo Alto to post to the City’s website the attached Board and Commission Application intact. I have read and understand my rights under Government Code Section 6254.21. I may revoke this permission at any time by providing written notice to the Palo Alto City Clerk. Consent to Publish Personal Information on the City of Palo Alto Website Occupation Retired Architect Please list your relevant education, training, experience, certificates of training, licenses, and professional registration. If describing work experience, please include company/employer name and occupation. Harvard College BA Philosophy, The Cooper Union - non degree, Harvard Grad. School of Design - M Arch Registered Architect; New York State and Connecticut; Senior Urban Designer; Mayors Office of Development (MOD); Partner in several NYC Architectural Firms and founding partner of Urban Architectural Initiatives (UAI) from 1917-2026 responsible for many varied residential projects, educational facilities, community facilities and commercial street improvements. Please describe your involvement in community activities, volunteer and civic organizations, including dates and any offices held. Pre-Palo Alto: Renovated brownstone in Park Slope neighborhood of Brooklyn, Y.Y.; Active in block association, then Park Slope Civic Council for various neighborhood improvements; Board member Prospect Park Environmental Center including overseeing renovation of Historic Tennis House; participated in application to NYC Landmarks Commission to qualify Park Slope as first first designated historic neighborhood; Palo Alto Assistant t consultants for consultants first study of Cubberley to create a coordinated new community facility and future school ; ARB member for two terms. Please select all that apply to you.Architect, landscape architect, building designer, other design professional Personal and Job Experience 1. Why are you interested in serving on the Architectural Review Board and what experience would you bring to the position? I request the opportunity to serve a final term on the ARB. I believe my experience as the founder of an architectural firm in NY and previous experiences, especially my affprdab;e housing projects, civic buildings, educational facilities, historic structures, small commercial buildings and commercial street improvements has provided me with a deep understanding of the design and construction process. The two terms on the ARB has broadened this experience with the addition of the group consensus peocess. One special additional professional experience in NYC was as a senior urban designer for the Mayor's Office of Development, which effectively created opportunities for the restoration of failing commercial areas of the city. Fellow ARB member Peter Baltay and I agree that a development Office would significantly benefit to Palo Alto, especially as the city ought to be more pro-actively encouraging housing opportunities and neighborhood improvements in response to the Housing Element. 2. Please describe an issue that recently came before the Board that is of particular interest to you and describe why you are interested in it. A ten unit townhome development is proposed for a small section of the parking lot adjacent to Town and Country on Encina Avenue. Separately owned parcels surrounding this small development is a large parking lot Application Questions 2 of 4 Item 3 Attachment A - Architectural Review Board Initial and Extended Applications- Redacted Item 3: Staff Report Pg. 51 Packet Pg. 62 of 349 for T & C customers, There are presently no plans for the development of the immediately adjacent parking lots, In my opinion this project should be paused until a coordinated area plan is developed for the entire lot. The T & C principal spoke to this need and noted their interest in coordinating with the townhome developer, and yet my fellow Board members still voted to pass on this limited project. I did not. My opinion is that we must be responsible to the larger responsibility of the Housing Element as well as to recognize the limited and inappropriate location of the original townhome submission located in the midst of a parking lot, with inadequate open space and disruptive to the important community values of this historic quality of this excellent retail neighbor. 3. If you are appointed, what specific goals would you like to see the Architectural Review Board achieve, and how would you help in the process? Our responsibility is often fairly simple, since many qualified architects are willing to cope with the complexity of the approval process and standard regulations for individual buildings to build here But the signifiant increase in housing requirements in response to the Housing Element requirements will likely cause larger, more complex multi- building developments. RHNA unit requirements relative to their likely impact throughout Palo Alto (25 buildings at 250 units each = 6,250 total units and at an average of 2.3 people per apartment, about a 22% increase in our total population) which means consideration of extensive additional physical services and possibly other community facilities.) Site and building planning in such potentially non-conforming overlay developments, based on the PTOD Review Process 18.34.060 (d) suggests pre-zoning ARB review at the preliminary design phase, prior to Planning Commission review per the Zoning Code. I believe this is a critical requirement. 4. Please identify a project (or projects) that you find to be examples of good architecture, and explain why. You may include samples, identify project addresses, or provide links. St. Giorgio Margeroni on Venice's Grand Canal Arch. Palladio. The height of the Renaissance by the master of the Classical style.A hierarchy of scale to humble man in his quest for immorality. The chapel at Ronchamp France. Arch. Le Corbusier. The master of early 20th Century modernism -a painter, sculptor, architect created his boldest expression, a church roofed with a giant uplifted boat-like hull supported on battered walls with irregularly placed penetrations for beams of daylight to criss-cross the spare interior. The Capital of Bangladesh. Arch. Louis Kahn. A layering of fortress-like forms with huge geometric cut-outs, symbolic statement for this formation of a new country. A Dutch school and residence. Arch. Aldo van Eyck. A repetitive hierarchy of roof forms and courts, a system of clustered educational and residential areas for group living with the purpose of creating individual and social awareness.for children with limiting social issues. . . 5. Architectural Review Board Members work with the documents listed below. If you have experience with any of these documents, please describe that experience. Experience with these documents is not required for selection, but will help you better understand the work of the board. The Comp. Plan and the Zoning Code are an integral part of our analysis based on the Planning Department's inclusion in our bi-monthly packet. The relevant zoning per project is also required on the submitted applicants drawings. The Comp Plan is especially important to understand the preferred nature of the entire Palo Alto community. The El Camino planning is in flux based on recent re-zoning, and this applies to major areas of San Antonio Road as well. CEQA issues are normally addressed by Planning. Density bonus's has become critical to advance the Housing Element. I have personally been made aware of the Secy. of the Interior's Historic Building requirements on several significant Historic Restoration projects for our NYC office. As the ARB representative, I worked with the consultants on the Objective Design Standards and our board was consulted on the SB9 Standards as well. I note the Downtown Guidelines and California Street Improvement Guidelines are presently being revised. 3 of 4 Item 3 Attachment A - Architectural Review Board Initial and Extended Applications- Redacted Item 3: Staff Report Pg. 52 Packet Pg. 63 of 349 If you'd like to provide any additional documents, please upload below. 5F96A2EB-20B6-4D08-8F6C-44E2DBA667E2_1_105_c.jpeg 08D62009-989F-47CD-B0A4-2156B6B5EC49_1_105_c.jpeg 80C86B60-F90F-4173-A81E-3908C966139A_1_105_c.jpeg 889C19AA-F484-4DDC-8035-16F1D8842B69_1_105_c.jpeg Please confirm that you have read the Boards and Commissions Handbook. Yes Signature Date Completed 04/21/2025 4 of 4 Item 3 Attachment A - Architectural Review Board Initial and Extended Applications- Redacted Item 3: Staff Report Pg. 53 Packet Pg. 64 of 349 Item 3 Attachment A - Architectural Review Board Initial and Extended Applications- Redacted Item 3: Staff Report Pg. 54 Packet Pg. 65 of 349 Item 3 Attachment A - Architectural Review Board Initial and Extended Applications-Redacted Item 3: Staff Report Pg. 55 Packet Pg. 66 of 349 Item 3 Attachment A - Architectural Review Board Initial and Extended Applications-Redacted Item 3: Staff Report Pg. 56 Packet Pg. 67 of 349 Item 3 Attachment A - Architectural Review Board Initial and Extended Applications-Redacted Item 3: Staff Report Pg. 57 Packet Pg. 68 of 349 Architectural Review Board Application Submitted on 30 April 2025, 5:18pm Receipt number 93 Related form version 15 Name Grace Lee Cell Phone Number Home Phone Number Email Address Are you a Palo Alto resident?Yes Address City Palo Alto Postal Code CA Do you have any relatives or members of your household who are employed by the City of Palo Alto, who are currently serving on the City Council, or who are Commissioners or Board Members? No Are you available and committed to complete the term applied for? Yes Fair Political Practices No Excluding your principal residence, do you or your spouse own real property in Palo Alto? Yes How did you learn about the vacancy on the Architectural Review Board? Email from the City City Website Personal Information 1 of 3 Item 3 Attachment A - Architectural Review Board Initial and Extended Applications- Redacted Item 3: Staff Report Pg. 58 Packet Pg. 69 of 349 Read the code, and check only ONE option below:I request that the City of Palo Alto redact my home address, phone numbers, and email address from the attached Board and Commission Application prior to posting to the City’s website. Consent to Publish Personal Information on the City of Palo Alto Website Occupation Designer, Mentor, Volunteer Please list your relevant education, training, experience, certificates of training, licenses, and professional registration. If describing work experience, please include company/employer name and occupation. Master of Architecture Master of City Planning University of California, Berkeley LEED AP Former Vice President Carrasco & Associates Architects Former Lecturer in Architecture Stanford University University of San Francisco University of California, Berkeley Please describe your involvement in community activities, volunteer and civic organizations, including dates and any offices held. Mentor/college track coach of architectureundergraduate major Cal Poly San Luis Obispo/Peninsula Bridge Former Palo Alto Architectural Review Board member Former Pre- Major Advisor, Stanford University Please select all that apply to you.Architect, landscape architect, building designer, other design professional Personal and Job Experience 1. Why are you interested in serving on the Architectural Review Board and what experience would you bring to the position? I first moved to Palo Alto in the late 80s. My husband and I raised our now young adult daughters here. We are thankful for the neighborhoods, commercial districts, parks and libraries. I wish to contribute to the City’s efforts to plan for a sustainable future, while preserving the history and promoting a healthy environment. 2. Please describe an issue that recently came before the Board that is of particular interest to you and describe why you are interested in it. I find myself interested in practically all of the ARB agenda items, minor and major. l am curious to learn about and support the history, design and evolution of a space. I was drawn to recent discussions of a proposed fire station, as well as housing; both institutional and multifamily land uses shape the structure of a neighborhood. 3. If you are appointed, what specific goals would you like to see the Architectural Review Board achieve, and how would you help in the process? I can recall my experience serving on the board in the past. I have participated in past ARB retreats and design awards. I hope that the ARB participates in an effective onboarding process, carefully review submittals, listen attentively to community comments, Application Questions 2 of 3 Item 3 Attachment A - Architectural Review Board Initial and Extended Applications- Redacted Item 3: Staff Report Pg. 59 Packet Pg. 70 of 349 and be prepared to communicate effectively in collaboration with fellow board members. 4. Please identify a project (or projects) that you find to be examples of good architecture, and explain why. You may include samples, identify project addresses, or provide links. Palo Alto Children’s Library Lucie Stern Community Center Oak Court Apartments Hana Haus, former Varsity Theater 5. Architectural Review Board Members work with the documents listed below. If you have experience with any of these documents, please describe that experience. Experience with these documents is not required for selection, but will help you better understand the work of the board. As both a design professional and former ARB member, I have reviewed these documents. If you'd like to provide any additional documents, please upload below. Please confirm that you have read the Boards and Commissions Handbook. Yes Signature Name of signatory: Grace Lee Date Completed 04/30/2025 3 of 3 Item 3 Attachment A - Architectural Review Board Initial and Extended Applications- Redacted Item 3: Staff Report Pg. 60 Packet Pg. 71 of 349 Architectural Review Board Application Submitted on 1 April 2025, 12:56pm Receipt number 78 Related form version 15 Name Khelan Bhatt Cell Phone Number Home Phone Number Email Address Are you a Palo Alto resident?Yes Address City Palo Alto Postal Code 94301-1055 Do you have any relatives or members of your household who are employed by the City of Palo Alto, who are currently serving on the City Council, or who are Commissioners or Board Members? No Are you available and committed to complete the term applied for? Yes Fair Political Practices No Excluding your principal residence, do you or your spouse own real property in Palo Alto? No How did you learn about the vacancy on the Architectural Review Board? Community Group Personal Information 1 of 4 Item 3 Attachment A - Architectural Review Board Initial and Extended Applications- Redacted Item 3: Staff Report Pg. 61 Packet Pg. 72 of 349 Read the code, and check only ONE option below:I request that the City of Palo Alto redact my home address, phone numbers, and email address from the attached Board and Commission Application prior to posting to the City’s website. Consent to Publish Personal Information on the City of Palo Alto Website Occupation Technology Entrepreneur / Founder Please list your relevant education, training, experience, certificates of training, licenses, and professional registration. If describing work experience, please include company/employer name and occupation. I hold a Bachelors degree in Computer Science with honors from Northeastern Illinois University. I also obtained my Masters degree in Computer Science with a Machine Learning concentration from the Illinois Institute of Technology, as well as my M.B.A. from the University of Chicago. I have been focused on the intersection of technology, design and business for over 20 years, with an emphasis on applied high technology, especially Artificial Intelligence and Cybersecurity. I was formerly a Chief Information Security Officer for Plume Design, Inc. in Palo Alto, and have worked at Cisco, IBM, Gap, Inc., Anheuser-Busch InBev and with hyper-growth startups. I currently am founder of a startup that uses AI agents to fight fraud in B2B commerce. I am also an experienced real estate investor since 2005, having redeveloped, owned and operated multi-family properties and single family homes in my native Chicago as well as across the San Francisco Bay area. Please describe your involvement in community activities, volunteer and civic organizations, including dates and any offices held. I am a Cub Scout den leader (2024-2025 Palo Alto Pack 57), a youth volunteer at Addison Elementary school YMCA/Project Cornerstone (2020-2025), and have previously mentored/volunteered for the Boys and Girls Club of the Peninsula (2018-2019). I am proud of the city I live and work in, Palo Alto, and desire to contribute to the long-term development, stability and desirability of our community. Please select all that apply to you.None Personal and Job Experience 1. Why are you interested in serving on the Architectural Review Board and what experience would you bring to the position? Since 2005, I have been a real estate re-developer, investor and owner, both in my native Chicago, as well as in California and internationally. While it has been a passive investment for me alongside my career in high technology, I stay abreast of trends in housing, development, sustainability and other factors. Because housing and real estate are such fundamental aspects of society, and because I have a unique perspective spanning real estate and technology, I am seeking this position on the ARB as a way to give back to my community, learn from my fellow stakeholders, and hopefully apply technology to enhance and improve the experience and outcome for all stakeholders. 2. Please describe an issue that recently came before the Board that is of particular interest to you and describe why you are interested in it. 70 Encina Avenue, near Town & Country Village, interested me, as it illustrated the various, often competing, interests of stakeholders and the importance of having a well-defined process as well as sufficient time and communications for multiple voices to not only be heard, but have an opportunity to think and collaborate on a mutually favorable outcome. That the developer heeded concerns about density and traffic, while ensuring the project was economically viable, is a positive outcome. 3. If you are appointed, what specific goals would you like to see the Architectural Review Board achieve, and how would you help in the process? If appointed, I would like to see the ARB continue to meet its primary responsibilities of reviewing the design of new construction and changes to existing commercial, industrial and multi-family properties while Application Questions 2 of 4 Item 3 Attachment A - Architectural Review Board Initial and Extended Applications- Redacted Item 3: Staff Report Pg. 62 Packet Pg. 73 of 349 balancing obligations of harmonious development, desirable use of land and an emphasis on aesthetics. My contribution would be to provide my unique voice as a multi-family developer, real estate investor, technology entrepreneur and current property owner and resident of Palo Alto. I feel there are many opportunities to apply advanced technology, especially artificial intelligence, to the ARB and help us meet our goals in an efficient, transparent and balanced manner. Palo Alto has an opportunity to continue to lead across our region and even the world by adapting and applying certain cutting edge advanced technologies, and with my unique background, I am confident I can make a meaningful contribution to the team. 4. Please identify a project (or projects) that you find to be examples of good architecture, and explain why. You may include samples, identify project addresses, or provide links. Growing up in the City of Chicago, I was spoiled for choice when it comes to fantastic architecture. I lived in the literal shadows of giants Frank Lloyd Wright, Louis Sullivan, Helmut Jahn and Rem Koolhaas and contemporaries like Jeanne Gang. I studied on the campus of Koolhaas- designed Illinois Tech. I was a former condo owner at 600 N. Fairbanks Ct. in Chicago, which was designed by Jahn. I almost bought a 55th floor unit of Gang's famous Aqua Tower. My parents took me to Oak Park to see Frank Lloyd Wright's famous designs. Closer to home in California, I am impressed by Joseph Eichler's mid-century modern homes for the masses. Many of my friends and neighbors live in Palo Alto's famed Eichlers, and I have tried several times (unsuccessfully!) to buy an Eichler over the years. Walking distance from my current home on High Street is the Joseph Bellomo designed 102 University Ave. I have never been inside, but I admire the rooftop gardens and the undulating facade. 5. Architectural Review Board Members work with the documents listed below. If you have experience with any of these documents, please describe that experience. Experience with these documents is not required for selection, but will help you better understand the work of the board. I am familiar with the zoning code, comprehensive plan and permit streamlining act. I have applied for and obtained city of Palo Alto permits (none subject to ARB, however) at my former home at 526 Seneca Street and current home at 233 High Street. If you'd like to provide any additional documents, please upload below. Please confirm that you have read the Boards and Commissions Handbook. Yes Signature Name of signatory: Khelan Bhatt Date Completed 04/01/2025 3 of 4 Item 3 Attachment A - Architectural Review Board Initial and Extended Applications- Redacted Item 3: Staff Report Pg. 63 Packet Pg. 74 of 349 4 of 4 Item 3 Attachment A - Architectural Review Board Initial and Extended Applications- Redacted Item 3: Staff Report Pg. 64 Packet Pg. 75 of 349 Architectural Review Board Application Submitted on 30 April 2025, 6:36pm Receipt number 79 Related form version 15 Name Marton Jojarth Cell Phone Number Home Phone Number Email Address Are you a Palo Alto resident?No Address City Mountain View Postal Code 94040 Do you have any relatives or members of your household who are employed by the City of Palo Alto, who are currently serving on the City Council, or who are Commissioners or Board Members? No Are you available and committed to complete the term applied for?Yes Fair Political Practices No Excluding your principal residence, do you or your spouse own real property in Palo Alto? No How did you learn about the vacancy on the Architectural Review Board?Email from the City Personal Information Read the code, and check only ONE option below:I give permission for the City of Palo Alto to post to the City’s website the attached Board and Commission Application intact. I have read and understand my rights under Government Code Section 6254.21. I may revoke this permission at any time by providing written notice to the Palo Alto City Clerk. Consent to Publish Personal Information on the City of Palo Alto Website Personal and Job Experience 1 of 3 Item 3 Attachment A - Architectural Review Board Initial and Extended Applications- Redacted Item 3: Staff Report Pg. 65 Packet Pg. 76 of 349 Occupation Building designer Please list your relevant education, training, experience, certificates of training, licenses, and professional registration. If describing work experience, please include company/employer name and occupation. I am the President of Mindframe Inc (www.mindframe.live), a design-build firm operating primarily in Palo Alto. I have been designing and constructing single family homes in Palo Alto since 2016 and have completed many new construction and remodel projects, including Individual Reviews. Prior to launching my firm, I was an executive at Equinix Inc. and Google Inc. I hold a General Contractor license in California, as well as an MBA degree from Harvard Business School, a Master of Science in Industrial Relations from Oxford University (UK) and PhD in Economics from the University of St Gallen (Switzerland). Please describe your involvement in community activities, volunteer and civic organizations, including dates and any offices held. I am member of The Nova Vista Symphony Orchestra in Sunnyvale. Please select all that apply to you.Architect, landscape architect, building designer, other design professional 1. Why are you interested in serving on the Architectural Review Board and what experience would you bring to the position? I lived in Palo Alto between 2008 and 2022 and I continue to work in Palo Alto on a daily basis. I am excited to help shape Palo Alto in a way that preserves its heritage, celebrates its beauty and sets it up for future success. I am a designer and builder of single family homes, and most of my projects are in Palo Alto. I am well versed in Palo Alto’s approach to planning, zoning and building code. I am familiar with Palo Alto’s Planning & Development Services and interact with Planning and Building staff regularly. Prior to becoming a designer, I was working as an executive in various tech companies, most recently at Google Inc. Thanks to this experience, I can help contribute a business perspective to the ARB. I would like to use this diverse background to act as a helpful bridge between the architecture profession, developers, and City staff. 2. Please describe an issue that recently came before the Board that is of particular interest to you and describe why you are interested in it. The ARB played a key role in the development of the Objective Design Standards for SB9 projects. The implications of SB9 have been a matter of keen interest of most of my clients ever since 2021. Almost every family who is considering constructing a new home in Palo Alto wants to know about SB9. Initially, it was not easy to work with these questions as the rules were new and difficult to apply to most situations. The 2023 permanent ordinance made things much clearer and more flexible. With the 2024 Objective Design Guidelines, the conversations about SB9 have become straightforward. I was not personally involved in the study sessions or the focus group, but I was aware of them and it is clear that the ARB has taken its role seriously to collect feedback from key stakeholders. It was very successful in helping the City adjust its rules and help to balance the need for housing development while maintaining neighborhood character. 3. If you are appointed, what specific goals would you like to see the Architectural Review Board achieve, and how would you help in the process? As a member of the ARB, I would like to advocate for developments that are architecturally innovative and artistically creative, rather than just satisfy the objective design guidelines. I would like innovation and art to still respect the architectural heritage of the city, which includes the enhanced utilization of local materials, native plants, and environmental sustainability, including aspects such as bird safety and night lighting. I am interested in helping the ARB to continue to provide more proactive guidance to developers on what is expected and desired from new projects. More publicity around the Design Awards program could be helpful, or publications showcasing examples of excellent design in Palo Alto. I would like to support the Coordinated Area Plans and collaborate with other city departments and other boards and commissions to expanding Palo Alto’s resident housing and businesses in a way that is architecturally attractive and enhances the appeal of Palo Alto. 4. Please identify a project (or projects) that you find to be examples of good architecture, and explain why. You may include samples, identify project addresses, or provide links. The development at 2500 El Camino Real offers many examples for what good architecture in Palo Alto looks like. My explanation for this choice is summarized and illustrated with pictures in the following document: https://docs.google.com/document/d/1nRijdbcnDaZgEIzn0_mastba7FtR4CNLYcA0vBFC usp=sharing 5. Architectural Review Board Members work with the documents listed below. If you have experience with any of these documents, please As part of my work as a building designer, I work regularly with the Zoning Code, The Palo Alto Comprehensive Plan, various neighborhood design guidelines Application Questions 2 of 3 Item 3 Attachment A - Architectural Review Board Initial and Extended Applications- Redacted Item 3: Staff Report Pg. 66 Packet Pg. 77 of 349 describe that experience. Experience with these documents is not required for selection, but will help you better understand the work of the board. (Eichler, Professorville), the Single-Family Zoning Technical Manual, Individual Review Guidelines, Fence Code and the Historic Review Guide. I am very familiar with these documents. If you'd like to provide any additional documents, please upload below. Please confirm that you have read the Boards and Commissions Handbook. Yes Signature Name of signatory: Marton Jojarth Date Completed 04/07/2025 3 of 3 Item 3 Attachment A - Architectural Review Board Initial and Extended Applications- Redacted Item 3: Staff Report Pg. 67 Packet Pg. 78 of 349 Architectural Review Board Application Submitted on 29 April 2025, 9:56pm Receipt number 92 Related form version 15 Name Matthew Kelly Cell Phone Number Home Phone Number Email Address Are you a Palo Alto resident?No Address City Menlo Park Postal Code 94025 Do you have any relatives or members of your household who are employed by the City of Palo Alto, who are currently serving on the City Council, or who are Commissioners or Board Members? No Are you available and committed to complete the term applied for? Yes Fair Political Practices Yes Excluding your principal residence, do you or your spouse own real property in Palo Alto? No How did you learn about the vacancy on the Architectural Review Board? Email from the City Personal Information 1 of 3 Item 3 Attachment A - Architectural Review Board Initial and Extended Applications- Redacted Item 3: Staff Report Pg. 68 Packet Pg. 79 of 349 Read the code, and check only ONE option below:I request that the City of Palo Alto redact my home address, phone numbers, and email address from the attached Board and Commission Application prior to posting to the City’s website. Consent to Publish Personal Information on the City of Palo Alto Website Occupation Architect Please list your relevant education, training, experience, certificates of training, licenses, and professional registration. If describing work experience, please include company/employer name and occupation. - Education: Bachelor of Arts (major- Architecture, Lehigh '05); Master of Architecture (Penn, '08); - Licensed architect in CA since 2026; LEED AP BD+C - Principal/partner at Huang Iboshi Architecture (since 2010) Please describe your involvement in community activities, volunteer and civic organizations, including dates and any offices held. Volunteer coach in Alpine Little League since 2023; volunteer at local church Please select all that apply to you.Architect, landscape architect, building designer, other design professional Personal and Job Experience 1. Why are you interested in serving on the Architectural Review Board and what experience would you bring to the position? I am interested in using my experience as an architect to help improve my community beyond individual private, residential clients. I have worked on projects across several municipalities in the Bay Area (including Palo Alto) over the past 15 years. I would bring my professional insights as an architect and my personal experience as a father of two school-age children. I want to do my part to ensure the best possible future for my children and families within the community. 2. Please describe an issue that recently came before the Board that is of particular interest to you and describe why you are interested in it. One issue I'm interested in is the implementation and adoption of the Housing Element. There is clearly an urgent need for more housing and I would be eager to be part of the process. I'm also interested in bringing more life to downtown areas (e.g., University Avenue, California Avenue), specifically foot traffic. I have lived in cities of all sizes and I love seeing downtown spaces fully activated. 3. If you are appointed, what specific goals would you like to see the Architectural Review Board achieve, and how would you help in the process? I would like to see more multi-family housing projects that the City can be proud of, and the design of which would be models for other municipalities. There is so much design talent in the Bay Area, yet I see so many projects built in which good design seems to be an afterthought. 4. Please identify a project (or projects) that you find to be examples of good architecture, and explain why. You may include samples, identify project addresses, or provide links. I am very impressed with Springline (https://springline.com/) in Menlo Park. I like that there is a generous sidewalk on El Camino and that there are multiple access points to the site. The scale feels very comfortable, though I would have liked to see an extra story or two to provide more housing units. More public gathering space is always welcome and there is a great deal here. While the Mission Style has been overused on all kinds of project types over the years, it is applied tastefully here and is appropriate for Menlo Park. This project is not trying too hard to be something it's not, and I think it's very successful as a result. Application Questions 2 of 3 Item 3 Attachment A - Architectural Review Board Initial and Extended Applications- Redacted Item 3: Staff Report Pg. 69 Packet Pg. 80 of 349 Item 3 Attachment A - Architectural Review Board Initial and Extended Applications- Redacted Item 3: Staff Report Pg. 70 Packet Pg. 81 of 349 Architectural Review Board Application Submitted on 21 April 2025, 5:13pm Receipt number 84 Related form version 15 Name Naveen Cell Phone Number Home Phone Number Email Address Are you a Palo Alto resident?No Address City Fremont Postal Code 94539 Do you have any relatives or members of your household who are employed by the City of Palo Alto, who are currently serving on the City Council, or who are Commissioners or Board Members? No Are you available and committed to complete the term applied for? Yes Fair Political Practices No Excluding your principal residence, do you or your spouse own real property in Palo Alto? No How did you learn about the vacancy on the Architectural Review Board? City Website Personal Information 1 of 3 Item 3 Attachment A - Architectural Review Board Initial and Extended Applications- Redacted Item 3: Staff Report Pg. 71 Packet Pg. 82 of 349 Read the code, and check only ONE option below:I give permission for the City of Palo Alto to post to the City’s website the attached Board and Commission Application intact. I have read and understand my rights under Government Code Section 6254.21. I may revoke this permission at any time by providing written notice to the Palo Alto City Clerk. Consent to Publish Personal Information on the City of Palo Alto Website Occupation Architect/Urban Planner Please list your relevant education, training, experience, certificates of training, licenses, and professional registration. If describing work experience, please include company/employer name and occupation. Masters in Urban Planning, Texas A&M, College Station Bachelors of Architecture, RVCE, Bangalore, India LEED Accredited Professional (LEED AP) Currently serving as a Senior Project Manager for the City of Mountain View, California, I specialize in public infrastructure and civic facility projects. My professional background spans both public agencies and private firms, with prior leadership roles at several well-regarded multidisciplinary architecture and engineering firms. Please describe your involvement in community activities, volunteer and civic organizations, including dates and any offices held. Historical Architectural Review Board Member, City of FremontCity of Fremont, Sep 2024 - Present · 8 mos Please select all that apply to you.Architect, landscape architect, building designer, other design professional Personal and Job Experience 1. Why are you interested in serving on the Architectural Review Board and what experience would you bring to the position? I’m interested in serving on the Architectural Review Board because I’m committed to supporting and enhancing the design excellence that characterizes Palo Alto. With over 20 years of experience in the architecture industry—spanning both public agencies and private firms— I bring a depth of design and construction experience. Combined with my graduate degree in Urban Planning, I offer a well-rounded perspective that considers both design excellence and urban context. 2. Please describe an issue that recently came before the Board that is of particular interest to you and describe why you are interested in it. The public hearing for the 70 Encina Avenue Housing Project (24PLN- 00095) on February 6, 2025, was particularly engaging. The topic of rezoning for housing has become increasingly prominent across California in response to the ongoing housing shortage and the recent adoption of updated Housing Elements. I found the board’s discussion and recommendation both thoughtful and encouraging. 3. If you are appointed, what specific goals would you like to see the Architectural Review Board achieve, and how would you help in the process? If appointed, I would aim to help the Architectural Review Board achieve several key goals: promote thoughtful and sustainable growth, facilitate meaningful public engagement, and support applicants in meeting Palo Alto’s high standards for design excellence. 4. Please identify a project (or projects) that you find to be examples of good architecture, and explain why. You may include samples, identify project addresses, or provide links. Palo Alto is home to several examples of strong architecture, but my top pick would be the recently completed Stanford Center for Academic Medicine by HOK. The building’s thoughtful massing, clean design elements, and carefully selected materials complement the surrounding campus architecture. Additionally, it offers a variety of outdoor spaces that take full advantage of the California climate, enhancing both Application Questions 2 of 3 Item 3 Attachment A - Architectural Review Board Initial and Extended Applications- Redacted Item 3: Staff Report Pg. 72 Packet Pg. 83 of 349 functionality and user experience. Here is a link to project - https://www.hok.com/projects/view/stanford-university-school-of- medicine%E2%80%AFcenter-for-academic-medicine/ 5. Architectural Review Board Members work with the documents listed below. If you have experience with any of these documents, please describe that experience. Experience with these documents is not required for selection, but will help you better understand the work of the board. I am currently working with a consultant to obtain CEQA approval for a new Public Safety Building for the City of Mountain View. In this role, I am assisting the City by reviewing and providing feedback on CEQA documents, supporting the public noticing process, and coordinating with the Planning Department to gather input and facilitate approval. In my current role as a board member of the Fremont Architectural Review Board, I regularly reference the Secretary of the Interior’s Standards when reviewing projects with historical significance to ensure they meet established preservation guidelines and compliance requirements. If you'd like to provide any additional documents, please upload below. Please confirm that you have read the Boards and Commissions Handbook. Yes Signature Name of signatory: naveen govind Date Completed 04/21/2025 3 of 3 Item 3 Attachment A - Architectural Review Board Initial and Extended Applications- Redacted Item 3: Staff Report Pg. 73 Packet Pg. 84 of 349 Architectural Review Board Application Submitted on 25 January 2025, 9:44am Receipt number 71 Related form version 15 Name Sema Yavuz Cell Phone Number Home Phone Number Email Address Are you a Palo Alto resident?Yes Address City Palo Alto Postal Code 94301 Do you have any relatives or members of your household who are employed by the City of Palo Alto, who are currently serving on the City Council, or who are Commissioners or Board Members? No Are you available and committed to complete the term applied for? Yes Fair Political Practices No Excluding your principal residence, do you or your spouse own real property in Palo Alto? No How did you learn about the vacancy on the Architectural Review Board? Palo Alto Weekly Personal Information 1 of 3 Item 3 Attachment A - Architectural Review Board Initial and Extended Applications- Redacted Item 3: Staff Report Pg. 74 Packet Pg. 85 of 349 Read the code, and check only ONE option below:I request that the City of Palo Alto redact my home address, phone numbers, and email address from the attached Board and Commission Application prior to posting to the City’s website. Consent to Publish Personal Information on the City of Palo Alto Website Occupation Architect and Urban designer Please list your relevant education, training, experience, certificates of training, licenses, and professional registration. If describing work experience, please include company/employer name and occupation. USGBC LEED certified CA architectural license 20 year experience as an architect and urban planner Worked for Hillier, EYP up at East coast and had my own architectural firm in San Diego 2007-2013 Designed cities, office campuses, schools, homes, tenant improvement projects in US and internationally I have been focusing on affordable housing investment, development and operations in Indiana since 2012 to present I am mostly concerned and pationate about about affordability of housing to the young generation all in all through out the country Please describe your involvement in community activities, volunteer and civic organizations, including dates and any offices held. New to the community. Moved from San Diego end of December 2024 lived in Palo Alto 2018 to 2021 Please select all that apply to you.Architect, landscape architect, building designer, other design professional Personal and Job Experience 1. Why are you interested in serving on the Architectural Review Board and what experience would you bring to the position? Advocating affordable home. Sustainable urban and building practices also working and enhancing the urban design guidelines for downtown 2. Please describe an issue that recently came before the Board that is of particular interest to you and describe why you are interested in it. Affordable housing homes for everyone, mitigation of wild fires 3. If you are appointed, what specific goals would you like to see the Architectural Review Board achieve, and how would you help in the process? Affordable housing, enhancing urban design guidelines with business success and affordability to all in mind. Promote diversity 4. Please identify a project (or projects) that you find to be examples of good architecture, and explain why. You may include samples, identify project addresses, or provide links. Affordable housing using Modular’s and prefabricated components projects with mixed use component that promotes revitalization with sustainability in mind 5. Architectural Review Board Members work with the documents listed below. If you have experience with any of I have experience developing/ designing Design guidelines , master planning Application Questions 2 of 3 Item 3 Attachment A - Architectural Review Board Initial and Extended Applications- Redacted Item 3: Staff Report Pg. 75 Packet Pg. 86 of 349 these documents, please describe that experience. Experience with these documents is not required for selection, but will help you better understand the work of the board. If you'd like to provide any additional documents, please upload below. Please confirm that you have read the Boards and Commissions Handbook. Yes Signature Name of signatory: Sema Yavuz Date Completed 01/23/2025 3 of 3 Item 3 Attachment A - Architectural Review Board Initial and Extended Applications- Redacted Item 3: Staff Report Pg. 76 Packet Pg. 87 of 349 Architectural Review Board Application Submitted on 24 April 2025, 10:38am Receipt number 90 Related form version 15 Name Yingxi Chen Cell Phone Number Home Phone Number Email Address Are you a Palo Alto resident?Yes Address City Palo Alto Postal Code 94303 Do you have any relatives or members of your household who are employed by the City of Palo Alto, who are currently serving on the City Council, or who are Commissioners or Board Members? No Are you available and committed to complete the term applied for? Yes Fair Political Practices No Excluding your principal residence, do you or your spouse own real property in Palo Alto? No How did you learn about the vacancy on the Architectural Review Board? Email from the City Other: Current sitting Vice Chair - reapplying for position Personal Information 1 of 3 Item 3 Attachment A - Architectural Review Board Initial and Extended Applications- Redacted Item 3: Staff Report Pg. 77 Packet Pg. 88 of 349 Read the code, and check only ONE option below:I request that the City of Palo Alto redact my home address, phone numbers, and email address from the attached Board and Commission Application prior to posting to the City’s website. Consent to Publish Personal Information on the City of Palo Alto Website Occupation Architect Please list your relevant education, training, experience, certificates of training, licenses, and professional registration. If describing work experience, please include company/employer name and occupation. Licensed Architect in the State of California LEED Accredited Professional Work Experience: Y. Chen Architect, Principal, 2017 - present Williams + Paddon Architects + Planners, Job Captain, 2011- 2017 Collaborative Design Studio, Architectural Intern, 2008- 2011 CHORA Architecture and Urbanism, Researcher and Designer, 2007 Education: Master of Architecture, University at Buffalo, The State University of New York, 2008 Study Abroad Program - Henry Van de Velde Institute in Antwerp, Belgium, 2007 Bachelor of Architecture, Beijing University of Technology, Beijing, China, 2006 Please describe your involvement in community activities, volunteer and civic organizations, including dates and any offices held. Currently Vice Chair on the Palo Alto Architecture Review Board Committee member, AIA (American Institute of Architects) Silicon Valley 2018 Design Awards Committee member, AIA Silicon Valley 2018 and 2019 Home Tour Please select all that apply to you.Architect, landscape architect, building designer, other design professional Personal and Job Experience 1. Why are you interested in serving on the Architectural Review Board and what experience would you bring to the position? To me, buildings represent a lasting commitment. As architects, we bear the responsibility of designing quality spaces where people live, work, and thrive. The role of the ARB is even more significant in this context, and I am eager to contribute to shaping a better community. Before starting my own practice, I gained valuable experience working with two architectural firms, where I had the opportunity to participate in a diverse range of projects—from schools to hotel resorts, from ski lodges to car dealerships. With this experience, I hope to continue making a meaningful impact and help create environments that enrich our community. 2. Please describe an issue that recently came before the Board that is of particular interest to you and describe why you are interested in it. Given the housing crisis we are facing, I am especially interested in finding a balance between supporting a healthy, growing city and preserving its unique character. One of the key challenges is addressing onsite circulation issues while also alleviating the pressure on road traffic across the city. 3. If you are appointed, what specific goals would you like to see the Architectural Review Board achieve, and how would I would like to see the ARB take an active role in reviewing large-scale urban planning for specific areas. Providing coordinated plans and Application Questions 2 of 3 Item 3 Attachment A - Architectural Review Board Initial and Extended Applications- Redacted Item 3: Staff Report Pg. 78 Packet Pg. 89 of 349 you help in the process?guidelines before the start of projects would be highly beneficial. 4. Please identify a project (or projects) that you find to be examples of good architecture, and explain why. You may include samples, identify project addresses, or provide links. Our city is home to many quality buildings, and one of my favorites is the Junior Museum and Zoo. It serves as a great example of an inspiring and interactive space for children. Architecturally, the gable roof and clean forms offer a contemporary interpretation of the surrounding neighborhood. 5. Architectural Review Board Members work with the documents listed below. If you have experience with any of these documents, please describe that experience. Experience with these documents is not required for selection, but will help you better understand the work of the board. I have reviewed all of these documents during my time on ARB If you'd like to provide any additional documents, please upload below. Please confirm that you have read the Boards and Commissions Handbook. Yes Signature Name of signatory: Yingxi Chen Date Completed 04/24/2025 3 of 3 Item 3 Attachment A - Architectural Review Board Initial and Extended Applications- Redacted Item 3: Staff Report Pg. 79 Packet Pg. 90 of 349 City Council Staff Report From: City Manager Report Type: STUDY SESSION Lead Department: Administrative Services Meeting Date: May 12, 2025 Report #:2505-4609 TITLE FY 2026 Proposed Operating and Capital Budget - Finance Committee Update and Council Budget Discussion This will be a late packet report published on May 8, 2025. Item 4 Item 4 Staff Report Item 4: Staff Report Pg. 1 Packet Pg. 91 of 349 City Council Staff Report From: City Manager Report Type: STUDY SESSION Lead Department: Public Works Meeting Date: May 12, 2025 Report #:2503-4421 TITLE Discussion of Strategies for the Use of Low Carbon Fuel Standard, Electric and Gas Cap and Trade, and Electric and Gas Public Benefits Revenues; CEQA Status - Not a Project RECOMMENDATION This is a study session item and no Council action is requested. Staff is requesting feedback on its strategy for the use of Low Carbon Fuel Standard, Electric and Gas Cap and Trade, and Electric and Gas Public Benefits revenues in the FY 2026 Budget. In addition, staff requests feedback on proposed general guidelines for future adoption regarding the use of Public Benefits revenues. EXECUTIVE SUMMARY The City, through operating a utility, receives and collects revenues designed to promote efficiency, conservation, and emissions reduction, and which can also be used in ways that reduce electric and gas rates or bills. These include revenues related to State-mandated participation by both the electric and gas utilities in the Western Climate Initiative Cap and Trade Program (Cap and Trade), the electric utility’s participation in the State’s Low Carbon Fuel Standard Program, and mandated electric and gas utility spending on public benefits programs. Each revenue source has its own regulatory constraints, but within those constraints Council direction has generally been to prioritize efficiency, conservation, and emissions reduction. To date, these revenue sources have been used to buy renewable energy, fund low-income programs, deliver energy efficiency programs, and for building and vehicle electrification. While Cap and Trade revenues have been routinely utilized by PG&E and many publicly owned utilities to customers in the form of “climate credits”, Palo Alto has not historically used the funds in that manner. However, staff and the Utilities Advisory Commission currently recommend use of $1.6 million for a one-time climate credit in FY 2026 to mitigate the impact of proposed gas rate increases on residential gas customers. Item 5 Item 5 Staff Report Item 5: Staff Report Pg. 1 Packet Pg. 92 of 349 The City is completing a Sustainability and Climate Action Plan (S/CAP) Funding Study to develop potential strategies for scaling up building and vehicle electrification in line with the S/CAP goal of reducing emissions 80% from 1990 levels by 2030 (80x30 goal). Discussions on these strategies will take place with the Climate Action and Sustainability Committee, other Committees or Commissions, and the full Council throughout 2025. This study session item will support discussions of longer-term commitments of these revenue sources for renewable energy procurement to meet State RPS mandates, climate programs, rate and bill reduction, and other utility purposes. BACKGROUND •Cap and Trade: The City is allocated allowances as part of the State-mandated participation by its electric and gas utilities in the Western Climate Initiative Cap and Trade Program (Cap and Trade). The mandated sale of these allowances generates revenues (Electric and Gas Cap and Trade revenues). •Low Carbon Fuel Standard: The City receives credits under the State’s Low Carbon Fuel Standard (LCFS) program for delivering electricity to electric vehicles (EVs) in Palo Alto. It auctions these credits to fossil fuel suppliers, who are required to buy them to fulfill program mandates. •Public Benefits: The State mandates that electric utilities collect a surcharge equal to a fixed percentage of revenues (the Public Benefits surcharge) and use those revenues for specific public purposes. The State also requires gas utilities to provide certain types of public purpose programs if they want to avoid paying into a collective fund run by the California Energy Commission to provide those programs. Item 5 Item 5 Staff Report Item 5: Staff Report Pg. 2 Packet Pg. 93 of 349 These revenue sources are subject to various state laws and regulatory requirements and Council policies (summarized below and in more detail in Attachment A): •Cap and Trade revenues must be used for GHG emissions reduction programs (including renewable energy, efficiency, fuel switching, SF6 reduction, and more, with different opportunities for the gas vs. electric utility) or returned to ratepayers on a non-volumetric basis as a climate credit. Council has adopted a policy1 for the use of Cap and Trade revenues and has expressed a preference for emissions reductions over climate credits. •LCFS revenues must be used for the benefit of current or future EV owners, with a particular focus on income-qualified EV owners. Council has adopted a program2 for the use of LCFS revenues focused heavily on education and outreach and on multi-family EV charging. •Public Benefits revenues must be used for electric or gas efficiency, research and development, low-income programs, and may be used to buy renewable energy for the electric utility. Council has approved spending plans for Public Benefits revenues and has expressed policy goals through the adoption of energy efficiency goals and local solar plans. However, no general statement of policy preference exists for Public Benefits revenues as exists for Cap and Trade and LCFS revenues. 1 Resolution 10077, October 3, 2022, Resolution of the Council of the City of Palo Alto Amending the City’s Policy on the Use of Freely Allocated Allowance Under the State's Cap-and-Trade Program and Authorizing the City Manager to use $1.25 million from the Gas Utility Cap and Trade Reserve for the Advanced Heat Pump Water Heater program - also see Attachment A for more detail. 2 Resolution 9871, December 2, 2019, Resolution Amending Utility Rate Schedule E-15 (Electric Service Connection Charges), and Approving Updates to the City’s Program for use of Revenues from the Sale of Low Carbon Fuel Standard Credits – also see Attachment A for more detail Item 5 Item 5 Staff Report Item 5: Staff Report Pg. 3 Packet Pg. 94 of 349 ANALYSIS There are several community priorities these revenues could be helpful in advancing: •Achieving 80x30 and other S/CAP climate goals. •Meeting or exceeding State Mandates on Renewable Portfolio Standard of 60% by 2030. •Implementing programs supportive of State and regional vehicle and building electrification regulations. •Maintaining electric competitive utility rates for affordability and promoting fuel switching. •Advancing community goals, some of which are also emissions-reducing, such as municipal electrification or local resiliency. FY 2026 Proposals for Use of Cap and Trade, LCFS, and Public Benefits Charge Reserves and Revenues Staff has submitted budget and rate proposals in FY 2026 consistent with the following strategies: •Focused climate spending on programs that are Council Priority Objectives and in the 2023- 2025 S/CAP Work Plan, with initial budgets large enough for scalable “proof of concept” with the recognition that staff may return to Council to request additional funds through budget amendments based on need and program effectiveness. •Continued funding of the City’s renewable portfolio from Electric Cap and Trade revenues, which helps maintain the City’s lower utility rates compared to surrounding cities, thereby improving the cost-effectiveness of electrification. •A distribution of single year gas climate credits to gas residential customers (at a cost of $1.6 million). The proposed credit is recommended in the FY 2026 Gas Utility Financial Forecast by the Utilities Advisory Commission (UAC), and was reviewed by the Finance Committee on April 15, without action taken. Staff is proposing a strategy focused on shorter-term proposals to allow discussions planned in 2025 on strategies for scaling up climate action to take place, in line with Council‘s 2025 Climate Action and Adaptation & Natural Environment Protection Priority Objective 28. Preliminary results from the S/CAP Funding Study performed to support this objective are showing community electrification to be a net benefit, even on the accelerated time scales of the 80x30 and other S/CAP climate goals, though costs and benefits vary among customers, time frames, and equipment types.3 But various factors mean creativity will be needed to design programs to realize that net benefit. For example, the costs and the benefits are different depending on the technology and across different groups of community members. Also, the savings in household expenses from electrified equipment are realized over time, 3 For more information, please see the April 4 Climate Action and Sustainability Committee report on this topic: https://cityofpaloalto.primegov.com/meetings/ItemWithTemplateType?id=7672&meetingTemplateType=2&comp iledMeetingDocumentId=13682 Item 5 Item 5 Staff Report Item 5: Staff Report Pg. 4 Packet Pg. 95 of 349 while the up-front cost of the equipment can be higher than the cost of gas equipment replacements. •Opportunities for climate programs to support 80x30 and S/CAP climate goals •Opportunities for State and Regional regulatory support •Opportunities for utility bill competitiveness •Opportunities to support other community goals. •First, run early pilots and do studies to support expanded pilots; •Second, run large pilots focused on early adopters; and •Third, use the lessons learned from large pilots to develop scalable programs to serve the majority of Palo Altans. Item 5 Item 5 Staff Report Item 5: Staff Report Pg. 5 Packet Pg. 96 of 349 conducted for early adopters in single-family building electrification (especially the 1000-unit Advanced Heat Pump Water Heater Pilot Program and the 150-unit Whole Home Electrification Program), and a multi-family EV charging program on track to achieve EV charging in buildings representing 10% of multi-family units in Palo Alto. These pilots help the City understand community decision-making, identify barriers like permitting and utility connections, create outreach strategies, and develop scalable financial models. The second phase larger pilots, costing between $5 million and $9 million, cover the incremental up-front installation costs for many early adopters, with long-term community benefits that offset some or all of these costs, some of which accrue to the City, partially offsetting the costs of the pilots. The programs aim to find financial strategies to attract outside capital, but until those strategies are proven, funding is needed for up-front costs. This could require $25 million to $40 million in funding through 2030. •A “proof of concept” advanced pilot for small and medium business rooftop HVAC electrification. •Smaller pilots for major facility electrification and central space and water heating in multi- family buildings. •Expansions of the advanced pilots for single-family building electrification and multi-family EV charging to move these programs closer to a scalable program design. •The Advanced Clean Cars II regulation requires 100% of vehicle sales in California to be emissions free by 2035. Item 5 Item 5 Staff Report Item 5: Staff Report Pg. 6 Packet Pg. 97 of 349 •The Bay Area Air District’s Zero Nox standards come into effect in phases. At each phase, the sale of these appliances becomes prohibited in the Bay Area: o 2027: Residential-scale gas water heaters o 2029: Gas space heaters o 2031: Commercial-scale gas water heaters •Facilitating access to EV charging for multi-family residents, either publicly available or in multi-family parking lots. The costs of these chargers are significantly higher than in single- family homes and the logistics of installation are more complex. •Facilitating transformer upgrades for larger multi-family buildings either separately or as part of the multi-year grid modernization program. •Providing help to homeowners and condo owners whose mandated building electrification projects are more complex. This could include technical assistance or incentives. •Providing assistance programs for those who cannot afford the increased cost of the electrified equipment. •Financing the higher up-front costs for other homeowners may be desirable, with repayment being at least partially offset by long-term bill savings. Item 5 Item 5 Staff Report Item 5: Staff Report Pg. 7 Packet Pg. 98 of 349 market power to its commercial customers. Ava (previously East Bay Clean Energy) also purchases some market power from unspecified sources. $0.00 $20.00 $40.00 $60.00 $80.00 $100.00 $120.00 $140.00 $160.00 $180.00 City of Palo Alto PCE SVCE AMP SVP Ava PG&E Item 5 Item 5 Staff Report Item 5: Staff Report Pg. 8 Packet Pg. 99 of 349 If the City, rather than expending funding on climate pilots to advance 80x30 and S/CAP climate goals, instead focused on electric rate competitiveness and supporting State and regional regulations, there would be an opportunity to reduce rates about 2% through 2030, equal to about $1.67 per month on the median residential bill. Some of the funding sources that would need to be used for this reduction do not extend past 2030. Various State leaders have stated an intent to extend the Cap and Trade program, but it is still unclear what revenues would be allocated to publicly owned utilities in that extension. Item 5 Item 5 Staff Report Item 5: Staff Report Pg. 9 Packet Pg. 100 of 349 storage owners for every kWh of energy delivered to the City’s electric system. These solar and storage systems, if configured as microgrids, can be connected to specific circuits within buildings to provide additional resiliency during short-term or longer-term outages. If the City wanted to increase its support to local microgrid projects, these funding sources could be used as an alternative to the use of ratepayer funds (as were used for the Palo Alto CLEAN). Staff is currently analyzing various strategies to achieve the community’s resiliency goals as part of its implementation of the Reliability and Resiliency Strategic Plan and does not yet have cost estimates. Establishing a Policy for Use of Public Benefits Funds •Energy efficiency and conservation •Building electrification as an energy efficiency measure •E-bikes and other small EVs as transportation efficiency •Utility-scale renewable energy resources •Local renewable energy (could include energy storage or be configured as a microgrid) •Small pilots of emerging energy or electrification technologies or program delivery mechanisms •Low-income efficiency •Low-income rate assistance •Low-income vehicle electrification, including EV charging •E-bikes and other small EVs as transportation efficiency Item 5 Item 5 Staff Report Item 5: Staff Report Pg. 10 Packet Pg. 101 of 349 Gas Public Utilities Code Section 890, enacted in 2000, imposes a surcharge on all natural gas consumed in California to fund certain public purposes (listed below). Municipalities that offer programs similar to those set forth below are not required to collect the surcharge: •Low-income rate assistance and weatherization •Cost effective energy efficiency and conservation measures •Public interest research and development The proposed Council policy restates these objectives without elaboration, though it would be possible to elaborate further in the policy on the types of programs the Council wants to prioritize in this area. FISCAL/RESOURCE IMPACT The fiscal and staffing resource impact of decisions on the use of these revenue sources will depend on the spending decisions made. The impacts of different spending decisions are included above in the description of each listed spending opportunity. In general, climate programs to further the 80x30 goal require significant staff time and resources, as noted above. Commitments to State and Regional regulatory support require slightly lower, but still significant staff time and resources. Committing funds to new renewable energy resources to meet State RPS goals requires the least staff time and helps maintain competitive utility rates in comparison to other public owned utilities. The fiscal impact of staff’s proposed FY 2026 Climate budget items will be provided as part of the FY 2026 budget process. STAKEHOLDER ENGAGEMENT Staff has not done outreach beyond public hearings (e.g. UAC, Finance, Council) on the use of these revenue sources. Staff has held numerous public hearings on the S/CAP over the past decade and holds public hearings on utility rates annually. Staff plans to continue these types of hearings in the future. The Air District has done public outreach and held hearings about its Zero NOx regulations. ENVIRONMENTAL REVIEW Council’s discussion of the use of these revenue sources is not a project as defined by CEQA because it does not involve any commitment to any specific project which may result in a potentially significant physical impact on the environment. CEQA Guidelines section 15378(b)(4). Item 5 Item 5 Staff Report Item 5: Staff Report Pg. 11 Packet Pg. 102 of 349 ATTACHMENTS APPROVED BY: Item 5 Item 5 Staff Report Item 5: Staff Report Pg. 12 Packet Pg. 103 of 349 Attachment A Low Carbon Fuel Standard, Cap and Trade, and Public Benefits Revenues State Regulations and Council Policies This attachment provides an overview of the State regulations and Council policies applicable to the revenues received as a result of: •The State-mandated participation of the City’s gas and electric utilities in the Western Climate Initiative Cap and Trade Program (Gas and Electric Cap and Trade revenues) •The City’s electric utility’s participation in the State’s Low Carbon Fuel Standard program for the electricity it serves to electric vehicles (LCFS revenues) •The revenues the State mandates the City’s electric utility collect for public purpose programs and the gas utility’s public purpose program requirements (Gas and Electric Public Benefits) Electric Cap and Trade Regulatory requirements: 17 Code of California Regulations (CCR) 95892 •Revenue must be used “for the primary benefit of retail electricity ratepayers of each electrical distribution utility, consistent with the goals of AB 32, and may not be used for the benefit of entities or persons other than such ratepayers.” (17 CCR sec. 95892(d)(3)). •Revenues subject to to any limitations imposed by the governing body of the utility, as well as those listed below. •Revenue must be used for: o Renewable energy (including with energy storage), as described in 95892(d)(3)(A); o Energy efficiency or other projects that reduce energy demand o Fuel switching, including zero emissions vehicles (ZEVs) or ZEV infrastructure, active transportation, or public transportation o Other greenhouse gas (GHG) emissions activities for which the electrical distribution utility can demonstrate GHG emission reductions, including but not limited to sulfur hexafluoride (SF6) reduction, wildfire risk reduction, or forest carbon sequestration o Non-volumetric return to ratepayers (e.g. a climate credit) o Administrative overhead and educational programs of the above uses Council policy: Resolution 100771, approved October 3, 2022 The Council resolution, originally approved in 2012 and amended in 2022, permits: •Purchases of renewable energy •Investment in energy efficiency •Fuel switching from other fuels to electricity •Investment in other carbon reduction activities •Rebates to electric ratepayers 1 Resolution 10077, October 3, 2022, Resolution of the Council of the City of Palo Alto Amending the City’ s Policy on the Use of Freely Allocated Allowance Under the State's Cap-and-Trade Program and Authori zing the City Manager to use $1.25 million from the Gas Utility Cap and Trade Reserve for the Advanced Heat Pump Water Heater program, https://recordsportal.paloalto.gov/WebLink/DocView.aspx? id=61567&dbid=0&repo=PaloAlto Item 5 Attachment A - Summary of State regulations and Council Policies for Cap and Trade, LCFS, and Public Benefits Item 5: Staff Report Pg. 13 Packet Pg. 104 of 349 Attachment A All uses of these funds will be reviewed for compliance with applicable State law before implementing new programs. Examples of permissible uses of Electric Cap and Trade Funds: Use category Examples Renewable energy •Buying energy via power purchase agreement (PPA) from utility-scale renewable generators outside Palo Alto •Prepayments of PPAs to reduce overall costs •Buying local renewable energy (e.g. via Palo Alto CLEAN) from solar installations or solar + battery microgrids •Incentives / rebates for local renewable energy (e.g. solar rebates), including local solar + battery microgrids Energy efficiency •Rebates or programs to install efficient equipment in buildings, including “Efficiency as a Service” programs Fuel switching •Rebates or programs to replace gas equipment in buildings with electric equipment, •Zero emissions vehicle rebates and charging/fueling infrastructure Other carbon reduction •Replacing SF6 in utility equipment (e.g. transformers) •Active transportation (e.g. walking, biking, e-bikes, e- scooters) •Public transit Rebates •Climate Credit to some or all customers in Palo Alto History of Council policy adoption and revenue allocation •December 10, 2012: Council adopts Resolution 93072 on use of Cap and Trade revenue for the Electric Utility. Authority to designate use of revenue was delegated to the City Manager, except for customer rebates, which were required to be approved by Council. In the discussion staff recommended that the revenues be used to fund renewable energy and energy efficiency programs already planned by the utility. •FY 2012 – FY 2020: 100% of funds were used for renewable energy and energy efficiency. •August 4, 2020: Council approved use of some Cap and Trade revenue for local decarbonization.3 Revenue was to be transferred to a Cap and Trade reserve until designated for use under the Council-adopted policy. •October 3, 2022: Council adopts Resolution 10077 updating the use of Cap and Trade revenue policy for the Electric Utility to explicitly include fuel switching from other fuels to electricity. 2 Resolution 9307, December 10, 2012, Resolution of the Council of the City of Palo Alto Adopting the Ca p-and-Trade Revenue Utilization Policy for the Use of Revenues From the Sale of Allocated Allowances i n California's Greenhouse Gas Cap-and-Trade Auctions, https://recordsportal.paloalto.gov/WebLink/ DocView.aspx?id=53586&dbid=0&repo=PaloAlto 3 Staff Report 11556, August 24, 2020: https://www.cityofpaloalto.org/civicax/filebank/blobdload.aspx?Blo bID=78046 Item 5 Attachment A - Summary of State regulations and Council Policies for Cap and Trade, LCFS, and Public Benefits Item 5: Staff Report Pg. 14 Packet Pg. 105 of 349 Attachment A Gas Cap and Trade Regulatory requirements: 17 CCR 95893 •Revenue must be used “for the primary benefit of retail gas ratepayers of each electrical distribution utility, consistent with the goals of AB 32, and may not be used for the benefit of entities or persons other than such ratepayers.” (17 CCR sec. 95893(d)(3)) •Revenues subject to any limitations imposed by the governing body of the utility, as well as those listed below. •Revenue must be used for: o Energy efficiency and other projects that reduce energy demand o Other GHG emissions activities, for which the natural gas supplier can demonstrate GHG emission reductions, including but not limited to reductions in emissions of uncombusted natural gas not required by mandates o Non-volumetric return to ratepayers (e.g. a climate credit) o Administrative overhead and educational programs for the above uses Council policy: Resolution 100774, approved October 3, 2022 The Council resolution, originally approved in 2015 and amended in 2022, permits: •Investment in energy efficiency •Purchases of cost effective renewable biogas •Fuel switching from natural gas to electricity that reduces greenhouse gas emissions •Investment in other carbon reduction activities including system maintenance or replacement to reduce fugitive gas emissions; •Non-volumetric rebates to electric ratepayers It expresses a preference for the use of revenues for GHG-reducing activities. All uses of these funds will be reviewed for compliance with applicable State law before implementing new programs. Examples of permissible uses of Gas Cap and Trade Funds: Use category Examples Energy efficiency •Rebates or programs to install efficient equipment in buildings, including “Efficiency as a Service” programs Purchases of cost-effective biogas •Purchases of cost-effective biogas for the gas portfolio Fuel switching •Rebates or programs to replace gas equipment in buildings with electric equipment, Other carbon reduction •Leak detection and repair more frequent than mandated Rebates •Climate Credit to some or all customers in Palo Alto History of Council policy adoption and revenue allocation 4 Resolution 10077, October 3, 2022, Resolution of the Council of the City of Palo Alto Amending the City’ s Policy on the Use of Freely Allocated Allowance Under the State's Cap-and-Trade Program and Authori zing the City Manager to use $1.25 million from the Gas Utility Cap and Trade Reserve for the Advanced Heat Pump Water Heater program, https://recordsportal.paloalto.gov/WebLink/DocView.aspx? id=61567&dbid=0&repo=PaloAlto Item 5 Attachment A - Summary of State regulations and Council Policies for Cap and Trade, LCFS, and Public Benefits Item 5: Staff Report Pg. 15 Packet Pg. 106 of 349 Attachment A •January 26, 2015: Council adopts Resolution 94875 on the use of Gas Cap and Trade revenue. The policy expresses a preference for the use of revenues for GHG-reducing activities. •October 3, 2022: Council adopts Resolution 10077 updating the use of Cap and Trade revenue policy for the Gas Utility to explicitly include fuel switching from other fuels to electricity. At that time Council also allocated $1.25 million for the Advanced Heat Pump Water Heater Pilot Program. •April 15, 2024: Council allocated an additional $846K to the Advanced Heat Pump Water Heater Pilot Program Low Carbon Fuel Standard Regulatory requirements: 17 CCR 95483(c), 95491(d)(3)(A) California Air Resources Board (CARB) Guidance Document 20-03 •25% of credit revenue must be contributed to the statewide Clean Fuel Reward program •50% of remaining credit revenue must be used for low-income individuals •The remaining credit revenue must be used to benefit current or future EV drivers •CARB strongly encourages revenue collected from a specific sector (e.g. residential) to be used for projects serving that sector Council policy: Resolution 9871, December 2, 20196 The Council resolution, originally approved in 2016 and amended in 2019, permits the following for the use of funds from the sale of LCFS credits obtained due to serving electricity to EVs: •EV charger infrastructure focused on multi-family, including utility connection fees •EV rebates, including e-bikes and e-scooters •Rate incentives to lower the cost of EV charging or encourage off-peak charging •EV demand response •Education and outreach All uses of these funds will be reviewed for compliance with applicable State law before implementing new programs. 5 Resolution 9487, January 26, 2015, Resolution of the Council of the City of Palo Alto Amending the Cap -and-Trade Revenue Utilization Policy to Cover the Use of Freely Allocated Allowances for the Gas and El ectric Utilities, https://recordsportal.paloalto.gov/Weblink/DocView.aspx?id=53850 6 Resolution 9871, December 2, 2019, Resolution Amending Utility Rate Schedule E-15 (Electric Service Connection Charges), and Approving Updates to the City’s Program for use of Revenues from the Sale of Low Carbon Fuel Standard Credits, https://recordsportal.paloalto.gov/WebLink/DocView.aspx? id=54120&dbid=0&repo=PaloAlto Item 5 Attachment A - Summary of State regulations and Council Policies for Cap and Trade, LCFS, and Public Benefits Item 5: Staff Report Pg. 16 Packet Pg. 107 of 349 Attachment A Examples of permissible uses of LCFS Funds from serving electricity to EVs: Use category Examples Low-income projects and programs •EV charging infrastructure •EV rebates •Public transit and active transportation (bikes, walking) •E-mobility (e.g. e-bikes, e-scooters, EV sharing and rideshare) •Bill credits to reduce the cost of EV charging Use for the benefit of current and future EV owners •EV charging infrastructure •EV rebates •Bill credits to reduce the cost of EV charging The policy also includes provisions related to the LCFS credits received for serving compressed natural gas (CNG), which must be used to promote CNG vehicle adoption, including: •Capital and maintenance costs of the City’s CNG station •Activity to dispense carbon neutral CNG (e.g. offsets or renewable natural gas) •Reducing the CNG retail charge rate History of Council policy adoption and revenue allocation •October 24, 2016: Council adopts a policy on the use of Low Carbon Fuel Standard revenue.7 It included an initial spending plan and gave the City Manager authority to make changes. •December 2, 2019: Council approves Resolution 9871 updating the policy to include rebates for connection fees (e.g. the cost of transformer upgrades) Electric Public Benefits Regulatory requirements: State Public Utilities Code Section 385 (AB 1890, 1996) •Publicly owned utilities must impose a surcharge on all electricity sales to fund: o (1) Cost-effective demand-side management services to promote energy-efficiency and energy conservation o (2) New investment in renewable energy resources and technologies consistent with existing statutes and regulations which promote those resources and technologies. o (3) Research, development and demonstration programs for the public interest to advance science or technology which is not adequately provided by competitive and regulated markets. o (4) Services provided for low-income electricity customers, including but not limited to, targeted energy efficiency service and rate discounts. Council policy: FY 1998 Rate Setting Process, spring 1997 and FY 1999 Budget, spring 1998 7 Staff Report ID#7301, October 24, 2016: https://recordsportal.paloalto.gov/Weblink/DocView.aspx?id=79920 Item 5 Attachment A - Summary of State regulations and Council Policies for Cap and Trade, LCFS, and Public Benefits Item 5: Staff Report Pg. 17 Packet Pg. 108 of 349 Attachment A On May 5, 1997 Council approved modifications to the electric utility rates to separate them into distribution, supply, and public benefits charges, as mandated by law, and as described in City Manager’s Report (CMR) 219:978. The public benefits charge was only 1.6% of revenues when it took effect July 1, 1997, below the 2.85% of revenues mandated by law, but in its motion to approve the FY 1999 Budget on June 22, 1998 the Council approved a UAC and Finance Committee recommendation to increase Public Benefits spending to 2.85% as described in CMR 237:989. A Public Benefits Reserve was also created to hold any unspent funds from the Public Benefits charge. Council has approved plans for spending of electric public benefits funds in various forms since then. The most current approved plan for electric public benefit spending was adopted May 3, 2021, setting 10-year electric energy efficiency goals.10 Examples of permissible uses: Use category Examples Cost-effective energy efficiency and conservation •Rebates or programs to install efficient equipment in buildings, including “Efficiency as a Service” programs •Rebates or programs to replace gas equipment in buildings with electric. •E-bikes or e-scooters as transportation energy efficiency Renewable energy •Buying energy via power purchase agreement (PPA) from utility-scale renewable generators outside Palo Alto •Prepayments of PPAs to reduce overall costs •Buying local renewable energy (e.g. via Palo Alto CLEAN) from solar installations or solar + battery microgrids •Incentives / rebates for local renewable energy (e.g. solar rebates), including local solar + battery microgrids Research and development •Building envelope improvements to reduce heat loss Low-income services •Utilities Residential Energy Assistance Program, which does direct installation of efficiency measures in homes •Rate or bill discounts for low-income customers •Low-income building or vehicle electrification programs (including EV charging) that reduce bills for income- qualified customers compared to use of gas or gasoline Gas Public Benefits Regulatory requirements: State Public Utilities Code Section 890 (AB 1002, 2000) •A surcharge must be imposed on all methane gas consumed in California to fund: o low-income rate assistance programs, o low-income energy efficiency programs, 8 City Manager’s Report 219:97, Finance Committee, May 5, 1997, Proposed Electric Fund Rate Increas e, Establishment of Unbundled Rates and New Commercial Rate Options, and Calaveras Reserve Propo sal, https://recordsportal.paloalto.gov/Weblink/DocView.aspx?id=64775 9 City Manager’s Report 237:98, May 19, 1998, Proposed Electric Public Benefits Programs for Fiscal Ye ar 1998-1999, https://recordsportal.paloalto.gov/Weblink/DocView.aspx?id=63843 10 Staff Report ID#12068, May 3, 2021: https://www.cityofpaloalto.org/files/assets/public/v/1/agendas- minutes-reports/reports/city-manager-reports-cmrs/year-archive/2021/id-12068.pdf Item 5 Attachment A - Summary of State regulations and Council Policies for Cap and Trade, LCFS, and Public Benefits Item 5: Staff Report Pg. 18 Packet Pg. 109 of 349 Attachment A o cost-effective energy efficiency and conservation activities, and o public interest research and development not adequately provided by the competitive and regulated markets. •Municipalities that offer home weatherization services, low-income customer rate assistance or programs similar to those set forth above are not required to collect the surcharge. Council policy: FY 1997 Budget, June 24, 1996 In its motion to approve the FY 1997 Budget on June 24, 1996 the Council approved a UAC and Finance Committee recommendation to approve a new Demand Side Management (DSM) policy as described in City Manager’s Report (CMR) 209:96. CMR:209:9611 recommended a “policy for allocation of (between .75% and 1.25% of revenues) to the environmentally friendly and DSM programs, with proposed program details to be provided to the UAC for review and comment.” Council has approved plans for spending of gas public benefits in various forms since then. The most current approved plan for gas public benefit spending was adopted April 3, 2017, setting 10 year gas efficiency goals.12 Examples of permissible uses: Use category Examples Low-income rate assistance programs •Utilities Rate Assistance Program Low-income energy efficiency programs •Utilities Residential Energy Assistance Program, which does direct installation of efficiency measures in homes Cost-effective energy efficiency and conservation •Building envelope improvements to reduce heat loss Research and Development •Building electrification resulting in reduced gas utility costs (e.g. block electrification to prevent gas main replacement) 11 City Manager’s Report 209:96, City Council, April 18, 1996, Budget Issue: New Demand Side Manage ment Program, https://recordsportal.paloalto.gov/Weblink/DocView.aspx?id=65489 12 Staff Report ID#7862, April 3, 2017: https://www.cityofpaloalto.org/files/assets/public/v/1/agendas- minutes-reports/reports/city-manager-reports-cmrs/year-archive/2017/final-staff-report-id-7862_update-of- ten-year-gas-efficiency-goals.pdf Item 5 Attachment A - Summary of State regulations and Council Policies for Cap and Trade, LCFS, and Public Benefits Item 5: Staff Report Pg. 19 Packet Pg. 110 of 349 Low Carbon Fuel Standard, Cap and Trade, and Public Benefits Reserves, Revenues, and Expenses P F F F F F F F P 7 L 6 E 4 G 1 P 5 5 5 5 6 6 L 1 1 1 1 1 1 E 2 2 3 3 3 3 G 3 3 3 3 4 4 P (((((( L (((((- E (((((( G ------ P -(---- L -(---- E ------ G ((---- F ((---- U --6 6 6 8 F R Y F F F Item 5 Attachment B - Cap and Trade, LCFS, and Public Benefits Reserves, Revenues, and Expenses Item 5: Staff Report Pg. 20 Packet Pg. 111 of 349 DRAFT ATTACHMENT C 6056930 1 Proposed Policy on the Use of Electric and Gas Public Benefits Funds Public Utilities Code Section 385, enacted in 1996, requires all publicly owned utilities (POUs) with distribution facilities to collect a nonbypassable usage-based charge to fund investments in four areas: (1) Cost-effective demand-side management services to promote energy efficiency and energy conservation. (2) New investment in renewable energy resources and technologies consistent with existing statutes and regulations which promote those resources and technologies. (3) Research, development and demonstration programs for the public interest to advance science or technology which is not adequately provided by competitive and regulated markets. (4) Services provided for low-income electricity customers, including, but not limited to, energy efficiency services, education, weatherization, and rate discounts. While Public Utilities Code Section 385 prescribes a specific revenue collection formula,1 the statute provides POUs flexibility to implement a program as long as expenditures fall within the four categories specified in the statute. This structure has remained unchanged for nearly 20 years.2 Legislative history supports an interpretation of broad POU authority over their Public Benefits programs. The last bill to amend Section 385 was SB 1939 in 2000. Both the final Senate Floor Analysis and final Assembly Floor Analysis included the following description of the Public Benefits program: AB 1890 (Brulte), Chapter 854, Statutes of 1996, the landmark electric restructuring law, requires IOUs and publicly-owned utilities to impose a surcharge on each electricity customer to fund, among other programs, needs- based public purpose programs for low-income electricity customers, including but not limited to, targeted energy efficiency and rate discounts. The publicly- owned utilities, unlike the IOUs, are not required to spend specified amounts on public purpose programs and have total discretion as to how these monies are spent.3 1 The statute does not establish a specific collection rate from customers, but it does establish a formula. Most POUs have interpreted this formula to result in a local distribution service charge of 2.85%. POUs may present the charge as a separate bill component or fold it into the overall rate. 2 In contrast, the statutes governing similar programs for investor-owned utilities have regularly been restructured, modified, and limited over that time period. The lack of legislative action related to POU public benefits programs suggests that the Legislature views POU programs as consistent with legislative intent. (Bd. of Trustees of California State Univ. v. Pub. Employment Relations Bd., 155 Cal. App. 4th 866, 877–78 (2007)). 3 Senate Floor Analysis of SB 1939, August 30, 2000 (emphasis added). Item 5 Attachment C - Proposed Policy on the Use of Electric and Gas Public Benefits Funds Item 5: Staff Report Pg. 21 Packet Pg. 112 of 349 DRAFT ATTACHMENT C 6056930 2 II. Gas Public Benefits Charge Public Utilities Code Section 890, enacted by AB 1002 in 2000, imposes a surcharge on all natural gas consumed in California to fund: 1) low-income rate assistance programs, 2) low-income energy efficiency programs, 3) cost-effective energy efficiency and conservation activities, and 4) public interest research and development not adequately provided by the competitive and regulated markets. Municipalities that offer home weatherization services, low-income customer rate assistance or programs similar to those set forth above are not required to collect the surcharge. Since Palo Alto’s Gas Utility offers the services and programs described, CPAU does not collect the surcharge as a separate line item on customer bills. Rather, the Gas Utility uses between 0.75% and 1.25% of gas utility revenues to fund Gas Public Benefit Programs in whatever amount is needed to fulfill demand for the above programs. Legislative history described the gas Public Benefit programs as “of a similar character” as the non- bypassable surcharge which funds electric public purpose programs and “specific to the service territory of each gas public utility”.4 III. Use of Gas and Electric Public Benefits Funds In light of the statutory text and legislative history interpreting the Electric and Gas Public Benefits statutes, the Council wishes to set forth a policy on prioritization of the use of Public Benefits funds collected by the City’s Electric and Gas Utilities. All uses of these funds will be reviewed for compliance with applicable State law before implementing new programs. 1)Electric Utility Public Benefits revenues may be used for any of the purposes identified in Public Utilities Code section 385 in the following order of preference: a) Demand Side Management Programs to support Distributed Energy Resource Integration b)Cost effective energy efficiency and conservation measures to ensure compliance with SB 1037 (2005) requiring the development of all cost-effective energy efficiency and SB 350 (2015) which increased energy efficiency targets statewide. i) Energy efficiency and conservation include building electrification measures that reduce energy use on a btu basis compared to a gas equivalent piece of equipment. ii) Cost-effectiveness can be determined by studies using the direct supply cost savings to the community associated with the efficiency or electrification measures. iii) Incentives for the purchase of e-bikes or other small EVs or provision of leasing services are included as an energy efficiency measure for electric transportation. c) Services to low-income customers, including: i) Low-income rate discounts 4 California Bill Analysis of AB 1002, June 27, 2000. Item 5 Attachment C - Proposed Policy on the Use of Electric and Gas Public Benefits Funds Item 5: Staff Report Pg. 22 Packet Pg. 113 of 349 DRAFT ATTACHMENT C 6056930 3 ii) Energy efficiency and building electrification services, provided that electrification measures reduce customer utility bills compared to a gas equivalent piece of equipment. iii) Vehicle electrification, including EV charging. iv) Incentives for the purchase of e-bikes or other small EVs or provision of leasing services as an energy efficiency measure for electric transportation. d) Purchasing or providing incentives for renewable energy (with or without the inclusion of battery storage), either locally or outside Palo Alto e) Research and development funding for small pilots of emerging energy or electrification technologies or program delivery mechanisms. 2)Gas Public Benefits Revenues may be used for any of the purposes identified in Public Utilities Code section 890, in the following order of preference: a)Low-income rate assistance and weatherization b)Cost effective energy efficiency and conservation measures c)Public interest research and development Item 5 Attachment C - Proposed Policy on the Use of Electric and Gas Public Benefits Funds Item 5: Staff Report Pg. 23 Packet Pg. 114 of 349 7 1 6 8 City Council Staff Report From: City Manager Report Type: CONSENT CALENDAR Lead Department: City Auditor Meeting Date: May 12, 2025 Report #:2504-4585 TITLE Approve the Office of the City Auditor Quarterly Report for the Period of October - December 2024 RECOMMENDATION The Policy & Services Committee and the Office of the City Auditor recommend City Council approve the results of the Office of the City Auditor Quarterly Report for the Period of October through December 2024. BACKGROUND The City of Palo Alto’s (City) contract with Baker Tilly Advisory Group, LP (Baker Tilly) outlines six tasks for administering the City Auditor function. As part of Task 5 – Various Reporting & City Hotline, Baker Tilly provides quarterly status reports on audit progress and completion, as well as progress on other tasks to City Council. Task 6 – Evaluation and Benchmarking, tasks the City Auditor with conducting a benchmarking assessment of audit activities and costs against other comparable cities. ANALYSIS The internal audit activities from October – December 2024 are listed below by task as set forth in Baker Tilly’s agreement with the City: •Task 1 – Citywide Risk Assessment The Citywide Risk Assessment was completed in November and presented to the Policy & Services Committee and City Council in December 2024.1 •Task 2 – Preparation of the Annual Audit Plan 1 Policy & Services Committee Meeting 12/10/2024 Staff Report 2411-3841 Item 6 Item 6 Staff Report Item 6: Staff Report Pg. 1 Packet Pg. 115 of 349 7 1 6 8 The FY2025 Audit Plan was approved by City Council in December 2024.2 •Task 3 – Selection of External Financial Auditor and Annual Audit Coordination The City’s external auditor, Macias Gini & O’Connell, LLP (MGO) completed the FY2024 Financial Statement Audit and Annual Comprehensive Financial Report (ACFR)3 also known as the Single Audit and presented the results at the December 3, 2024 Finance Committee meeting. MGO issued a clean opinion on each audit report and reported no findings within the Agreed-Upon Procedures report. •Task 4 – Execute Annual Audit Plan Presented two audit reports to the Policy & Services Committee: ADA Compliance on November 6, 20244 Recruitment & Succession Planning Audit on December 10, 20245 Several Audits from the FY2024 Audit Plan were in reporting in the 2nd quarter of FY2025 including: Grant Management Audit (Task Order 4.24) Emergency Preparedness Audit (Task Order 4.25) Utility Billing Audit (Task Order 4.26) Payment Card Industry Data Security Standards Audit (Task Order 4.27) Dispatch Center Program Assessment (Task Order 4.28) •Task 5 – Periodic Reporting, Hotline Monitoring, and Other Administrative Functions No hotline allegations were received during this period. One hotline allegation was closed with no remediation needed. One hotline allegation is still being investigated. The City Auditor’s Office provided the FY2025, Q1 update on October 8, 2024.6 Baker Tilly participated in various meetings including City Council, Executive Leadership, Agenda Planning, and Committee Meetings. 2 Staff Report 2411-3841 3 Staff Report 2404-2912 4 Staff Report 2409-3476 5 Staff Report 2410-3633 6 Staff Report 2409-3519 Item 6 Item 6 Staff Report Item 6: Staff Report Pg. 2 Packet Pg. 116 of 349 7 1 6 8 •Task 6 – Evaluation and Benchmarking The City Auditor began a Benchmarking Assessment7 of audit activity costs. The results of this work were presented as part of this Quarterly Status presentation. At the March 11, 2025 Committee meeting, Policy & Services Committee members requested additional information about cities closer in size to Palo Alto. The table below consolidates the information provided in the original presentation as well as information on the additional cities of Cupertino, Menlo Park, Mountain View, Sunnyvale and Santa Clara. Comparative Audit Activity Information for FY2024 FISCAL/RESOURCE IMPACT The Quarterly Status Report does not have a resource impact and is included as part of the annual Office of the City Auditor budget. ENVIRONMENTAL REVIEW Council action on this item is not a project as defined by CEQA because the audit activities do not involve any commitment to any specific project which may result in a potentially significant 7 Based on information publicly available on city websites. Item 6 Item 6 Staff Report Item 6: Staff Report Pg. 3 Packet Pg. 117 of 349 7 1 6 8 physical impact on the environment. CEQA Guidelines section 15378(b)(4). Council action on this item is not a project as defined by CEQA because the audit activities do not involve any commitment to any specific project which may result in a potentially significant physical impact on the environment. CEQA Guidelines section 15378(b)(4). ATTACHMENTS APPROVED BY: Item 6 Item 6 Staff Report Item 6: Staff Report Pg. 4 Packet Pg. 118 of 349 Baker Tilly US, LLP, trading as Baker Tilly, is a member of the global network of Baker Tilly International Ltd., the members of which are separate and independent legal entities. © 2022 Baker Tilly US, LLP. City of Palo Alto Office of the City Auditor (OCA) Policy & Services Committee Meeting FY2025, Q2 - Quarterly Status Report March 11, 2025 Item 6 Attachment A - Office of the City Auditor Quarterly Report for FY25, Q2 Item 6: Staff Report Pg. 5 Packet Pg. 119 of 349 Baker Tilly US, LLP, trading as Baker Tilly, is a member of the global network of Baker Tilly International Ltd., the members of which are separate and independent legal entities. © 2022 Baker Tilly US, LLP. Agenda •Audit Activities •Task 4 – Execute Annual Audit Plan – Project Status •Task 5 – Various Reporting & City Hotline •Task 6 – Evaluation & Benchmarking Item 6 Attachment A - Office of the City Auditor Quarterly Report for FY25, Q2 Item 6: Staff Report Pg. 6 Packet Pg. 120 of 349 3 Quarterly Report for October – December 2024 AUDIT ACTIVITIES Task Key Activities 1 Citywide risk assessment FY2024 risk assessment was presented to the Policy & Services Committee on 12/10/24. 2 Annual audit plan FY2025 audit plan was adopted by City Council on 12/16/24. 3 Financial statement audit FY2024 Audited Financial Statements scheduled for presented to the Finance Committee on 12/3/24. 4 Execute annual audit plan Policy & Services Committee approved: •ADA Compliance Audit (11/6/24) •Recruitment & Succession Planning (12/10/24) 5 Periodic reporting, hotline monitoring, admin. function •One hotline allegation investigation was closed with no remediation needed and one investigation is still in process from the first quarter of FY2025. •No hotline allegations received in Q2 of FY2025. •Quarterly Status Report for Q1 presented to Policy & Services on 10/8/24. 6 Evaluation and benchmarking Benchmarking study began Item 6 Attachment A - Office of the City Auditor Quarterly Report for FY25, Q2 Item 6: Staff Report Pg. 7 Packet Pg. 121 of 349 4 Quarterly Report for October – December 2024 TA S K 4 – E X E C U T E A N N U A L A U D I T P L A N Status of FY2024 Audit Plan Projects* Department Project Title Task Order Status Public Works ADA Compliance Audit 4.22 Completed Human Resources Recruitment & Succession Planning Audit 4.23 Completed Citywide Grant Management Audit 4.24 Completed (02/25) Utility Utility Billing Audit 4.26 Completed (02/25) Citywide Emergency Preparedness (Wildfire) Audit 4.25 Reporting Police/Citywide Dispatch Center Program Assessment 4.28 Reporting Citywide Payment Card Industry Data Security Standards Audit 4.27 Reporting * Completed projects are removed from the list the following Quarter’s Status Report Item 6 Attachment A - Office of the City Auditor Quarterly Report for FY25, Q2 Item 6: Staff Report Pg. 8 Packet Pg. 122 of 349 5 Current Projects TA S K 4 – E X E C U T E A N N U A L A U D I T P L A N Status of FY2025 Audit Plan Projects Started in January 2025* Department Project Title Task Order Status Administrative Services Purchasing Card 4.29 Planning Planning & Development Building Permit & Inspection Fees 4.30 Planning Community Services Junior Museum & Zoo Operations 4.31 Planning Community Services Equipment & Materials Inventory Management 4.32 Planning Police/Citywide Public Safety Staffing and Overtime 4.33 Planning Citywide Follow-up on Prior Audit Recommendations 4.34 Planning * Completed projects are removed from the list the following Quarter’s Status Report Item 6 Attachment A - Office of the City Auditor Quarterly Report for FY25, Q2 Item 6: Staff Report Pg. 9 Packet Pg. 123 of 349 6 Quarterly Report for July – September 2024 TA S K 5 – VA R I O U S R E P O R T I N G & C I T Y H O T L I N E Fraud, waste & abuse Hotline Reports & Updates Quarter Received In Process Closed FY25, Q2 0 1 1 Item 6 Attachment A - Office of the City Auditor Quarterly Report for FY25, Q2 Item 6: Staff Report Pg. 10 Packet Pg. 124 of 349 7 Benchmarking Analysis TA S K 6 – E VA L U AT I O N & B E N C H M A R K I N G •Comparative Analysis of several Bay Area Cities •Highlights from the Association of Local Government Auditors 2024 Benchmarking Survey Item 6 Attachment A - Office of the City Auditor Quarterly Report for FY25, Q2 Item 6: Staff Report Pg. 11 Packet Pg. 125 of 349 8 Benchmarking Analysis TA S K 6 – E VA L U AT I O N & B E N C H M A R K I N G •Roughly 50 local government agencies that are part of the Association of Local Government Auditors (ALGA) •Berkeley Glendale •Long Beach Oakland •San Jose •Benchmarking Criteria •Population •Audit Budget •No. of FTEs •Number of Reports Issued •Cost per Audit Item 6 Attachment A - Office of the City Auditor Quarterly Report for FY25, Q2 Item 6: Staff Report Pg. 12 Packet Pg. 126 of 349 9 Benchmarking Analysis TA S K 6 – E VA L U AT I O N & B E N C H M A R K I N G City Population Audit Function Outsourced?Audit Budget No. of FTE’s No. of Audits Issued Average Cost per Audit (Audit budget/ No. of Audits) Berkeley 118,932 No $3,124,862 14.75 1 $3,124,862 Glendale 203,000 No $796,575 2 9*$88,508 Long Beach 449,468 No $3,507,601 18 10 $350,760 Oakland 436,504 No $3,528,626 12 5 $705,725 San Jose 969,655 No $3,641,097 14 17**$214,182 Palo Alto 65,882 Yes $366,755 14+3 $122,252 Comparative information for FY 2024 * Three of Glendale’s audits appear to be PCI Compliance Audits **Based on San Jose’s budget document of expected audit outputs, however, their website shows 9 audits issued in FY2023-24 Palo Alto 65,882 Yes $695,124 14+7 $99,303 Comparative information for FY 2025 Item 6 Attachment A - Office of the City Auditor Quarterly Report for FY25, Q2 Item 6: Staff Report Pg. 13 Packet Pg. 127 of 349 10 Benchmarking Analysis TA S K 6 – E VA L U AT I O N & B E N C H M A R K I N G Some metrics from ALGA’s 2024 Benchmarking Survey •Small shop is defined as 3 to 5 auditors •Approximately 14 Baker Tilly staff worked on Palo Alto audits in FY24/FY25 •On average, 57% of staff hours are allocated directly to audits for small shops •Over 70% of Baker Tilly contract hours in 2024 were allocated directly to audits •95%of management agreed with audit recommendations •100% of management agreed with audit recommendations in 2024 •Estimated financial impacts related to audit findings and recommendations •We will look at the feasibility of tracking this in the future Item 6 Attachment A - Office of the City Auditor Quarterly Report for FY25, Q2 Item 6: Staff Report Pg. 14 Packet Pg. 128 of 349 11 Benchmarking Analysis TA S K 6 – E VA L U AT I O N & B E N C H M A R K I N G From ALGA’s 2024 Benchmarking Survey: Audit plans compared to ranked audit risk categories Item 6 Attachment A - Office of the City Auditor Quarterly Report for FY25, Q2 Item 6: Staff Report Pg. 15 Packet Pg. 129 of 349 12 Quarterly Report for October – December 2024 RECOMMENDATION The Office of the City Auditor recommends that the Policy and Services Committee recommend the City Council accept the Office of the City Auditor’s Quarterly Status Report covering Q2, FY2025. Item 6 Attachment A - Office of the City Auditor Quarterly Report for FY25, Q2 Item 6: Staff Report Pg. 16 Packet Pg. 130 of 349 City Council Staff Report From: City Manager Report Type: CONSENT CALENDAR Lead Department: Planning and Development Services Meeting Date: May 12, 2025 Report #:2502-4133 TITLE Stanford University Medical Center (SUMC) Annual Report to Council for Fiscal Year 2024 (FY 24) RECOMMENDATION Staff recommends that the City Council: 1. Review the Stanford University Medical Center (SUMC) Annual Report for FY 24, and find that Stanford Hospitals & Clinics, Lucile Packard Children’s Hospital, and Stanford University (SUMC Parties) have complied in good faith with the terms and conditions of the SUMC Development Agreement; 2. Find that the SUMC Parties are not in default with the terms and conditions of the Agreement in all sections; and 3. Accept the City of Palo Alto’s (City) Annual Report Supplements regarding the funds received from the SUMC Parties, as required under Section 12(d) of the Development Agreement (Attachment E). EXECUTIVE SUMMARY The City Council is required to review the SUMC Development Agreement, an agreement between Stanford Hospital and Clinics, Lucile Packard Children’s Hospital, Stanford University (SUMC Parties), and the City of Palo Alto, (the “Agreement”), to confirm compliance with the Agreement’s terms. SUMC prepared their SUMC Annual Report for Fiscal Year (FY) 2023-2024 that discusses how they met their compliance obligations during the reporting time period (Attachment A). The City also uses this Annual Report to Council to provide information on the City’s compliance obligations, such as providing the required summary and description of how the City expended funds provided by SUMC per the Agreement. As documented in this Annual Report to Council, both SUMC and the City are in compliance with the terms of the Agreement and Agreement Amendment Number 1 for the reporting period FY 24. Item 7 Item 7 Staff Report Item 7: Staff Report Pg. 1 Packet Pg. 131 of 349 BACKGROUND 1 Previous annual reports and compliance documentation can be found via the weblinks in Attachment B. ANALYSIS •Health Care Benefits; •Fiscal Benefits; •Traffic Mitigation and Reduced Vehicle Trips; •Linkages (Pedestrian, Bicycle, and Transit); •Infrastructure, Sustainable Neighborhoods & Communities, Affordable Housing; and •Climate Change. 1 The SUMC Annual Report to Council Fiscal Year 2022-2023 went before City Council at their March 11, 2024 meeting, see Consent Calendar Item 6 at the following meeting weblink: https://cityofpaloalto.primegov.com/Portal/Meeting?meetingTemplateId=1115. Item 7 Item 7 Staff Report Item 7: Staff Report Pg. 2 Packet Pg. 132 of 349 Construction Activities and Net New Square Footage SUMC discusses their construction activities for FY 24 in their SUMC Annual Report (Attachment A). City staff reviewed the information regarding SUMC net new square footage in the report and determined this information is complete and correct. No new construction received a certificate of occupancy in FY 2023-24 and therefore there was no change in net square footage. Traffic Mitigation and Reduced Vehicle Trips SUMC implemented all required transportation demand management (TDM) obligations in FY 2023-24, such as purchasing of Caltrain Go Passes, funding for the AC Transit U-Line, and other activities. Summaries of these activities can be found in Attachments A and C. Alternative Mode Share Milestone Targets SUMC previously achieved their 2021 alternative mode share milestone target of 33% for employee trips early, and every year between 2013 and 2019. The SUMC Parties maintained all TDM requirements in FY 2020 until Santa Clara County issued COVID-19 pandemic shelter-in- place orders in March 2020. On March 27, 2020, the City conditionally approved a one-year delay in the submittal of two reports; the FY 2020 Alternative Mode Share Report and Mitigation Measure TR 2.3 Enhanced Stanford University TDM Program report. Conditional approval of this delay was consistent with the procedures in Section 6(p) of the Agreement. In Fiscal Years 2020-2021, 2021-2022, and 2022-2023, despite continuing to implement all TDM programs, as well as enhancing communications and promotions, the SUMC parties found that the alternative mode share milestone target of 33% was again not met. Under Agreement Section 5(c)(ix) Monitoring of TDM Programs, missing the alternative mode share milestone target for three consecutive years would have required SUMC to provide two $175,000 payments to the City for alternative transportation funding. After submitting the FY 2021-2022 Alternative Mode Share report, SUMC sent the City a Notice of Intent to claim a permitted delay as outlined in the Development Agreement Section 18(c) Force Majeure. SUMC subsequently filed a Development Agreement Amendment application that proposed adjusted dates for achieving alternative mode share milestone target dates to account for the effect of the COVID-19 pandemic on SUMC employee use of alternative transportation modes. The City Council approved Ord. 5602: First Amendment to the SUMC Development Agreement Amendment.2 The amendment adjusted the alternative mode share milestone target dates, while still reaching 35.0% by 2026. The amendment also reset the interim target years, which trigger penalties in the event the targets are not met for two consecutive years. The amendment includes an alternative mode share rate target of 33.0% by 2024, and 35.0% by 2026. Unfortunately, SUMC did not meet their 2024 target of 33.0%. Per the 2024 Alternative 2 Link to Ord. 5602: First Amendment to the SUMC Development Agreement Amendment: https://recordsportal.paloalto.gov/Weblink/DocView.aspx?id=48276 Item 7 Item 7 Staff Report Item 7: Staff Report Pg. 3 Packet Pg. 133 of 349 Mode Share Report (Attachment B), the 2024 alternative mode share was 30.5%. No penalty applies unless they also do not meet the 2024 target in 2025. Construction Sales and Use Tax Monitoring Report Use of Development Agreement Funds (Supplement to the Annual Report) •$366,000 transfer from the Community Health and Safety Fund to the General Fund (Police Department) for a Psychiatric Emergency Response Team (PERT); •$3.3 million transfer from the Infrastructure, Sustainable Neighborhoods and Communities, and Affordable Housing Fund to Capital Improvement Project Fire Station 4 Replacement (PE-18004); and •$2.0 million transfer from the Infrastructure, Sustainable Neighborhoods and Communities, and Affordable Housing Fund to Capital Improvement Project Roth Building Rehabilitation (PF-23001). •Fiscal Year 2024 Adopted Operating Budget document, Special Revenue Funds section; and Item 7 Item 7 Staff Report Item 7: Staff Report Pg. 4 Packet Pg. 134 of 349 •Fiscal Year 2024 Adopted Capital Improvement Budget document.3 The SUMC agreement Section 5(a)(iii) requires that a joint committee make annual recommendations to the City Council regarding proposed disbursements from the Community Health and Safety Program Fund, and the City Council may use reasonable discretion to accept, reject, or modify these recommendations. The joint committee includes SUMC representatives and City staff from the Office of Transportation, Administrative Services, and Public Works departments. Projects using Community Health and Safety funds have gained mutual support from members of the joint committee and approval from the City Council. During the fiscal year, the following changes were made between the Operating Budget and the final audited balances: •$366,000 was not transferred for a PERT team, as Police was unable to hire for this position(s); •The total transfer from the Infrastructure, Sustainable Neighborhoods and Communities, and Affordable Housing Fund to Capital Improvement Project was slightly lower than budgeted, at $4,575,000; and •$750,000 was transferred from the Expansion Cost Mitigation fund for the Fire Station #4 Replacement (PE-18004). FISCAL/RESOURCE IMPACT There are no fiscal or resource impacts resulting from City Council review of the SUMC Agreement to confirm compliance with its terms. Planning for use of SUMC funds occurs separately during the City’s Annual budgeting process. STAKEHOLDER ENGAGEMENT Community members and policy makers were extensively involved in the crafting of the Agreement and all other associated project enabling entitlements; however, no subsequent outreach has been required for the annual reports. Furthermore, subsequent related project entitlements continue to be processed through the City’s standard review processes, as discussed in the Development Agreement and other entitlements. ENVIRONMENTAL REVIEW Reviewing and making findings regarding SUMC and City compliance with the Agreement is not a project under the California Environmental Quality Act and no environmental assessment is required for the annual compliance review. An environmental impact report for the entire 3 Fiscal Year 2024 Adopted Operating Budget document, Special Revenue Funds section: https://www.cityofpaloalto.org/files/assets/public/v/1/administrative-services/city-budgets/fy-2024-city- budget/adopted/fy-24-palo-alto-adopted-operating-budget-book.pdf; Item 7 Item 7 Staff Report Item 7: Staff Report Pg. 5 Packet Pg. 135 of 349 SUMC project was prepared and certified by the City Council prior to approval of the Agreement. ATTACHMENTS APPROVED BY: Item 7 Item 7 Staff Report Item 7: Staff Report Pg. 6 Packet Pg. 136 of 349 Image Courtesy of Nearmap US Inc, 2024 PREPARED FOR THE CITY OF PALO ALTO | JULY 3, 2024 2023-24 ANNUAL REPORT Item 7 Attachment A - SUMC Annual Report FY 24 Item 7: Staff Report Pg. 7 Packet Pg. 137 of 349 CONTENTS EXECUTIVE SUMMARY 1 BACKGROUND AND PURPOSE 2 2023-2024 SUMMARY OF PROGRESS 3 LUCILE PACKARD CHILDREN’S HOSPITAL 3 STANFORD HEALTH CARE 4 SCHOOL OF MEDICINE 5 BLAKE WILBUR DRIVE ROADWAY EXTENSION 6 NET NEW SQUARE FOOTAGE 7 COMPLIANCE WITH DEVELOPMENT AGREEMENT OBLIGATIONS 8 HEALTH CARE BENEFITS 8 SECTION 5(a)(ii). FUND FOR HEALTHCARE SERVICES 8 SECTION 5(a)(iii). FUND FOR COMMUNITY HEALTH AND SAFETY PROGRAMS 8 PALO ALTO FISCAL BENEFITS 8 SECTIONS 5(b)(i) AND 5(b)(ii). PAYMENT OF SALES AND USE TAXES 9 SECTION 5(b)(iii). FUNDING OF OPERATING DEFICIT 9 SECTION 5(b)(iv). PAYMENT OF UTILITY USER TAX 9 SECTION 5(b)(v). SCHOOL FEES 10 TRAFFIC MITIGATION AND REDUCED VEHICLE TRIPS 10 SECTION 5(c)(ii). MENLO PARK TRAFFIC MITIGATION 10 SECTION 5(c)(iii). EAST PALO ALTO VOLUNTARY MITIGATION 10 SECTION 5(c)(iv). CONTRIBUTIONS TO AC TRANSIT 10 SECTION 5(c)(v). OPTICOM PAYMENTS 11 SECTION 5(c)(vi). CALTRAIN GO PASSES 11 SECTION 5(c)(vii). MARGUERITE SHUTTLE SERVICE 11 SECTION 5(c)(viii). TRANSPORTATION DEMAND MANAGEMENT COORDINATOR 12 SECTION 5(c)(ix). MONITORING OF TDM PROGRAMS 12 LINKAGES 14 SECTION 5(d)(i). INTERMODAL TRANSIT FUND 14 SECTION 5(d)(ii). QUARRY ROAD FUND 14 SECTION 5(d)(iii). STANFORD BARN CONNECTION 14 INFRASTRUCTURE, SUSTAINABLE NEIGHBORHOODS AND COMMUNITIES, AND AFFORDABLE HOUSING 15 SECTION 5(e). 15 CLIMATE CHANGE 15 SECTION 5(f). CLIMATE CHANGE FUND 15 SATISFACTION OF CONDITIONS OF APPROVAL 15 SECTION 5(h). SATISFACTION OF ALL CONDITIONS OF APPROVAL 15 CONCLUSION 16 Item 7 Attachment A - SUMC Annual Report FY 24 Item 7: Staff Report Pg. 8 Packet Pg. 138 of 349 ANNUAL REPORT 2023-24 1 EXECUTIVE SUMMARY On June 6, 2011, the Stanford University Medical Center parties (now Stanford Medicine)—comprised of Stanford Hospital and Clinics (now Stanford Health Care), Lucile Packard Children’s Hospital, and Stanford University—entered into a Development Agreement with the City of Palo Alto, committing to provide a range of community benefits in exchange for vested development rights to develop and use the Stanford Medicine Renewal and Replacement Project (“Renewal Project”) facilities in accordance with the approvals granted by the City, and a streamlined process for obtaining subsequent project approvals. The Renewal Project—driven by a growing demand for healthcare services, state-mandated seismic safety requirements, and the need to replace outmoded facilities with modern, technologically advanced spaces—is transforming the way that healthcare is delivered and research is conducted. Today, thirteen years after the execution of the Development Agreement, the Lucile Packard Children’s Hospital Expansion and the new Stanford Hospital are now open for patient care, and the School of Medicine has completed the first phase of development of its replacement facilities, with its BioMedical Innovations building open for research. Interior renovations within the 1989 portion of the preexisting Stanford Hospital facility are well underway, and are expected to continue for the next several years, bringing the facility up to modern healthcare standards. Against this backdrop, Stanford Medicine submits its Annual Report in compliance with Section 12(c) of the Development Agreement, and looks forward to continued collaboration with the City of Palo Alto in advancing the goals of both Stanford Medicine and the broader community. Item 7 Attachment A - SUMC Annual Report FY 24 Item 7: Staff Report Pg. 9 Packet Pg. 139 of 349 2 ANNUAL REPORT 2023-24 BACKGROUND AND PURPOSE The Palo Alto City Council’s unanimous approval of the entitlements for the Stanford Medicine Renewal and Replacement Project in July 2011 has paved the way for a historic investment in new and replacement facilities for Stanford Medicine. The project approvals—including new zoning for the Renewal Project sites, a conditional use permit, architectural review approval, and the execution of a Development Agreement—allow for the construction of approximately 1.3 million net new square feet of hospital facilities, clinics, medical offices, and medical research spaces, and are enabling the Hospitals to optimize the delivery of healthcare services to patients, and maintain their position as leading providers of world-class healthcare. In order to facilitate this important replacement and expansion work, the Stanford Medicine parties entered into a Development Agreement with the City of Palo Alto, which includes a comprehensive package of community benefits and additional development conditions. In exchange for these benefits, the City has vested for a period of 30 years Stanford Medicine’s rights to develop and use the property in accordance with the project approvals, and agreed to streamline the process for obtaining subsequent approvals. The terms of the Development Agreement (Section 12(c)) provide for a periodic review of compliance, and require that Stanford Medicine submit an Annual Report to the City of Palo Alto’s Director of Planning and Community Environment each year within 30 days of the anniversary of the agreement effective date (June 6, 2011). The Annual Report is to summarize Stanford Medicine’s progress on the Renewal Project, including a list of net new square footage for which a certificate of occupancy has been received, and a description of the steps that Stanford Medicine has taken to comply with the obligations listed in Section 5 of the Development Agreement. With this report, Stanford Medicine fulfills these requirements. Within 45 days of receipt of this Annual Report, the City will prepare a Supplement to the Annual Report, to provide an accounting of the City’s balances and expenditures from each of the City Funds and how they were used. Item 7 Attachment A - SUMC Annual Report FY 24 Item 7: Staff Report Pg. 10 Packet Pg. 140 of 349 ANNUAL REPORT 2023-24 3 2023-2024 SUMMARY OF PROGRESS The Renewal Project has reached key milestones in the past several years, with the opening of the Lucile Packard Children’s Hospital expansion in 2017 and the opening of the New Stanford Hospital in 2019, and most recently the opening of the School of Medicine’s BioMedical Innovations building in 20201. While the COVID-19 pandemic changed the pace of progress on the Renewal Project, as Stanford Medicine focused resources on pandemic response, including launching clinical trials for therapeutic treatments for COVID-19 and establishing community testing and vaccination sites, it also highlighted the importance of modern, state-of-the-art facilities to support Stanford Medicine’s research and patient care. The section to follow provides an overview of central goals for the project elements that presently are under construction or nearing construction, a synopsis of progress to date, as well as a preview of near- term upcoming activities. LUCILE PACKARD CHILDREN’S HOSPITAL In response to growing community needs for specialized pediatric and obstetric care, Lucile Packard Children’s Hospital opened an expanded facility in late 2017. The new Main building, located adjacent to the preexisting Lucile Packard Children’s Hospital (West building), provides patients and doctors with the most modern clinical advancements and technology, while also creating a more patient- and family- centered environment of care, with additional single-patient rooms and more spaces for families to be with their child during treatment and recovery. The LPCH Main building features a new entrance lobby, public concourse with dining, three floors of nursing units, and new patient rooms. Spaces have been designed with an attention to natural light and views, and the exterior grounds—more than 3.5 acres of outdoor areas and gardens—provide a park-like setting for patients, families, and visitors. 1 Temporary certificate of occupancy was issued in 2020; final certificate of occupancy was issued in 2021. Item 7 Attachment A - SUMC Annual Report FY 24 Item 7: Staff Report Pg. 11 Packet Pg. 141 of 349 4 ANNUAL REPORT 2023-24 LPCH is currently embarking on improvements to its preexisting West building which will modernize its infrastructure and provide a more comfortable patient experience. These improvements include a redesigned main lobby entry and drop-off for the West Building; plans were formally submitted to the City for Architectural Review in Summer 2022 and were approved in Fall 2023. STANFORD HEALTH CARE Stanford Health Care is constructing new and replacement hospital facilities to usher in a new era of advanced patient care. Growth in patient volumes and rapidly changing medical technology have rendered much of the existing midcentury hospital infrastructure inadequate, while new seismic safety requirements have accelerated the need to construct replacement facilities. In November 2019, Stanford Health Care’s first phase of facilities renewal completed as the New Stanford Hospital received its license from the State Department of Public Health and opened to patient care. With the new Stanford Hospital now complete, Stanford Health Care has begun a series of renovations within its preexisting facilities, including the conversion of shared patient rooms into private rooms within the 1989 portion of the Hospital; this renovation work is proceeding in phases over the next several years. In addition, to enable the conversion of shared patient rooms to private rooms, Stanford Health Care is also planning an addition to the preexisting Hospital of approximately 37,000 square feet. This proposed addition received Architectural Review approval in March 2022, and a City grading / excavation permit was issued in June 2022. Grading activity is ongoing. 2023-2024 SUMMARY OF PROGRESS Item 7 Attachment A - SUMC Annual Report FY 24 Item 7: Staff Report Pg. 12 Packet Pg. 142 of 349 ANNUAL REPORT 2023-24 5 SCHOOL OF MEDICINE The Stanford University School of Medicine is replacing its outmoded research buildings with new state-of-the-art facilities designed to support contemporary translational research. The new facilities will accommodate 21st century medical advancements and enable the development of new medical innovations, featuring integrated laboratory suites, with easier access between labs and support facilities, enabling transparency, flexibility, and collaboration. The first phase of School of Medicine development (BioMedical Innovations Building 1, or “BMI-1”) is now complete, having received a certificate of occupancy in Spring 2021, and features four above-grade floors of research labs and light-filled gathering places, and a lower basement level for utility support, as well as a connective tunnel to other nearby research facilities. Building interiors were designed for best practices for laboratory design safety and space allocation, with a flexible template to maximize efficient use of space and ease of renovation. The four above-grade floors provide space for a mix of disciplines, basic and clinical research, wet and dry labs, and leading-edge translational studies. 2023-2024 SUMMARY OF PROGRESS Item 7 Attachment A - SUMC Annual Report FY 24 Item 7: Staff Report Pg. 13 Packet Pg. 143 of 349 6 ANNUAL REPORT 2023-24 BLAKE WILBUR DRIVE ROADWAY EXTENSION As required by the 2011 Project Approvals, a new link roadway has now been established between Sand Hill Road and Welch Road. This roadway, which was completed in Fall 2023, connects Durand Way to Blake Wilbur Drive, and provides an important automobile, bicycle, and pedestrian connection in the vicinity of the Medical Center. Specifically, it serves as an uncongested route for emergency vehicles accessing the medical campus via Sand Hill Road, and provides improved access to both the Main Medical Campus and the outer Welch medical office buildings. The new roadway includes two travel lanes in each direction, Class II bicycle lanes, sidewalks with planter strips including new tree plantings and bioretention areas, new signal poles, and underground utilities. 2023-2024 SUMMARY OF PROGRESS Item 7 Attachment A - SUMC Annual Report FY 24 Item 7: Staff Report Pg. 14 Packet Pg. 144 of 349 ANNUAL REPORT 2023-24 7 2023-2024 SUMMARY OF PROGRESS NET NEW SQUARE FOOTAGE The following table summarizes the net new square footage for which a certificate of occupancy has been issued. PROJECT COMPONENT GROSS SQUARE FOOTAGE STANFORD HEALTH CARE 1101 Welch demolished (40,100) 500 Pasteur 719,266 Total 679,166 LUCILE PACKARD CHILDREN’S HOSPITAL EXPANSION 701 Welch demolished (56,300) 703 Welch demolished (23,500) Lucile Packard Children’s Hospital Expansion 446,088 Total 366,288 SCHOOL OF MEDICINE BioMedical Innovations building 196,921 Partial decant of Boswell, Grant, Alway, Lane, Edwards (22,614) Total 174,307 HOOVER PAVILION Miscellaneous shops and storage demolished (13,831) Stanford Neuroscience Health Center (Hoover MOB)91,605 Total 77,774 Item 7 Attachment A - SUMC Annual Report FY 24 Item 7: Staff Report Pg. 15 Packet Pg. 145 of 349 8 ANNUAL REPORT 2023-24 COMPLIANCE WITH DEVELOPMENT AGREEMENT OBLIGATIONS This section of the Annual Report summarizes the steps that Stanford Medicine has taken to comply with its obligations under Section 5 of the Development Agreement. HEALTH CARE BENEFITS In addition to the health care funds listed below, Stanford Medicine provides certain intrinsic benefits to the community, as both a global leader in medical care and research, and as a community healthcare services provider. The Renewal Project enables Stanford Medicine to continue its important work, and the addition of more beds for adults and children will help to alleviate overcrowding. Additionally, the new hospital facilities provide critical emergency preparedness and response resources for the community in the event of an earthquake, pandemic, or other major disaster. Section 5(a)(ii). Fund for Healthcare Services The Hospitals have designated the amount of $3 million for Healthcare Services, which will increase to $5.6 million by December 31, 2025. No further action is required until 2026. This amount will be reconciled with the construction use tax payments as described in Development Agreement Section 5(b) (ii)(C), and will be spent between 2026 and 2036. Section 5(a)(iii). Fund for Community Health and Safety Programs Stanford Medicine has contributed a single lump-sum payment of $4 million to establish a Community Health and Safety Program Fund for the City of Palo Alto. This fund is to be distributed to selected community health programs that benefit residents of the City, including the Project Safety Net Program, a community-based mental health plan for youth well-being in Palo Alto. A joint committee is to be established to evaluate proposals regarding the other specific programs to receive funding, composed of two representatives selected by Stanford Medicine and two representatives selected by the City; this committee shall make annual recommendations to the City Council regarding proposed disbursements from the Community Health and Safety Program Fund, and the City Council shall use its reasonable discretion to decide whether to accept, reject, or modify the joint committee recommendations. Stanford Medicine provided the entire required contribution to the Community Health and Safety Program Fund on August 25, 2011. No further action is required by Stanford Medicine to comply with this Development Agreement provision, though in the past two years Stanford Medicine has engaged with City staff to establish the joint committee to evaluate proposals for programs to receive funding. Based on this engagement, the City intends to use the remaining funds to support the Psychiatric Emergency Response Team (PERT), which will be operated in partnership with the Santa Clara County Behavioral Health Services Department. As required by Development Agreement Section 12(d), the City will provide yearly Supplements to the Annual Report to provide an accounting of the City’s expenditures from this fund, and the purposes for which the expenditures were used. PALO ALTO FISCAL BENEFITS The Stanford Medicine Renewal Project brings considerable fiscal benefits to the City of Palo Alto. The project was expected to generate $8.1 million in sales and use tax revenues for the City, and multiple mechanisms have been put into place to ensure that this target is met. The Development Agreement also provides for further fiscal benefits to the City, including a payment by Stanford Medicine to fund the City’s operating deficit, and the payment of utility user taxes and school fees. Item 7 Attachment A - SUMC Annual Report FY 24 Item 7: Staff Report Pg. 16 Packet Pg. 146 of 349 ANNUAL REPORT 2023-24 9 Sections 5(b)(i) and 5(b)(ii). Payment of Sales and Use Taxes As required by the Development Agreement, Stanford Medicine submitted its annual Construction Sales and Use Tax monitoring report to the City on June 28, 2024. The Stanford Medicine parties will continue to submit such a report annually during the construction period for the Renewal Project so that the City can determine the share of construction use taxes that it has received as a result of the Renewal Project. Each year, within 60 days of receiving the monitoring report, the City will provide its determination of the amount of construction use taxes that it has received as a result of the Renewal Project during the preceding calendar year. In August 2026 or soon thereafter, Stanford Medicine and the City will conduct a reconciliation process to confirm that the City has received at least $8.1 million in construction use taxes as a result of the Renewal Project, as further described in Development Agreement Section 5(b)(ii). To date, Stanford Medicine has taken the following steps detailed below to maximize the City’s allocation of sales and use taxes associated with Project construction and operation. Documentation of each of these items is included in the 2023 construction use tax monitoring report already submitted. • Stanford Medicine has obtained all permits and licenses necessary to maximize the City’s allocation of construction use taxes derived from the project, including California Seller ’s Permits and Use Tax Direct Pay Permits. • Stanford Medicine has designated and required all contractors and subcontractors to designate the project site as the place of sale of all fixtures furnished or installed as part of the project. • Stanford Medicine has designated and required all contractors and subcontractors to designate the project site as the place of use of all materials used in the construction of the project. • Stanford Medicine has required all contractors and subcontractors to allocate the local sales and use taxes derived from their contracts directly to the City. Stanford Medicine has used best efforts to require contractors and subcontractors to complete and file any forms required by the State Board of Equalization to effect these designations. • Both Hospitals have obtained use tax direct pay permits from the State of California for their existing facilities in order to increase the City tax allocation for the Hospitals’ purchases. The Hospitals will maintain the use tax direct pay permit for the life of the project. • Finally, Stanford Medicine has assisted the City in establishing and administering a Retail Sales and Use Tax Reporting District for the Renewal Project, to enable the City to track the generation, allocation, reporting and payment of sales and use taxes derived from the Project. Section 5(b)(iii). Funding of Operating Deficit In order to assure that City costs associated with the Renewal Project do not exceed revenues to the City resulting from construction and operation of the project, Stanford Medicine has provided to the City a single lump sum payment in the amount of $2,417,000. This payment was made on August 25, 2011. No further action is required by Stanford Medicine to comply with this Development Agreement provision. Section 5(b)(iv). Payment of Utility User Tax Stanford Medicine will pay the City a utility user tax at a minimum rate of 5 percent of all electricity, gas, and water charges allocable to new construction completed as part of the project for the life of the project. This rate may be increased by the City as provided by Section 2.35.100(b) of the Municipal Code. The 5 percent utility user tax is currently being paid by Stanford Medicine. COMPLIANCE WITH DEVELOPMENT AGREEMENT OBLIGATIONS Item 7 Attachment A - SUMC Annual Report FY 24 Item 7: Staff Report Pg. 17 Packet Pg. 147 of 349 10 ANNUAL REPORT 2023-24 Section 5(b)(v). School Fees Stanford Medicine will pay to the City—which is then to forward to the Palo Alto Unified School District— school fees upon issuance of each building permit from the City or OSHPD, in the amount that is generally applicable to non-residential development at the time of payment based upon net new square footage, as defined in the Development Agreement. School fees were paid in 2012 for LPCH and SHC in the amounts of $188,815 and $153,802, respectively. In July 2013, additional school fees were paid in the amount of $7,051 to account for additional program square footage for the New Stanford Hospital and Garage. In May 2014, an additional payment of school fees in the amount of $16,119 was made to account for the incremental square footage associated with the Hoover Medical Office Building, beyond the 60,000 square feet originally planned. In November 2015, additional school fees in the amount of $461.16 were paid to account for incremental square footage for the New Stanford Hospital Garage. In May 2022, school fees in the amount of $22,641 were paid to Palo Alto Unified School District to account for Stanford Health Care’s planned addition to the 1989 portion of the preexisting hospital. TRAFFIC MITIGATION AND REDUCED VEHICLE TRIPS Stanford Medicine has taken a number of steps to mitigate the potential traffic impacts projected at full project buildout. Stanford Medicine provides a robust transportation demand management program, offering a variety of incentives for employees to forego driving alone to work. As required by the Development Agreement, Stanford Medicine has taken the additional actions outlined below. Section 5(c)(ii). Menlo Park Traffic Mitigation Stanford Medicine agreed to contribute to the City of Menlo Park a total of $3,699,000 for use in connection with traffic mitigation, infrastructure enhancements, and the promotion of sustainable neighborhoods and communities and affordable housing. This contribution has been made in three equal payments; the first payment of $1,233,000 was made on August 19, 2011. The second payment of $1,233,000 was made on December 5, 2012, following the November 2012 issuance of the first Hospital foundation permit. The final payment in the amount of $1,233,000 was made on December 14, 2017, within 30 days from issuance of the first Hospital occupancy permit. No further action is required by Stanford Medicine to comply with this Development Agreement provision. Section 5(c)(iii). East Palo Alto Voluntary Mitigation Stanford Medicine has contributed a single lump sum payment of $200,000 to East Palo Alto to be used for roadway and traffic signal improvements on University Avenue. This payment was made on August 19, 2011. No further action is required by Stanford Medicine to comply with this Development Agreement provision. In the event that Stanford Medicine does not meet the alternative transportation mode goals specified in the Development Agreement by 2026 and is assessed an approximately $4 million payment under Development Agreement section 5(c)(ix)(B), the City will be required to remit $150,000 of such payment to the City of East Palo Alto. Section 5(c)(iv). Contributions to AC Transit The Hospitals committed to the following actions within 30 days from issuance of the first Hospital occupancy permit, and have fulfilled these commitments as outlined below: • The Hospitals agreed to offer a one-time payment of $250,000 to AC Transit to be used for capital COMPLIANCE WITH DEVELOPMENT AGREEMENT OBLIGATIONS Item 7 Attachment A - SUMC Annual Report FY 24 Item 7: Staff Report Pg. 18 Packet Pg. 148 of 349 ANNUAL REPORT 2023-24 11 improvements to the U-Line to increase capacity (Section 5(c)(iv)(A)). As required, the Hospitals offered to contribute $250,000 to AC Transit for capital improvements to the U Line; this offer was accepted, and the payment was made on January 5, 2018. • The Hospitals agreed to offer to make annual payments to AC Transit in a reasonable amount, not to exceed $50,000, to be used for operating costs of the U-Line to maintain a load factor for bus service to the Medical Center of less than 1 (Section 5(c)(iv)(B)). The Hospitals are making annual payments to AC Transit for purposes of U-Line operating costs. • In order to encourage Hospital employees living in the East Bay to use public transit for their commute, the Hospitals committed to using best efforts to lease 75 parking spaces at the Ardenwood Park and Ride lot, or an equivalent location, at a cost not to exceed $45,000 per year (Section 5(c)(iv)(C)). The Hospitals had been meeting this requirement through the lease of parking spaces in Newark, but bus service to these spaces was suspended during the pandemic due to low ridership. East Bay riders continue to be served by the U Line and DB Express, and the Hospitals and AC Transit are currently finalizing a parking agreement for the Ardenwood Park & Ride Lot in order to better serve these commuters. Section 5(c)(v). Opticom Payments Within 30 days from issuance of the first Hospital occupancy permit, the Hospitals committed to pay $11,200 to the City of Palo Alto to be used for the installation of Opticom traffic control systems at the following seven intersections: El Camino Real/Palm Drive/University Avenue; El Camino Real/Page Mill Road; Middlefield Road/Lytton Road; Junipero Serra/Page Mill Road; Junipero Serra/Campus Drive West; Galvez/Arboretum; and the Alpine/280 Northbound ramp. However, since the time that this commitment was made, the City determined that Opticom systems are outdated, and proposed the purchase and installation of the ATMS.now Emergency.now package, which would allow coordinated prioritization at all City-maintained traffic signals. Agreement to this change in traffic signal priority system is documented in a letter dated December 12, 2017 from the City Manager to the SUMC Parties, which was accepted and agreed to by the SUMC Parties by countersigned letter. The required payment was made on December 12, 2017, within 30 days of issuance of the first Hospital occupancy permit. Section 5(c)(vi). Caltrain GO Passes The Development Agreement requires that the Hospitals purchase annual Caltrain GO Passes for all existing and new Hospital employees who work more than 20 hours per week at a cost of up to approximately $1.8 million per year, beginning on September 1, 2015. This obligation is expected to continue for a period of 51 years. Hospital management accelerated the purchase of the annual GO Pass for Hospital employees, and began providing free GO Passes to employees commencing on January 1, 2012. Annual passes were purchased again for all existing and new eligible employees for 2024. Section 5(c)(vii). Marguerite Shuttle Service The Hospitals will fund the reasonable costs, in an approximate amount of $2 million, for the purchase of additional shuttle vehicles for the Marguerite shuttle service, as and when required to meet increased demand for shuttle service between the project sites and the Palo Alto Intermodal Transit Station. In addition, the Hospitals will fund as annual payments the reasonable costs, in an approximate amount of $450,000 per year, to cover the net increase in operating costs for the Marguerite Shuttle. Demand for the Marguerite shuttle increased in 2012, and the Hospitals funded the purchase of three new hybrid shuttles to meet this increased demand. Since this time, the Hospitals have funded as annual payments COMPLIANCE WITH DEVELOPMENT AGREEMENT OBLIGATIONS Item 7 Attachment A - SUMC Annual Report FY 24 Item 7: Staff Report Pg. 19 Packet Pg. 149 of 349 12 ANNUAL REPORT 2023-24 the reasonable costs of the net increase in operating costs for the Marguerite Shuttle. Section 5(c)(viii). Transportation Demand Management Coordinator The Development Agreement requires that the Hospitals employ an onsite qualified Transportation Demand Management (TDM) Coordinator for Stanford Medicine, commencing on September 1, 2015, and continuing through the life of the Renewal Project. Because the Hospitals accelerated the purchase of the Caltrain GO Pass, the Hospitals also accelerated the hiring of the TDM Coordinator, filling this position in March 2012. The TDM Coordinator is responsible for overseeing the analysis, development, and implementation of programs to advance the Hospitals’ TDM objectives. Specific duties that are carried out in collaboration with Stanford Transportation include raising awareness among commuters about alternative transportation options and Stanford’s commute incentive programs; providing alternative commute planning assistance and responses to customer inquiries; writing and editing electronic and print communications; coordinating and staffing outreach events, such as free transit pass distributions and employee fairs; and providing alternative transportation information and resources at new employee orientations. The Hospitals also established a new role, Transportation/TDM Director, that is in addition to the previously established TDM Coordinator role, to lead the effort of increasing the use of alternative transportation among Hospital employees. Section 5(c)(ix). Monitoring of TDM Programs The Hospitals are required to submit annual monitoring reports showing the current number of employees COMPLIANCE WITH DEVELOPMENT AGREEMENT OBLIGATIONS Item 7 Attachment A - SUMC Annual Report FY 24 Item 7: Staff Report Pg. 20 Packet Pg. 150 of 349 ANNUAL REPORT 2023-24 13 employed over 20 hours per week; the number of employees using an alternative transportation mode as documented by a study or survey to be completed by the Hospitals using a method mutually agreeable to the City and the Hospitals; and the efforts used by the Hospitals to attempt to achieve the Alternative Mode Targets identified in the Development Agreement. The Development Agreement specifies payments to be made in the event that such targets are not met during particular time periods. Stanford Medicine submitted its 2024 Alternative Mode Share Report to the City on May 31, 2024; this report shows an alternative mode split of 30.5% for the Hospitals, reflecting a continuation of the trend of on- campus Hospital staff shifting back to mass transportation and other alternative modes. In previous years where the pandemic had a pronounced impact on daily life, a shift was observed from alternative modes to single-occupancy vehicles, and the Hospitals’ previously successful alternative mode share slipped significantly. This change in behavior was attributed to reduced levels of transit service at the time and perceived health risks of public transportation. Further exacerbating these issues was the inability for staff to work remotely as they primarily occupy roles which require direct patient interface or otherwise require physical presence. As the pandemic recedes into the distance, transit service levels have normalized and concerns about the health risks of public transit have diminished. The 2023-24 survey results demonstrate that the Hospitals are continuing along the path to recovery of their previously successful alternative mode share. Reducing drive-alone rates for employees remains a priority, and the Hospitals continue to pilot additional programs to meet the unique needs of their employees while continuing to provide and promote existing alternative mode opportunities. COMPLIANCE WITH DEVELOPMENT AGREEMENT OBLIGATIONS Item 7 Attachment A - SUMC Annual Report FY 24 Item 7: Staff Report Pg. 21 Packet Pg. 151 of 349 14 ANNUAL REPORT 2023-24 LINKAGES To further encourage use of Caltrain, bus, and other transit services, and to enhance and encourage use of pedestrian and bicycle connections between Stanford Medicine and downtown Palo Alto, Stanford Medicine has funded the following specific infrastructure improvements. Section 5(d)(i). Intermodal Transit Fund Stanford Medicine has provided to the City one lump sum payment of $2.25 million for improvements to enhance the pedestrian and bicycle connection from the Palo Alto Intermodal Transit Center to the existing intersection of El Camino Real and Quarry Road. Up to $2 million of this amount is to be used by the City for the development of an attractive, landscaped passive park/green space with a clearly marked and lighted pedestrian pathway, benches, and flower borders. Stanford Medicine paid the entire required amount for the Intermodal Transit Fund on August 25, 2011. No further action is required by Stanford Medicine to comply with this Development Agreement provision. As required by Development Agreement Section 12(d), the City will provide yearly Supplements to the Annual Report to provide an accounting of the City’s expenditures from this fund, and the purposes for which the expenditures were used. In Summer 2017, prior to issuance of the first Hospital Occupancy Permit, the City completed a temporary path with associated lighting, landscaping / green space, benches, and flower borders from the transit center to the existing crosswalk at the intersection of El Camino Real and Quarry Road. Available funds remaining will be applied to the construction of permanent improvements in the future, which may include a bus transit connection in addition to the planned bicycle and pedestrian improvements. Section 5(d)(ii). Quarry Road Fund Stanford Medicine has provided to the City one lump sum payment of $400,000 for improvements to and within the public right-of-way to enhance the pedestrian and bicycle connection from the west side of El Camino Real to Welch Road along Quarry Road, including urban design elements and way finding, wider bicycle lanes, as necessary, on Quarry Road, enhanced transit nodes for bus and/or shuttle stops, and prominent bicycle facilities. Stanford Medicine paid the entire required amount for the Quarry Road Fund on August 25, 2011. No further action is required by Stanford Medicine to comply with this Development Agreement provision. As required by Development Agreement Section 12(d), the City will provide yearly Supplements to the Annual Report to provide an accounting of the City’s expenditures from this fund, and the purposes for which the expenditures were used. The City was required to construct the improvements prior to issuance of the first Hospital Occupancy Permit, but as agreed to with Stanford Medicine, delayed implementation of these improvements until utility trenching to the Medical Center was complete. In late 2018, the City completed these improvements, including enhanced crosswalks and bicycle striping and signage. Section 5(d)(iii). Stanford Barn Connection Stanford Medicine agreed to construct up to $700,000 of improvements to enhance the pedestrian connection between the Main Medical Campus and the Stanford Shopping Center from Welch Road to Vineyard Lane, in the area adjacent to the Stanford Barn prior to issuance of the first Hospital Occupancy permit. Construction of the improvements completed in November 2017, in advance of issuance of the first Hospital Occupancy permit. No further action is required by Stanford Medicine to comply with this Development Agreement provision. COMPLIANCE WITH DEVELOPMENT AGREEMENT OBLIGATIONS Item 7 Attachment A - SUMC Annual Report FY 24 Item 7: Staff Report Pg. 22 Packet Pg. 152 of 349 ANNUAL REPORT 2023-24 15 INFRASTRUCTURE, SUSTAINABLE NEIGHBORHOODS AND COMMUNITIES, AND AFFORDABLE HOUSING Section 5(e). Infrastructure, Sustainable Neighborhoods and Communities, and Affordable Housing Fund Stanford Medicine agreed to contribute a total amount of $23.2 million toward City of Palo Alto infrastructure, sustainable neighborhoods and communities, and affordable housing. As required by the Development Agreement, this contribution has been made in three equal payments. The first payment, in the amount of $7,733,333, was made on August 25, 2011; the second payment of $7,733,333 was made on December 5, 2012, following the November 2012 issuance of the first Hospital foundation permit; and the final payment of $7,733,333 was made on December 12, 2017, within 30 days from issuance of the first Hospital occupancy permit. No further action is required by Stanford Medicine to comply with this Development Agreement provision. As required by Development Agreement Section 12(d), the City will provide yearly Supplements to the Annual Report to provide an accounting of the City’s expenditures from this fund, and the purposes for which the expenditures were used. The City will use $1,720,488 of these funds in the same manner as funds collected under the City’s housing fee ordinance. CLIMATE CHANGE Section 5(f). Climate Change Fund Stanford Medicine agreed to contribute a total amount of $12 million toward City projects and programs for a sustainable community, including programs identified in the City’s Climate Action Plan, carbon credits, and investments in renewable energy and energy conservation. As required by the Development Agreement, this contribution has been made in three equal payments. The first payment, in the amount of $4 million, was made on August 25, 2011; the second payment of $4 million was made on December 5, 2012, following the November 2012 issuance of the first Hospital foundation permit; and the final payment of $4 million was made on December 12, 2017, within 30 days from issuance of the first Hospital occupancy permit. No further action is required by Stanford Medicine to comply with this Development Agreement provision. As required by Development Agreement Section 12(d), the City will provide yearly Supplements to the Annual Report to provide an accounting of the City’s expenditures from this fund, and the purposes for which the expenditures were used. SATISFACTION OF CONDITIONS OF APPROVAL Section 5(h). Satisfaction of All Conditions of Approval Stanford Medicine will satisfy all Conditions of Approval by the dates and within the time periods required by the project approvals, subject to modifications allowed by the Development Agreement, and has taken several steps in order to ensure that this requirement is met (Section 5(h)). The Conditions of Approval encompass conditions imposed by the Architectural Review Board, mitigation measures enumerated in the Mitigation Monitoring and Reporting Program, and conditions attached to the Conditional Use Permit. In order to implement, monitor, and report on the implementation of this diverse array of conditions, Stanford Medicine, with input from City planning staff, has created two Excel spreadsheet tracking and reporting tools. These spreadsheets serve as a centralized repository for compliance monitoring information and documentation, and are updated by the Stanford Medicine project teams on a regular basis, and reviewed by the City. COMPLIANCE WITH DEVELOPMENT AGREEMENT OBLIGATIONS Item 7 Attachment A - SUMC Annual Report FY 24 Item 7: Staff Report Pg. 23 Packet Pg. 153 of 349 16 ANNUAL REPORT 2023-24 CONCLUSION As the Renewal Project completes its thirteenth year, Stanford Medicine looks forward to continued engagement with the City of Palo Alto as the project continues to progress. Item 7 Attachment A - SUMC Annual Report FY 24 Item 7: Staff Report Pg. 24 Packet Pg. 154 of 349 ATTACHMENT B SUMC Development Agreement Annual Reporting •https://www.paloalto.gov/News-Articles/Planning-and-Development-Services/SUMC-Renewal- Replacement-Project •Fiscal Year 2011-2012 https://www.paloalto.gov/files/assets/public/v/1/planning-amp-development-services/file- migration/development-projects/sumc/2011-12-annual-report.pdf •Fiscal Year 2012-2013 https://www.paloalto.gov/files/assets/public/v/1/planning-amp-development-services/file- migration/development-projects/sumc/2012-13-annual-report.pdf •Fiscal Year 2013-2014 https://www.paloalto.gov/files/assets/public/v/1/planning-amp-development-services/file- migration/development-projects/sumc/2013-14-annual-report.pdf •Fiscal Year 2014-2015 https://www.paloalto.gov/files/assets/public/v/1/planning-amp-development-services/file- migration/development-projects/sumc/2014-15-annual-report.pdf •Fiscal Year 2015-2016 https://www.paloalto.gov/files/assets/public/v/1/planning-amp-development-services/file- migration/development-projects/sumc/2015-16-annual-report.pdf •Fiscal Year 2016-2017 https://www.paloalto.gov/files/assets/public/v/1/planning-amp-development-services/file- migration/development-projects/sumc/2016-17-annual-report.pdf •Fiscal Years 2017-2018, 2018-2019, and 2019-2020 https://www.paloalto.gov/files/assets/public/v/1/planning-amp-development-services/file- migration/development-projects/sumc/2017-2020-combined-annual-report.pdf •Fiscal Year 2020-2021 https://www.paloalto.gov/files/assets/public/v/2/planning-amp-development-services/file- migration/development-projects/sumc/sumc-annual-report-2020-2021.pdf Item 7 Attachment B - Weblinks to Prior SUMC Annual Reports Item 7: Staff Report Pg. 25 Packet Pg. 155 of 349 • Fiscal Year 2021-2022 https://www.paloalto.gov/files/assets/public/v/1/planning-amp-development-services/file- migration/development-projects/sumc/2021-2022-sumc-annual-report.pdf •Fiscal Year 2022-2023 https://www.paloalto.gov/files/assets/public/v/1/planning-amp-development-services/file- migration/development-projects/sumc/2022-2023-annual-report.pdf Item 7 Attachment B - Weblinks to Prior SUMC Annual Reports Item 7: Staff Report Pg. 26 Packet Pg. 156 of 349 SUMC Development Agreement, Section 5 - SUMC Parties’ Promises Attachment C FY 2023-2024 1 SUMC Development Agreement Compliance: FY 2023-2024 Health Care Benefits DA Section Description Summary Activity Complies? 5(a)(ii) Fund for Healthcare Services Financial assistance for Palo Alto residents SUMC establishment of a $3M fund that will grow to $5.6M by December 31, 2025. Fund will be used in even increments over a ten- year period from 2026-2036 to assist Palo Alto residents who have self-payment responsibilities beyond their financial means, as described in Section 5(a)(ii). Yes, complies – No activity required in FY 2023-24. 5(a)(iii) Fund for Community Health and Safety Programs $4M fund for selected community health programs for Palo Alto residents $4M City fund established on August 25, 2011. The joint committee formed according to the Development Agreement and approved $366,000 in expenditures from this fund for FY 2023-24, however it was not used. Yes, complies - Fund activity and balances in FY 2023-24 reported in Attachment E. Fiscal Benefits DA Section Description Summary Activity Complies? 5(b)(i), (ii) Payment of Sales and Use Taxes Activities to maximize sales and use taxes paid to the City SUMC contributes to General Fund Sales and Use Tax revenues via construction-related activities. The City reviews the Construction Sales & Use Tax Monitoring Report that is Yes, complies - SUMC timely submitted the Construction Sales & Use Tax Monitoring Report for Item 7 Attachment C - SUMC Development Agreement Section 5 Compliance Table Item 7: Staff Report Pg. 27 Packet Pg. 157 of 349 SUMC Development Agreement, Section 5 - SUMC Parties’ Promises Attachment C FY 2023-2024 2 SUMC Development Agreement Compliance: FY 2023-2024 submitted by SUMC on June 30 of each year. The City submits a letter to SUMC each year that notes local tax received from SUMC project activities for the year. Based upon the City’s review of the annual Construction Sales and Use Tax Monitoring Report, revenues for calendar years 2011 through 2023 have totaled $5,497,299. the previous calendar year. The City sent their required response. This annual reporting assists in the process of ensuring that the City would receive no less than $8.1M in construction sales and tax revenue by December 31, 2025. 5(b)(iii) Funding of Operating Deficit / Expansion Cost Mitigation $2.417M fund to assure City costs associated with the project do not exceed revenues resulting from construction and operation of the project. $2.417M fund established on August 25, 2011. $750,000 were transferred in FY 2023- 2024 Yes, complies - Fund activity and balances in FY 2023-24 reported in Attachment E. 5(b)(iv)Payment of Utility Users Tax 5% tax on all electricity, gas and water charges on new construction Established in past fiscal years, the Utility Users Tax is paid through the normal billing process for each building. Yes, complies. 5(b)(v)School Fees PAUSD school fees have been paid based on the net new square footage reported in the Item 7 Attachment C - SUMC Development Agreement Section 5 Compliance Table Item 7: Staff Report Pg. 28 Packet Pg. 158 of 349 SUMC Development Agreement, Section 5 - SUMC Parties’ Promises Attachment C FY 2023-2024 3 SUMC Development Agreement Compliance: FY 2023-2024 Payment of PAUSD fees for net new square footage SUMC Annual Report. No occupancy for new square footage occurred in FY 2023-24. Yes, complies – No activity in FY 2023-24 Traffic Mitigation and Reduced Vehicle Trips DA Section Description Summary Activity Complies? 5(c)(ii) Menlo Park Traffic Mitigation $3,699,000 payment for traffic mitigation, infrastructure, sustainable neighborhoods, affordable housing All required payments were made to Menlo Park between 2011-2017. No further activity needed. Yes, complies - completed in FY 2017-18. 5(c)(iii) East Palo Alto Voluntary Mitigation $200K for roadway and signal improvements on University Ave. $200K payment made on August 19, 2011. Yes, complies - completed in FY 2011-12. 5(c)(iv)Contributions to AC Transit U-line capital improvements, low load factor ratios, parking spaces at Ardenwood Park & Ride $250K payment made to AC Transit on January 5, 2018. SUMC is also invoiced by AC Transit for payments throughout the year that total over the $50K per year discussed in the SUMC Development Agreement. Payments to AC Transit are required for the life of the project. Since FY 2020-2021, SUMC has leased 100 Yes, complies. Item 7 Attachment C - SUMC Development Agreement Section 5 Compliance Table Item 7: Staff Report Pg. 29 Packet Pg. 159 of 349 SUMC Development Agreement, Section 5 - SUMC Parties’ Promises Attachment C FY 2023-2024 4 SUMC Development Agreement Compliance: FY 2023-2024 parking spaces in Newark (35263 Fircrest Drive). 5(c)(v)Opticom Payments $11,200 payment for Opticom traffic control system at 7 intersections $11.2K payment made to the City in FY 2017-2018. As the City has upgraded systems, the City and SUMC agreed through a letter exchange that the payment could be used for the new coordinated prioritization signaling at City-maintained traffic signals. Yes, complies - completed. 5(c)(vi)Caltrain Go Passes SUMC purchase of passes for all existing and new hospital employees working >20hrs/week Go Passes have been purchased per the Development Agreement since January 1, 2012, including for FY 2023-2024. Yes, complies. 5(c)(vii)Marguerite Shuttle Service Purchase of additional shuttles to meet demand Between 2011-2018, the fleet was expanded to five renewable diesel-electric hybrid buses and 41 all-electric buses. Yes, complies - completed. 5(c)(viii) SUMC Transportation Demand Management SUMC hires coordinator to promote alternative transportation options TDM Coordinator was hired in March 2012. This position has since been elevated to a TDM Program Manager position and the position remains filled. Yes, complies. Item 7 Attachment C - SUMC Development Agreement Section 5 Compliance Table Item 7: Staff Report Pg. 30 Packet Pg. 160 of 349 SUMC Development Agreement, Section 5 - SUMC Parties’ Promises Attachment C FY 2023-2024 5 SUMC Development Agreement Compliance: FY 2023-2024 (TDM) Coordinator 5(c)(ix)Monitoring of TDM Programs Yearly report regarding alternative transit mode use The SUMC parties found that the alternative mode share milestone target of 33% outlined in SUMC DA Section 5(c)(ix) was not met for 2024. SUMC timely submitted their annual Alternative Mode Share report for FY 2022-24. SUMC missed the alternative mode share target of 33% for one year. No penalty is incurred unless SUMC does not meet the 2024 target in 2025. Linkages DA Section Description Summary Activity Complies? 5(d)(i)Intermodal Transit Fund $2.25M payment to improve pedestrian linkages to PA Intermodal Transit Center $2.25M City fund established on August 25, 2011. City constructed temporary improvements prior to the issuance of the first Hospital Occupancy Permit (LPCH) to serve the linkage goal and functional requirements. There were no expenditures from this fund during the reporting period FY 2023-2024. Yes, complies - Fund activity and balances in FY 2023-24 reported in Attachment E. Item 7 Attachment C - SUMC Development Agreement Section 5 Compliance Table Item 7: Staff Report Pg. 31 Packet Pg. 161 of 349 SUMC Development Agreement, Section 5 - SUMC Parties’ Promises Attachment C FY 2023-2024 6 SUMC Development Agreement Compliance: FY 2023-2024 5(d)(ii)Quarry Road Fund $400K payment to improve pedestrian linkages along Quarry Road $400K City fund established on August 25, 2011. City constructed the improvements prior to the issuance of the first Hospital Occupancy Permit (LPCH) to serve the linkage goal and functional requirements. Yes, complies – Completed, as of FY 2019. 5(d)(iii)Stanford Barn Connection SUMC budgets up to $700K for connections in the vicinity of barn SUMC constructed the Stanford Barn Connection prior to the issuance of the first Hospital Occupancy Permit (LPCH) to serve the linkage goal and facilities are fully operational. Yes, complies – Completed. Infrastructure, Sustainable Neighborhoods and Communities, and Affordable Housing DA Section Description Summary Activity Complies? 5(e) Infrastructure, Sustainable Neighborhoods and Communities, and Affordable Housing Fund $23.2M payment for these uses $23.2M fund established between 2011- 2017. There were $5.3M expenditures budgeted from this fund during the reporting period FY 2023-24. Actual expenditure $4.58M The funds allotted to Affordable Housing were fully exhausted in FY 2013 for the Stevenson House Project, and in FY 2020 for the Wilton Court Housing Project. Yes, complies -Fund activity and balances in FY 2022-2023 reported in Attachment E. Climate Change Item 7 Attachment C - SUMC Development Agreement Section 5 Compliance Table Item 7: Staff Report Pg. 32 Packet Pg. 162 of 349 SUMC Development Agreement, Section 5 - SUMC Parties’ Promises Attachment C FY 2023-2024 7 SUMC Development Agreement Compliance: FY 2023-2024 DA Section Description Summary Activity Complies? 5(f) Climate Change – Sustainability Programs Benefit Fund $12M payment for climate change- related projects and programs $12M fund established 2011-2017. There were no expenditures from this fund during the reporting period FY 2023-2024. Yes, complies -Fund activity and balances in FY 2023-24 reported in Attachment E. Item 7 Attachment C - SUMC Development Agreement Section 5 Compliance Table Item 7: Staff Report Pg. 33 Packet Pg. 163 of 349 ATTACHMENT D SUMC Development Agreement Annual Reporting Background and Purpose On June 6, 2011, the City Council approved Comprehensive Plan amendments, zoning changes, a conditional use permit, annexation and design applications for the Stanford University Medical Center Facilities Renewal and Replacement Project (the “Projects”). The Projects include the construction of a new Stanford Hospital and clinics buildings, an expansion of the Lucile Packard Children’s Hospital, construction of new School of Medicine buildings, renovation of the existing Hoover Pavilion, construction of a new medical office building and parking garage at Hoover Pavilion, roadway improvements along Welch Road and Durand Way, and SUMC design guidelines. A Development Agreement (the “Agreement”) vesting these approvals was entered into between the SUMC Parties and the City and was effective on June 6, 2011 and continues for thirty (30) years from the effective date. The Agreement requires an annual report, prepared by SUMC that outlines the activities of the preceding year and the efforts to fulfill the obligations of the Agreement. Per the requirements of sections 12(a) and 12(c) of the Agreement, The City of Palo Alto is to prepare a supplement to the annual report that contains an accounting of the funds described in the Section 5 of the Agreement (“SUMC Parties’ Promises”) including the fund balances and expenditures and the purposes for which the expenditures were used. Public Benefit Fund Accounting This SUMC Annual Report Supplement covers the period during the thirteenth year of the Agreement: June 6, 2023 through June 6, 2024. Accounting for the funds outlined extends through the end of the City’s FY 2024. The specific funding accounts reported in this SUMC Annual Report Supplement are consistent with Section 5 of the Agreement. These funds have been assigned a unique cost center number for accounting purposes. This SUMC Annual Report Supplement also contains the investment earnings and the earnings allocation to the various cost centers. In summary, the SUMC Parties have paid approximately $44.3 million in public benefit fees to the City since June 6, 2011 through the FY 2023-2024 reporting period. There were no required new payments from the SUMC Parties during the FY 2023-2024 reporting period. The first payment of $20,800,333 on August 11, 2011 was for the following funds: •Fund for Community Health and Safety, Project Safety Net (Section 5(a)(iii)); Item 7 Attachment D - Supplement to the Annual Report Item 7: Staff Report Pg. 34 Packet Pg. 164 of 349 •Fund for Expansion Cost Mitigation (Section 5(b)(iii)); •Fund for Pedestrian and Bicycle Connections from Intermodal Transit Center to El Camino Real/Quarry Road Intersection (Section 5(d)(i)); •Fund for Public Right of Way Improvements to Enhance Pedestrian and Bicycle Connections on Quarry Road (Section 5(d)(ii)); •Fund for Infrastructure, Sustainable Neighborhoods and Communities and Affordable Housing (Section 5(e)), and •Fund for Climate Change - Sustainable Programs Benefit (Section 5(f)(i)). The second payment of $11,733,333 payment on December 5, 2012 was for the following funds: • Fund for Infrastructure, Sustainable Neighborhoods and Communities and Affordable Housing (Section 5(e)) and • Fund for Climate Change - Sustainable Programs Benefit (Section 5(f)(i)). The third payment and final payment of $11,744,533 on December 12, 2017 was for the following funds: •Fund for Infrastructure, Sustainable Neighborhoods and Communities and Affordable Housing (Section 5(e)); •Fund for Climate Change -Sustainable Programs Benefit (Section 5(f)(i)); and •Fund for Community Health and Safety, Project Safety Net (Section 5(a)(iii)). Public Benefit Fund Expenditures Expenditures and other activity occurred in the following funds in FY 2023-2024: Budgeted: •$366,000 transfer from the Community Health and Safety Fund to the General Fund (Police Department) for a Psychiatric Emergency Response Team (PERT); •$3.3 million transfer from the Infrastructure, Sustainable Neighborhoods and Communities, and Affordable Housing Fund to Capital Improvement Project Fire Station 4 Replacement (PE-18004); •$2.0 million transfer from the Infrastructure, Sustainable Neighborhoods and Communities, and Affordable Housing Fund to Capital Improvement Project Roth Building Rehabilitation (PF- 23001); Actual: •The total transfer from the Infrastructure, Sustainable Neighborhoods and Communities, and Affordable Housing Fund to Capital Improvement Project was slightly lower than budgeted, at $4,575,000; •$750,000 was transferred from the Expansion Cost Mitigation fund for the Fire Station #4 Replacement (PE-18004) Item 7 Attachment D - Supplement to the Annual Report Item 7: Staff Report Pg. 35 Packet Pg. 165 of 349 Item 7 Attachment D - Supplement to the Annual Report Item 7: Staff Report Pg. 36 Packet Pg. 166 of 349 City Council Staff Report From: City Manager Report Type: CONSENT CALENDAR Lead Department: Public Works Meeting Date: May 12, 2025 Report #:2502-4227 TITLE Approval of Professional Services Contract No. C25193532 with Biggs Cardosa Associates Inc. in an Amount Not to Exceed $750,000 for On-Call Structural Engineering Services for City Structures including Bridges, Buildings, and Other Structures over a Period of Three Years; CEQA status – Not a Project RECOMMENDATION Staff recommends that Council approve and authorize the City Manager or their designee to execute Contract No. C25193532 with Biggs Cardosa Associates, Inc. to provide on-call structural engineering services for a term of three years in the amount of $250,000 per year, for a total not-to-exceed amount of $750,000. BACKGROUND The proposed on-call contract will use funding from the City Bridge Improvements capital improvement program (CIP) project (PE-20001) for as-needed structural inspections, evaluations, and design services for bridges, culverts, and guardrails, and funding for other City structures will be encumbered as task orders assigned to specific CIP projects, funded through those projects’ budgets as approved by Council. The City owns and maintains about 173 bridge and culvert structures located in the public right- of-way and in parks and preserves. Of these, Caltrans inspects 26 structures and the City is responsible for inspecting the remaining 147 structures. In 2017, an assessment project inspected 50 City-owned bridges and culverts and recommended recurring inspections and short and long-term improvements. The City established a recurring bridge inspection and repair program in fiscal year 2020 which includes recurring inspections, structural evaluation, and recommendations for repairs and maintenance for the structures to meet functional and structural standards. Typically, the recommended recurring inspection frequency of the structures varies from two to four years depending on age and structural conditions. As part of the recurring bridge inspection and repair program, the City entered into a 3-year on-call Item 8 Item 8 Staff Report Item 8: Staff Report Pg. 1 Packet Pg. 167 of 349 structural engineering contract1 with Biggs Cardosa Associates, Inc. (Biggs Cardosa) in 2021 in the amount of $85,000 per year. The proposed contract replaces the previous on-call structural contract that has expired. Biggs Cardosa inspected a total of 42 bridge structures and prepared designs for repairs to 7 bridge structures under the previous on-call structural contract. The City’s contractor completed the repairs to the 7 structures in 2024. Biggs Cardosa also provided as-needed structural evaluation for other Public Works CIP projects. ANALYSIS Table #1: Summary of Request for Proposal 1 Biggs Cardosa Associates Inc. Professional Services Contract for On-Call Structural Engineering Services S21180444; https://www.paloalto.gov/files/assets/public/v/1/public-works/engineering-services/s21180444- bca_psa_fully-executed.pdf Item 8 Item 8 Staff Report Item 8: Staff Report Pg. 2 Packet Pg. 168 of 349 The proposals were evaluated and one proposal was determined to be responsive to the criteria identified in the RFP. Biggs Cardosa was selected based on the quality and effectiveness of their proposal, the experience of their assigned project staff with similar projects, and prior record of performance with the City. Interviews were not conducted for this evaluation. The hourly rates in the proposed contract are generally 6-12% higher than the 2023-2024 hourly rates in the previous contract for similar job classification. The hourly rates will remain firm for the first two years of the contract and the anticipated escalation in the third year is 3.5% to 6%, which is within the current industry standards. Rebidding the project would delay the contract and would be unlikely to produce more competitive rates. Therefore, staff recommends approval of Contract No. C25193532 (Attachment A) with Biggs Cardosa. FISCAL/RESOURCE IMPACT STAKEHOLDER ENGAGEMENT ENVIRONMENTAL REVIEW ATTACHMENTS APPROVED BY: Item 8 Item 8 Staff Report Item 8: Staff Report Pg. 3 Packet Pg. 169 of 349 Professional Services Rev. Oct 16,2024 Page 1 of 31 CITY OF PALO ALTO CONTRACT NO. C25193532 AGREEMENT FOR PROFESSIONAL SERVICES BETWEEN THE CITY OF PALO ALTO AND BIGGS CARDOSA ASSOCIATES, INC. This Agreement for Professional Services (this “Agreement”) is entered into as of the 21st day of April, 2025 (the “Effective Date”), by and between the CITY OF PALO ALTO, a California chartered municipal corporation (“CITY”), and BIGGS CARDOSA ASSOCIATES, INC., a California corporation, located at 865 The Alameda, San Jose, CA 95126 (“CONSULTANT”). The following recitals are a substantive portion of this Agreement and are fully incorporated herein by this reference: RECITALS A. CITY intends to contract for as-needed, on-call structural engineering consultant services (the “Project”) and desires to engage a consultant to provide services for inspection, assessment, and design for repairs to City bridges, culverts, guardrails, and other structures in connection with the Project (the “Services”, as detailed more fully in Exhibit A). B. CONSULTANT represents that it, its employees and subconsultants, if any, possess the necessary professional expertise, qualifications, and capability, and all required licenses and/or certifications to provide the Services. C. CITY, in reliance on these representations, desires to engage CONSULTANT to provide the Services as more fully described in Exhibit A, entitled “SCOPE OF SERVICES”. NOW, THEREFORE, in consideration of the recitals, covenants, terms, and conditions, in this Agreement, the parties agree as follows: SECTION 1. SCOPE OF SERVICES. CONSULTANT shall perform the Services described in Exhibit A in accordance with the terms and conditions contained in this Agreement. The performance of all Services shall be to the reasonable satisfaction of CITY. Optional On-Call Provision (This provision only applies if checked and only applies to on-call agreements.) CITY may elect to, but is not required to, authorize on-call Services up to the maximum compensation amount set forth in Section 4 (Not to Exceed Compensation). CONSULTANT shall provide on-call Services only by advanced, written authorization from CITY as detailed in this Section. On-call Services, if any, shall be authorized by CITY, as needed, with a Task Order assigned and approved by CITY’s Project Manager, as identified in Section 13 (Project Management). Each Task Order shall be in substantially the same form as Exhibit A-1 entitled “PROFESSIONAL SERVICES TASK ORDER”. Each Task Order shall contain a specific scope of services, schedule of performance and maximum compensation amount, in accordance with the provisions of this Agreement. Docusign Envelope ID: 705C0BD3-CF46-4357-AB9C-7D113BB2D69F Item 8 Attachment A - Biggs Cardosa Associates, Inc. Contract C25193532 Item 8: Staff Report Pg. 4 Packet Pg. 170 of 349 Professional Services Rev. Oct 16,2024 Page 2 of 31 Compensation for on-call Services shall be specified by CITY in the Task Order, based on whichever is lowest: the compensation structure set forth in Exhibit C, the hourly rates set forth in Exhibit C-1, or a negotiated lump sum. To accept a Task Order, CONSULTANT shall sign the Task Order and return it to CITY’s Project Manager within the time specified by the Project Manager, and upon authorization by CITY (defined as counter-signature by the CITY Project Manager), the fully executed Task Order shall become part of this Agreement. The cumulative total compensation due to CONSULTANT for all Task Orders issued under this Agreement shall not exceed the amount of compensation set forth in Section 4. CONSULTANT shall only be compensated for on-call Services performed under an authorized Task Order and only up to the maximum compensation amount set forth in Section 4. Performance of and payment for any on-call Services are subject to all requirements and restrictions in this Agreement. SECTION 2. TERM. The term of this Agreement shall be from the effective date of this agreement through April 30, 2028 unless terminated earlier pursuant to Section 19 (Termination) of this Agreement. SECTION 3. SCHEDULE OF PERFORMANCE. Time is of the essence in the performance of Services under this Agreement. CONSULTANT shall complete the Services within the term of this Agreement and in accordance with the schedule set forth in Exhibit B, entitled “SCHEDULE OF PERFORMANCE”. Any Services for which times for performance are not specified in this Agreement shall be commenced and completed by CONSULTANT in a reasonably prompt and timely manner based upon the circumstances and direction communicated to the CONSULTANT. CITY’s agreement to extend the term or the schedule for performance shall not preclude recovery of damages for delay if the extension is required due to the fault of CONSULTANT. SECTION 4. NOT TO EXCEED COMPENSATION. The compensation to be paid to CONSULTANT for performance of the Services shall be based on the compensation structure detailed in Exhibit C, entitled “COMPENSATION,” including any reimbursable expenses specified therein, and the maximum total compensation shall not exceed Two Hundred Fifty Thousand Dollars ($250,000) per contract year for a total not-to-exceed compensation of Seven Hundred Fifty Thousand Dollars ($750,000). The hourly schedule of rates, if applicable, is set out in Exhibit C-1, entitled “SCHEDULE OF RATES.” Any work performed or expenses incurred for which payment would result in a total exceeding the maximum compensation set forth in this Section 4 shall be at no cost to the CITY. SECTION 5. INVOICES. In order to request payment, CONSULTANT shall submit monthly invoices to the CITY describing the Services performed and the applicable charges (including, if applicable, an identification of personnel who performed the Services, hours worked, hourly rates, and reimbursable expenses), based upon Exhibit C or, as applicable, CONSULTANT’s schedule of rates set forth in Exhibit C-1. If applicable, the invoice shall also describe the percentage of completion of each task. The information in CONSULTANT’s invoices shall be subject to verification by CITY. CONSULTANT shall send all invoices to CITY’s Project Manager at the address specified in Section 13 (Project Management) below. CITY will generally process and pay invoices within thirty (30) days of receipt of an acceptable invoice. Docusign Envelope ID: 705C0BD3-CF46-4357-AB9C-7D113BB2D69F Item 8 Attachment A - Biggs Cardosa Associates, Inc. Contract C25193532 Item 8: Staff Report Pg. 5 Packet Pg. 171 of 349 Professional Services Rev. Oct 16,2024 Page 3 of 31 SECTION 6. QUALIFICATIONS/STANDARD OF CARE. All Services shall be performed by CONSULTANT or under CONSULTANT’s supervision. CONSULTANT represents that it, its employees and subcontractors, if any, possess the professional and technical personnel necessary to perform the Services required by this Agreement and that the personnel have sufficient skill and experience to perform the Services assigned to them. CONSULTANT represents that it, its employees and subcontractors, if any, have and shall maintain during the term of this Agreement all licenses, permits, qualifications, insurance and approvals of whatever nature that are legally required to perform the Services. All Services to be furnished by CONSULTANT under this Agreement shall meet the professional standard and quality that prevail among professionals in the same discipline and of similar knowledge and skill engaged in related work throughout California under the same or similar circumstances. SECTION 7. COMPLIANCE WITH LAWS. CONSULTANT shall keep itself informed of and in compliance with all federal, state and local laws, ordinances, regulations, and orders that may affect in any manner the Project or the performance of the Services or those engaged to perform Services under this Agreement, as amended from time to time. CONSULTANT shall procure all permits and licenses, pay all charges and fees, and give all notices required by law in the performance of the Services. SECTION 8. ERRORS/OMISSIONS. CONSULTANT is solely responsible for costs, including, but not limited to, increases in the cost of Services, arising from or caused by CONSULTANT’s errors and omissions, including, but not limited to, the costs of corrections such errors and omissions, any change order markup costs, or costs arising from delay caused by the errors and omissions or unreasonable delay in correcting the errors and omissions. 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 the CITY’s stated construction budget by ten percent (10%) or more, CONSULTANT shall make recommendations to CITY for aligning the Project design with the budget, incorporate CITY approved recommendations, and revise the design to meet the Project budget, at no additional cost to CITY. SECTION 10. INDEPENDENT CONTRACTOR. CONSULTANT acknowledges and agrees that CONSULTANT and any agent or employee of CONSULTANT will act as and shall be deemed at all times to be an independent contractor and shall be wholly responsible for the manner in which CONSULTANT performs the Services requested by CITY under this Agreement. CONSULTANT and any agent or employee of CONSULTANT will not have employee status with CITY, nor be entitled to participate in any plans, arrangements, or distributions by CITY pertaining to or in connection with any retirement, health or other benefits that CITY may offer its employees. CONSULTANT will be responsible for all obligations and payments, whether imposed by federal, state or local law, including, but not limited to, FICA, income tax withholdings, workers’ compensation, unemployment compensation, insurance, and other similar responsibilities related to CONSULTANT’s performance of the Services, or any agent or employee of CONSULTANT providing same. Nothing in this Agreement shall be construed as creating an employment or agency relationship between CITY and CONSULTANT or any agent or employee of CONSULTANT. Any terms in this Agreement referring to direction from CITY shall be construed as providing for direction as to policy and the result of CONSULTANT’s Docusign Envelope ID: 705C0BD3-CF46-4357-AB9C-7D113BB2D69F Item 8 Attachment A - Biggs Cardosa Associates, Inc. Contract C25193532 Item 8: Staff Report Pg. 6 Packet Pg. 172 of 349 Professional Services Rev. Oct 16,2024 Page 4 of 31 provision of the Services only, and not as to the means by which such a result is obtained. SECTION 11. ASSIGNMENT. The parties agree that the expertise and experience of CONSULTANT are material considerations for this Agreement. CONSULTANT shall not assign or transfer any interest in this Agreement nor the performance of any of CONSULTANT’s obligations hereunder without the prior written approval of the City Manager. Any purported assignment made without the prior written approval of the City Manager will be void and without effect. Subject to the foregoing, the covenants, terms, conditions and provisions of this Agreement will apply to, and will bind, the heirs, successors, executors, administrators and assignees of the parties. SECTION 12. SUBCONTRACTING. Option A: No Subcontractor: CONSULTANT shall not subcontract any portion of the Services to be performed under this Agreement without the prior written authorization of the City Manager or designee. In the event CONSULTANT does subcontract any portion of the work to be performed under this Agreement, CONSULTANT shall be fully responsible for all acts and omissions of subcontractors. Option B: Subcontracts Authorized: Notwithstanding Section 11 (Assignment) above, CITY agrees that subcontractors may be used to complete the Services. The subcontractors authorized by CITY to perform work on this Project are: BKF Engineers – Civil Engineering Schaaf & Wheeler – Hydrology & Hydraulics Analyses Parikh – Geotechnical Investigations & Engineering Callander – Landscape and Bridge Architecture Bennett Engineering Services – Transportation & Electrical Engineering CONSULTANT shall be responsible for directing the work of any subcontractors and for any compensation due to subcontractors. CITY assumes no responsibility whatsoever concerning compensation of subcontractors. CONSULTANT shall be fully responsible to CITY for all acts and omissions of subcontractors. CONSULTANT shall change or add subcontractors only with the prior written approval of the City Manager or designee. SECTION 13. PROJECT MANAGEMENT. CONSULTANT will assign Anthony Notaro as the CONSULTANT’s Project Manager to have supervisory responsibility for the performance, progress, and execution of the Services and represent CONSULTANT during the day-to-day performance of the Services. If circumstances cause the substitution of the CONSULTANT’s Project Manager or any other of CONSULTANT’s key personnel for any reason, the appointment of a substitute Project Manager and the assignment of any key new or replacement personnel will be subject to the prior written approval of the CITY’s Project Manager. CONSULTANT, at CITY’s request, shall promptly remove CONSULTANT personnel who CITY finds do not perform the Services in an acceptable manner, are uncooperative, or present a threat to the adequate or timely completion of the Services or a threat to the safety of persons or property. CITY’s Project Manager is Megha Bansal, Public Works Department, Engineering Services Division, 250 Hamilton Avenue, Palo Alto, CA, 94301, Telephone: 650-329-2693. CITY’s Project Docusign Envelope ID: 705C0BD3-CF46-4357-AB9C-7D113BB2D69F Item 8 Attachment A - Biggs Cardosa Associates, Inc. Contract C25193532 Item 8: Staff Report Pg. 7 Packet Pg. 173 of 349 Professional Services Rev. Oct 16,2024 Page 5 of 31 Manager will be CONSULTANT’s point of contact with respect to performance, progress and execution of the Services. CITY may designate an alternate Project Manager from time to time. SECTION 14. OWNERSHIP OF MATERIALS. All work product, including without limitation, all writings, drawings, studies, sketches, photographs, plans, reports, specifications, computations, models, recordings, data, documents, and other materials and copyright interests developed under this Agreement, in any form or media, shall be and remain the exclusive property of CITY without restriction or limitation upon their use. CONSULTANT agrees that all copyrights which arise from creation of the work product pursuant to this Agreement are vested in CITY, and CONSULTANT hereby waives and relinquishes all claims to copyright or other intellectual property rights in favor of CITY. Neither CONSULTANT nor its subcontractors, if any, shall make any of such work product available to any individual or organization without the prior written approval of the City Manager or designee. CONSULTANT makes no representation of the suitability of the work product for use in or application to circumstances not contemplated by the Scope of Services. SECTION 15. AUDITS. CONSULTANT agrees to permit CITY and its authorized representatives to audit, at any reasonable time during the term of this Agreement and for four (4) years from the date of final payment, CONSULTANT’s records pertaining to matters covered by this Agreement, including without limitation records demonstrating compliance with the requirements of Section 10 (Independent Contractor). CONSULTANT further agrees to maintain and retain accurate books and records in accordance with generally accepted accounting principles for at least four (4) years after the expiration or earlier termination of this Agreement or the completion of any audit hereunder, whichever is later. SECTION 16. INDEMNITY. [Option A applies to the following design professionals pursuant to Civil Code Section 2782.8: architects; landscape architects; registered professional engineers and licensed professional land surveyors.] 16.1. To the fullest extent permitted by law, CONSULTANT shall indemnify, defend and hold harmless CITY, its Council members, officers, employees and agents (each an “Indemnified Party”) from and against any and all third party demands, claims, or liability of any nature, including death or injury to any person, property damage or any other loss, including all costs and expenses of whatever nature including attorney’s fees, experts fees, court costs and disbursements (“Claims”) to the extent that such Claims arise out of, pertain to, or relate to the negligence, recklessness, or willful misconduct of CONSULTANT, its officers, employees, agents or contractors under this Agreement, regardless of whether or not it is caused in part by an Indemnified Party. CITY will reimburse CONSULTANT for the proportionate percentage of defense costs exceeding CONSULTANT’s proportionate percentage of fault as determined by the final judgment of a court of competent jurisdiction. [Option B applies to any consultant who does not qualify as a design professional as defined in Civil Code Section 2782.8.] 16.1. To the fullest extent permitted by law, CONSULTANT shall indemnify, defend and hold harmless CITY, its Council members, officers, employees and agents (each an “Indemnified Party”) from and against any and all demands, claims, or liability of any nature, including death or injury to any person, property damage or any other loss, including all costs and expenses of whatever nature including attorney’s fees, experts fees, court costs and disbursements (“Claims”) resulting from, arising out of or in any manner related Docusign Envelope ID: 705C0BD3-CF46-4357-AB9C-7D113BB2D69F Item 8 Attachment A - Biggs Cardosa Associates, Inc. Contract C25193532 Item 8: Staff Report Pg. 8 Packet Pg. 174 of 349 Professional Services Rev. Oct 16,2024 Page 6 of 31 to performance or nonperformance 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 indemnify an Indemnified Party from a Claim arising from the active negligence or willful misconduct of an Indemnified Party that is not contributed to by any act of, or by any omission to perform a duty imposed by law or agreement by, CONSULTANT, its officers, employees, agents or contractors under this Agreement. 16.3. The acceptance of CONSULTANT’s Services and duties by CITY shall not operate as a waiver of the right of indemnification. The provisions of this Section 16 shall survive the expiration or early termination of this Agreement. SECTION 17. WAIVERS. No waiver of a condition or nonperformance of an obligation under this Agreement is effective unless it is in writing in accordance with Section 29.4 of this Agreement. No delay or failure to require performance of any provision of this Agreement shall constitute a waiver of that provision as to that or any other instance. Any waiver granted shall apply solely to the specific instance expressly stated. No single or partial exercise of any right or remedy will preclude any other or further exercise of any right or remedy. SECTION 18. INSURANCE. 18.1. CONSULTANT, at its sole cost and expense, shall obtain and maintain, in full force and effect during the term of this Agreement, the insurance coverage described in Exhibit D, entitled “INSURANCE REQUIREMENTS”. CONSULTANT and its contractors, if any, shall obtain a policy endorsement naming CITY as an additional insured under any general liability or automobile policy or policies. 18.2. All insurance coverage required hereunder shall be provided through carriers with AM Best’s Key Rating Guide ratings of A-:VII or higher which are licensed or authorized to transact insurance business in the State of California. Any and all contractors of CONSULTANT retained to perform Services under this Agreement will obtain and maintain, in full force and effect during the term of this Agreement, identical insurance coverage, naming CITY as an additional insured under such policies as required above. 18.3. Certificates evidencing such insurance shall be filed with CITY concurrently with the execution of this Agreement. The certificates will be subject to the approval of CITY’s Risk Manager and will contain an endorsement stating that the insurance is primary coverage and will not be canceled, or materially reduced in coverage or limits, by the insurer except after filing with the Purchasing Manager thirty (30) days’ prior written notice of the cancellation or modification. If the insurer cancels or modifies the insurance and provides less than thirty (30) days’ notice to CONSULTANT, CONSULTANT shall provide the Purchasing Manager written notice of the cancellation or modification within two (2) business days of the CONSULTANT’s receipt of such notice. CONSULTANT shall be responsible for ensuring that current certificates evidencing the insurance are provided to CITY’s Chief Procurement Officer during the entire term of this Agreement. 18.4. The procuring of such required policy or policies of insurance will not be Docusign Envelope ID: 705C0BD3-CF46-4357-AB9C-7D113BB2D69F Item 8 Attachment A - Biggs Cardosa Associates, Inc. Contract C25193532 Item 8: Staff Report Pg. 9 Packet Pg. 175 of 349 Professional Services Rev. Oct 16,2024 Page 7 of 31 construed to limit CONSULTANT’s liability hereunder nor to fulfill 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 performed under this Agreement, including such damage, injury, or loss arising after the Agreement is terminated or the term has expired. SECTION 19. TERMINATION OR SUSPENSION OF AGREEMENT OR SERVICES. 19.1. The City Manager may suspend the performance of the Services, in whole or in part, or terminate this Agreement, with or without cause, by giving ten (10) days prior written notice thereof to CONSULTANT. If CONSULTANT fails to perform any of its material obligations under this Agreement, in addition to all other remedies provided under this Agreement or at law, the City Manager may terminate this Agreement sooner upon written notice of termination. Upon receipt of any notice of suspension or termination, CONSULTANT will discontinue its performance of the Services on the effective date in the notice of suspension or termination. 19.2. In event of suspension or termination, CONSULTANT will deliver to the City Manager on or before the effective date in the notice of suspension or termination, any and all work product, as detailed in Section 14 (Ownership of Materials), whether or not completed, prepared by CONSULTANT or its contractors, if any, in the performance of this Agreement. Such work product is the property of CITY, as detailed in Section 14 (Ownership of Materials). 19.3. In event of suspension or termination, CONSULTANT will be paid for the Services rendered and work products delivered to CITY in accordance with the Scope of Services up to the effective date in the notice of suspension or termination; provided, however, if this Agreement is suspended or terminated on account of a default by CONSULTANT, CITY will be obligated to compensate CONSULTANT only for that portion of CONSULTANT’s Services provided in material conformity with this Agreement as such determination is made by the City Manager acting in the reasonable exercise of his/her discretion. The following Sections will survive any expiration or termination of this Agreement: 14, 15, 16, 17, 19.2, 19.3, 19.4, 20, 25, 27, 28, 29 and 30. 19.4. No payment, partial payment, acceptance, or partial acceptance by CITY will operate as a waiver on the part of CITY of any of its rights under this Agreement, unless made in accordance with Section 17 (Waivers). SECTION 20. NOTICES. All notices hereunder will be given in writing and mailed, postage prepaid, by certified mail, addressed as follows: To CITY: Office of the City Clerk City of Palo Alto Post Office Box 10250 Palo Alto, CA 94303 With a copy to the Purchasing Manager Docusign Envelope ID: 705C0BD3-CF46-4357-AB9C-7D113BB2D69F Item 8 Attachment A - Biggs Cardosa Associates, Inc. Contract C25193532 Item 8: Staff Report Pg. 10 Packet Pg. 176 of 349 Professional Services Rev. Oct 16,2024 Page 8 of 31 To CONSULTANT: Attention of the Project Manager at the address of CONSULTANT recited on the first page of this Agreement. CONSULTANT shall provide written notice to CITY of any change of address. SECTION 21. CONFLICT OF INTEREST. 21.1. In executing this Agreement, CONSULTANT covenants that it presently has no interest, and will not acquire any interest, direct or indirect, financial or otherwise, which would conflict in any manner or degree with the performance of the Services. 21.2. CONSULTANT further covenants that, in the performance of this Agreement, it will not employ subcontractors or other persons or parties having such an interest. CONSULTANT certifies that no person who has or will have any financial interest under this Agreement is an officer or employee of CITY; this provision will be interpreted in accordance with the applicable provisions of the Palo Alto Municipal Code and the Government Code of the State of California, as amended from time to time. CONSULTANT agrees to notify CITY if any conflict arises. 21.3. If the CONSULTANT meets the definition of a “Consultant” as defined by the Regulations of the Fair Political Practices Commission, CONSULTANT will file the appropriate financial disclosure documents required by the Palo Alto Municipal Code and the Political Reform Act of 1974, as amended from time to time. SECTION 22. NONDISCRIMINATION; COMPLIANCE WITH ADA. 22.1. As set forth in Palo Alto Municipal Code Section 2.30.510, as amended from time to time, CONSULTANT certifies that in the performance of this Agreement, it shall not discriminate in the employment of any person due to that person’s race, skin color, gender, gender identity, age, religion, disability, national origin, ancestry, sexual orientation, pregnancy, genetic information or condition, housing status, marital status, familial status, weight or height of such person. CONSULTANT acknowledges that it has read and understands the provisions of Section 2.30.510 of the Palo Alto Municipal Code relating to Nondiscrimination Requirements and the penalties for violation thereof, and agrees to meet all requirements of Section 2.30.510 pertaining to nondiscrimination in employment. 22.2. CONSULTANT understands and agrees that pursuant to the Americans Disabilities Act (“ADA”), programs, services and other activities provided by a public entity to the public, whether directly or through a contractor or subcontractor, are required to be accessible to the disabled public. CONSULTANT will provide the Services specified in this Agreement in a manner that complies with the ADA and any other applicable federal, state and local disability rights laws and regulations, as amended from time to time. CONSULTANT will not discriminate against persons with disabilities in the provision of services, benefits or activities provided under this Agreement. SECTION 23. ENVIRONMENTALLY PREFERRED PURCHASING AND ZERO WASTE REQUIREMENTS. CONSULTANT shall comply with the CITY’s Environmentally Docusign Envelope ID: 705C0BD3-CF46-4357-AB9C-7D113BB2D69F Item 8 Attachment A - Biggs Cardosa Associates, Inc. Contract C25193532 Item 8: Staff Report Pg. 11 Packet Pg. 177 of 349 Professional Services Rev. Oct 16,2024 Page 9 of 31 Preferred Purchasing policies which are available at CITY’s Purchasing Department, hereby incorporated by reference and as amended from time to time. CONSULTANT shall comply with waste reduction, reuse, recycling and disposal requirements of CITY’s Zero Waste Program. Zero Waste best practices include, first, minimizing and reducing waste; second, reusing waste; and, third, recycling or composting waste. In particular, CONSULTANT shall comply with the following Zero Waste requirements: (a) All printed materials provided by CONSULTANT to CITY generated from a personal computer and printer including but not limited to, proposals, quotes, invoices, reports, and public education materials, shall be double-sided and printed on a minimum of 30% or greater post-consumer content paper, unless otherwise approved by CITY’s Project Manager. Any submitted materials printed by a professional printing company shall be a minimum of 30% or greater post-consumer material and printed with vegetable-based inks. (b) Goods purchased by CONSULTANT on behalf of CITY shall be purchased in accordance with CITY’s Environmental Purchasing Policy including but not limited to Extended Producer Responsibility requirements for products and packaging. A copy of this policy is on file at the Purchasing Department’s office. (c) Reusable/returnable pallets shall be taken back by CONSULTANT, at no additional cost to CITY, for reuse or recycling. CONSULTANT shall provide documentation from the facility accepting the pallets to verify that pallets are not being disposed. SECTION 24. COMPLIANCE WITH PALO ALTO MINIMUM WAGE ORDINANCE. CONSULTANT shall comply with all requirements of the Palo Alto Municipal Code Chapter 4.62 (Citywide Minimum Wage), as amended from time to time. In particular, for any employee otherwise entitled to the State minimum wage, who performs at least two (2) hours of work in a calendar week within the geographic boundaries of the City, CONSULTANT shall pay such employees no less than the minimum wage set forth in Palo Alto Municipal Code Section 4.62.030 for each hour worked within the geographic boundaries of the City of Palo Alto. In addition, CONSULTANT shall post notices regarding the Palo Alto Minimum Wage Ordinance in accordance with Palo Alto Municipal Code Section 4.62.060. SECTION 25. NON-APPROPRIATION. This Agreement is subject to the fiscal provisions of the Charter of the City of Palo Alto and the Palo Alto Municipal Code, as amended from time to time. This Agreement will terminate without any penalty (a) at the end of any fiscal year in the event that funds are not appropriated for the following fiscal year, or (b) at any time within a fiscal year in the event that funds are only appropriated for a portion of the fiscal year and funds for this Agreement are no longer available. This Section shall take precedence in the event of a conflict with any other covenant, term, condition, or provision of this Agreement. SECTION 26. PREVAILING WAGES AND DIR REGISTRATION FOR PUBLIC WORKS CONTRACTS. 26.1. This Project is not subject to prevailing wages and related requirements. CONSULTANT is not required to pay prevailing wages and meet related requirements under the California Labor Code and California Code of Regulations in the performance and implementation of the Project if the contract: (1) is not a public works contract; (2) is for a public works construction project of $25,000 or less, per California Labor Code Sections 1782(d)(1), 1725.5(f) and 1773.3(j); or Docusign Envelope ID: 705C0BD3-CF46-4357-AB9C-7D113BB2D69F Item 8 Attachment A - Biggs Cardosa Associates, Inc. Contract C25193532 Item 8: Staff Report Pg. 12 Packet Pg. 178 of 349 Professional Services Rev. Oct 16,2024 Page 10 of 31 (3) is for a public works alteration, demolition, repair, or maintenance project of $15,000 or less, per California Labor Code Sections 1782(d)(1), 1725.5(f) and 1773.3(j). OR 26.1. This Project is subject to prevailing wages and related requirements as a “public works” under California Labor Code Sections 1720 et seq. and related regulations. CONSULTANT is required to pay general prevailing wages as defined in California Labor Code Section 1773.1 and Subchapter 3, Title 8 of the California Code of Regulations Section 16000 et seq., as amended from time to time. Pursuant to Labor Code Section 1773, the CITY 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 State of California Department of Industrial Relations (“DIR”). Copies of these rates may be obtained at the CITY’s Purchasing Department office. The general prevailing wage rates are also available at the DIR, Division of Labor Statistics and Research, web site (see e.g. http://www.dir.ca.gov/DLSR/PWD/index.htm) as amended from time to time. CONSULTANT shall post a copy of the general prevailing wage rates at all Project job sites and shall pay the adopted prevailing wage rates as a minimum. CONSULTANT shall comply with all applicable provisions of Division 2, Part 7, Chapter 1 of the California Labor Code (Labor Code Section 1720 et seq.), including but not limited to Sections 1725.5, 1771, 1771.1, 1771.4, 1773.2, 1774, 1775, 1776, 1777.5, 1782, 1810, 1813 and 1815, and all applicable implementing regulations, including but not limited to Subchapter 3, Title 8 of the California Code of Regulations Section 16000 et seq. (8 CCR Section 16000 et seq.), as amended from time to time. CONSULTANT shall comply with the requirements of Exhibit E, entitled “DIR REGISTRATION FOR PUBLIC WORKS CONTRACTS”, for any contract for public works construction, alteration, demolition, repair or maintenance, including but not limited to the obligations to register with, and furnish certified payroll records directly to, DIR. SECTION 27. CLAIMS PROCEDURE FOR “9204 PUBLIC WORKS PROJECTS”. For purposes of this Section 27, a “9204 Public Works Project” means the erection, construction, alteration, repair, or improvement of any public structure, building, road, or other public improvement of any kind. (Cal. Pub. Cont. Code § 9204.) Per California Public Contract Code Section 9204, for Public Works Projects, certain claims procedures shall apply, as set forth in Exhibit F, entitled “Claims for Public Contract Code Section 9204 Public Works Projects”. This Project is a 9204 Public Works Project and is required to comply with the claims procedures set forth in Exhibit F, entitled “Claims for Public Contract Code Section 9204 Public Works Projects”. OR This Project is not a 9204 Public Works Project. SECTION 28. CONFIDENTIAL INFORMATION. 28.1. In the performance of this Agreement, CONSULTANT may have access to CITY’s Confidential Information (defined below). CONSULTANT will hold Confidential Docusign Envelope ID: 705C0BD3-CF46-4357-AB9C-7D113BB2D69F Item 8 Attachment A - Biggs Cardosa Associates, Inc. Contract C25193532 Item 8: Staff Report Pg. 13 Packet Pg. 179 of 349 Professional Services Rev. Oct 16,2024 Page 11 of 31 Information in strict confidence, not disclose it to any third party, and will use it only for the performance of its obligations to CITY under this Agreement and for no other purpose. CONSULTANT will maintain reasonable and appropriate administrative, technical and physical safeguards to ensure the security, confidentiality and integrity of the Confidential Information. Notwithstanding the foregoing, CONSULTANT may disclose Confidential Information to its employees, agents and subcontractors, if any, to the extent they have a need to know in order to perform CONSULTANT’s obligations to CITY under this Agreement and for no other purpose, provided that the CONSULTANT informs them of, and requires them to follow, the confidentiality and security obligations of this Agreement. 28.2. “Confidential Information” means all data, information (including without limitation “Personal Information” about a California resident as defined in Civil Code Section 1798 et seq., as amended from time to time) and materials, in any form or media, tangible or intangible, provided or otherwise made available to CONSULTANT by CITY, directly or indirectly, pursuant to this Agreement. Confidential Information excludes information that CONSULTANT can show by appropriate documentation: (i) was publicly known at the time it was provided or has subsequently become publicly known other than by a breach of this Agreement; (ii) was rightfully in CONSULTANT’s possession free of any obligation of confidence prior to receipt of Confidential Information; (iii) is rightfully obtained by CONSULTANT from a third party without breach of any confidentiality obligation; (iv) is independently developed by employees of CONSULTANT without any use of or access to the Confidential Information; or (v) CONSULTANT has written consent to disclose signed by an authorized representative of CITY. 28.3. Notwithstanding the foregoing, CONSULTANT may disclose Confidential Information to the extent required by order of a court of competent jurisdiction or governmental body, provided that CONSULTANT will notify CITY in writing of such order immediately upon receipt and prior to any such disclosure (unless CONSULTANT is prohibited by law from doing so), to give CITY an opportunity to oppose or otherwise respond to such order. 28.4. CONSULTANT will notify City promptly upon learning of any breach in the security of its systems or unauthorized disclosure of, or access to, Confidential Information in its possession or control, and if such Confidential Information consists of Personal Information, CONSULTANT will provide information to CITY sufficient to meet the notice requirements of Civil Code Section 1798 et seq., as applicable, as amended from time to time. 28.5. Prior to or upon termination or expiration of this Agreement, CONSULTANT will honor any request from the CITY to return or securely destroy all copies of Confidential Information. All Confidential Information is and will remain the property of the CITY and nothing contained in this Agreement grants or confers any rights to such Confidential Information on CONSULTANT. 28.6. If selected in Section 30 (Exhibits), this Agreement is also subject to the terms and conditions of the Information Privacy Policy and Cybersecurity Terms and Conditions. SECTION 29. MISCELLANEOUS PROVISIONS. 29.1. This Agreement will be governed by California law, without regard to its Docusign Envelope ID: 705C0BD3-CF46-4357-AB9C-7D113BB2D69F Item 8 Attachment A - Biggs Cardosa Associates, Inc. Contract C25193532 Item 8: Staff Report Pg. 14 Packet Pg. 180 of 349 Professional Services Rev. Oct 16,2024 Page 12 of 31 conflict of law provisions. 29.2. In the event that an action is brought, the parties agree that trial of such action will be vested exclusively in the state courts of California in the County of Santa Clara, State of California. 29.3. The prevailing party in any action brought to enforce the provisions of this Agreement may recover its reasonable costs and attorneys’ fees expended in connection with that action. The prevailing party shall be entitled to recover an amount equal to the fair market value of legal services provided by attorneys employed by it as well as any attorneys’ fees paid to third parties. 29.4. This Agreement, including all exhibits, constitutes the entire and integrated agreement between the parties with respect to the subject matter of this Agreement, and supersedes all prior agreements, negotiations, representations, statements and undertakings, either oral or written. This Agreement may be amended only by a written instrument, which is signed by the authorized representatives of the parties and approved as required under Palo Alto Municipal Code, as amended from time to time. 29.5. If a court of competent jurisdiction finds or rules that any provision of this Agreement is void or unenforceable, the unaffected provisions of this Agreement will remain in full force and effect. 29.6. In the event of a conflict between the terms of this Agreement and the exhibits hereto (per Section 30) or CONSULTANT’s proposal (if any), the Agreement shall control. In the event of a conflict between the exhibits hereto and CONSULTANT’s proposal (if any), the exhibits shall control. 29.7. The provisions of all checked boxes in this Agreement shall apply to this Agreement; the provisions of any unchecked boxes shall not apply to this Agreement. 29.8. All section headings contained in this Agreement are for convenience and reference only and are not intended to define or limit the scope of any provision of this Agreement. 29.9. This Agreement may be signed in multiple counterparts, which, when executed by the authorized representatives of the parties, shall together constitute a single binding agreement. SECTION 30. EXHIBITS. Each of the following exhibits, if the check box for such exhibit is selected below, is hereby attached and incorporated into this Agreement by reference as though fully set forth herein: EXHIBIT A: SCOPE OF SERVICES EXHIBIT A-1 PROFESSIONAL SERVICES TASK ORDER EXHIBIT B: SCHEDULE OF PERFORMANCE EXHIBIT C: COMPENSATION EXHIBIT C-1: SCHEDULE OF RATES EXHIBIT D: INSURANCE REQUIREMENTS Docusign Envelope ID: 705C0BD3-CF46-4357-AB9C-7D113BB2D69F Item 8 Attachment A - Biggs Cardosa Associates, Inc. Contract C25193532 Item 8: Staff Report Pg. 15 Packet Pg. 181 of 349 Professional Services Rev. Oct 16,2024 Page 13 of 31 EXHIBIT E: DIR REGISTRATION FOR PUBLIC WORKS CONTRACTS EXHIBIT F: CLAIMS FOR PUBLIC CONTRACT CODE SECTION 9204 PUBLIC WORKS PROJECTS THIS AGREEMENT IS NOT COMPLETE UNLESS ALL SELECTED EXHIBITS ARE ATTACHED. Docusign Envelope ID: 705C0BD3-CF46-4357-AB9C-7D113BB2D69F Item 8 Attachment A - Biggs Cardosa Associates, Inc. Contract C25193532 Item 8: Staff Report Pg. 16 Packet Pg. 182 of 349 Professional Services Rev. Oct 16,2024 Page 14 of 31 CONTRACT No. C25193532 SIGNATURE PAGE IN WITNESS WHEREOF, the parties hereto have by their duly authorized representatives executed this Agreement as of the date first above written. CITY OF PALO ALTO ____________________________ City Manager APPROVED AS TO FORM: __________________________ City Attorney or designee BIGGS CARDOSA ASSOCIATES, INC. Officer 1 By: ________________________________ Name: ______________________________ Title: _______________________________ Officer 2 By: ________________________________ Name: ______________________________ Title: _______________________________ Docusign Envelope ID: 705C0BD3-CF46-4357-AB9C-7D113BB2D69F Mahvash Harms Principal, Vice President Roy Schnabel Principal/President Item 8 Attachment A - Biggs Cardosa Associates, Inc. Contract C25193532 Item 8: Staff Report Pg. 17 Packet Pg. 183 of 349 Professional Services Rev. Oct 16,2024 Page 15 of 31 EXHIBIT A SCOPE OF SERVICES CONSULTANT shall provide the Services detailed in this Exhibit A, entitled “SCOPE OF SERVICES”. Notwithstanding any provision herein to the contrary, CONSULTANT’s duties and services described in this Scope of Services shall not include preparing or assisting CITY with any portion of CITY’s preparation of a request for proposals, request for qualifications, or any other solicitation regarding a subsequent or additional contract with CITY. CITY shall at all times retain responsibility for public contracting, including with respect to any subsequent phase of this project. CONSULTANT’s participation in the planning, discussions, or drawing of project plans or specifications shall be limited to conceptual, preliminary, or initial plans or specifications. CONSULTANT shall cooperate with CITY to ensure that all bidders for a subsequent contract on any subsequent phase of this project have access to the same information, including all conceptual, preliminary, or initial plans or specifications prepared by CONSULTANT pursuant to this Scope of Services. CONSULTANT shall provide as-needed, on-call Structural Engineering Consultant Services for inspection, assessment, and design for repairs to City bridges, culverts, guardrails, and other structures. Projects will be done on a task order basis. Task Order scopes, budgets, and schedules will be negotiated as projects arise. The Scope of Services included herein provides requirements for performing on-call structural inspection, providing recommendations for short-term and long-term improvements, and designs for recommended improvements as necessary for the City’s bridge and culvert structures. OVERVIEW There are roughly 212 bridge and culvert structures located within and around the perimeter of the City. Of these, the City owns and maintains 173 bridge and culvert structures; 147 of those structures are inspected by the City and 26 structures are inspected by Caltrans. The remaining 39 structures are owned by other public and private entities. CONSULTANT shall provide as-needed, on-call Structural Engineering Consultant Services for inspection/evaluation and design for improvements to the 147 City-owned structures that are not inspected by Caltrans. The City reserves the right to add or remove bridge and culvert structures to the Consultant’s task order scope for inspection and design services. In 2017, a structural consulting firm inspected 50 city-owned bridge and culvert structures and completed a Structural Bridge Assessment study. Based on the recommendations of the study, the City established a recurring bridge inspection, maintenance, and repair program in fiscal year 2020. This program includes on-going inspections of the bridge and culvert structures, recommendations for repairs, and maintenance to meet functional and structural improvements in accordance with industry standards. In 2022-2024, City’s structural engineering consultant performed recurring/additional inspections of bridge structures. Completed reports will be provided to the Consultant as needed to be referenced as a preliminary basis for further evaluation or repair of the structures that were previously inspected. Consultant shall follow a similar format for all bridge assessment reports prepared. Docusign Envelope ID: 705C0BD3-CF46-4357-AB9C-7D113BB2D69F Item 8 Attachment A - Biggs Cardosa Associates, Inc. Contract C25193532 Item 8: Staff Report Pg. 18 Packet Pg. 184 of 349 Professional Services Rev. Oct 16,2024 Page 16 of 31 SPECIFIC QUALIFICATION The CONSULTANT must be able to provide design disciplines or expertise in-house in the following discipline(s): • Structural Engineering The CONSULTANT must be able to provide the services of the following disciplines, either in- house or through the use of subconsultants: 1. Geotechnical Engineering 2. Mechanical Engineering 3. Architecture 4. Historical building design/remodel 5. Electrical Engineering 6. Civil Engineering 7. Landscape Architecture 8. Acoustical Engineering 9. Construction Cost Estimating 10. Construction Management TASK ORDERS CONSULTANT shall perform Structural Engineering Consultant services on a task order basis for a term up to three (3) years and with a maximum compensation not to exceed $250,000 per year. No work shall be performed without a task order; more than one task order may be open at a time. Task orders will be developed for specific projects by the City department requesting the work and a fee and schedule negotiated with the Consultant. The City reserves the right to issue a stand- alone RFP for any project at any time. SCOPE OF WORK All services to be performed by the CONSULTANT shall be documented in a Task Order to be executed by CONSULTANT and City. The Consultant may be asked to work on more than one project at a time. The scope of services for bridges and culverts structural inspections and assessment may include but is not limited to the following: • Review available information. • Determine inspections and evaluation methodologies in accordance with industry standards and prioritize structures for inspections, repair and rehabilitation. • Conduct site visits. • Perform visual inspections, prepare photo log, and document evidence of structure condition/deterioration. • Identify structural and functional deficiencies, and potential mitigation measures. • Recommend short-term and long-term improvements including repair, rehabilitation and replacement needs and frequency for future inspections. • Develop concept level designs for recommended improvements as necessary. • Provide potential order of magnitude costs for recommended improvements. • Prepare inspections, condition assessment, and basis of design reports. • Prepare plans, specifications, and estimates for the structures selected by the City for Docusign Envelope ID: 705C0BD3-CF46-4357-AB9C-7D113BB2D69F Item 8 Attachment A - Biggs Cardosa Associates, Inc. Contract C25193532 Item 8: Staff Report Pg. 19 Packet Pg. 185 of 349 Professional Services Rev. Oct 16,2024 Page 17 of 31 repairs based on the findings from the inspections. • Provide construction administration services as needed for structures repairs and replacement projects. The City may also request the consultant to provide structural evaluations, calculations, and design and construction administration services for other City structures as needed. Docusign Envelope ID: 705C0BD3-CF46-4357-AB9C-7D113BB2D69F Item 8 Attachment A - Biggs Cardosa Associates, Inc. Contract C25193532 Item 8: Staff Report Pg. 20 Packet Pg. 186 of 349 Professional Services Rev. Oct 16,2024 Page 18 of 31 EXHIBIT A-1 PROFESSIONAL SERVICES TASK ORDER CONSULTANT shall perform the Services detailed below in accordance with all the terms and conditions of the Agreement referenced in Item 1A below. All exhibits referenced in Item 8 are incorporated into this Task Order by this reference. CONSULTANT shall furnish the necessary facilities, professional, technical and supporting personnel required by this Task Order as described below. CONTRACT NO. OR PURCHASE ORDER REQUISITION NO. (AS APPLICABLE) 1A. MASTER AGREEMENT NO. (MAY BE SAME AS CONTRACT / P.O. NO. ABOVE): 1B. TASK ORDER NO.: 2. CONSULTANT NAME: 3. PERIOD OF PERFORMANCE: START: COMPLETION: 4 TOTAL TASK ORDER PRICE: $__________________ BALANCE REMAINING IN MASTER AGREEMENT/CONTRACT $_______________ 5. BUDGET CODE_______________ COST CENTER________________ COST ELEMENT______________ WBS/CIP__________ PHASE__________ 6. CITY PROJECT MANAGER’S NAME & DEPARTMENT:_____________________________________ 7. DESCRIPTION OF SCOPE OF SERVICES (Attachment A) MUST INCLUDE: SERVICES AND DELIVERABLES TO BE PROVIDED SCHEDULE OF PERFORMANCE MAXIMUM COMPENSATION AMOUNT AND RATE SCHEDULE (as applicable) REIMBURSABLE EXPENSES, if any (with “not to exceed” amount) 8. ATTACHMENTS: A: Task Order Scope of Services B (if any): _____________________________ I hereby authorize the performance of the work described in this Task Order. APPROVED: CITY OF PALO ALTO BY:____________________________________ Name __________________________________ Title___________________________________ Date ___________________________________ this Task Order and warrant that I have authority to sign on behalf of Consultant. APPROVED: COMPANY NAME: ______________________ BY:____________________________________ Name __________________________________ Title___________________________________ Date ___________________________________ Docusign Envelope ID: 705C0BD3-CF46-4357-AB9C-7D113BB2D69F Item 8 Attachment A - Biggs Cardosa Associates, Inc. Contract C25193532 Item 8: Staff Report Pg. 21 Packet Pg. 187 of 349 Professional Services Rev. Oct 16,2024 Page 19 of 31 EXHIBIT B SCHEDULE OF PERFORMANCE Optional Schedule of Performance Provision for On-Call or Additional Services Agreements. (This provision only applies if checked and only applies to on-call agreements per Section 1 or agreements with Additional Services per Section 4.) The schedule of performance shall be as provided in the approved Task Order, as detailed in Section 1 (Scope of Services) in the case of on-call Services, or as detailed in Section 4 in the case of Additional Services, provided in all cases that the schedule of performance shall fall within the term as provided in Section 2 (Term) of this Agreement. Docusign Envelope ID: 705C0BD3-CF46-4357-AB9C-7D113BB2D69F Item 8 Attachment A - Biggs Cardosa Associates, Inc. Contract C25193532 Item 8: Staff Report Pg. 22 Packet Pg. 188 of 349 Professional Services Rev. Oct 16,2024 Page 20 of 31 EXHIBIT C COMPENSATION CITY agrees to compensate CONSULTANT for the Services performed in accordance with the terms and conditions of this Agreement, including Services, any specified reimbursable expenses, and Additional Services (if any, per Section 4 of the Agreement), based on the hourly rate schedule attached as Exhibit C-1. The compensation to be paid to CONSULTANT under this Agreement for all Services, any specified reimbursable expenses, and Additional Services (if any, per Section 4), shall not exceed the amount(s) stated in Section 4 of this Agreement. CONSULTANT agrees to complete all Services, any specified reimbursable expenses, and Additional Services (if any, per Section 4), within this/these amount(s). Any work performed or expenses incurred for which payment would result in a total exceeding the maximum amount of compensation set forth in this Agreement shall be at no cost to the CITY. REIMBURSABLE EXPENSES CONSULTANT’S ordinary business expenses, such as administrative, overhead, administrative support time/overtime, information systems, software and hardware, photocopying, telecommunications (telephone, internet), in-house printing, insurance and other ordinary business expenses, are included within the scope of payment for Services and are not reimbursable expenses hereunder. Reimbursable expenses, if any are specified as reimbursable under this section, will be reimbursed at actual cost. The expenses (by type, e.g. travel) for which CONSULTANT will be reimbursed are: outside printing and reproduction costs, courier delivery/shipping charges, potholing services, geotechnical borings, and permit fees up to the total not-to- exceed amount of: $2,000.00. A. Travel outside the San Francisco Bay Area, including transportation and meals, if specified as reimbursable, will be reimbursed at actual cost subject to the City of Palo Alto’s policy for reimbursement of travel and meal expenses. B. Long distance telephone service charges, cellular phone service charges, facsimile transmission and postage charges, if specified as reimbursable, will be reimbursed at actual cost. All requests for reimbursement of expenses, if any are specified as reimbursable under this section, shall be accompanied by appropriate backup documentation and information. Docusign Envelope ID: 705C0BD3-CF46-4357-AB9C-7D113BB2D69F Item 8 Attachment A - Biggs Cardosa Associates, Inc. Contract C25193532 Item 8: Staff Report Pg. 23 Packet Pg. 189 of 349 Professional Services Rev. Oct 16,2024 Page 21 of 31 EXHIBIT C-1 SCHEDULE OF RATES CONSULTANT’s schedule of rates is as follows: Docusign Envelope ID: 705C0BD3-CF46-4357-AB9C-7D113BB2D69F Item 8 Attachment A - Biggs Cardosa Associates, Inc. Contract C25193532 Item 8: Staff Report Pg. 24 Packet Pg. 190 of 349 Professional Services Rev. Oct 16,2024 Page 22 of 31 SUBCONSULTANTS: Docusign Envelope ID: 705C0BD3-CF46-4357-AB9C-7D113BB2D69F Item 8 Attachment A - Biggs Cardosa Associates, Inc. Contract C25193532 Item 8: Staff Report Pg. 25 Packet Pg. 191 of 349 Professional Services Rev. Oct 16,2024 Page 23 of 31 Docusign Envelope ID: 705C0BD3-CF46-4357-AB9C-7D113BB2D69F Item 8 Attachment A - Biggs Cardosa Associates, Inc. Contract C25193532 Item 8: Staff Report Pg. 26 Packet Pg. 192 of 349 Professional Services Rev. Oct 16,2024 Page 24 of 31 Docusign Envelope ID: 705C0BD3-CF46-4357-AB9C-7D113BB2D69F Item 8 Attachment A - Biggs Cardosa Associates, Inc. Contract C25193532 Item 8: Staff Report Pg. 27 Packet Pg. 193 of 349 Professional Services Rev. Oct 16,2024 Page 25 of 31 EXHIBIT D INSURANCE REQUIREMENTS CONSULTANTS TO THE CITY OF PALO ALTO (CITY), AT THEIR SOLE EXPENSE, SHALL FOR THE TERM OF THE CONTRACT OBTAIN AND MAINTAIN INSURANCE IN THE AMOUNTS FOR THE COVERAGE SPECIFIED BELOW, AFFORDED BY COMPANIES WITH AM BEST’S KEY RATING OF A-:VII, OR HIGHER, LICENSED OR AUTHORIZED TO TRANSACT INSURANCE BUSINESS IN THE STATE OF CALIFORNIA. AWARD IS CONTINGENT ON COMPLIANCE WITH CITY’S INSURANCE REQUIREMENTS AS SPECIFIED HEREIN. REQUIRED TYPE OF COVERAGE REQUIREMENT MINIMUM LIMITS EACH OCCURRENCE AGGREGATE YES YES WORKER’S COMPENSATION EMPLOYER’S LIABILITY STATUTORY STATUTORY STATUTORY STATUTORY YES GENERAL LIABILITY, INCLUDING PERSONAL INJURY, BROAD FORM PROPERTY DAMAGE BLANKET CONTRACTUAL, AND FIRE LEGAL LIABILITY BODILY INJURY PROPERTY DAMAGE BODILY INJURY & PROPERTY DAMAGE COMBINED. $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 YES AUTOMOBILE LIABILITY, INCLUDING ALL OWNED, HIRED, NON-OWNED BODILY INJURY - EACH PERSON - EACH OCCURRENCE PROPERTY DAMAGE BODILY INJURY AND PROPERTY DAMAGE, COMBINED $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 YES PROFESSIONAL LIABILITY, INCLUDING, ERRORS AND OMISSIONS, MALPRACTICE (WHEN APPLICABLE), AND NEGLIGENT PERFORMANCE ALL DAMAGES $1,000,000 YES THE CITY OF PALO ALTO IS TO BE NAMED AS AN ADDITIONAL INSURED: CONSULTANT, AT ITS SOLE COST AND EXPENSE, SHALL OBTAIN AND MAINTAIN, IN FULL FORCE AND EFFECT THROUGHOUT THE ENTIRE TERM OF ANY RESULTANT AGREEMENT, THE INSURANCE COVERAGE HEREIN DESCRIBED, INSURING NOT ONLY CONSULTANT COMPENSATION, EMPLOYER’S LIABILITY AND PROFESSIONAL INSURANCE, NAMING AS ADDITIONAL INSUREDS CITY, ITS COUNCIL MEMBERS, OFFICERS, AGENTS, AND EMPLOYEES. I. INSURANCE COVERAGE MUST INCLUDE: A. A CONTRACTUAL LIABILITY ENDORSEMENT PROVIDING INSURANCE COVERAGE FOR CONSULTANT’S AGREEMENT TO INDEMNIFY CITY. II. THE CONSULTANT MUST SUBMIT CERTIFICATES(S) OF INSURANCE EVIDENCING REQUIRED COVERAGE AT THE FOLLOWING EMAIL: PURCHASINGSUPPORT@CITYOFPALOALTO.ORG III. ENDORSEMENT PROVISIONS WITH RESPECT TO THE INSURANCE AFFORDED TO ADDITIONAL INSUREDS: A. PRIMARY COVERAGE WITH RESPECT TO CLAIMS ARISING OUT OF THE OPERATIONS OF THE NAMED INSURED, INSURANCE AS AFFORDED BY THIS POLICY IS PRIMARY AND IS NOT ADDITIONAL TO OR CONTRIBUTING WITH ANY OTHER INSURANCE CARRIED BY OR FOR THE BENEFIT OF THE ADDITIONAL INSUREDS. Docusign Envelope ID: 705C0BD3-CF46-4357-AB9C-7D113BB2D69F Item 8 Attachment A - Biggs Cardosa Associates, Inc. Contract C25193532 Item 8: Staff Report Pg. 28 Packet Pg. 194 of 349 Professional Services Rev. Oct 16,2024 Page 26 of 31 B. CROSS LIABILITY THE NAMING OF MORE THAN ONE PERSON, FIRM, OR CORPORATION AS INSUREDS UNDER THE POLICY SHALL NOT, FOR THAT REASON ALONE, EXTINGUISH ANY RIGHTS OF THE INSURED AGAINST ANOTHER, BUT THIS ENDORSEMENT, AND THE NAMING OF MULTIPLE INSUREDS, SHALL NOT INCREASE THE TOTAL LIABILITY OF THE COMPANY UNDER THIS POLICY. C. NOTICE OF CANCELLATION 1. IF THE POLICY IS CANCELED BEFORE ITS EXPIRATION DATE FOR ANY REASON OTHER THAN THE NON-PAYMENT OF PREMIUM, THE CONSULTANT SHALL PROVIDE CITY AT LEAST A THIRTY (30) DAY WRITTEN NOTICE BEFORE THE EFFECTIVE DATE OF CANCELLATION. 2. IF THE POLICY IS CANCELED BEFORE ITS EXPIRATION DATE FOR THE NON-PAYMENT OF PREMIUM, THE CONSULTANT SHALL PROVIDE CITY AT LEAST A TEN (10) DAY WRITTEN NOTICE BEFORE THE EFFECTIVE DATE OF CANCELLATION. EVIDENCE OF INSURANCE AND OTHER RELATED NOTICES ARE REQUIRED TO BE FILED WITH THE CITY OF PALO ALTO SENT TO THE FOLLOWING EMAIL: PURCHASINGSUPPORT@CITYOFPALOALTO.ORG Docusign Envelope ID: 705C0BD3-CF46-4357-AB9C-7D113BB2D69F Item 8 Attachment A - Biggs Cardosa Associates, Inc. Contract C25193532 Item 8: Staff Report Pg. 29 Packet Pg. 195 of 349 Professional Services Rev. Oct 16,2024 Page 27 of 31 EXHIBIT E DIR REGISTRATION FOR PUBLIC WORKS CONTRACTS This Exhibit shall apply only to a contract for public works construction, alteration, demolition, repair or maintenance work, CITY will not accept a bid proposal from or enter into this Agreement with CONSULTANT without proof that CONSULTANT and its listed subcontractors are registered with the California Department of Industrial Relations (“DIR”) to perform public work, subject to limited exceptions. City requires CONSULTANT and its listed subcontractors, if any, to comply with all applicable requirements of the California Labor Code including but not limited to Labor Code Sections 1720 through 1861, and all applicable related regulations, including but not limited to Subchapter 3, Title 8 of the California Code of Regulations Section 16000 et seq., as amended from time to time. This Exhibit E applies in addition to the provisions of Section 26 (Prevailing Wages and DIR Registration for Public Works Contracts) of the Agreement. CITY provides notice to CONSULTANT of the requirements of California Labor Code Section 1771.1(a), which reads: “A contractor or subcontractor shall not be qualified to bid on, be listed in a bid proposal, subject to the requirements of Section 4104 of the Public Contract Code, or engage in the performance of any contract for public work, as defined in this chapter, unless currently registered and qualified to perform public work pursuant to Section 1725.5. It is not a violation of this section for an unregistered contractor to submit a bid that is authorized by Section 7029.1 of the Business and Professions Code or Section 10164 or 20103.5 of the Public Contract Code, provided the contractor is registered to perform public work pursuant to Section 1725.5 at the time the contract is awarded.” This Project is subject to compliance monitoring and enforcement by DIR. All contractors must be registered with DIR per Labor Code Section 1725.5 in order to submit a bid. All subcontractors must also be registered with DIR. No contractor or subcontractor may be awarded a contract for public work on a public works project unless registered with DIR. Additional information regarding public works and prevailing wage requirements is available on the DIR web site (see e.g. http://www.dir.ca.gov) as amended from time to time. CITY gives notice to CONSULTANT and its listed subcontractors that CONSULTANT is required to post all job site notices prescribed by law or regulation. CONSULTANT shall furnish certified payroll records directly to the Labor Commissioner (DIR) in accordance with Subchapter 3, Title 8 of the California Code of Regulations Section 16461 (8 CCR Section 16461). CITY requires CONSULTANT and its listed subcontractors to comply with the requirements of Labor Code Section 1776, including but not limited to: Keep accurate payroll records, showing the name, address, social security number, work classification, straight time and overtime hours worked each day and week, and the actual per diem wages paid to each journeyman, apprentice, worker, or other employee employed by, respectively, CONSULTANT and its listed subcontractors, in connection with the Project. Docusign Envelope ID: 705C0BD3-CF46-4357-AB9C-7D113BB2D69F Item 8 Attachment A - Biggs Cardosa Associates, Inc. Contract C25193532 Item 8: Staff Report Pg. 30 Packet Pg. 196 of 349 Professional Services Rev. Oct 16,2024 Page 28 of 31 The payroll records shall be verified as true and correct and shall be certified and made available for inspection at all reasonable hours at the principal office of CONSULTANT and its listed subcontractors, respectively. At the request of CITY, acting by its Project Manager, CONSULTANT and its listed subcontractors shall make the certified payroll records available for inspection or furnished upon request to the CITY Project Manager within ten (10) days of receipt of CITY’s request. CITY requests CONSULTANT and its listed subcontractors to submit the certified payroll records to CITY’s Project Manager at the end of each week during the Project. If the certified payroll records are not provided as required within the 10-day period, then CONSULTANT and its listed subcontractors shall be subject to a penalty of one hundred dollars ($100.00) per calendar day, or portion thereof, for each worker, and CITY shall withhold the sum total of penalties from the progress payment(s) then due and payable to CONSULTANT. Inform CITY’s Project Manager of the location of CONSULTANT’s and its listed subcontractors’ payroll records (street address, city and county) at the commencement of the Project, and also provide notice to CITY’s Project Manager within five (5) business days of any change of location of those payroll records. Eight (8) hours labor constitutes a legal day’s work. CONSULTANT shall forfeit as a penalty to CITY, $25.00 for each worker employed in the execution of the Agreement by CONSULTANT or any subcontractor for each calendar day during which such worker is required or permitted to work more than eight (8) hours in any one calendar day or forty (40) hours in any one calendar week in violation of the provisions of the Labor Code, and in particular, Sections 1810 through 1815 thereof, except that work performed by employees of CONSULTANT or any subcontractor in excess of eight (8) hours per day, or forty (40) hours during any one week, shall be permitted upon compensation for all hours worked in excess of eight (8) hours per day, or forty (40) hours per week, at not less than one and one-half (1&1/2) times the basic rate of pay, as provided in Section 1815. CONSULTANT shall secure the payment of workers’ compensation to its employees as provided in Labor Code Sections 1860 and 3700 (Labor Code 1861). CONSULTANT shall sign and file with the CITY a statutorily prescribed statement acknowledging its obligation to secure the payment of workers’ compensation to its employees before beginning work (Labor Code 1861). CONSULTANT shall post job site notices per regulation (Labor Code 1771.4(a)(2)). CONSULTANT shall comply with the statutory requirements regarding employment of apprentices including without limitation Labor Code Section 1777.5. The statutory provisions will be enforced for penalties for failure to pay prevailing wages and for failure to comply with wage and hour laws. Docusign Envelope ID: 705C0BD3-CF46-4357-AB9C-7D113BB2D69F Item 8 Attachment A - Biggs Cardosa Associates, Inc. Contract C25193532 Item 8: Staff Report Pg. 31 Packet Pg. 197 of 349 Professional Services Rev. Oct 16,2024 Page 29 of 31 EXHIBIT F CLAIMS FOR PUBLIC CONTRACT CODE SECTION 9204 PUBLIC WORKS PROJECTS The provisions of this Exhibit are provided in compliance with Public Contract Code Section 9204; they provide the exclusive procedures for any claims pursuant to Public Contract Code Section 9204 related to the Services performed under this Agreement. 1. Claim Definition. “Claim” means a separate demand by the Contractor sent by registered mail or certified mail with return receipt requested, for one or more of the following: (A) A time extension, including, without limitation, for relief from damages or penalties for delay assessed by the City. (B) Payment by the City of money or damages arising from the Services performed by, or on behalf of, the Contractor pursuant to the Agreement and payment for which is not otherwise expressly provided or to which the Contractor is not otherwise entitled. (C) Payment of an amount that is disputed by the City. 2. Claim Process. (A) Timing. Any Claim must be submitted to City in compliance with the requirements of this Exhibit no later than fourteen (14) days following the event or occurrence giving rise to the Claim. This time requirement is mandatory; failure to submit a Claim within fourteen (14) days will result in its being deemed waived. (B) Submission. The Claim must be submitted to City in writing, clearly identified as a “Claim” submitted pursuant to this Exhibit, and must include reasonable documentation substantiating the Claim. The Claim must clearly identify and describe the dispute, including relevant references to applicable portions of the Agreement, and a chronology of relevant events. Any Claim for additional payment must include a complete, itemized breakdown of all labor, materials, taxes, insurance, and subcontract, or other costs. Substantiating documentation such as payroll records, receipts, invoices, or the like, must be submitted in support of each claimed cost. Any Claim for an extension of time or delay costs must be substantiated with schedule analysis and narrative depicting and explaining claimed time impacts. (C) Review. Upon receipt of a Claim in compliance with this Exhibit, the City shall conduct a reasonable review of the Claim and, within a period not to exceed 45 days from receipt, shall provide the Contractor a written statement identifying what portion of the Claim is disputed and what portion is undisputed. Upon receipt of a Claim, the City and Contractor may, by mutual agreement, extend the time period provided in this paragraph 2. (D) If City Council Approval Required. If the City needs approval from the City Council to provide the Contractor a written statement identifying the disputed portion and the undisputed portion of the Claim, and the City Council does not meet within the 45 days or within the mutually agreed to extension of time following receipt of a Claim sent by registered mail or certified mail, return receipt requested, the City shall have up to three days following the next duly publicly noticed meeting of the City Council after the 45-day period, or extension, expires to provide the Contractor a written statement identifying the disputed portion and the undisputed portion. Docusign Envelope ID: 705C0BD3-CF46-4357-AB9C-7D113BB2D69F Item 8 Attachment A - Biggs Cardosa Associates, Inc. Contract C25193532 Item 8: Staff Report Pg. 32 Packet Pg. 198 of 349 Professional Services Rev. Oct 16,2024 Page 30 of 31 (E) Payment. Any payment due on an undisputed portion of the Claim shall be processed and made within 60 days after the City issues its written statement. If the City fails to issue a written statement, paragraph 3, below, shall apply. 3. Disputed Claims (A) Meet and Confer. If the Contractor disputes the City's written response, or if the City fails to respond to a Claim submitted pursuant to this Exhibit within the time prescribed, the Contractor may demand in writing an informal conference to meet and confer for settlement of the issues in dispute. Upon receipt of a demand in writing sent by registered mail or certified mail, return receipt requested, the City shall schedule a meet and confer conference within 30 days for settlement of the dispute. Within 10 business days following the conclusion of the meet and confer conference, if the Claim or any portion of the Claim remains in dispute, the City shall provide the Contractor a written statement identifying the portion of the Claim that remains in dispute and the portion that is undisputed. Any payment due on an undisputed portion of the Claim shall be processed and made within 60 days after the City issues its written statement. (B) Mediation. Any remaining disputed portion of the Claim, as identified by the Contractor in writing, shall be submitted to nonbinding mediation, with the City and the Contractor sharing the associated costs equally. The City and Contractor shall mutually agree to a mediator within 10 business days after the disputed portion of the Claim has been identified in writing by the Contractor. If the parties cannot agree upon a mediator, each party shall select a mediator and those mediators shall select a qualified neutral third party to mediate the disputed portion of the Claim. Each party shall bear the fees and costs charged by its respective mediator in connection with the selection of the neutral mediator. If mediation is unsuccessful, the parts of the Claim remaining in dispute shall be subject to any other remedies authorized by the Agreement and laws. (i) For purposes of this paragraph 3.B, mediation includes any nonbinding process, including, but not limited to, neutral evaluation or a dispute review board, in which an independent third party or board assists the parties in dispute resolution through negotiation or by issuance of an evaluation. Any mediation utilized shall conform to the timeframes in this section. (ii) Unless otherwise agreed to by the City and the Contractor in writing, the mediation conducted pursuant to this section shall excuse any further obligation, if any, under Public Contract Code Section 20104.4 to mediate after litigation has been commenced. 4. City’s Failure to Respond. Failure by the City to respond to a Claim from the Contractor within the time periods described in this Exhibit or to otherwise meet the time requirements of this Exhibit shall result in the Claim being deemed rejected in its entirety. A Claim that is denied by reason of the City's failure to have responded to a Claim, or its failure to otherwise meet the time requirements of this Exhibit, shall not constitute an adverse finding with regard to the merits of the Claim or the responsibility or qualifications of the Contractor. 5. Interest. Amounts not paid in a timely manner as required by this section shall bear interest at seven (7) percent per annum. Docusign Envelope ID: 705C0BD3-CF46-4357-AB9C-7D113BB2D69F Item 8 Attachment A - Biggs Cardosa Associates, Inc. Contract C25193532 Item 8: Staff Report Pg. 33 Packet Pg. 199 of 349 Professional Services Rev. Oct 16,2024 Page 31 of 31 6. Approved Subcontractor Claims. If an approved subcontractor or a lower tier subcontractor lacks legal standing to assert a Claim against the City because privity of contract does not exist, the Contractor may present to the City a Claim on behalf of a subcontractor or lower tier subcontractor. A subcontractor may request in writing, either on his or her own behalf or on behalf of a lower tier subcontractor, that the Contractor present a Claim for work which was performed by the subcontractor or by a lower tier subcontractor on behalf of the subcontractor. The subcontractor requesting that the Claim be presented to the City shall furnish reasonable documentation to support the Claim. Within 45 days of receipt of this written request, the Contractor shall notify the subcontractor in writing as to whether the Contractor presented the claim to the City and, if the Contractor did not present the claim, provide the subcontractor with a statement of the reasons for not having done so. 7. Waiver of Provisions. A waiver of the rights granted by Public Contract Code Section 9204 is void and contrary to public policy, provided, however, that (1) upon receipt of a Claim, the parties may mutually agree to waive, in writing, mediation and proceed directly to the commencement of a civil action or binding arbitration, as applicable; and (2) the City may prescribe reasonable change order, claim, and dispute resolution procedures and requirements in addition to the provisions of Public Contract Code Section 9204, so long as the contractual provisions do not conflict with or otherwise impair the timeframes and procedures set forth in this section. Docusign Envelope ID: 705C0BD3-CF46-4357-AB9C-7D113BB2D69F Item 8 Attachment A - Biggs Cardosa Associates, Inc. Contract C25193532 Item 8: Staff Report Pg. 34 Packet Pg. 200 of 349 City Council Staff Report From: City Manager Report Type: CONSENT CALENDAR Lead Department: City Clerk Meeting Date: May 12, 2025 Report #:2503-4417 TITLE Approval of Two Professional Services Contracts, No. C25192359A with the Embarcadero Media Foundation and C25192359B with San Francisco Daily dba The Daily Post, in an Amount Not to Exceed $425,000 in Total for Legal Advertising Services for a Period of 5 Years; CEQA Status - Not a Project RECOMMENDATION Staff recommends that the City Council approve and authorize the City Manager or designee to execute Contract No. C25192359A with the Embarcadero Media Foundation (Attachment A) and C25192359B with San Francisco Daily dba The Daily Post (Attachment B) to provide legal advertising services for a term of 5 years and a total amount not-to-exceed $425,000. BACKGROUND The City currently contracts with the Embarcadero Media Foundation and San Francisco Daily dba The Daily Post (”the Daily Post”) for a variety of advertising services, including: •Legally required notices •Advertising for Boards, Commissions, and Committees recruitments •Notice of City-sponsored community events such as the City Council Reorganization and State of the City State law and the Palo Alto Municipal Code require the City Clerk to publish certain notices in newspapers of general circulation. These include notices of legislative body meeting agendas, local elections, annual budget and municipal fee schedule adoption, public hearings, recently adopted ordinances. Staff advertises online and/or in the paper edition of both publications. Per Santa Clara County Superior Court1, the Daily Post and Palo Alto Weekly are newspapers of general circulation serving Palo Alto. 1 Listing of Newspapers of General Circulation https://santaclara.courts.ca.gov/system/files/forms/pb-4000.pdf Item 9 Item 9 Staff Report Item 9: Staff Report Pg. 1 Packet Pg. 201 of 349 The Embarcadero Media Foundation publishes a hard copy of the Palo Alto Weekly newspaper once a week and posts online to Palo Alto Online. The Daily Post publishes a hard copy newspaper five days a week (Monday, Wednesday, Thursday, Friday, weekend) and posts online. ANALYSIS Table 1: Summary of Request for Proposal Proposal Description Legal Advertising RFP192359 FISCAL/RESOURCE IMPACT STAKEHOLDER ENGAGEMENT Item 9 Item 9 Staff Report Item 9: Staff Report Pg. 2 Packet Pg. 202 of 349 ENVIRONMENTAL REVIEW ATTACHMENTS APPROVED BY: Item 9 Item 9 Staff Report Item 9: Staff Report Pg. 3 Packet Pg. 203 of 349 Professional Services Rev. Oct 16,2024 Page 1 of 22 CITY OF PALO ALTO CONTRACT NO. C25192359A AGREEMENT FOR PROFESSIONAL SERVICES BETWEEN THE CITY OF PALO ALTO AND THE EMBARCADERO MEDIA FOUNDATION This Agreement for Professional Services (this “Agreement”) is entered into as of the 12th day of May, 2025 (the “Effective Date”), by and between the CITY OF PALO ALTO, a California chartered municipal corporation (“CITY”), and the EMBARCADERO MEDIA FOUNDATION, a California Corporation, located at 2345 Yale Street, FL 1, Palo Alto, CA 94306 (“CONSULTANT”). The following recitals are a substantive portion of this Agreement and are fully incorporated herein by this reference: RECITALS A. CITY intends to publish legally required notices and/or display advertisements (the “Project”) and desires to engage a consultant to provide legally require notice publication services and/or display advertisement publication services in connection with the Project (the “Services”, as detailed more fully in Exhibit A). B. CONSULTANT represents that it, its employees and subconsultants, if any, possess the necessary professional expertise, qualifications, and capability, and all required licenses and/or certifications to provide the Services. C. CITY, in reliance on these representations, desires to engage CONSULTANT to provide the Services as more fully described in Exhibit A, entitled “SCOPE OF SERVICES”. NOW, THEREFORE, in consideration of the recitals, covenants, terms, and conditions, in this Agreement, the parties agree as follows: SECTION 1. SCOPE OF SERVICES. CONSULTANT shall perform the Services described in Exhibit A in accordance with the terms and conditions contained in this Agreement. The performance of all Services shall be to the reasonable satisfaction of CITY. Optional On-Call Provision (This provision only applies if checked and only applies to on-call agreements.) CITY may elect to, but is not required to, authorize on-call Services up to the maximum compensation amount set forth in Section 4 (Not to Exceed Compensation). CONSULTANT shall provide on-call Services only by advanced, written authorization from CITY as detailed in this Section. On-call Services, if any, shall be authorized by CITY, as needed, with a Task Order assigned and approved by CITY’s Project Manager, as identified in Section 13 (Project Management). Each Task Order shall be in substantially Docusign Envelope ID: 292336D3-8044-4532-831A-358A809633AD Item 9 Attachment A - Embarcadero Media Foundation, Contract C25192359A Item 9: Staff Report Pg. 4 Packet Pg. 204 of 349 Professional Services Rev. Oct 16,2024 Page 2 of 22 the same form as Exhibit A-1 entitled “PROFESSIONAL SERVICES TASK ORDER”. Each Task Order shall contain a specific scope of services, schedule of performance and maximum compensation amount, in accordance with the provisions of this Agreement. Compensation for on-call Services shall be specified by CITY in the Task Order, based on whichever is lowest: the compensation structure set forth in Exhibit C, the hourly rates set forth in Exhibit C-1, or a negotiated lump sum. To accept a Task Order, CONSULTANT shall sign the Task Order and return it to CITY’s Project Manager within the time specified by the Project Manager, and upon authorization by CITY (defined as counter-signature by the CITY Project Manager), the fully executed Task Order shall become part of this Agreement. The cumulative total compensation due to CONSULTANT for all Task Orders issued under this Agreement shall not exceed the amount of compensation set forth in Section 4. CONSULTANT shall only be compensated for on-call Services performed under an authorized Task Order and only up to the maximum compensation amount set forth in Section 4. Performance of and payment for any on-call Services are subject to all requirements and restrictions in this Agreement. SECTION 2. TERM. The term of this Agreement shall be from July 1,2025 through June 30, 2030 unless terminated earlier pursuant to Section 19 (Termination) of this Agreement. SECTION 3. SCHEDULE OF PERFORMANCE. Time is of the essence in the performance of Services under this Agreement. CONSULTANT shall complete the Services within the term of this Agreement and in accordance with the schedule set forth in Exhibit B, entitled “SCHEDULE OF PERFORMANCE”. Any Services for which times for performance are not specified in this Agreement shall be commenced and completed by CONSULTANT in a reasonably prompt and timely manner based upon the circumstances and direction communicated to the CONSULTANT. CITY’s agreement to extend the term or the schedule for performance shall not preclude recovery of damages for delay if the extension is required due to the fault of CONSULTANT. SECTION 4. NOT TO EXCEED COMPENSATION. The compensation to be paid to CONSULTANT for performance of the Services shall be based on the compensation structure detailed in Exhibit C, entitled “COMPENSATION,” including any reimbursable expenses specified therein, and the maximum total compensation shall not exceed Eighty-Five Thousand Dollars ($85,000) per contract year, however, CITY and CONSULTANT understands and agree that the compensation paid to CONSULTANT likely will be less than $85,000 per contract year, as CITY has appropriated that amount to payments to be made under two on-call contracts, of which this Agreement is one. The two on-call contracts shall be administered by the City Clerk’s Department to ensure the total aggregate of compensation paid per contract year for the on-call Services to be provided across both contracts will not exceed Eighty-Five Thousand Dollars ($85,000.00), with a total not to exceed contract amount of Four Hundred Twenty-Five Thousand Dollars ($425,000) over the term of the Agreement. The applicable rate schedule by which Docusign Envelope ID: 292336D3-8044-4532-831A-358A809633AD Item 9 Attachment A - Embarcadero Media Foundation, Contract C25192359A Item 9: Staff Report Pg. 5 Packet Pg. 205 of 349 Professional Services Rev. Oct 16,2024 Page 3 of 22 CONSULTANT will be paid for Services rendered under this Agreement is set out at Exhibit “C- 1”, entitled SCHEDULE OF RATES”. Any work performed or expenses incurred for which payment would result in a total exceeding the maximum compensation as set forth herein shall be at no cost to the CITY. The CITY is hiring two (2) consultants, neither of whom, including the CONSULTANT under this Agreement, is guaranteed or assured of any minimum quantity of work to be performed. If work is performed by any one or more such consultants, CITY will ensure that total compensation to all such consultants will not exceed in the aggregate $425,000 over the term of the Agreement. SECTION 5. INVOICES. In order to request payment, CONSULTANT shall submit monthly invoices to the CITY describing the Services performed and the applicable charges (including, if applicable, an identification of personnel who performed the Services, hours worked, hourly rates, and reimbursable expenses), based upon Exhibit C or, as applicable, CONSULTANT’s schedule of rates set forth in Exhibit C-1. If applicable, the invoice shall also describe the percentage of completion of each task. The information in CONSULTANT’s invoices shall be subject to verification by CITY. CONSULTANT shall send all invoices to CITY’s Project Manager at the address specified in Section 13 (Project Management) below. CITY will generally process and pay invoices within thirty (30) days of receipt of an acceptable invoice. SECTION 6. QUALIFICATIONS/STANDARD OF CARE. All Services shall be performed by CONSULTANT or under CONSULTANT’s supervision. CONSULTANT represents that it, its employees and subcontractors, if any, possess the professional and technical personnel necessary to perform the Services required by this Agreement and that the personnel have sufficient skill and experience to perform the Services assigned to them. CONSULTANT represents that it, its employees and subcontractors, if any, have and shall maintain during the term of this Agreement all licenses, permits, qualifications, insurance and approvals of whatever nature that are legally required to perform the Services. All Services to be furnished by CONSULTANT under this Agreement shall meet the professional standard and quality that prevail among professionals in the same discipline and of similar knowledge and skill engaged in related work throughout California under the same or similar circumstances. SECTION 7. COMPLIANCE WITH LAWS. CONSULTANT shall keep itself informed of and in compliance with all federal, state and local laws, ordinances, regulations, and orders that may affect in any manner the Project or the performance of the Services or those engaged to perform Services under this Agreement, as amended from time to time. CONSULTANT shall procure all permits and licenses, pay all charges and fees, and give all notices required by law in the performance of the Services. SECTION 8. ERRORS/OMISSIONS. CONSULTANT is solely responsible for costs, including, but not limited to, increases in the cost of Services, arising from or caused by CONSULTANT’s errors and omissions, including, but not limited to, the costs of corrections such errors and omissions, any change order markup costs, or costs arising from delay caused by the errors and omissions or unreasonable delay in correcting the errors and omissions. SECTION 9. COST ESTIMATES. If this Agreement pertains to the design of a public works Docusign Envelope ID: 292336D3-8044-4532-831A-358A809633AD Item 9 Attachment A - Embarcadero Media Foundation, Contract C25192359A Item 9: Staff Report Pg. 6 Packet Pg. 206 of 349 Professional Services Rev. Oct 16,2024 Page 4 of 22 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 the CITY’s stated construction budget by ten percent (10%) or more, CONSULTANT shall make recommendations to CITY for aligning the Project design with the budget, incorporate CITY approved recommendations, and revise the design to meet the Project budget, at no additional cost to CITY. SECTION 10. INDEPENDENT CONTRACTOR. CONSULTANT acknowledges and agrees that CONSULTANT and any agent or employee of CONSULTANT will act as and shall be deemed at all times to be an independent contractor and shall be wholly responsible for the manner in which CONSULTANT performs the Services requested by CITY under this Agreement. CONSULTANT and any agent or employee of CONSULTANT will not have employee status with CITY, nor be entitled to participate in any plans, arrangements, or distributions by CITY pertaining to or in connection with any retirement, health or other benefits that CITY may offer its employees. CONSULTANT will be responsible for all obligations and payments, whether imposed by federal, state or local law, including, but not limited to, FICA, income tax withholdings, workers’ compensation, unemployment compensation, insurance, and other similar responsibilities related to CONSULTANT’s performance of the Services, or any agent or employee of CONSULTANT providing same. Nothing in this Agreement shall be construed as creating an employment or agency relationship between CITY and CONSULTANT or any agent or employee of CONSULTANT. Any terms in this Agreement referring to direction from CITY shall be construed as providing for direction as to policy and the result of CONSULTANT’s provision of the Services only, and not as to the means by which such a result is obtained. SECTION 11. ASSIGNMENT. The parties agree that the expertise and experience of CONSULTANT are material considerations for this Agreement. CONSULTANT shall not assign or transfer any interest in this Agreement nor the performance of any of CONSULTANT’s obligations hereunder without the prior written approval of the City Manager. Any purported assignment made without the prior written approval of the City Manager will be void and without effect. Subject to the foregoing, the covenants, terms, conditions and provisions of this Agreement will apply to, and will bind, the heirs, successors, executors, administrators and assignees of the parties. SECTION 12. SUBCONTRACTING. Option A: No Subcontractor: CONSULTANT shall not subcontract any portion of the Services to be performed under this Agreement without the prior written authorization of the City Manager or designee. In the event CONSULTANT does subcontract any portion of the work to be performed under this Agreement, CONSULTANT shall be fully responsible for all acts and omissions of subcontractors. SECTION 13. PROJECT MANAGEMENT. CONSULTANT will assign Adam Dawes Email: adawes@embarcaderopublishing.com as the CONSULTANT’s Project Manager to have supervisory responsibility for the performance, progress, and execution of the Services and represent CONSULTANT during the day-to-day performance of the Services. If circumstances cause the substitution of the CONSULTANT’s Project Manager or any other of CONSULTANT’s key personnel for any reason, the appointment of a substitute Project Manager and the assignment Docusign Envelope ID: 292336D3-8044-4532-831A-358A809633AD Item 9 Attachment A - Embarcadero Media Foundation, Contract C25192359A Item 9: Staff Report Pg. 7 Packet Pg. 207 of 349 Professional Services Rev. Oct 16,2024 Page 5 of 22 of any key new or replacement personnel will be subject to the prior written approval of the CITY’s Project Manager. CONSULTANT, at CITY’s request, shall promptly remove CONSULTANT personnel who CITY finds do not perform the Services in an acceptable manner, are uncooperative, or present a threat to the adequate or timely completion of the Services or a threat to the safety of persons or property. CITY’s Project Manager is Christine Prior, City Clerk Department, 250 Hamilton Ave Palo Alto, CA, zipcode: 94301, Telephone: 650-329-2159. CITY’s Project Manager will be CONSULTANT’s point of contact with respect to performance, progress and execution of the Services. CITY may designate an alternate Project Manager from time to time. SECTION 14. OWNERSHIP OF MATERIALS. All work product, including without limitation, all writings, drawings, studies, sketches, photographs, plans, reports, specifications, computations, models, recordings, data, documents, and other materials and copyright interests developed under this Agreement, in any form or media, shall be and remain the exclusive property of CITY without restriction or limitation upon their use. CONSULTANT agrees that all copyrights which arise from creation of the work product pursuant to this Agreement are vested in CITY, and CONSULTANT hereby waives and relinquishes all claims to copyright or other intellectual property rights in favor of CITY. Neither CONSULTANT nor its subcontractors, if any, shall make any of such work product available to any individual or organization without the prior written approval of the City Manager or designee. CONSULTANT makes no representation of the suitability of the work product for use in or application to circumstances not contemplated by the Scope of Services. SECTION 15. AUDITS. CONSULTANT agrees to permit CITY and its authorized representatives to audit, at any reasonable time during the term of this Agreement and for four (4) years from the date of final payment, CONSULTANT’s records pertaining to matters covered by this Agreement, including without limitation records demonstrating compliance with the requirements of Section 10 (Independent Contractor). CONSULTANT further agrees to maintain and retain accurate books and records in accordance with generally accepted accounting principles for at least four (4) years after the expiration or earlier termination of this Agreement or the completion of any audit hereunder, whichever is later. SECTION 16. INDEMNITY. [Option B applies to any consultant who does not qualify as a design professional as defined in Civil Code Section 2782.8.] 16.1. To the fullest extent permitted by law, CONSULTANT shall indemnify, defend and hold harmless CITY, its Council members, officers, employees and agents (each an “Indemnified Party”) from and against any and all demands, claims, or liability of any nature, including death or injury to any person, property damage or any other loss, including all costs and expenses of whatever nature including attorney’s fees, experts fees, court costs and disbursements (“Claims”) resulting from, arising out of or in any manner related to performance or nonperformance 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 Docusign Envelope ID: 292336D3-8044-4532-831A-358A809633AD Item 9 Attachment A - Embarcadero Media Foundation, Contract C25192359A Item 9: Staff Report Pg. 8 Packet Pg. 208 of 349 Professional Services Rev. Oct 16,2024 Page 6 of 22 require CONSULTANT to indemnify an Indemnified Party from a Claim arising from the active negligence or willful misconduct of an Indemnified Party that is not contributed to by any act of, or by any omission to perform a duty imposed by law or agreement by, CONSULTANT, i ts officers, employees, agents or contractors under this Agreement. 16.3. The acceptance of CONSULTANT’s Services and duties by CITY shall not operate as a waiver of the right of indemnification. The provisions of this Section 16 shall survive the expiration or early termination of this Agreement. SECTION 17. WAIVERS. No waiver of a condition or nonperformance of an obligation under this Agreement is effective unless it is in writing in accordance with Section 29.4 of this Agreement. No delay or failure to require performance of any provision of this Agreement shall constitute a waiver of that provision as to that or any other instance. Any waiver granted shall apply solely to the specific instance expressly stated. No single or partial exercise of any right or remedy will preclude any other or further exercise of any right or remedy. SECTION 18. INSURANCE. 18.1. CONSULTANT, at its sole cost and expense, shall obtain and maintain, in full force and effect during the term of this Agreement, the insurance coverage described in Exhibit D, entitled “INSURANCE REQUIREMENTS”. CONSULTANT and its contractors, if any, shall obtain a policy endorsement naming CITY as an additional insured under any general liability or automobile policy or policies. 18.2. All insurance coverage required hereunder shall be provided through carriers with AM Best’s Key Rating Guide ratings of A-:VII or higher which are licensed or authorized to transact insurance business in the State of California. Any and all contractors of CONSULTANT retained to perform Services under this Agreement will obtain and maintain, in full force and effect during the term of this Agreement, identical insurance coverage, naming CITY as an additional insured under such policies as required above. 18.3. Certificates evidencing such insurance shall be filed with CITY concurrently with the execution of this Agreement. The certificates will be subject to the approval of CITY’s Risk Manager and will contain an endorsement stating that the insurance is primary coverage and will not be canceled, or materially reduced in coverage or limits, by the insurer except after filing with the Purchasing Manager thirty (30) days’ prior written notice of the cancellation or modification. If the insurer cancels or modifies the insurance and provides less than thirty (30) days’ notice to CONSULTANT, CONSULTANT shall provide the Purchasing Manager written notice of the cancellation or modification within two (2) business days of the CONSULTANT’s receipt of such notice. CONSULTANT shall be responsible for ensuring that current certificates evidencing the insurance are provided to CITY’s Chief Procurement Officer during the entire term of this Agreement. 18.4. The procuring of such required policy or policies of insurance will not be construed to limit CONSULTANT’s liability hereunder nor to fulfill 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 performed under this Agreement, including Docusign Envelope ID: 292336D3-8044-4532-831A-358A809633AD Item 9 Attachment A - Embarcadero Media Foundation, Contract C25192359A Item 9: Staff Report Pg. 9 Packet Pg. 209 of 349 Professional Services Rev. Oct 16,2024 Page 7 of 22 such damage, injury, or loss arising after the Agreement is terminated or the term has expired. SECTION 19. TERMINATION OR SUSPENSION OF AGREEMENT OR SERVICES. 19.1. The City Manager may suspend the performance of the Services, in whole or in part, or terminate this Agreement, with or without cause, by giving ten (10) days prior written notice thereof to CONSULTANT. If CONSULTANT fails to perform any of its material obligations under this Agreement, in addition to all other remedies provided under this Agreement or at law, the City Manager may terminate this Agreement sooner upon written notice of termination. Upon receipt of any notice of suspension or termination, CONSULTANT will discontinue its performance of the Services on the effective date in the notice of suspension or termination. 19.2. In event of suspension or termination, CONSULTANT will deliver to the City Manager on or before the effective date in the notice of suspension or termination, any and all work product, as detailed in Section 14 (Ownership of Materials), whether or not completed, prepared by CONSULTANT or its contractors, if any, in the performance of this Agreement. Such work product is the property of CITY, as detailed in Section 14 (Ownership of Materials). 19.3. In event of suspension or termination, CONSULTANT will be paid for the Services rendered and work products delivered to CITY in accordance with the Scope of Services up to the effective date in the notice of suspension or termination; provided, however, if this Agreement is suspended or terminated on account of a default by CONSULTANT, CITY will be obligated to compensate CONSULTANT only for that portion of CONSULTANT’s Services provided in material conformity with this Agreement as such determination is made by the City Manager acting in the reasonable exercise of his/her discretion. The following Sections will survive any expiration or termination of this Agreement: 14, 15, 16, 17, 19.2, 19.3, 19.4, 20, 25, 27, 28, 29 and 30. 19.4. No payment, partial payment, acceptance, or partial acceptance by CITY will operate as a waiver on the part of CITY of any of its rights under this Agreement, unless made in accordance with Section 17 (Waivers). SECTION 20. NOTICES. All notices hereunder will be given in writing and mailed, postage prepaid, by certified mail, addressed as follows: To CITY: Office of the City Clerk City of Palo Alto Post Office Box 10250 Palo Alto, CA 94303 With a copy to the Purchasing Manager To CONSULTANT: Attention of the Project Manager at the address of CONSULTANT recited on the first page of this Agreement. Docusign Envelope ID: 292336D3-8044-4532-831A-358A809633AD Item 9 Attachment A - Embarcadero Media Foundation, Contract C25192359A Item 9: Staff Report Pg. 10 Packet Pg. 210 of 349 Professional Services Rev. Oct 16,2024 Page 8 of 22 CONSULTANT shall provide written notice to CITY of any change of address. SECTION 21. CONFLICT OF INTEREST. 21.1. In executing this Agreement, CONSULTANT covenants that it presently has no interest, and will not acquire any interest, direct or indirect, financial or otherwise, which would conflict in any manner or degree with the performance of the Services. 21.2. CONSULTANT further covenants that, in the performance of this Agreement, it will not employ subcontractors or other persons or parties having such an interest. CONSULTANT certifies that no person who has or will have any financial interest under this Agreement is an officer or employee of CITY; this provision will be interpreted in accordance with the applicable provisions of the Palo Alto Municipal Code and the Government Code of the State of California, as amended from time to time. CONSULTANT agrees to notify CITY if any conflict arises. 21.3. If the CONSULTANT meets the definition of a “Consultant” as defined by the Regulations of the Fair Political Practices Commission, CONSULTANT will file the appropriate financial disclosure documents required by the Palo Alto Municipal Code and the Political Reform Act of 1974, as amended from time to time. SECTION 22. NONDISCRIMINATION; COMPLIANCE WITH ADA. 22.1. As set forth in Palo Alto Municipal Code Section 2.30.510, as amended from time to time, CONSULTANT certifies that in the performance of this Agreement, it shall not discriminate in the employment of any person due to that person’s race, skin color, gender, gender identity, age, religion, disability, national origin, ancestry, sexual orientation, pregnancy, genetic information or condition, housing status, marital status, familial status, weight or height of such person. CONSULTANT acknowledges that it has read and understands the provisions of Section 2.30.510 of the Palo Alto Municipal Code relating to Nondiscrimination Requirements and the penalties for violation thereof, and agrees to meet all requirements of Section 2.30.510 pertaining to nondiscrimination in employment. 22.2. CONSULTANT understands and agrees that pursuant to the Americans Disabilities Act (“ADA”), programs, services and other activities provided by a public entity to the public, whether directly or through a contractor or subcontractor, are required to be accessible to the disabled public. CONSULTANT will provide the Services specified in this Agreement in a manner that complies with the ADA and any other applicable federal, state and local disability rights laws and regulations, as amended from time to time. CONSULTANT will not discriminate against persons with disabilities in the provision of services, benefits or activities provided under this Agreement. SECTION 23. ENVIRONMENTALLY PREFERRED PURCHASING AND ZERO WASTE REQUIREMENTS. CONSULTANT shall comply with the CITY’s Environmentally Preferred Purchasing policies which are available at CITY’s Purchasing Department, hereby incorporated by reference and as amended from time to time. CONSULTANT shall comply with waste reduction, reuse, recycling and disposal requirements of CITY’s Zero Waste Program. Zero Waste best practices include, first, minimizing and reducing waste; second, reusing waste; and, Docusign Envelope ID: 292336D3-8044-4532-831A-358A809633AD Item 9 Attachment A - Embarcadero Media Foundation, Contract C25192359A Item 9: Staff Report Pg. 11 Packet Pg. 211 of 349 Professional Services Rev. Oct 16,2024 Page 9 of 22 third, recycling or composting waste. In particular, CONSULTANT shall comply with the following Zero Waste requirements: (a) All printed materials provided by CONSULTANT to CITY generated from a personal computer and printer including but not limited to, proposals, quotes, invoices, reports, and public education materials, shall be double-sided and printed on a minimum of 30% or greater post-consumer content paper, unless otherwise approved by CITY’s Project Manager. Any submitted materials printed by a professional printing company shall be a minimum of 30% or greater post-consumer material and printed with vegetable-based inks. (b) Goods purchased by CONSULTANT on behalf of CITY shall be purchased in accordance with CITY’s Environmental Purchasing Policy including but not limited to Extended Producer Responsibility requirements for products and packaging. A copy of this policy is on file at the Purchasing Department’s office. (c) Reusable/returnable pallets shall be taken back by CONSULTANT, at no additional cost to CITY, for reuse or recycling. CONSULTANT shall provide documentation from the facility accepting the pallets to verify that pallets are not being disposed. SECTION 24. COMPLIANCE WITH PALO ALTO MINIMUM WAGE ORDINANCE. CONSULTANT shall comply with all requirements of the Palo Alto Municipal Code Chapter 4.62 (Citywide Minimum Wage), as amended from time to time. In particular, for any employee otherwise entitled to the State minimum wage, who performs at least two (2) hours of work in a calendar week within the geographic boundaries of the City, CONSULTANT shall pay such employees no less than the minimum wage set forth in Palo Alto Municipal Code Section 4.62.030 for each hour worked within the geographic boundaries of the City of Palo Alto. In addition, CONSULTANT shall post notices regarding the Palo Alto Minimum Wage Ordinance in accordance with Palo Alto Municipal Code Section 4.62.060. SECTION 25. NON-APPROPRIATION. This Agreement is subject to the fiscal provisions of the Charter of the City of Palo Alto and the Palo Alto Municipal Code, as amended from time to time. This Agreement will terminate without any penalty (a) at the end of any fiscal year in the event that funds are not appropriated for the following fiscal year, or (b) at any time within a fiscal year in the event that funds are only appropriated for a portion of the fiscal year and funds for this Agreement are no longer available. This Section shall take precedence in the event of a conflict with any other covenant, term, condition, or provision of this Agreement. SECTION 26. PREVAILING WAGES AND DIR REGISTRATION FOR PUBLIC WORKS CONTRACTS. 26.1. This Project is not subject to prevailing wages and related requirements. CONSULTANT is not required to pay prevailing wages and meet related requirements under the California Labor Code and California Code of Regulations in the performance and implementation of the Project if the contract: (1) is not a public works contract; (2) is for a public works construction project of $25,000 or less, per California Labor Code Sections 1782(d)(1), 1725.5(f) and 1773.3(j); or (3) is for a public works alteration, demolition, repair, or maintenance project of $15,000 or less, per California Labor Code Sections 1782(d)(1), 1725.5(f) and 1773.3(j). Docusign Envelope ID: 292336D3-8044-4532-831A-358A809633AD Item 9 Attachment A - Embarcadero Media Foundation, Contract C25192359A Item 9: Staff Report Pg. 12 Packet Pg. 212 of 349 Professional Services Rev. Oct 16,2024 Page 10 of 22 SECTION 27. CLAIMS PROCEDURE FOR “9204 PUBLIC WORKS PROJECTS”. For purposes of this Section 27, a “9204 Public Works Project” means the erection, construction, alteration, repair, or improvement of any public structure, building, road, or other public improvement of any kind. (Cal. Pub. Cont. Code § 9204.) Per California Public Contract Code Section 9204, for Public Works Projects, certain claims procedures shall apply, as set forth in Exhibit F, entitled “Claims for Public Contract Code Section 9204 Public Works Projects”. This Project is not a 9204 Public Works Project. SECTION 28. CONFIDENTIAL INFORMATION. 28.1. In the performance of this Agreement, CONSULTANT may have access to CITY’s Confidential Information (defined below). CONSULTANT will hold Confidential Information in strict confidence, not disclose it to any third party, and will use it only for the performance of its obligations to CITY under this Agreement and for no other purpose. CONSULTANT will maintain reasonable and appropriate administrative, technical and physical safeguards to ensure the security, confidentiality and integrity of the Confidential Information. Notwithstanding the foregoing, CONSULTANT may disclose Confidential Information to its employees, agents and subcontractors, if any, to the extent they have a need to know in order to perform CONSULTANT’s obligations to CITY under this Agreement and for no other purpose, provided that the CONSULTANT informs them of, and requires them to follow, the confidentiality and security obligations of this Agreement. 28.2. “Confidential Information” means all data, information (including without limitation “Personal Information” about a California resident as defined in Civil Code Section 1798 et seq., as amended from time to time) and materials, in any form or media, tangible or intangible, provided or otherwise made available to CONSULTANT by CITY, directly or indirectly, pursuant to this Agreement. Confidential Information excludes information that CONSULTANT can show by appropriate documentation: (i) was publicly known at the time it was provided or has subsequently become publicly known other than by a breach of this Agreement; (ii) was rightfully in CONSULTANT’s possession free of any obligation of confidence prior to receipt of Confidential Information; (iii) is rightfully obtained by CONSULTANT from a third party without breach of any confidentiality obligation; (iv) is independently developed by employees of CONSULTANT without any use of or access to the Confidential Information; or (v) CONSULTANT has written consent to disclose signed by an authorized representative of CITY. 28.3. Notwithstanding the foregoing, CONSULTANT may disclose Confidential Information to the extent required by order of a court of competent jurisdiction or governmental body, provided that CONSULTANT will notify CITY in writing of such order immediately upon receipt and prior to any such disclosure (unless CONSULTANT is prohibited by law from doing so), to give CITY an opportunity to oppose or otherwise respond to such order. 28.4. CONSULTANT will notify City promptly upon learning of any breach in the security of its systems or unauthorized disclosure of, or access to, Confidential Information in its possession or control, and if such Confidential Information consists of Personal Information, Docusign Envelope ID: 292336D3-8044-4532-831A-358A809633AD Item 9 Attachment A - Embarcadero Media Foundation, Contract C25192359A Item 9: Staff Report Pg. 13 Packet Pg. 213 of 349 Professional Services Rev. Oct 16,2024 Page 11 of 22 CONSULTANT will provide information to CITY sufficient to meet the notice requirements of Civil Code Section 1798 et seq., as applicable, as amended from time to time. 28.5. Prior to or upon termination or expiration of this Agreement, CONSULTANT will honor any request from the CITY to return or securely destroy all copies of Confidential Information. All Confidential Information is and will remain the property of the CITY and nothing contained in this Agreement grants or confers any rights to such Confidential Information on CONSULTANT. 28.6. If selected in Section 30 (Exhibits), this Agreement is also subject to the terms and conditions of the Information Privacy Policy and Cybersecurity Terms and Conditions. SECTION 29. MISCELLANEOUS PROVISIONS. 29.1. This Agreement will be governed by California law, without regard to its conflict of law provisions. 29.2. In the event that an action is brought, the parties agree that trial of such action will be vested exclusively in the state courts of California in the County of Santa Clara, State of California. 29.3. The prevailing party in any action brought to enforce the provisions of this Agreement may recover its reasonable costs and attorneys’ fees expended in connection with that action. The prevailing party shall be entitled to recover an amount equal to the fair market value of legal services provided by attorneys employed by it as well as any attorneys’ fees paid to third parties. 29.4. This Agreement, including all exhibits, constitutes the entire and integrated agreement between the parties with respect to the subject matter of this Agreement, and supersedes all prior agreements, negotiations, representations, statements and undertakings, either oral or written. This Agreement may be amended only by a written instrument, which is signed by the authorized representatives of the parties and approved as required under Palo Alto Municipal Code, as amended from time to time. 29.5. If a court of competent jurisdiction finds or rules that any provision of this Agreement is void or unenforceable, the unaffected provisions of this Agreement will remain in full force and effect. 29.6. In the event of a conflict between the terms of this Agreement and the exhibits hereto (per Section 30) or CONSULTANT’s proposal (if any), the Agreement shall control. In the event of a conflict between the exhibits hereto and CONSULTANT’s proposal (if any), the exhibits shall control. 29.7. The provisions of all checked boxes in this Agreement shall apply to this Agreement; the provisions of any unchecked boxes shall not apply to this Agreement. 29.8. All section headings contained in this Agreement are for convenience and reference only and are not intended to define or limit the scope of any provision of this Agreement. Docusign Envelope ID: 292336D3-8044-4532-831A-358A809633AD Item 9 Attachment A - Embarcadero Media Foundation, Contract C25192359A Item 9: Staff Report Pg. 14 Packet Pg. 214 of 349 Professional Services Rev. Oct 16,2024 Page 12 of 22 29.9. This Agreement may be signed in multiple counterparts, which, when executed by the authorized representatives of the parties, shall together constitute a single binding agreement. SECTION 30. EXHIBITS. Each of the following exhibits, if the check box for such exhibit is selected below, is hereby attached and incorporated into this Agreement by reference as though fully set forth herein: EXHIBIT A: SCOPE OF SERVICES EXHIBIT A-1 PROFESSIONAL SERVICES TASK ORDER EXHIBIT B: SCHEDULE OF PERFORMANCE EXHIBIT C: COMPENSATION EXHIBIT C-1: SCHEDULE OF RATES EXHIBIT D: INSURANCE REQUIREMENTS THIS AGREEMENT IS NOT COMPLETE UNLESS ALL SELECTED EXHIBITS ARE ATTACHED. Docusign Envelope ID: 292336D3-8044-4532-831A-358A809633AD Item 9 Attachment A - Embarcadero Media Foundation, Contract C25192359A Item 9: Staff Report Pg. 15 Packet Pg. 215 of 349 Professional Services Rev. Oct 16,2024 Page 13 of 22 CONTRACT No. C25192359A SIGNATURE PAGE IN WITNESS WHEREOF, the parties hereto have by their duly authorized representatives executed this Agreement as of the date first above written. CITY OF PALO ALTO ____________________________ City Manager APPROVED AS TO FORM: __________________________ City Attorney or designee THE EMBARCADERO MEDIA FOUNDATION Officer 1 By: ________________________________ Name: ______________________________ Title: _______________________________ Officer 2 By: ________________________________ Name: ______________________________ Title: _______________________________ Docusign Envelope ID: 292336D3-8044-4532-831A-358A809633AD CEO Adam Dawes Nico Navarrete Director of Finance and Operations Item 9 Attachment A - Embarcadero Media Foundation, Contract C25192359A Item 9: Staff Report Pg. 16 Packet Pg. 216 of 349 Professional Services Rev. Oct 16,2024 Page 14 of 22 EXHIBIT A SCOPE OF SERVICES CONSULTANT shall provide the Services detailed in this Exhibit A, entitled “SCOPE OF SERVICES”. Notwithstanding any provision herein to the contrary, CONSULTANT’s duties and services described in this Scope of Services shall not include preparing or assisting CITY with any portion of CITY’s preparation of a request for proposals, request for qualifications, or any other solicitation regarding a subsequent or additional contract with CITY. CITY shall at all times retain responsibility for public contracting, including with respect to any subsequent phase of this project. CONSULTANT’s participation in the planning, discussions, or drawing of project plans or specifications shall be limited to conceptual, preliminary, or initial plans or specificati ons. CONSULTANT shall cooperate with CITY to ensure that all bidders for a subsequent contract on any subsequent phase of this project have access to the same information, including all conceptual, preliminary, or initial plans or specifications prepared by CONSULTANT pursuant to this Scope of Services. CONSULTANT shall provide on-call, as-needed adjudicated newspaper and display advertisement services, specifically, the publication of Legally Required Notices (defined below) and/or display advertisements, as further detailed below. The City makes no guarantee as to the number, size, or frequency of publication of any Notice and/or display advertisement. Notices and/or display advertisements will be placed on an as-needed basis. The City reserves the right to publish elsewhere as needed in City’s sole discretion. The scope of services to be provided is further detailed as follows: a. Publish Legally Required Notices (or “Notices”), as defined under the Definitions section below, as a Newspaper of General Circulation in the City of Palo Alto, as adjudicated by the Santa Clara County Superior Court; b. Publish display advertisements for the City of Palo Alto; c. Provide cost of each Notice or display advertisement and proof copy for review and approval by the City prior to publication; d. Provide proof of publication of a Notice or display advertisement upon request within two (2) businesses days of such a request; e. Accept and publish all Notices and/or display advertisements submitted by the City within the publication’s required lead times(s) (as provided on the Proposal Details Form) in advance of publication (as applicable, in both print and digital formats); f. Provide invoices for services rendered on a monthly basis via electronic means; g. Allow invoice payment on a net-30 basis; Docusign Envelope ID: 292336D3-8044-4532-831A-358A809633AD Item 9 Attachment A - Embarcadero Media Foundation, Contract C25192359A Item 9: Staff Report Pg. 17 Packet Pg. 217 of 349 Professional Services Rev. Oct 16,2024 Page 15 of 22 h. Maintain accounts for multiple City departments and sub-groups as requested by City departments; i. On an annual basis, provide the circulation information for Consultant’s newspaper for the City of Palo Alto, including, but separating, circulation information for (1) print media distributions and (2) digital impressions; and j. Maintain proof of adjudication by the Santa Clara County Court as a Newspaper of General Circulation in the City of Palo Alto for the duration of the term of the Agreement and provide proof to City upon request. DEFINITIONS “Legally Required Notice” – Any notice which in whole or in part satisfies a legal requirement through publication in a newspaper or Newspaper of General Circulation pursuant to the laws of, the United States of America, the State of California, the County of Santa Clara, the City of Palo Alto, or other governmental or regulatory entity. Examples of Legally Required Notices (subject to change): • Uncashed checks; • Annual appropriation (GANN) limit, Annual Budget, Municipal Fee Schedule, and Proposition 218 assessment and tax notices; • Sale of Transferable Development Rights (TDRs); • Sale of surplus property; • Notice of election and other election related publications; • Agendas for legislative and various advisory bodies; • Notice of City Council and/or Planning & Transportation Commission public hearings; and • Notices required pursuant to the California Environmental Quality Act (CEQA). Examples of display advertisements (subject to change) not considered Legally Required Notices: • Recruitments for City Boards, Commissions, and Committees • Announcements of City sponsored and community events; • Catalogs, newspaper inserts, special publications; • Programmatic promotion; and • Invitations to participate in City sponsored surveys and requests for feedback not required by law. “Circulation” – Vendor’s publication frequency, number of copies distributed within Palo Alto per published issue, geographic area of distribution within Palo Alto, and method of distribution within Palo Alto. Digital circulation data is also included. EXHIBIT A-1 Docusign Envelope ID: 292336D3-8044-4532-831A-358A809633AD Item 9 Attachment A - Embarcadero Media Foundation, Contract C25192359A Item 9: Staff Report Pg. 18 Packet Pg. 218 of 349 Professional Services Rev. Oct 16,2024 Page 16 of 22 PROFESSIONAL SERVICES TASK ORDER CONSULTANT shall perform the Services detailed below in accordance with all the terms and conditions of the Agreement referenced in Item 1A below. All exhibits referenced in Item 8 are incorporated into this Task Order by this reference. CONSULTANT shall furnish the necessary facilities, professional, technical and supporting personnel required by this Task Order as described below. CONTRACT NO. OR PURCHASE ORDER REQUISITION NO. (AS APPLICABLE) 1A. MASTER AGREEMENT NO. (MAY BE SAME AS CONTRACT / P.O. NO. ABOVE): 1B. TASK ORDER NO.: 2. CONSULTANT NAME: 3. PERIOD OF PERFORMANCE: START: COMPLETION: 4 TOTAL TASK ORDER PRICE: $__________________ BALANCE REMAINING IN MASTER AGREEMENT/CONTRACT $_______________ 5. BUDGET CODE_______________ COST CENTER________________ COST ELEMENT______________ WBS/CIP__________ PHASE__________ 6. CITY PROJECT MANAGER’S NAME & DEPARTMENT:_____________________________________ 7. DESCRIPTION OF SCOPE OF SERVICES (Attachment A) MUST INCLUDE: ▪ SERVICES AND DELIVERABLES TO BE PROVIDED ▪ SCHEDULE OF PERFORMANCE ▪ MAXIMUM COMPENSATION AMOUNT AND RATE SCHEDULE (as applicable) ▪ REIMBURSABLE EXPENSES, if any (with “not to exceed” amount) 8. ATTACHMENTS: A: Task Order Scope of Services B (if any): _____________________________ I hereby authorize the performance of the work described in this Task Order. APPROVED: CITY OF PALO ALTO BY:____________________________________ Name __________________________________ Title___________________________________ Date ___________________________________ I hereby acknowledge receipt and acceptance of this Task Order and warrant that I have authority to sign on behalf of Consultant. APPROVED: COMPANY NAME: ______________________ BY:____________________________________ Name __________________________________ Title___________________________________ Date ___________________________________ Docusign Envelope ID: 292336D3-8044-4532-831A-358A809633AD Item 9 Attachment A - Embarcadero Media Foundation, Contract C25192359A Item 9: Staff Report Pg. 19 Packet Pg. 219 of 349 Professional Services Rev. Oct 16,2024 Page 17 of 22 EXHIBIT B SCHEDULE OF PERFORMANCE CONSULTANT shall perform the Services consistent with the provisions of Exhibit A (Scope of Services) of this Agreement and so as to meet the schedule set forth in each Task Order as detailed in Section 1 (Scope of Services) of this Agreement. Docusign Envelope ID: 292336D3-8044-4532-831A-358A809633AD Item 9 Attachment A - Embarcadero Media Foundation, Contract C25192359A Item 9: Staff Report Pg. 20 Packet Pg. 220 of 349 Professional Services Rev. Oct 16,2024 Page 18 of 22 EXHIBIT C COMPENSATION The CITY agrees to compensate the CONSULTANT for on-call, as-needed, time-limited project support Services performed in accordance with the terms and conditions of this Agreement based on the hourly rate schedule provided in Exhibit C-1 (“Schedule of Rates”) of this Agreement, in accordance with Section 4 of this Agreement. The compensation to be paid to CONSULTANT under this Agreement for all Services shall not exceed the amounts stated in Section 4 of this Agreement. Docusign Envelope ID: 292336D3-8044-4532-831A-358A809633AD Item 9 Attachment A - Embarcadero Media Foundation, Contract C25192359A Item 9: Staff Report Pg. 21 Packet Pg. 221 of 349 Professional Services Rev. Oct 16,2024 Page 19 of 22 EXHIBIT C-1 SCHEDULE OF RATES CONSULTANT’s schedule of rates is as follows: Scope Contract Year Est. # of Ads/year Ad size Rate Est. Compensation Task 1 : Advertising for City Council and Council Committee Meetings Year #1 65 18 units $36/unit $42,120 Year #2 65 18 units $37/unit $43,290 Year #3 65 18 units $38/unit $44,460 Year #4 65 18 units $39/unit $45,630 Year #5 65 18 units $40/unit $46,800 TOTAL NOT TO EXCEED, TASK 1 325 5850 units $40/unit $222,300 Task 2: Advertising for Boards, Commissions, Committees (BCC) Recruitment Year #1 10 10 units $36/unit $3,600 Year #2 10 10 units $37/unit $3,700 Year #3 10 10 units $38/unit $3,800 Year #4 10 10 units $39/unit $3,900 Year #5 10 10 units $40/unit $4,000 TOTAL NOT TO EXCEED, TASK 2 50 500 units $40/unit $19,000 Task 3: Advertising for Elections Year #1 4 8 units $36/unit $1,152 Year #2 4 8 units $37/unit $1,184 Year #3 4 8 units $38/unit $1,216 Year #4 4 8 units $39/unit $1,248 Year #5 4 8 units $40/unit $1,280 TOTAL NOT TO EXCEED, TASK 3 20 160 units $40/unit $6,080 TOTAL NOT TO EXCEED (TASKS 1 – 3) 395 6510 units $40/unit $247,380 Docusign Envelope ID: 292336D3-8044-4532-831A-358A809633AD Item 9 Attachment A - Embarcadero Media Foundation, Contract C25192359A Item 9: Staff Report Pg. 22 Packet Pg. 222 of 349 Professional Services Rev. Oct 16,2024 Page 20 of 22 * Dimensions are measured in display units, with 40 units per page, 5 columns and 8 rows per 10" x 13" printed page. Each unit measures 1 7/8" x 1 15/16". Consultant’s design services team will engage City to size ads to ensure legibility. The rate per unit will be as indicated in the table and the city can use as many units as it needs to properly design ads. The city will have full freedom to work with Consultant’s design department to generate the best ad. The units quoted are based on the average units the city has used over the past two years of running each type of ad with us. Consultant will provide a flat per-unit rate according to contract year. The city can consume as much advertising as it needs based on the format that is most appropriate for the ad. Use of more display units will increase cost. Docusign Envelope ID: 292336D3-8044-4532-831A-358A809633AD Item 9 Attachment A - Embarcadero Media Foundation, Contract C25192359A Item 9: Staff Report Pg. 23 Packet Pg. 223 of 349 Professional Services Rev. Oct 16,2024 Page 21 of 22 EXHIBIT D INSURANCE REQUIREMENTS CONSULTANTS TO THE CITY OF PALO ALTO (CITY), AT THEIR SOLE EXPENSE, SHALL FOR THE TERM OF THE CONTRACT OBTAIN AND MAINTAIN INSURANCE IN THE AMOUNTS FOR THE COVERAGE SPECIFIED BELOW, AFFORDED BY COMPANIES WITH AM BEST’S KEY RATING OF A-:VII, OR HIGHER, LICENSED OR AUTHORIZED TO TRANSACT INSURANCE BUSINESS IN THE STATE OF CALIFORNIA. AWARD IS CONTINGENT ON COMPLIANCE WITH CITY’S INSURANCE REQUIREMENTS AS SPECIFIED HEREIN. REQUIRED TYPE OF COVERAGE REQUIREMENT MINIMUM LIMITS EACH OCCURRENCE AGGREGATE YES YES WORKER’S COMPENSATION EMPLOYER’S LIABILITY STATUTORY STATUTORY STATUTORY STATUTORY YES GENERAL LIABILITY, INCLUDING PERSONAL INJURY, BROAD FORM PROPERTY DAMAGE BLANKET CONTRACTUAL, AND FIRE LEGAL LIABILITY BODILY INJURY PROPERTY DAMAGE BODILY INJURY & PROPERTY DAMAGE COMBINED. $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 YES AUTOMOBILE LIABILITY, INCLUDING ALL OWNED, HIRED, NON-OWNED BODILY INJURY - EACH PERSON - EACH OCCURRENCE PROPERTY DAMAGE BODILY INJURY AND PROPERTY DAMAGE, COMBINED $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 YES PROFESSIONAL LIABILITY, INCLUDING, ERRORS AND OMISSIONS, MALPRACTICE (WHEN APPLICABLE), AND NEGLIGENT PERFORMANCE ALL DAMAGES $1,000,000 YES THE CITY OF PALO ALTO IS TO BE NAMED AS AN ADDITIONAL INSURED: CONSULTANT, AT ITS SOLE COST AND EXPENSE, SHALL OBTAIN AND MAINTAIN, IN FULL FORCE AND EFFECT THROUGHOUT THE ENTIRE TERM OF ANY RESULTANT AGREEMENT, THE INSURANCE COVERAGE HEREIN DESCRIBED, INSURING NOT ONLY CONSULTANT AND ITS SUBCONSULTANTS, IF ANY, BUT ALSO, WITH THE EXCEPTION OF WORKERS’ COMPENSATION, EMPLOYER’S LIABILITY AND PROFESSIONAL INSURANCE, NAMING AS ADDITIONAL INSUREDS CITY, ITS COUNCIL MEMBERS, OFFICERS, AGENTS, AND EMPLOYEES. I. INSURANCE COVERAGE MUST INCLUDE: A. A CONTRACTUAL LIABILITY ENDORSEMENT PROVIDING INSURANCE COVERAGE FOR CONSULTANT’S AGREEMENT TO INDEMNIFY CITY. II. THE CONSULTANT MUST SUBMIT CERTIFICATES(S) OF INSURANCE EVIDENCING REQUIRED COVERAGE AT THE FOLLOWING EMAIL: PURCHASINGSUPPORT@CITYOFPALOALTO.ORG III. ENDORSEMENT PROVISIONS WITH RESPECT TO THE INSURANCE AFFORDED TO ADDITIONAL INSUREDS: A. PRIMARY COVERAGE WITH RESPECT TO CLAIMS ARISING OUT OF THE OPERATIONS OF THE NAMED INSURED, INSURANCE AS AFFORDED BY THIS POLICY IS PRIMARY AND IS NOT ADDITIONAL TO OR CONTRIBUTING WITH ANY OTHER INSURANCE CARRIED BY OR FOR THE BENEFIT OF THE ADDITIONAL INSUREDS. Docusign Envelope ID: 292336D3-8044-4532-831A-358A809633AD Item 9 Attachment A - Embarcadero Media Foundation, Contract C25192359A Item 9: Staff Report Pg. 24 Packet Pg. 224 of 349 Professional Services Rev. Oct 16,2024 Page 22 of 22 B. CROSS LIABILITY THE NAMING OF MORE THAN ONE PERSON, FIRM, OR CORPORATION AS INSUREDS UNDER THE POLICY SHALL NOT, FOR THAT REASON ALONE, EXTINGUISH ANY RIGHTS OF THE INSURED AGAINST ANOTHER, BUT THIS ENDORSEMENT, AND THE NAMING OF MULTIPLE INSUREDS, SHALL NOT INCREASE THE TOTAL LIABILITY OF THE COMPANY UNDER THIS POLICY. C. NOTICE OF CANCELLATION 1. IF THE POLICY IS CANCELED BEFORE ITS EXPIRATION DATE FOR ANY REASON OTHER THAN THE NON-PAYMENT OF PREMIUM, THE CONSULTANT SHALL PROVIDE CITY AT LEAST A THIRTY (30) DAY WRITTEN NOTICE BEFORE THE EFFECTIVE DATE OF CANCELLATION. 2. IF THE POLICY IS CANCELED BEFORE ITS EXPIRATION DATE FOR THE NON-PAYMENT OF PREMIUM, THE CONSULTANT SHALL PROVIDE CITY AT LEAST A TEN (10) DAY WRITTEN NOTICE BEFORE THE EFFECTIVE DATE OF CANCELLATION. EVIDENCE OF INSURANCE AND OTHER RELATED NOTICES ARE REQUIRED TO BE FILED WITH THE CITY OF PALO ALTO SENT TO THE FOLLOWING EMAIL: PURCHASINGSUPPORT@CITYOFPALOALTO.ORG Docusign Envelope ID: 292336D3-8044-4532-831A-358A809633AD Item 9 Attachment A - Embarcadero Media Foundation, Contract C25192359A Item 9: Staff Report Pg. 25 Packet Pg. 225 of 349 Certificate Of Completion Envelope Id: 292336D3-8044-4532-831A-358A809633AD Status: Completed Subject: Complete with Docusign: FINAL C25192359A Embarcadero Media .pdf Source Envelope: Document Pages: 22 Signatures: 2 Envelope Originator: Certificate Pages: 2 Initials: 0 Alice Harrison AutoNav: Enabled EnvelopeId Stamping: Enabled Time Zone: (UTC-08:00) Pacific Time (US & Canada) 250 Hamilton Ave Palo Alto , CA 94301 Alice.Harrison@CityofPaloAlto.org IP Address: 199.33.32.254 Record Tracking Status: Original 4/9/2025 10:24:21 AM Holder: Alice Harrison Alice.Harrison@CityofPaloAlto.org Location: DocuSign Security Appliance Status: Connected Pool: StateLocal Storage Appliance Status: Connected Pool: City of Palo Alto Location: Docusign Signer Events Signature Timestamp Adam Dawes adawes@embarcaderomedia.org CEO Security Level: Email, Account Authentication (None)Signature Adoption: Pre-selected Style Using IP Address: 76.79.100.122 Sent: 4/9/2025 10:27:19 AM Viewed: 4/9/2025 10:37:04 AM Signed: 4/9/2025 10:57:12 AM Electronic Record and Signature Disclosure: Not Offered via Docusign Nico Navarrete nnavarrete@embarcaderomedia.org Director of Finance and Operations Security Level: Email, Account Authentication (None)Signature Adoption: Pre-selected Style Using IP Address: 73.70.201.54 Sent: 4/9/2025 10:57:14 AM Viewed: 4/9/2025 4:38:38 PM Signed: 4/9/2025 4:39:01 PM Electronic Record and Signature Disclosure: Not Offered via Docusign In Person Signer Events Signature Timestamp Editor Delivery Events Status Timestamp Agent Delivery Events Status Timestamp Intermediary Delivery Events Status Timestamp Certified Delivery Events Status Timestamp Carbon Copy Events Status Timestamp Christine Prior christine.prior@cityofpaloalto.org Administrative Associate III Copa Security Level: Email, Account Authentication (None) Sent: 4/9/2025 4:39:02 PM Electronic Record and Signature Disclosure: Not Offered via Docusign Item 9 Attachment A - Embarcadero Media Foundation, Contract C25192359A Item 9: Staff Report Pg. 26 Packet Pg. 226 of 349 Carbon Copy Events Status Timestamp Mahea Ah Yun mahealani.ahyun@cityofpaloalto.org City Clerk Security Level: Email, Account Authentication (None) Sent: 4/9/2025 4:39:03 PM Electronic Record and Signature Disclosure: Not Offered via Docusign Witness Events Signature Timestamp Notary Events Signature Timestamp Envelope Summary Events Status Timestamps Envelope Sent Hashed/Encrypted 4/9/2025 10:27:19 AM Certified Delivered Security Checked 4/9/2025 4:38:38 PM Signing Complete Security Checked 4/9/2025 4:39:01 PM Completed Security Checked 4/9/2025 4:39:03 PM Payment Events Status Timestamps Item 9 Attachment A - Embarcadero Media Foundation, Contract C25192359A Item 9: Staff Report Pg. 27 Packet Pg. 227 of 349 Professional Services Rev. Oct 16,2024 Page 1 of 24 CITY OF PALO ALTO CONTRACT NO. C25192359B AGREEMENT FOR PROFESSIONAL SERVICES BETWEEN THE CITY OF PALO ALTO AND PALO ALTO AND SAN FRANCISCO DAILY, LLC. DBA THE DAILY POST This Agreement for Professional Services (this “Agreement”) is entered into as of the 12th day of May, 2025 (the “Effective Date”), by and between the CITY OF PALO ALTO, a California chartered municipal corporation (“CITY”), and PALO ALTO AND SAN FRANCISCO DAILY, LLC. DBA THE DAILY POST, a California Corporation, located at 385 Forest Avenue, Palo Alto, CA 94306 (“CONSULTANT”). The following recitals are a substantive portion of this Agreement and are fully incorporated herein by this reference: RECITALS A. CITY intends to publish legally required notices and/or display advertisements (the “Project”) and desires to engage a consultant to provide legally require notice publication services and/or display advertisement publication services in connection with the Project (the “Services”, as detailed more fully in Exhibit A). B. CONSULTANT represents that it, its employees and subconsultants, if any, possess the necessary professional expertise, qualifications, and capability, and all required licenses and/or certifications to provide the Services. C. CITY, in reliance on these representations, desires to engage CONSULTANT to provide the Services as more fully described in Exhibit A, entitled “SCOPE OF SERVICES”. NOW, THEREFORE, in consideration of the recitals, covenants, terms, and conditions, in this Agreement, the parties agree as follows: SECTION 1. SCOPE OF SERVICES. CONSULTANT shall perform the Services described in Exhibit A in accordance with the terms and conditions contained in this Agreement. The performance of all Services shall be to the reasonable satisfaction of CITY. Optional On-Call Provision (This provision only applies if checked and only applies to on-call agreements.) CITY may elect to, but is not required to, authorize on-call Services up to the maximum compensation amount set forth in Section 4 (Not to Exceed Compensation). CONSULTANT shall provide on-call Services only by advanced, written authorization from CITY as detailed in this Section. On-call Services, if any, shall be authorized by CITY, as needed, with a Task Order assigned and approved by CITY’s Project Manager, Docusign Envelope ID: 0F7BDCB7-51E0-4F05-B87B-FC5CFA75962D Item 9 Attachment B - San Francisco Daily dba The Daily Post, Contract C25192359B Item 9: Staff Report Pg. 28 Packet Pg. 228 of 349 Professional Services Rev. Oct 16,2024 Page 2 of 24 as identified in Section 13 (Project Management). Each Task Order shall be in substantially the same form as Exhibit A-1 entitled “PROFESSIONAL SERVICES TASK ORDER”. Each Task Order shall contain a specific scope of services, schedule of performance and maximum compensation amount, in accordance with the provisions of this Agreement. Compensation for on-call Services shall be specified by CITY in the Task Order, based on whichever is lowest: the compensation structure set forth in Exhibit C, the hourly rates set forth in Exhibit C-1, or a negotiated lump sum. To accept a Task Order, CONSULTANT shall sign the Task Order and return it to CITY’s Project Manager within the time specified by the Project Manager, and upon authorization by CITY (defined as counter-signature by the CITY Project Manager), the fully executed Task Order shall become part of this Agreement. The cumulative total compensation due to CONSULTANT for all Task Orders issued under this Agreement shall not exceed the amount of compensation set forth in Section 4. CONSULTANT shall only be compensated for on-call Services performed under an authorized Task Order and only up to the maximum compensation amount set forth in Section 4. Performance of and payment for any on-call Services are subject to all requirements and restrictions in this Agreement. SECTION 2. TERM. The term of this Agreement shall be from July 1, 2025 through June 30, 2030 unless terminated earlier pursuant to Section 19 (Termination) of this Agreement. SECTION 3. SCHEDULE OF PERFORMANCE. Time is of the essence in the performance of Services under this Agreement. CONSULTANT shall complete the Services within the term of this Agreement and in accordance with the schedule set forth in Exhibit B, entitled “SCHEDULE OF PERFORMANCE”. Any Services for which times for performance are not specified in this Agreement shall be commenced and completed by CONSULTANT in a reasonably prompt and timely manner based upon the circumstances and direction communicated to the CONSULTANT. CITY’s agreement to extend the term or the schedule for performance shall not preclude recovery of damages for delay if the extension is required due to the fault of CONSULTANT. SECTION 4. NOT TO EXCEED COMPENSATION. The compensation to be paid to CONSULTANT for performance of the Services shall be based on the compensation structure detailed in Exhibit C, entitled “COMPENSATION,” including any reimbursable expenses specified therein, and the maximum total compensation shall not exceed Eighty-Five Thousand Dollars ($85,000) per contract year, however, CITY and CONSULTANT understands and agree that the compensation paid to CONSULTANT likely will be less than $85,000 per contract year, as CITY has appropriated that amount to payments to be made under two on-call contracts, of which this Agreement is one. The two on-call contracts shall be administered by the City Clerk’s Department to ensure the total aggregate of compensation paid per contract year for the on -call Services to be provided across both contracts will not exceed Eighty-Five Thousand Dollars ($85,000.00), with a total not to exceed contract amount of Four Hundred Twenty-Five Thousand Dollars ($425,000) over the term of the Agreement. The applicable rate schedule by which CONSULTANT will be paid for Services rendered under this Agreement is set out at Exhibit “C- 1”, entitled SCHEDULE OF RATES”. Any work performed or expenses incurred for which payment would result in a total exceeding the maximum compensation as set forth herein shall be Docusign Envelope ID: 0F7BDCB7-51E0-4F05-B87B-FC5CFA75962D Item 9 Attachment B - San Francisco Daily dba The Daily Post, Contract C25192359B Item 9: Staff Report Pg. 29 Packet Pg. 229 of 349 Professional Services Rev. Oct 16,2024 Page 3 of 24 at no cost to the CITY. The CITY is hiring two (2) consultants, neither of whom, including the CONSULTANT under this Agreement, is guaranteed or assured of any minimum quantity of work to be performed. If work is performed by any one or more such consultants, CITY will ensure that total compensation to all such consultants will not exceed in the aggregate $425,000 over the term of the Agreement. SECTION 5. INVOICES. In order to request payment, CONSULTANT shall submit monthly invoices to the CITY describing the Services performed and the applicable charges (including, if applicable, an identification of personnel who performed the Services, hours worked, hourly rates, and reimbursable expenses), based upon Exhibit C or, as applicable, CONSULTANT’s schedule of rates set forth in Exhibit C-1. If applicable, the invoice shall also describe the percentage of completion of each task. The information in CONSULTANT’s invoices shall be subject to verification by CITY. CONSULTANT shall send all invoices to CITY’s Project Manager at the address specified in Section 13 (Project Management) below. CITY will generally process and pay invoices within thirty (30) days of receipt of an acceptable invoice. SECTION 6. QUALIFICATIONS/STANDARD OF CARE. All Services shall be performed by CONSULTANT or under CONSULTANT’s supervision. CONSULTANT represents that it, its employees and subcontractors, if any, possess the professional and technical personnel necessary to perform the Services required by this Agreement and that the personnel have sufficient skill and experience to perform the Services assigned to them. CONSULTANT represents that it, its employees and subcontractors, if any, have and shall maintain during the term of this Agreement all licenses, permits, qualifications, insurance and approvals of whatever nature that are legally required to perform the Services. All Services to be furnished by CONSULTANT under this Agreement shall meet the professional standard and quality that prevail among professionals in the same discipline and of similar knowledge and skill engaged in related work throughout California under the same or similar circumstances. SECTION 7. COMPLIANCE WITH LAWS. CONSULTANT shall keep itself informed of and in compliance with all federal, state and local laws, ordinances, regulations, and orders that may affect in any manner the Project or the performance of the Services or those engaged to perform Services under this Agreement, as amended from time to time. CONSULTANT shall procure all permits and licenses, pay all charges and fees, and give all notices required by law in the performance of the Services. SECTION 8. ERRORS/OMISSIONS. CONSULTANT is solely responsible for costs, including, but not limited to, increases in the cost of Services, arising from or caused by CONSULTANT’s errors and omissions, including, but not limited to, the costs of corrections such errors and omissions, any change order markup costs, or costs arising from delay caused by the errors and omissions or unreasonable delay in correcting the errors and omissions. 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 the CITY’s stated construction budget by ten percent (10%) or more, CONSULTANT shall make Docusign Envelope ID: 0F7BDCB7-51E0-4F05-B87B-FC5CFA75962D Item 9 Attachment B - San Francisco Daily dba The Daily Post, Contract C25192359B Item 9: Staff Report Pg. 30 Packet Pg. 230 of 349 Professional Services Rev. Oct 16,2024 Page 4 of 24 recommendations to CITY for aligning the Project design with the budget, incorporate CITY approved recommendations, and revise the design to meet the Project budget, at no additional cost to CITY. SECTION 10. INDEPENDENT CONTRACTOR. CONSULTANT acknowledges and agrees that CONSULTANT and any agent or employee of CONSULTANT will act as and shall be deemed at all times to be an independent contractor and shall be wholly responsible for the manner in which CONSULTANT performs the Services requested by CITY under this Agreement. CONSULTANT and any agent or employee of CONSULTANT will not have employee status with CITY, nor be entitled to participate in any plans, arrangements, or distributions by CITY pertaining to or in connection with any retirement, health or other benefits that CITY may offer its employees. CONSULTANT will be responsible for all obligations and payments, whether imposed by federal, state or local law, including, but not limited to, FICA, income tax withholdings, workers’ compensation, unemployment compensation, insurance, and other similar responsibilities related to CONSULTANT’s performance of the Services, or any agent or employee of CONSULTANT providing same. Nothing in this Agreement shall be construed as creating an employment or agency relationship between CITY and CONSULTANT or any agent or employee of CONSULTANT. Any terms in this Agreement referring to direction from CITY shall be construed as providing for direction as to policy and the result of CONSULTANT’s provision of the Services only, and not as to the means by which such a result is obtained. SECTION 11. ASSIGNMENT. The parties agree that the expertise and experience of CONSULTANT are material considerations for this Agreement. CONSULTANT shall not assign or transfer any interest in this Agreement nor the performance of any of CONSULTANT’s obligations hereunder without the prior written approval of the City Manager. Any purported assignment made without the prior written approval of the City Manager will be void and without effect. Subject to the foregoing, the covenants, terms, conditions and provisions of this Agreement will apply to, and will bind, the heirs, successors, executors, administrators and assignees of the parties. SECTION 12. SUBCONTRACTING. Option A: No Subcontractor: CONSULTANT shall not subcontract any portion of the Services to be performed under this Agreement without the prior written authorization of the City Manager or designee. In the event CONSULTANT does subcontract any portion of the work to be performed under this Agreement, CONSULTANT shall be fully responsible for all acts and omissions of subcontractors. SECTION 13. PROJECT MANAGEMENT. CONSULTANT will assign Brandon Heinrichs Email: bheinrichs@padailypost.com as the CONSULTANT’s Project Manager to have supervisory responsibility for the performance, progress, and execution of the Services and represent CONSULTANT during the day-to-day performance of the Services. If circumstances cause the substitution of the CONSULTANT’s Project Manager or any other of CONSULTANT’s key personnel for any reason, the appointment of a substitute Project Manager and the assignment of any key new or replacement personnel will be subject to the prior written approval of the CITY’s Project Manager. CONSULTANT, at CITY’s request, shall promptly remove CONSULTANT Docusign Envelope ID: 0F7BDCB7-51E0-4F05-B87B-FC5CFA75962D Item 9 Attachment B - San Francisco Daily dba The Daily Post, Contract C25192359B Item 9: Staff Report Pg. 31 Packet Pg. 231 of 349 Professional Services Rev. Oct 16,2024 Page 5 of 24 personnel who CITY finds do not perform the Services in an acceptable manner, are uncooperative, or present a threat to the adequate or timely completion of the Services or a threat to the safety of persons or property. CITY’s Project Manager is Christine Prior, City Clerk Department, 250 Hamilton Ave Palo Alto, CA, zipcode: 94301, Telephone: 650-329-2159. CITY’s Project Manager will be CONSULTANT’s point of contact with respect to performance, progress and execution of the Services. CITY may designate an alternate Project Manager from time to time. SECTION 14. OWNERSHIP OF MATERIALS. All work product, including without limitation, all writings, drawings, studies, sketches, photographs, plans, reports, specifications, computations, models, recordings, data, documents, and other materials and copyright interests developed under this Agreement, in any form or media, shall be and remain the exclusive property of CITY without restriction or limitation upon their use. CONSULTANT agrees that all copyrights which arise from creation of the work product pursuant to this Agreement are vested in CITY, and CONSULTANT hereby waives and relinquishes all claims to copyright or other intellectual property rights in favor of CITY. Neither CONSULTANT nor its subcontractors, if any, shall make any of such work product available to any individual or organization without the prior written approval of the City Manager or designee. CONSULTANT makes no representation of the suitability of the work product for use in or application to circumstances not contemplated by the Scope of Services. SECTION 15. AUDITS. CONSULTANT agrees to permit CITY and its authorized representatives to audit, at any reasonable time during the term of this Agreement and for four (4) years from the date of final payment, CONSULTANT’s records pertaining to matters covered by this Agreement, including without limitation records demonstrating compliance with the requirements of Section 10 (Independent Contractor). CONSULTANT further agrees to maintain and retain accurate books and records in accordance with generally accepted accounting principles for at least four (4) years after the expiration or earlier termination of this Agreement or the completion of any audit hereunder, whichever is later. SECTION 16. INDEMNITY. [Option B applies to any consultant who does not qualify as a design professional as defined in Civil Code Section 2782.8.] 16.1. To the fullest extent permitted by law, CONSULTANT shall indemnify, defend and hold harmless CITY, its Council members, officers, employees and agents (each an “Indemnified Party”) from and against any and all demands, claims, or liability of any nature, including death or injury to any person, property damage or any other loss, including all costs and expenses of whatever nature including attorney’s fees, experts fees, court costs and disbursements (“Claims”) resulting from, arising out of or in any manner related to performance or nonperformance 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 indemnify an Indemnified Party from a Claim arising from the active Docusign Envelope ID: 0F7BDCB7-51E0-4F05-B87B-FC5CFA75962D Item 9 Attachment B - San Francisco Daily dba The Daily Post, Contract C25192359B Item 9: Staff Report Pg. 32 Packet Pg. 232 of 349 Professional Services Rev. Oct 16,2024 Page 6 of 24 negligence or willful misconduct of an Indemnified Party that is not contributed to by any act of, or by any omission to perform a duty imposed by law or agreement by, CONSULTANT, its officers, employees, agents or contractors under this Agreement. 16.3. The acceptance of CONSULTANT’s Services and duties by CITY shall not operate as a waiver of the right of indemnification. The provisions of this Section 16 shall survive the expiration or early termination of this Agreement. SECTION 17. WAIVERS. No waiver of a condition or nonperformance of an obligation under this Agreement is effective unless it is in writing in accordance with Section 29.4 of this Agreement. No delay or failure to require performance of any provision of this Agreement shall constitute a waiver of that provision as to that or any other instance. Any waiver granted shall apply solely to the specific instance expressly stated. No single or partial exercise of any right or remedy will preclude any other or further exercise of any right or remedy. SECTION 18. INSURANCE. 18.1. CONSULTANT, at its sole cost and expense, shall obtain and maintain, in full force and effect during the term of this Agreement, the insurance coverage described in Exhibit D, entitled “INSURANCE REQUIREMENTS”. CONSULTANT and its contractors, if any, shall obtain a policy endorsement naming CITY as an additional insured under any general liability or automobile policy or policies. 18.2. All insurance coverage required hereunder shall be provided through carriers with AM Best’s Key Rating Guide ratings of A-:VII or higher which are licensed or authorized to transact insurance business in the State of California. Any and all contractors of CONSULTANT retained to perform Services under this Agreement will obtain and maintain, in full force and effect during the term of this Agreement, identical insurance coverage, naming CITY as an additional insured under such policies as required above. 18.3. Certificates evidencing such insurance shall be filed with CITY concurrently with the execution of this Agreement. The certificates will be subject to the approval of CITY’s Risk Manager and will contain an endorsement stating that the insurance is primary coverage and will not be canceled, or materially reduced in coverage or limits, by the insurer except after filing with the Purchasing Manager thirty (30) days’ prior written notice of the cancellation or modification. If the insurer cancels or modifies the insurance and provides less than thirty (30) days’ notice to CONSULTANT, CONSULTANT shall provide the Purchasing Manager written notice of the cancellation or modification within two (2) business days of the CONSULTANT’s receipt of such notice. CONSULTANT shall be responsible for ensuring that current certificates evidencing the insurance are provided to CITY’s Chief Procurement Officer during the entire term of this Agreement. 18.4. The procuring of such required policy or policies of insurance will not be construed to limit CONSULTANT’s liability hereunder nor to fulfill 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 performed under this Agreement, including Docusign Envelope ID: 0F7BDCB7-51E0-4F05-B87B-FC5CFA75962D Item 9 Attachment B - San Francisco Daily dba The Daily Post, Contract C25192359B Item 9: Staff Report Pg. 33 Packet Pg. 233 of 349 Professional Services Rev. Oct 16,2024 Page 7 of 24 such damage, injury, or loss arising after the Agreement is terminated or the term has expired. SECTION 19. TERMINATION OR SUSPENSION OF AGREEMENT OR SERVICES. 19.1. The City Manager may suspend the performance of the Services, in whole or in part, or terminate this Agreement, with or without cause, by giving ten (10) days prior written notice thereof to CONSULTANT. If CONSULTANT fails to perform any of its material obligations under this Agreement, in addition to all other remedies provided under this Agreement or at law, the City Manager may terminate this Agreement sooner upon written notice of termination. Upon receipt of any notice of suspension or termination, CONSULTANT will discontinue its performance of the Services on the effective date in the notice of suspension or termination. 19.2. In event of suspension or termination, CONSULTANT will deliver to the City Manager on or before the effective date in the notice of suspension or termination, any and all work product, as detailed in Section 14 (Ownership of Materials), whether or not completed, prepared by CONSULTANT or its contractors, if any, in the performance of this Agreement. Such work product is the property of CITY, as detailed in Section 14 (Ownership of Materials). 19.3. In event of suspension or termination, CONSULTANT will be paid for the Services rendered and work products delivered to CITY in accordance with the Scope of Services up to the effective date in the notice of suspension or termination; provided, however, if this Agreement is suspended or terminated on account of a default by CONSULTANT, CITY will be obligated to compensate CONSULTANT only for that portion of CONSULTANT’s Services provided in material conformity with this Agreement as such determination is made by the City Manager acting in the reasonable exercise of his/her discretion. The following Sections will survive any expiration or termination of this Agreement: 14, 15, 16, 17, 19.2, 19.3, 19.4, 20, 25, 27, 28, 29 and 30. 19.4. No payment, partial payment, acceptance, or partial acceptance by CITY will operate as a waiver on the part of CITY of any of its rights under this Agreement, unless made in accordance with Section 17 (Waivers). SECTION 20. NOTICES. All notices hereunder will be given in writing and mailed, postage prepaid, by certified mail, addressed as follows: To CITY: Office of the City Clerk City of Palo Alto Post Office Box 10250 Palo Alto, CA 94303 With a copy to the Purchasing Manager To CONSULTANT: Attention of the Project Manager at the address of CONSULTANT recited on the first page of this Agreement. Docusign Envelope ID: 0F7BDCB7-51E0-4F05-B87B-FC5CFA75962D Item 9 Attachment B - San Francisco Daily dba The Daily Post, Contract C25192359B Item 9: Staff Report Pg. 34 Packet Pg. 234 of 349 Professional Services Rev. Oct 16,2024 Page 8 of 24 CONSULTANT shall provide written notice to CITY of any change of address. SECTION 21. CONFLICT OF INTEREST. 21.1. In executing this Agreement, CONSULTANT covenants that it presently has no interest, and will not acquire any interest, direct or indirect, financial or otherwise, which would conflict in any manner or degree with the performance of the Services. 21.2. CONSULTANT further covenants that, in the performance of this Agreement, it will not employ subcontractors or other persons or parties having such an interest. CONSULTANT certifies that no person who has or will have any financial interest under this Agreement is an officer or employee of CITY; this provision will be interpreted in accordance with the applicable provisions of the Palo Alto Municipal Code and the Government Code of the State of California, as amended from time to time. CONSULTANT agrees to notify CITY if any conflict arises. 21.3. If the CONSULTANT meets the definition of a “Consultant” as defined by the Regulations of the Fair Political Practices Commission, CONSULTANT will file the appropriate financial disclosure documents required by the Palo Alto Municipal Code and the Political Reform Act of 1974, as amended from time to time. SECTION 22. NONDISCRIMINATION; COMPLIANCE WITH ADA. 22.1. As set forth in Palo Alto Municipal Code Section 2.30.510, as amended from time to time, CONSULTANT certifies that in the performance of this Agreement, it shall not discriminate in the employment of any person due to that person’s race, skin color, gender, gender identity, age, religion, disability, national origin, ancestry, sexual orientation, pregnancy, genetic information or condition, housing status, marital status, familial status, weight or height of such person. CONSULTANT acknowledges that it has read and understands the provisions of Section 2.30.510 of the Palo Alto Municipal Code relating to Nondiscrimination Requirements and the penalties for violation thereof, and agrees to meet all requirements of Section 2.30.510 pertaining to nondiscrimination in employment. 22.2. CONSULTANT understands and agrees that pursuant to the Americans Disabilities Act (“ADA”), programs, services and other activities provided by a public entity to the public, whether directly or through a contractor or subcontractor, are required to be accessible to the disabled public. CONSULTANT will provide the Services specified in this Agreement in a manner that complies with the ADA and any other applicable federal, state and local disability rights laws and regulations, as amended from time to time. CONSULTANT will not discriminate against persons with disabilities in the provision of services, benefits or activities provided under this Agreement. SECTION 23. ENVIRONMENTALLY PREFERRED PURCHASING AND ZERO WASTE REQUIREMENTS. CONSULTANT shall comply with the CITY’s Environmentally Preferred Purchasing policies which are available at CITY’s Purchasing Department, hereby incorporated by reference and as amended from time to time. CONSULTANT shall comply with Docusign Envelope ID: 0F7BDCB7-51E0-4F05-B87B-FC5CFA75962D Item 9 Attachment B - San Francisco Daily dba The Daily Post, Contract C25192359B Item 9: Staff Report Pg. 35 Packet Pg. 235 of 349 Professional Services Rev. Oct 16,2024 Page 9 of 24 waste reduction, reuse, recycling and disposal requirements of CITY’s Zero Waste Program. Zero Waste best practices include, first, minimizing and reducing waste; second, reusing waste; and, third, recycling or composting waste. In particular, CONSULTANT shall comply with the following Zero Waste requirements: (a) All printed materials provided by CONSULTANT to CITY generated from a personal computer and printer including but not limited to, proposals, quotes, invoices, reports, and public education materials, shall be double-sided and printed on a minimum of 30% or greater post-consumer content paper, unless otherwise approved by CITY’s Project Manager. Any submitted materials printed by a professional printing company shall be a minimum of 30% or greater post-consumer material and printed with vegetable-based inks. (b) Goods purchased by CONSULTANT on behalf of CITY shall be purchased in accordance with CITY’s Environmental Purchasing Policy including but not limited to Extended Producer Responsibility requirements for products and packaging. A copy of this policy is on file at the Purchasing Department’s office. (c) Reusable/returnable pallets shall be taken back by CONSULTANT, at no additional cost to CITY, for reuse or recycling. CONSULTANT shall provide documentation from the facility accepting the pallets to verify that pallets are not being disposed. SECTION 24. COMPLIANCE WITH PALO ALTO MINIMUM WAGE ORDINANCE. CONSULTANT shall comply with all requirements of the Palo Alto Municipal Code Chapter 4.62 (Citywide Minimum Wage), as amended from time to time. In particular, for any employee otherwise entitled to the State minimum wage, who performs at least two (2) hours of work in a calendar week within the geographic boundaries of the City, CONSULTANT shall pay such employees no less than the minimum wage set forth in Palo Alto Municipal Code Section 4.62.030 for each hour worked within the geographic boundaries of the City of Palo Alto. In addition, CONSULTANT shall post notices regarding the Palo Alto Minimum Wage Ordinance in accordance with Palo Alto Municipal Code Section 4.62.060. SECTION 25. NON-APPROPRIATION. This Agreement is subject to the fiscal provisions of the Charter of the City of Palo Alto and the Palo Alto Municipal Code, as amended from time to time. This Agreement will terminate without any penalty (a) at the end of any fiscal year in the event that funds are not appropriated for the following fiscal year, or (b) at any time within a fiscal year in the event that funds are only appropriated for a portion of the fiscal year and funds for this Agreement are no longer available. This Section shall take precedence in the event of a conflict with any other covenant, term, condition, or provision of this Agreement. SECTION 26. PREVAILING WAGES AND DIR REGISTRATION FOR PUBLIC WORKS CONTRACTS. 26.1. This Project is not subject to prevailing wages and related requirements. CONSULTANT is not required to pay prevailing wages and meet related requirements under the California Labor Code and California Code of Regulations in the performance and implementation of the Project if the contract: (1) is not a public works contract; (2) is for a public works construction project of $25,000 or less, per California Labor Code Sections 1782(d)(1), 1725.5(f) and 1773.3(j); or (3) is for a public works alteration, demolition, repair, or maintenance project of Docusign Envelope ID: 0F7BDCB7-51E0-4F05-B87B-FC5CFA75962D Item 9 Attachment B - San Francisco Daily dba The Daily Post, Contract C25192359B Item 9: Staff Report Pg. 36 Packet Pg. 236 of 349 Professional Services Rev. Oct 16,2024 Page 10 of 24 $15,000 or less, per California Labor Code Sections 1782(d)(1), 1725.5(f) and 1773.3(j). SECTION 27. CLAIMS PROCEDURE FOR “9204 PUBLIC WORKS PROJECTS”. For purposes of this Section 27, a “9204 Public Works Project” means the erection, construction, alteration, repair, or improvement of any public structure, building, road, or other public improvement of any kind. (Cal. Pub. Cont. Code § 9204.) Per California Public Contract Code Section 9204, for Public Works Projects, certain claims procedures shall apply, as set forth in Exhibit F, entitled “Claims for Public Contract Code Section 9204 Public Works Projects”. This Project is not a 9204 Public Works Project. SECTION 28. CONFIDENTIAL INFORMATION. 28.1. In the performance of this Agreement, CONSULTANT may have access to CITY’s Confidential Information (defined below). CONSULTANT will hold Confidential Information in strict confidence, not disclose it to any third party, and will use it only for the performance of its obligations to CITY under this Agreement and for no other purpose. CONSULTANT will maintain reasonable and appropriate administrative, technical and physical safeguards to ensure the security, confidentiality and integrity of the Confidential Information. Notwithstanding the foregoing, CONSULTANT may disclose Confidential Information to its employees, agents and subcontractors, if any, to the extent they have a need to know in order to perform CONSULTANT’s obligations to CITY under this Agreement and for no other purpose, provided that the CONSULTANT informs them of, and requires them to follow, the confidentiality and security obligations of this Agreement. 28.2. “Confidential Information” means all data, information (including without limitation “Personal Information” about a California resident as defined in Civil Code Section 1798 et seq., as amended from time to time) and materials, in any form or media, tangible or intangible, provided or otherwise made available to CONSULTANT by CITY, directly or indirectly, pursuant to this Agreement. Confidential Information excludes information that CONSULTANT can show by appropriate documentation: (i) was publicly known at the time it was provided or has subsequently become publicly known other than by a breach of this Agreement; (ii) was rightfully in CONSULTANT’s possession free of any obligation of confidence prior to receipt of Confidential Information; (iii) is rightfully obtained by CONSULTANT from a third party without breach of any confidentiality obligation; (iv) is independently developed by employees of CONSULTANT without any use of or access to the Confidential Information; or (v) CONSULTANT has written consent to disclose signed by an authorized representative of CITY. 28.3. Notwithstanding the foregoing, CONSULTANT may disclose Confidential Information to the extent required by order of a court of competent jurisdiction or governmental body, provided that CONSULTANT will notify CITY in writing of such order immediately upon receipt and prior to any such disclosure (unless CONSULTANT is prohibited by law from doing so), to give CITY an opportunity to oppose or otherwise respond to such order. Docusign Envelope ID: 0F7BDCB7-51E0-4F05-B87B-FC5CFA75962D Item 9 Attachment B - San Francisco Daily dba The Daily Post, Contract C25192359B Item 9: Staff Report Pg. 37 Packet Pg. 237 of 349 Professional Services Rev. Oct 16,2024 Page 11 of 24 28.4. CONSULTANT will notify City promptly upon learning of any breach in the security of its systems or unauthorized disclosure of, or access to, Confidential Information in its possession or control, and if such Confidential Information consists of Personal Information, CONSULTANT will provide information to CITY sufficient to meet the notice requirements of Civil Code Section 1798 et seq., as applicable, as amended from time to time. 28.5. Prior to or upon termination or expiration of this Agreement, CONSULTANT will honor any request from the CITY to return or securely destroy all copies of Confidential Information. All Confidential Information is and will remain the property of the CITY and nothing contained in this Agreement grants or confers any rights to such Confidential Information on CONSULTANT. 28.6. If selected in Section 30 (Exhibits), this Agreement is also subject to the terms and conditions of the Information Privacy Policy and Cybersecurity Terms and Conditions. SECTION 29. MISCELLANEOUS PROVISIONS. 29.1. This Agreement will be governed by California law, without regard to its conflict of law provisions. 29.2. In the event that an action is brought, the parties agree that trial of such action will be vested exclusively in the state courts of California in the County of Santa Clara, State of California. 29.3. The prevailing party in any action brought to enforce the provisions of this Agreement may recover its reasonable costs and attorneys’ fees expended in connection with that action. The prevailing party shall be entitled to recover an amount equal to the fair market value of legal services provided by attorneys employed by it as well as any attorneys’ fees paid to t hird parties. 29.4. This Agreement, including all exhibits, constitutes the entire and integrated agreement between the parties with respect to the subject matter of this Agreement, and supersedes all prior agreements, negotiations, representations, statements and undertakings, either oral or written. This Agreement may be amended only by a written instrument, which is signed by the authorized representatives of the parties and approved as required under Palo Alto Municipal Code, as amended from time to time. 29.5. If a court of competent jurisdiction finds or rules that any provision of this Agreement is void or unenforceable, the unaffected provisions of this Agreement will remain in full force and effect. 29.6. In the event of a conflict between the terms of this Agreement and the exhibits hereto (per Section 30) or CONSULTANT’s proposal (if any), the Agreement shall control. In the event of a conflict between the exhibits hereto and CONSULTANT’s proposal (if any), the exhibits shall control. Docusign Envelope ID: 0F7BDCB7-51E0-4F05-B87B-FC5CFA75962D Item 9 Attachment B - San Francisco Daily dba The Daily Post, Contract C25192359B Item 9: Staff Report Pg. 38 Packet Pg. 238 of 349 Professional Services Rev. Oct 16,2024 Page 12 of 24 29.7. The provisions of all checked boxes in this Agreement shall apply to this Agreement; the provisions of any unchecked boxes shall not apply to this Agreement. 29.8. All section headings contained in this Agreement are for convenience and reference only and are not intended to define or limit the scope of any provision of this Agreement. 29.9. This Agreement may be signed in multiple counterparts, which, when executed by the authorized representatives of the parties, shall together constitute a single binding agreement. SECTION 30. EXHIBITS. Each of the following exhibits, if the check box for such exhibit is selected below, is hereby attached and incorporated into this Agreement by reference as though fully set forth herein: EXHIBIT A: SCOPE OF SERVICES EXHIBIT A-1 PROFESSIONAL SERVICES TASK ORDER EXHIBIT B: SCHEDULE OF PERFORMANCE EXHIBIT C: COMPENSATION EXHIBIT C-1: SCHEDULE OF RATES EXHIBIT D: INSURANCE REQUIREMENTS THIS AGREEMENT IS NOT COMPLETE UNLESS ALL SELECTED EXHIBITS ARE ATTACHED. Docusign Envelope ID: 0F7BDCB7-51E0-4F05-B87B-FC5CFA75962D Item 9 Attachment B - San Francisco Daily dba The Daily Post, Contract C25192359B Item 9: Staff Report Pg. 39 Packet Pg. 239 of 349 Professional Services Rev. Oct 16,2024 Page 13 of 24 CONTRACT No. C25192359B SIGNATURE PAGE IN WITNESS WHEREOF, the parties hereto have by their duly authorized representatives executed this Agreement as of the date first above written. CITY OF PALO ALTO ____________________________ City Manager APPROVED AS TO FORM: __________________________ City Attorney or designee PALO ALTO AND SAN FRANCISCO DAILY, LLC. DBA THE DAILY POST Officer 1 By: ________________________________ Name: ______________________________ Title: _______________________________ Officer 2 By: ________________________________ Name: ______________________________ Title: _______________________________ Docusign Envelope ID: 0F7BDCB7-51E0-4F05-B87B-FC5CFA75962D BRANDON HEINRICHS General Manager Member Jim Pavelich Item 9 Attachment B - San Francisco Daily dba The Daily Post, Contract C25192359B Item 9: Staff Report Pg. 40 Packet Pg. 240 of 349 Professional Services Rev. Oct 16,2024 Page 14 of 24 EXHIBIT A SCOPE OF SERVICES CONSULTANT shall provide the Services detailed in this Exhibit A, entitled “SCOPE OF SERVICES”. Notwithstanding any provision herein to the contrary, CONSULTANT’s duties and services described in this Scope of Services shall not include preparing or assisting CITY with any portion of CITY’s preparation of a request for proposals, request for qualifications, or any other solicitation regarding a subsequent or additional contract with CITY. CITY shall at all times retain responsibility for public contracting, including with respect to any subsequent phase of this project. CONSULTANT’s participation in the planning, discussions, or drawing of project plans or specifications shall be limited to conceptual, preliminary, or initial plans or specifications. CONSULTANT shall cooperate with CITY to ensure that all bidders for a subsequent contract on any subsequent phase of this project have access to the same information, including all conceptual, preliminary, or initial plans or specifications prepared by CONSULTANT pursuant to this Scope of Services. CONSULTANT shall provide on-call, as-needed adjudicated newspaper and display advertisement services, specifically, the publication of Legally Required Notices (defined below) and/or display advertisements, as further detailed below. The City makes no guarantee as to the number, size, or frequency of publication of any Notice and/or display advertisement. Notices and/or display advertisements will be placed on an as-needed basis. The City reserves the right to publish elsewhere as needed in City’s sole discretion. The scope of services to be provided is further detailed as follows: a. Publish Legally Required Notices (or “Notices”), as defined under the Definitions section below, as a Newspaper of General Circulation in the City of Palo Alto, as adjudicated by the Santa Clara County Superior Court; b. Publish display advertisements for the City of Palo Alto; c. Provide cost of each Notice or display advertisement and proof copy for review and approval by the City prior to publication; d. Provide proof of publication of a Notice or display advertisement upon request within two (2) businesses days of such a request; e. Accept and publish all Notices and/or display advertisements submitted by the City within the publication’s required lead times(s) (as provided on the Proposal Details Form) in advance of publication (as applicable, in both print and digital formats); f. Provide invoices for services rendered on a monthly basis via electronic means; g. Allow invoice payment on a net-30 basis; Docusign Envelope ID: 0F7BDCB7-51E0-4F05-B87B-FC5CFA75962D Item 9 Attachment B - San Francisco Daily dba The Daily Post, Contract C25192359B Item 9: Staff Report Pg. 41 Packet Pg. 241 of 349 Professional Services Rev. Oct 16,2024 Page 15 of 24 h. Maintain accounts for multiple City departments and sub-groups as requested by City departments; i. On an annual basis, provide the circulation information for Consultant’s newspaper for the City of Palo Alto, including, but separating, circulation information for (1) print media distributions and (2) digital impressions; and j. Maintain proof of adjudication by the Santa Clara County Court as a Newspaper of General Circulation in the City of Palo Alto for the duration of the term of the Agreement and provide proof to City upon request. DEFINITIONS “Legally Required Notice” – Any notice which in whole or in part satisfies a legal requirement through publication in a newspaper or Newspaper of General Circulation pursuant to the laws of, the United States of America, the State of California, the County of Santa Clara, the City of Palo Alto, or other governmental or regulatory entity. Examples of Legally Required Notices (subject to change): • Uncashed checks; • Annual appropriation (GANN) limit, Annual Budget, Municipal Fee Schedule, and Proposition 218 assessment and tax notices; • Sale of Transferable Development Rights (TDRs); • Sale of surplus property; • Notice of election and other election related publications; • Agendas for legislative and various advisory bodies; • Notice of City Council and/or Planning & Transportation Commission public hearings; and • Notices required pursuant to the California Environmental Quality Act (CEQA). Examples of display advertisements (subject to change) not considered Legally Required Notices: • Recruitments for City Boards, Commissions, and Committees • Announcements of City sponsored and community events; • Catalogs, newspaper inserts, special publications; • Programmatic promotion; and • Invitations to participate in City sponsored surveys and requests for feedback not required by law. “Circulation” – Vendor’s publication frequency, number of copies distributed within Palo Alto per published issue, geographic area of distribution within Palo Alto, and method of distribution within Palo Alto. Digital circulation data is also included. Docusign Envelope ID: 0F7BDCB7-51E0-4F05-B87B-FC5CFA75962D Item 9 Attachment B - San Francisco Daily dba The Daily Post, Contract C25192359B Item 9: Staff Report Pg. 42 Packet Pg. 242 of 349 Professional Services Rev. Oct 16,2024 Page 16 of 24 EXHIBIT A-1 PROFESSIONAL SERVICES TASK ORDER CONSULTANT shall perform the Services detailed below in accordance with all the terms and conditions of the Agreement referenced in Item 1A below. All exhibits referenced in Item 8 are incorporated into this Task Order by this reference. CONSULTANT shall furnish the necessary facilities, professional, technical and supporting personnel required by this Task Order as described below. CONTRACT NO. OR PURCHASE ORDER REQUISITION NO. (AS APPLICABLE) 1A. MASTER AGREEMENT NO. (MAY BE SAME AS CONTRACT / P.O. NO. ABOVE): 1B. TASK ORDER NO.: 2. CONSULTANT NAME: 3. PERIOD OF PERFORMANCE: START: COMPLETION: 4 TOTAL TASK ORDER PRICE: $__________________ BALANCE REMAINING IN MASTER AGREEMENT/CONTRACT $_______________ 5. BUDGET CODE_______________ COST CENTER________________ COST ELEMENT______________ WBS/CIP__________ PHASE__________ 6. CITY PROJECT MANAGER’S NAME & DEPARTMENT:_____________________________________ 7. DESCRIPTION OF SCOPE OF SERVICES (Attachment A) MUST INCLUDE: ▪ SERVICES AND DELIVERABLES TO BE PROVIDED ▪ SCHEDULE OF PERFORMANCE ▪ MAXIMUM COMPENSATION AMOUNT AND RATE SCHEDULE (as applicable) ▪ REIMBURSABLE EXPENSES, if any (with “not to exceed” amount) 8. ATTACHMENTS: A: Task Order Scope of Services B (if any): _____________________________ I hereby authorize the performance of the work described in this Task Order. APPROVED: CITY OF PALO ALTO BY:____________________________________ Name __________________________________ Title___________________________________ Date ___________________________________ I hereby acknowledge receipt and acceptance of this Task Order and warrant that I have authority to sign on behalf of Consultant. APPROVED: COMPANY NAME: ______________________ BY:____________________________________ Name __________________________________ Title___________________________________ Date ___________________________________ Docusign Envelope ID: 0F7BDCB7-51E0-4F05-B87B-FC5CFA75962D Item 9 Attachment B - San Francisco Daily dba The Daily Post, Contract C25192359B Item 9: Staff Report Pg. 43 Packet Pg. 243 of 349 Professional Services Rev. Oct 16,2024 Page 17 of 24 EXHIBIT B SCHEDULE OF PERFORMANCE CONSULTANT shall perform the Services consistent with the provisions of Exhibit A (Scope of Services) of this Agreement and so as to meet the schedule set forth in each Task Order as detailed in Section 1 (Scope of Services) of this Agreement. Docusign Envelope ID: 0F7BDCB7-51E0-4F05-B87B-FC5CFA75962D Item 9 Attachment B - San Francisco Daily dba The Daily Post, Contract C25192359B Item 9: Staff Report Pg. 44 Packet Pg. 244 of 349 Professional Services Rev. Oct 16,2024 Page 18 of 24 EXHIBIT C COMPENSATION The CITY agrees to compensate the CONSULTANT for on-call, as-needed, time-limited project support Services performed in accordance with the terms and conditions of this Agreement based on the hourly rate schedule provided in Exhibit C-1 (“Schedule of Rates”) of this Agreement, in accordance with Section 4 of this Agreement. The compensation to be paid to CONSULTANT under this Agreement for all Services shall not exceed the amounts stated in Section 4 of this Agreement. Docusign Envelope ID: 0F7BDCB7-51E0-4F05-B87B-FC5CFA75962D Item 9 Attachment B - San Francisco Daily dba The Daily Post, Contract C25192359B Item 9: Staff Report Pg. 45 Packet Pg. 245 of 349 Professional Services Rev. Oct 16,2024 Page 19 of 24 EXHIBIT C-1 SCHEDULE OF RATES CONSULTANT’s schedule of rates is as follows: Docusign Envelope ID: 0F7BDCB7-51E0-4F05-B87B-FC5CFA75962D Item 9 Attachment B - San Francisco Daily dba The Daily Post, Contract C25192359B Item 9: Staff Report Pg. 46 Packet Pg. 246 of 349 Professional Services Rev. Oct 16,2024 Page 20 of 24 Docusign Envelope ID: 0F7BDCB7-51E0-4F05-B87B-FC5CFA75962D Item 9 Attachment B - San Francisco Daily dba The Daily Post, Contract C25192359B Item 9: Staff Report Pg. 47 Packet Pg. 247 of 349 Professional Services Rev. Oct 16,2024 Page 21 of 24 Docusign Envelope ID: 0F7BDCB7-51E0-4F05-B87B-FC5CFA75962D Item 9 Attachment B - San Francisco Daily dba The Daily Post, Contract C25192359B Item 9: Staff Report Pg. 48 Packet Pg. 248 of 349 Professional Services Rev. Oct 16,2024 Page 22 of 24 Docusign Envelope ID: 0F7BDCB7-51E0-4F05-B87B-FC5CFA75962D Item 9 Attachment B - San Francisco Daily dba The Daily Post, Contract C25192359B Item 9: Staff Report Pg. 49 Packet Pg. 249 of 349 Professional Services Rev. Oct 16,2024 Page 23 of 24 EXHIBIT D INSURANCE REQUIREMENTS CONSULTANTS TO THE CITY OF PALO ALTO (CITY), AT THEIR SOLE EXPENSE, SHALL FOR THE TERM OF THE CONTRACT OBTAIN AND MAINTAIN INSURANCE IN THE AMOUNTS FOR THE COVERAGE SPECIFIED BELOW, AFFORDED BY COMPANIES WITH AM BEST’S KEY RATING OF A-:VII, OR HIGHER, LICENSED OR AUTHORIZED TO TRANSACT INSURANCE BUSINESS IN THE STATE OF CALIFORNIA. AWARD IS CONTINGENT ON COMPLIANCE WITH CITY’S INSURANCE REQUIREMENTS AS SPECIFIED HEREIN. REQUIRED TYPE OF COVERAGE REQUIREMENT MINIMUM LIMITS EACH OCCURRENCE AGGREGATE YES YES WORKER’S COMPENSATION EMPLOYER’S LIABILITY STATUTORY STATUTORY STATUTORY STATUTORY YES GENERAL LIABILITY, INCLUDING PERSONAL INJURY, BROAD FORM PROPERTY DAMAGE BLANKET CONTRACTUAL, AND FIRE LEGAL LIABILITY BODILY INJURY PROPERTY DAMAGE BODILY INJURY & PROPERTY DAMAGE COMBINED. $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 YES AUTOMOBILE LIABILITY, INCLUDING ALL OWNED, HIRED, NON-OWNED BODILY INJURY - EACH PERSON - EACH OCCURRENCE PROPERTY DAMAGE BODILY INJURY AND PROPERTY DAMAGE, COMBINED $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 YES PROFESSIONAL LIABILITY, INCLUDING, ERRORS AND OMISSIONS, MALPRACTICE (WHEN APPLICABLE), AND NEGLIGENT PERFORMANCE ALL DAMAGES $1,000,000 YES THE CITY OF PALO ALTO IS TO BE NAMED AS AN ADDITIONAL INSURED: CONSULTANT, AT ITS SOLE COST AND EXPENSE, SHALL OBTAIN AND MAINTAIN, IN FULL FORCE AND EFFECT THROUGHOUT THE ENTIRE TERM OF ANY RESULTANT AGREEMENT, THE INSURANCE COVERAGE HEREIN DESCRIBED, INSURING NOT ONLY CONSULTANT AND ITS SUBCONSULTANTS, IF ANY, BUT ALSO, WITH THE EXCEPTION OF WORKERS’ COMPENSATION, EMPLOYER’S LIABILITY AND PROFESSIONAL INSURANCE, NAMING AS ADDITIONAL INSUREDS CITY, ITS COUNCIL MEMBERS, OFFICERS, AGENTS, AND EMPLOYEES. I. INSURANCE COVERAGE MUST INCLUDE: A. A CONTRACTUAL LIABILITY ENDORSEMENT PROVIDING INSURANCE COVERAGE FOR CONSULTANT’S AGREEMENT TO INDEMNIFY CITY. II. THE CONSULTANT MUST SUBMIT CERTIFICATES(S) OF INSURANCE EVIDENCING REQUIRED COVERAGE AT THE FOLLOWING EMAIL: PURCHASINGSUPPORT@CITYOFPALOALTO.ORG III. ENDORSEMENT PROVISIONS WITH RESPECT TO THE INSURANCE AFFORDED TO ADDITIONAL INSUREDS: A. PRIMARY COVERAGE WITH RESPECT TO CLAIMS ARISING OUT OF THE OPERATIONS OF THE NAMED INSURED, INSURANCE AS AFFORDED BY THIS POLICY IS PRIMARY AND IS NOT ADDITIONAL TO OR CONTRIBUTING WITH ANY OTHER INSURANCE CARRIED BY OR FOR THE BENEFIT OF THE Docusign Envelope ID: 0F7BDCB7-51E0-4F05-B87B-FC5CFA75962D Item 9 Attachment B - San Francisco Daily dba The Daily Post, Contract C25192359B Item 9: Staff Report Pg. 50 Packet Pg. 250 of 349 Professional Services Rev. Oct 16,2024 Page 24 of 24 ADDITIONAL INSUREDS. B. CROSS LIABILITY THE NAMING OF MORE THAN ONE PERSON, FIRM, OR CORPORATION AS INSUREDS UNDER THE POLICY SHALL NOT, FOR THAT REASON ALONE, EXTINGUISH ANY RIGHTS OF THE INSURED AGAINST ANOTHER, BUT THIS ENDORSEMENT, AND THE NAMING OF MULTIPLE INSUREDS, SHALL NOT INCREASE THE TOTAL LIABILITY OF THE COMPANY UNDER THIS POLICY. C. NOTICE OF CANCELLATION 1. IF THE POLICY IS CANCELED BEFORE ITS EXPIRATION DATE FOR ANY REASON OTHER THAN THE NON-PAYMENT OF PREMIUM, THE CONSULTANT SHALL PROVIDE CITY AT LEAST A THIRTY (30) DAY WRITTEN NOTICE BEFORE THE EFFECTIVE DATE OF CANCELLATION. 2. IF THE POLICY IS CANCELED BEFORE ITS EXPIRATION DATE FOR THE NON-PAYMENT OF PREMIUM, THE CONSULTANT SHALL PROVIDE CITY AT LEAST A TEN (10) DAY WRITTEN NOTICE BEFORE THE EFFECTIVE DATE OF CANCELLATION. EVIDENCE OF INSURANCE AND OTHER RELATED NOTICES ARE REQUIRED TO BE FILED WITH THE CITY OF PALO ALTO SENT TO THE FOLLOWING EMAIL: PURCHASINGSUPPORT@CITYOFPALOALTO.ORG Docusign Envelope ID: 0F7BDCB7-51E0-4F05-B87B-FC5CFA75962D Item 9 Attachment B - San Francisco Daily dba The Daily Post, Contract C25192359B Item 9: Staff Report Pg. 51 Packet Pg. 251 of 349 Certificate Of Completion Envelope Id: 0F7BDCB7-51E0-4F05-B87B-FC5CFA75962D Status: Completed Subject: Complete with Docusign: Final C25192359B Daily Post.pdf Source Envelope: Document Pages: 24 Signatures: 2 Envelope Originator: Certificate Pages: 2 Initials: 0 Alice Harrison AutoNav: Enabled EnvelopeId Stamping: Enabled Time Zone: (UTC-08:00) Pacific Time (US & Canada) 250 Hamilton Ave Palo Alto , CA 94301 Alice.Harrison@CityofPaloAlto.org IP Address: 199.33.32.254 Record Tracking Status: Original 4/9/2025 10:27:26 AM Holder: Alice Harrison Alice.Harrison@CityofPaloAlto.org Location: DocuSign Security Appliance Status: Connected Pool: StateLocal Storage Appliance Status: Connected Pool: City of Palo Alto Location: Docusign Signer Events Signature Timestamp BRANDON HEINRICHS bheinrichs@padailypost.com General Manager Security Level: Email, Account Authentication (None)Signature Adoption: Pre-selected Style Using IP Address: 173.167.125.101 Sent: 4/9/2025 10:29:54 AM Viewed: 4/9/2025 1:36:43 PM Signed: 4/9/2025 1:37:41 PM Electronic Record and Signature Disclosure: Not Offered via Docusign Jim Pavelich jspavelich@gmail.com Member Security Level: Email, Account Authentication (None)Signature Adoption: Pre-selected Style Using IP Address: 98.42.2.27 Sent: 4/9/2025 1:37:43 PM Resent: 4/14/2025 7:40:43 AM Resent: 4/15/2025 9:11:37 AM Viewed: 4/15/2025 5:16:54 PM Signed: 4/15/2025 5:19:05 PM Electronic Record and Signature Disclosure: Not Offered via Docusign In Person Signer Events Signature Timestamp Editor Delivery Events Status Timestamp Agent Delivery Events Status Timestamp Intermediary Delivery Events Status Timestamp Certified Delivery Events Status Timestamp Carbon Copy Events Status Timestamp Christine Prior christine.prior@cityofpaloalto.org Administrative Associate III Copa Security Level: Email, Account Authentication (None) Sent: 4/15/2025 5:19:07 PM Viewed: 4/15/2025 5:30:42 PM Electronic Record and Signature Disclosure: Not Offered via Docusign Item 9 Attachment B - San Francisco Daily dba The Daily Post, Contract C25192359B Item 9: Staff Report Pg. 52 Packet Pg. 252 of 349 Carbon Copy Events Status Timestamp Mahea Ah Yun mahealani.ahyun@cityofpaloalto.org City Clerk Security Level: Email, Account Authentication (None) Sent: 4/15/2025 5:19:08 PM Electronic Record and Signature Disclosure: Not Offered via Docusign Witness Events Signature Timestamp Notary Events Signature Timestamp Envelope Summary Events Status Timestamps Envelope Sent Hashed/Encrypted 4/9/2025 10:29:54 AM Certified Delivered Security Checked 4/15/2025 5:16:54 PM Signing Complete Security Checked 4/15/2025 5:19:05 PM Completed Security Checked 4/15/2025 5:19:08 PM Payment Events Status Timestamps Item 9 Attachment B - San Francisco Daily dba The Daily Post, Contract C25192359B Item 9: Staff Report Pg. 53 Packet Pg. 253 of 349 City Council Staff Report From: City Manager Report Type: ACTION ITEMS Lead Department: Planning and Development Services Meeting Date: May 12, 2025 Report #:2503-4326 TITLE FIRST READING: Adoption of an Ordinance Amending Various Palo Alto Municipal Code Chapters in Title 16 and 18 in Response to Direction from the California Department of Housing and Community Development (HCD) Regarding State Accessory and Junior Accessory Dwelling Unit Law. CEQA Status - Exempt From the Provisions of the California Environmental Quality Act (CEQA) Pursuant to Public Resources Code Section 21080.17 and CEQA Guidelines Section 15061(b)(3). RECOMMENDATION Staff recommends the City Council (Council) take the following actions: Adopt the draft Ordinance (Attachment A) amending Palo Alto Municipal Code (PAMC) Title 16 (Building Regulations) and Title 18 (Zoning) regulations for Accessory Dwelling Units (ADUs) and Junior Accessory Dwelling Units (JADUs). EXECUTIVE SUMMARY On October 29, 2024, Palo Alto received a letter from HCD (Attachment C) regarding the City’s ADU ordinance, which Council adopted in May 2023. (1)(2) HCD identified several aspects of the ordinance that they thought conflicted with or otherwise required further clarification in the ordinance based on recent State laws that were adopted between 2024 and 2025. On November 26, 2024, City staff responded to HCD’s letter noting concerns with the agency’s interpretation of some provision but also with a commitment to update the ordinance before July 2025 to align with State law (Attachment D). HCD did not provide additional feedback in response to this letter, however, the agency did publish updates its ADU Handbook3 in January amplifying requirements that were included in the letter to Palo Alto. Staff recommends revising the City’s ordinance to comply with HCD’s letter and the supporting ADU Handbook. 1 May 15, 2023 Council Meeting (Action Item #13): https://cityofpaloalto.primegov.com/Portal/Meeting?meetingTemplateId=11318 2 Ordinance 5587: https://recordsportal.paloalto.gov/Weblink/DocView.aspx?id=48255 3 HCD ADU Handbook (January 2025): https://www.hcd.ca.gov/sites/default/files/docs/policy-and-research/adu- handbook-update.pdf Item 10 Item 10 Staff Report Item 10: Staff Report Pg. 1 Packet Pg. 254 of 349 Attachment A is a clean draft of the proposed changes to the existing ordinance and Attachment B is an annotated version of the ordinance which keys to the specific changes HCD requested from their letter in Attachment C. 4 the Planning and Transportation Commission (PTC) discussed the proposed changes to the City’s ordinance and recommended, on a 7-0 vote, to adopt the ordinance, with a specific modification to the draft language in PAMC Section 18.09.050(f), discussed further below. BACKGROUND State ADU Laws 4 includes a list of the relevant State laws with a summary of their provisions relevant to the HCD comments. Staff Response to HCD Letter After providing an initial response to HCD, staff revisited its responses in the context of the recently released 2025 ADU Handbook. While in some cases staff believes no changes are needed to comply with State law, staff also endeavors to avoid the continued ambiguity in whether the City’s ordinance complies with State law caused by HCD’s delayed responses. When asked, HCD staff noted that they do not provide official pre-reviews of ADU/JADU ordinances prior to adoption, and therefore the City may not receive a response until a revised ordinance has been adopted. ANALYSIS Many of HCD’s comments were minor clarifications, which appear in the annotated draft ordinance (Attachment B) with comment bubbled responses indicating which response addresses specific items listed in the HCD letter. In many cases, the proposed adjustments clarify existing policy to provide assurance to the State and the public that the City’s ordinance should be interpreted in a manner consistent with State law. Unit Allowance (Item #3 in HCD Letter) 4 April 9, 2025 Staff Report (Action Item #3): https://cityofpaloalto.primegov.com/Portal/Meeting?meetingTemplateId=16512 Item 10 Item 10 Staff Report Item 10: Staff Report Pg. 2 Packet Pg. 255 of 349 primary home, one attached ADU (converted from existing or proposed space within the buildable area), one detached ADU, and one JADU (also converted from existing or proposed space within the buildable area). This is a recent interpretation of State law since 2024 which was reinforced in HCD’s updated Accessory Dwelling Unit Handbook (January 2025) published on their website.5 This effectively means that single family zoning in California can include up to four units on a parcel. Tree Ordinance (Item #9 in HCD Letter) 5 HCD ADU Website: https://www.hcd.ca.gov/policy-and-research/accessory-dwelling-units Item 10 Item 10 Staff Report Item 10: Staff Report Pg. 3 Packet Pg. 256 of 349 3. Replacement requirements based on the City’s Tree Technical Manual Table 3-1;6 4. A statement that this provision shall not result in the delay or denial of a building permit for a second unit. For projects that do not qualify for review under PAMC 18.09.030, the City’s tree protection and removal requirements would apply through Title 8. Whenever future modifications to the City’s tree ordinance occur, staff will need to update these provisions at the same time, otherwise it would result in various standards for tree protection/removal based on the scope of work for the permit. PAMC Section 18.09.040 JADU Provisions (Item #10 in HCD Letter) In 2020, the City updated its regulations to provide additional flexibility for JADU development by: 1) Allowing JADUs to be an addition to a home rather than a conversion of existing space; 2) Allowing JADUs to have a four-foot setback similar to attached or detached ADUs; 3) Providing a 500 square foot bonus to a property’s allowable floor area and lot coverage to build a JADU; and 4) Sharing the bonus floor area between a JADU and ADU. As a result of these changes, between late 2020 through the 2024 Annual Report,7 the City has received roughly 120 JADU applications. Prior to the code change, the City only received three JADU applications. HCD’s comment letter (Attachment C) contests that these provisions conflict with State law as JADUs may only be constructed within existing or proposed areas for the single-family home – effectively limiting JADU creation to the underlying setbacks, floor area, lot coverage, and similar regulations that apply to the primary home. Staff notes that Government Code Sections 66333 through 66339 provides cities with the authority to establish regulations for JADUs that is distinct from the authority cited by HCD. As a Charter City, Palo Alto is also able to adopt local development programs that do not conflict with State law. Staff believes that these local incentives do not conflict with State law because they are more permissive than what State law provides. The State has not substantially modified its JADU regulations since 2017 to incentivize JADU development, only ADU development. Eliminating these provisions would significantly hinder the City’s ability to develop JADUs and limit homeowner’s options to develop second units that meet their needs. To address HCD’s concerns while still incorporating these incentives into the ordinance, the draft ordinance recommends the following: 6 Tree Technical Manual: https://www.cityofpaloalto.org/files/assets/public/v/1/public-works/tree- section/ufmp/tree-technical-manual/cover-corecombined_cpa_ttm-2016-final-copy.pdf 7 2024 Annual Report: https://www.cityofpaloalto.org/files/assets/public/v/1/planning-amp-development- services/long-range-planning/adu/2024-annual-adu-report.pdf Item 10 Item 10 Staff Report Item 10: Staff Report Pg. 4 Packet Pg. 257 of 349 1) Remove the existing provisions for JADUs from PAMC Section 18.09.040; 2) Adopt a bonus provision for the primary home equal to the square footage of a proposed JADU (now reflected as PAMC Section 18.09.050(f)); and 3) Adopt a finding which declares PAMC Section 18.09.050(f) is consistent with State law. The initial draft language for this provision was phrased in a way that could be interpreted to allow for a larger home to be built regardless of the size of a JADU (e.g. a homeowner could build a 150 square foot JADU and use the remaining square footage as an addition to the home). During the April 9, 2025 PTC hearing, the PTC recommended modifying staff’s draft language to specify that the bonus afforded the home is limited to the size of the proposed JADU, which is now included in the draft Ordinance. This eliminates the potential for the primary home to receive bonus square footage that is not used specifically for a JADU. Alternatively, the Council could direct removing the provisions entirely from the ordinance, as HCD requested, or maintaining the provisions in PAMC Section 18.09.040 and adopt a finding that declares these regulations are more lenient than State law. Staff does not have data on how many of the permitted JADUs are being used as separate units and available to households beyond the principal single family residential occupants. Palo Alto Local Inventory of Historic Resources (Item #12 in HCD Letter) HCD states the City may not require ADU/JADUs to comply with the Secretary of Interior’s Standards for the Treatment of Historic Properties if the property is not listed on the California Register of Historical Resources (CRHR). This would impact roughly 350 properties on the local historic registry that are not on the CRHR and vary from Category 1 to 4 in terms of historical significance (the lower number rating being the more historically significant). Currently, the City may require any exterior alteration to a historic structure/site that is a Category 1 or 2 resource, or within a historic district, to be reviewed by the Architectural Review Board and/or Historic Review Board to ensure the modification doesn’t impact the integrity of the resource. By removing this provision, any attached ADU/JADU proposed on a Category 1 or 2 property may result in modifications that impact the integrity of these local resources, without a remedy. While the City does not have the authority to require additional changes based on the language in State law, it is important to note there could be impacts to the integrity of existing and future local resources. Kitchen Requirements for ADU/JADUs (Items #17 and 20 in HCD Letter) In 2020, the City updated its regulations to establish an objective standard for kitchen requirements for ADU/JADUs. State law does not provide clear guidance on what constitutes a kitchen and the lack of an objective standard for kitchen requirements led to uncertainty in the review process. Consistent with the State’s mandate to create ministerial and objective review standards for ADU/JADUs, it was prudent for the public and staff to have a consistent standard to ensure a streamlined review process. Absent a consistent, objective, and published standard, HCD’s comments appear to conflict with other parts of State law which mandate a ministerial Item 10 Item 10 Staff Report Item 10: Staff Report Pg. 5 Packet Pg. 258 of 349 and streamlined review process for ADU/JADUs by introducing subjective decision making into the review process. 8 (see page 8 of 18). Applicants that seek to deviate from the kitchen dimension guidelines would be permitted to do so. Miscellaneous PAMC Updates to Comply with ADU/JADU Regulations FISCAL/RESOURCE IMPACT The impact to the City’s resources as a result of adopting this ordinance would be minimal. Resources expended would be limited staff trainings on the materials, implementation and communication of this ordinance to the public, and staff time spent updating checklists or webpage information. STAKEHOLDER ENGAGEMENT The PAMC requires notice of this public hearing be published in a local paper at least 10 days in advance. Notice of a public hearing for this project was published in the Daily Post on May 2, 2025, which is 10 days in advance of the meeting. 8 Palo Alto ADU Handbook: https://www.cityofpaloalto.org/files/assets/public/v/1/development- services/planning-review/1.-single-family-and-duplexes/2024-adu-handbook.pdf Item 10 Item 10 Staff Report Item 10: Staff Report Pg. 6 Packet Pg. 259 of 349 3. Allowing height increases for ADU/JADUs in the flood zone; 4. Increasing base height allowances for ADU/JADUs; 5. Waiving/adjusting impact fee calculations for ADUs. These suggested policy changes are not required to be done to comply with state but may be revisited by Council and updated policy direction given. The commenter has some additional remarks, some are addressed below: Calculating Impact Fees for 750 SF ADUs In 2020, the State began limiting when impact fees can be applied to newly constructed ADUs, allowing them only for units that are 750 square feet or larger. When applicable, State law requires that these fees be assessed proportionally, based on the ADU’s size relative to the primary dwelling. For example, if an ADU is 20% the size of the main home, it would pay only 20% of the standard impact fee (e.g., $79,124.22 × 0.2 = $15,824.84).9 The commenter raised concerns that the City’s ordinance may not align with State law because it does not impose impact fees on home additions unless a new unit is being created. However, neither Government Code section 66324 nor HCD’s ADU Handbook (p. 22) requires impact fees to be tied to an addition occurring simultaneously with the ADU. State law simply authorizes cities to charge impact fees when a new unit over the size threshold is created — not based on whether the primary home is being expanded. 10 This approach is consistent with PAMC Sections 16.58.010(b) and 16.58.030(g), which bases impact fees on unit creation and size. At present, the City only applies impact fees to net new dwelling units. In response to ongoing policy discussions, the City Council has directed staff to re-examine this approach. As part of the Council's work plan objective to update development impact fees, staff will evaluate the application of impact fees more broadly through that process. To further reduce costs for homeowners and housing developers, the City recently revised its impact fee structure to a per-square-foot model, providing a more predictable and equitable fee system. Impact Fee Deferral During the April 9, 2025 hearing, the PTC briefly discussed adjusting the City’s process around recording a lien against a property to defer impact fee payment until final occupancy. However, a motion was not seconded to recommend changes to those policies during the hearing. The PTC requested staff return in the future to discuss potential changes to that policy and 9 2024 Development Impact Fee Spreadsheet: https://www.paloalto.gov/files/assets/public/v/2/development- services/planning-review/6.-planning-fees/fy25-impact-fee-information-sheet.pdf 10 Govt. Code Section 66324: https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?sectionNum=66324.&nodeTreePath=12.1.32. 2&lawCode=GOV Item 10 Item 10 Staff Report Item 10: Staff Report Pg. 7 Packet Pg. 260 of 349 encouraged staff to seek ways to streamline the internal process for recording the lien in the meantime. ENVIRONMENTAL REVIEW ATTACHMENTS APPROVED BY: Item 10 Item 10 Staff Report Item 10: Staff Report Pg. 8 Packet Pg. 261 of 349 *NOT YET APPROVED* 1 0160107_20250417_ms29 Ordinance No. _____ Ordinance of the Council of the City of Palo Alto Amending Title 16 (Building Regulations) and Title 18 (Zoning) of the Palo Alto Municipal Code to Amend Requirements Relating to Accessory Dwelling Units and Junior Accessory Dwelling Units The Council of the City of Palo Alto does ORDAIN as follows: SECTION 1. Findings and Declarations. A. In 2023, the City of Palo Alto adopted Ordinance 5585, amending the City’s requirements for ADUs and JADUs to reflect changes in State law and guidance from the California Department of Housing and Community Development (HCD). B. On October 29, 2024, the City received a letter from HCD commenting on aspects of the City’s J/ADU ordinance that HCD found inconsistent with State law. C. California Government Code section 66326(b)(2) requires that the City either amend its ordinance as indicated in the letter or adopt the ordinance without the changes and include findings that explain the reasons the City believes the ordinance complies with State J/ADU law. D. Upon recommendation of City Staff and the Planning and Transportation Commission, the Council of the City of Palo Alto now intends to amend its J/ADU ordinance in response to each of HCD’s comments. E. Additionally, the City now adopts explanatory findings to accompany the amendments in response to several of HCD’s comments. F. HCD Comment 9 states, “The Ordinance makes several references to Chapter 8.10, the City’s Tree and Landscape Preservation and Management regulations, and requires that elements of ADU development conform to Chapter 8.10…The City should amend the Ordinance to ensure that compliance with this ordinance section will not delay or cause the denial of an ADU or JADU building permit or use permit.” The City now intends to amend its ADU ordinance to eliminate references to Chapter 8.10. Additionally, the City now amends its Chapter 18.09.040 to include objective landscape requirements for those ADUs that are subject to local standards, pursuant to Government Code section 66314(b). These landscape requirements include adherence to applicable objective landscape standards in the Tree and Landscape Technical Manual for the protection of trees during construction. The City Council finds that the standards in the Tree and Landscape Technical Manual for the protection of trees during construction are industry standard best practices for construction and are typically imposed as conditions of approval. Consistent with HCD’s comment, the Item 10 Attachment A - Draft Ordinance (Clean Version) Item 10: Staff Report Pg. 9 Packet Pg. 262 of 349 *NOT YET APPROVED* 2 0160107_20250417_ms29 ordinance will clarify that the Tree and Landscape Technical Manual’s standards for tree protection during construction are not a cause of delay or denial of an ADU or JADU permit. G. HCD Comment 10 states, “The Ordinance describes JADUs in the section ‘Units Subject to Local Standards’ and creates governance of JADUs that ‘do not qualify for approval under section 18.090.030.’ However, all JADUs are created pursuant to Government Code section 66323, subdivision (a)(1), and would therefore be approved under section 18.090.030. The City must remove references to JADUs in this section.” The City Council finds that this comment is incorrect; although some JADUs are created pursuant to Government Code section 66323, JADUs may also be created pursuant to Government Code sections 66333- 66339 (also known as “Article 3”), which begins with the statement “Notwithstanding Article 2 (commencing with Section 66314 [and including section 66323]), a local agency may, by ordinance, provide for the creation of junior accessory dwelling units in single- family residential zones” (emphasis added). Nonetheless, through this Ordinance, the City intends to remove all references to JADUs in Section 18.09.040, “Units Subject to Local Standards.” All JADUs that meet the requirements of Government Code section 66323(a) will be subject to the ministerial approval provisions in Chapter 18.09.030. Additionally, in order to further incentivize the construction of JADUs, the Ordinance allows a 500 square foot bonus for the primary dwelling unit where a JADU that meets the conditions in 18.09.050(f) is constructed on site. The City Council finds that this additional incentive provided in 18.09.050 does not conflict with Government Code sections 66310-66342 because it liberalizes the City’s regulations for primary residences and does not regulate the construction of JADUs. H. HCD Comment 14 states, “Section 18.09.040 (l) – Parking Exceptions – The Ordinance does not provide for exemptions to parking requirements pursuant to Government Code section 66322, subdivisions (a)(1) through (a)(6)…Therefore, the City must amend the Ordinance to add the required exemptions.” Table 1 and 2 of PAMC 18.09.030 and 18.09.040, as well as Table 1 of PAMC 18.52.040, indicate that parking is not required for newly constructed ADUs or JADUs. Additionally, this Ordinance amends PAMC 18.09.040(l) so that the City no longer requires replacement parking for ADUs or JADUs under any circumstance. Because the Ordinance as amended imposes no parking requirements for J/ADUs, it does not enumerate the exemptions to parking requirements described in Government Code section 66322(a)(1)-(6). I. On September 19, 2024, the Governor signed Senate Bill (SB) 1211, effective January 1, 2025. SB 1211 allows up to 8 detached accessory dwelling units (ADUs) on parcels with existing multifamily development and provides that cities can no longer require replacement parking for uncovered parking spaces that are removed for an ADU. J. Upon recommendation of City Staff and the Planning and Transportation Commission, the Council of the City of Palo Alto desires to amend its J/ADU ordinance to implementing SB 1211 and to make additional clerical amendments and minor amendments to conform with State law. Item 10 Attachment A - Draft Ordinance (Clean Version) Item 10: Staff Report Pg. 10 Packet Pg. 263 of 349 *NOT YET APPROVED* 3 0160107_20250417_ms29 K. Section 9 of this Ordinance amends Chapter 16.04 (California Building Code, California Code of Regulations, Title 24, Part 2, Volumes 1 &2) of Title 16 (Building Regulations) of the Palo Alto Municipal Code. This is an administrative amendment to clarify and establish civil and administrative procedures, regulations, or rules to administer the enforcement of Title 16. In particular, it clarifies that while the California Building Code definitions of “gross floor area” and “net floor area” apply for the purposes of enforcing Title 16, for the purposes of enforcing the zoning code (Title 18 of the Palo Alto Municipal Code), the definitions in Title 18 apply. This amendment is not a building standard as defined in Health and Safety Code section 18909. SECTION 2. Chapter 18.09 (Accessory Dwelling Units and Junior Accessory Dwelling Units) of Title 18 (Zoning) of the Palo Alto Municipal Code (“PAMC”) is amended to read as follows (additions underlined and deletions struck-through): 18.09.010 Purpose The intent of this Chapter is to provide regulations to accommodate accessory and junior accessory dwelling units (ADU/JADU), in order to provide for variety to the city's housing stock and additional affordable housing opportunities. These units shall be separate, self-contained living units, with separate entrances from the main residence, whether attached or detached. The standards below are provided to minimize the impacts of units on nearby residents and throughout the city, and to assure that the size and location of such dwellings is compatible with the existing or proposed residence(s) on the site and with other structures in the area. 18.09.020 Applicable Zoning Districts The establishment of an accessory dwelling unit is permitted in zoning districts when single-family or multi-family residential is a permitted land use. The development of a single-family home, ADU, and/or a JADU on a lot that allows for single-family development shall not be considered a multifamily development pursuant to PAMC Section 18.04.030, nor shall they require Architectural Review pursuant to other sections of Chapter 18. 18.09.030 Units Exempt from Generally Applicable Local Regulations (a) Government Code sections 6632365852.2, subdivision (e) provides that certain units shall be approved notwithstanding State or local regulations that may otherwise apply. The following types of units shall be governed by the standards in this section. In the event of a conflict between this section and Government Code section 6632365852.2, subdivision (e), the Government Code shall prevail. Item 10 Attachment A - Draft Ordinance (Clean Version) Item 10: Staff Report Pg. 11 Packet Pg. 264 of 349 *NOT YET APPROVED* 4 0160107_20250417_ms29 i. An ADU and JADU within the existing space of a single-family dwelling or an ADU within the existing space of an accessory structure (i.e. conversion without substantial addition). ii. An ADU and JADU within the proposed space of a single-family dwelling. iii. A detached, new construction ADU on a lot with a proposed or existing single-family dwelling, provided the ADU does not exceed 800 square feet, sixteen feet in height, or four-foot side and rear (i.e. interior) setbacks, or the maximum height described in subparagraph (A), (B), or (C) of paragraph (4) of subdivision (b) of Government Code Section 66321, as applicable. iv. ADUs created by conversion of portions of existing multi-family dwellings not used as livable space. v. Up to two eight detached ADUs on a lot with an existing multi-family dwelling, provided that the number of ADUs does not exceed the number of existing units on the lot. vi. Up to two detached ADUs on a lot with a proposed multi-family dwelling. (b) The Development Standards for units governed by this section are summarized in Table 1. Regulations set forth in section 18.09.040 do not apply to units created under 18.09.030. The minimum and maximum sizes indicated in Table 1 do not prohibit units that are greater than 800 square feet. These sizes simply serve to distinguish when a unit transitions from regulations set forth in Table 1 and section 18.09.030 to regulations set forth in Table 2 and section 18.09.040. Table 1: Development Standards for Units Described in Government Code Section 65852.2(e) 66323 Single-Family Multi-Family Conversion of Space Within the Existing Space of a Single-Family Home or Accessory Structure Construction of Attached ADU/JADU Within the Proposed Space of a Single- Family Home New Construction of Detached ADU Conversion of Non-Habitable Space Within Existing Multi- family Dwelling Structure Conversion or Construction of Detached(4) ADU on a site with Existing Multi-family Structure Conversion or Construction of Detached(4) ADU on a site with Proposed Multi- family Structure Number of Units Allowed 1 ADU and 1 JADU 1 Attached ADU, 1 Detached ADU, and 1 JADU 25% of the existing units (at least one) Up to 8 (not to exceed the number of existing units on the lot) 2 Minimum 150 sf Item 10 Attachment A - Draft Ordinance (Clean Version) Item 10: Staff Report Pg. 12 Packet Pg. 265 of 349 *NOT YET APPROVED* 5 0160107_20250417_ms29 size(1) Maximum size(1) N/A2 800 sf N/A Setbacks N/A, if condition is sufficient for fire and safety Underlying zone standard for Single Family Home (ADU must be within allowable space of Single-Family Home) 4 feet from side and rear lot lines; underlying zoning for front setback N/A 4 feet from side and rear lot lines; underlying zoning for front setback Daylight Plane N/A N/A Maximum Height(3) N/A 16(5) N/A 16(5)(6) Parking None State Law Reference 65852.2(e)(1)(A ) 66323(a)(1) 65852.2(e)(1)(A ) 66323(a)(1) 65852.2(e)(1) (B) 66323(a)(2) 65852.2(e)(1)(C) 66323(a)(3) 65852.2(e)(1)(D) 66323(a)(4) (1) Lofts where the height from the floor level to the underside of the rafter or finished roof surface is 5' or greater shall count towards the unit’s floor area. (2) New construction must be consistent with allowable space (e.g. FAR, Lot Coverage) of a single family residence, except that up to 150 sf may be added for the purpose of ingress and egress only, without regard to underlying zone standards The maximum size of a JADU is 500 square feet. See PAMC 18.09.030(h) for additional information. (3) Units built in a flood zone are not entitled to any height extensions granted to the primary dwelling. (4) Units must be detached from existing primary dwellings but may be attached to each other. (5) A height of 18 feet for a detached ADU on a lot with an existing or proposed single family or multifamily dwelling unit that is within one-half of one mile walking distance of a major transit stop or a high-quality transit corridor, as those terms are defined in Section 21155 of the Public Resources Code. An additional two feet in height shall be provided to accommodate a roof pitch on an ADU that is aligned with the roof pitch of the primary dwelling unit. (6) A height of 18 feet for a detached ADU on a lot with an existing or proposed multifamily, multistory dwelling. (c) Development standards stated elsewhere in this Section or Title 18, including standards related to FAR, lot coverage, and privacy, are not applicable to ADUs or JADUs that qualify for approval under this section. When there is an ADU or JADU attached to an existing or proposed primary dwelling, the shared wall between these units shall contribute to the maximum allowable Floor Area, Lot Coverage, and Maximum House Size of the primary unit. For a single-family home, this measurement shall be taken to the outside stud wall in accordance with Section 18.04.030(a)(65)(D). For a multi-family dwelling, this measurement shall be taken to the outside surface of exterior walls in accordance with Section 18.04.030(a)(65)(B) and (C). (d) The establishment of accessory dwelling units and junior accessory dwelling units pursuant to this section shall not be conditioned on the correction of non- Item 10 Attachment A - Draft Ordinance (Clean Version) Item 10: Staff Report Pg. 13 Packet Pg. 266 of 349 *NOT YET APPROVED* 6 0160107_20250417_ms29 conforming zoning conditions; provided, however, that nothing in this section shall limit the authority of the Chief Building Official to require correction of building standards relating to health and safety. Upon request of the owner for a delay in enforcement, the Chief Building Official shall delay enforcement of a building standard, subject to compliance with Section 17980.12 of the Health and Safety Code. (e) The installation of fire sprinklers shall not be required in an accessory dwelling unit if sprinklers are not required for the primary residence. The construction of an accessory dwelling unit shall not trigger a requirement for fire sprinklers to be installed in the existing multifamily dwelling. Nothing in this section shall preclude the Fire Marshal from accepting fire sprinklers as an alternative means of compliance with generally applicable fire protection requirements. (f) Rental of any unit created pursuant to this section shall be for a term of 30 days or more. (g) Attached units shall have independent exterior access from a proposed or existing single-family dwelling. Except for JADUs, attached units shall not have an interior access point to the primary dwelling (e.g. hotel door or other similar feature/appurtenance). If a permitted JADU does not include a separate bathroom, the permitted JADU shall include a separate entrance from the main entrance to the structure, with an interior entry to the main living area. (h) Conversion of an existing accessory structure pursuant to Government Code section 65852.2(e)(1)(A) 66314(d)(7) may include reconstruction in-place of a non- conforming structure, so long as the renovation orf reconstruction does not increase the degree of non-compliance, such as increased height, envelope, or further intrusion into required setbacks. An expansion of not more than 150 square feet beyond the same physical dimensions as the existing accessory structure may be provided to accommodate ingress and egress. Any portion of an ADU addition to the existing accessory structure that is not limited to providing for ingress and egress to the unit, and that exceeds the envelope of the existing accessory structure shall be subject to Section 18.09.040. (i) Street addresses shall be assigned to all units prior to building permit final to assist in emergency response. (j) The unit shall not be sold separately from the primary residence, except as allowed under Government Code Section 66341. (k) Replacement parking is not required when a garage, carport, or covered parking structure an off-street parking space is converted to, or demolished in conjunction with the construction of, an ADU. Item 10 Attachment A - Draft Ordinance (Clean Version) Item 10: Staff Report Pg. 14 Packet Pg. 267 of 349 *NOT YET APPROVED* 7 0160107_20250417_ms29 (l) JADUs shall comply with the requirements of Section 18.09.050. (m) Notwithstanding any contrary provision of Chapter 8.10, to the extent the City’s application checklist requires a tree disclosure statement, it may be completed by the property owner. 18.09.040 Units Subject to Local Standards (a) This section shall govern applications for ADUs and JADUs that do not qualify for approval under section 18.09.030 and for which the City may impose local standards pursuant to Government Code section 65852.2, subdivisions (a) through (d)66314. Nothing in this section shall be interpreted to prohibit an ADU of up to 800 square feet, at the heights stated in Table 2, with a four foot side and rear setbacks. (b) The Development Standards for units governed by this section are provided in Table 2. These regulations do not limit the height of existing structures converted into ADU/JADUs unless the envelope of the building is proposed to be modified beyond any existing legal, non-conforming condition. Table 2: All other Units Attached Detached JADU Number of Units Allowed1 1 1 Minimum size 150 sf Maximum size 900 sf (1,000 sf for two or more bedrooms); no more than 50% of the size of the single- family home 900 sf (1,000 sf for two or more bedrooms) 500 sf Setbacks 4 feet from side and rear lot lines; Underlying zone standard for front setback Daylight Plane Underlying zone standard per footnote (7) N/A Underlying zone standard Maximum Height3 Underlying zone standard Res. Estate (RE) 30 feet Open Space (OS) 25 feet All other eligible zones 16 feet(5)(6)(7) Parking None Item 10 Attachment A - Draft Ordinance (Clean Version) Item 10: Staff Report Pg. 15 Packet Pg. 268 of 349 *NOT YET APPROVED* 8 0160107_20250417_ms29 Square Footage Exemption when in conjunction with a single family home(4) Up to 800 sf Up to 500 sf (1) An attached orand detached ADU may be built in conjunction with a JADU on a lot with an existing or proposed single family home. One attached or detached ADU may be built in conjunction with an existing or proposed multifamily building. (2) Lofts where the height from the floor level to the underside of the rafter or finished roof surface is 5' or greater shall count towards the unit’s floor area. (3) Units built in a flood zone are not entitled to any height extensions granted to the primary dwelling. (4) Lots with both an attached and detached ADU and a JADU may exempt a maximum combined total of 800 square feet of boththe ADUs and JADU from FAR, Lot Coverage, and Maximum House Size calculations. Any square footage that exceeds this exemption shall contribute to the FAR, Lot Coverage, and (if attached) Maximum House Size calculations for the subject property. This exemption is not afforded to lots with existing or proposed multifamily dwellings. (5) A height of 18 feet for a detached ADU on a lot with an existing or proposed single family or multifamily dwelling unit that is within one-half of one mile walking distance of a major transit stop or a high-quality transit corridor, as those terms are defined in Section 21155 of the Public Resources Code. An additional two feet in height shall be provided to accommodate a roof pitch on an ADU that is aligned with the roof pitch of the primary dwelling unit. (6) A height of 18 feet for a detached ADU on a lot with an existing or proposed multifamily, multistory dwelling. (7) A height of 25 feet or the height limitation in the underlying zone district that applies to the primary dwelling, whichever is lower, for an ADU that is attached to a primary dwelling. These ADUs shall not exceed two stories in height. (c) A single-family or multifamily dwelling shall exist on the lot or shall be constructed on the lot in conjunction with the construction of an ADU/JADU. (d) ADU and/or JADU square footage shall not be included in FAR, Lot Coverage, and Maximum House Size calculations for a lot with an existing or proposed single family home, up to the amounts stated in Table 2. ADU and/or JADU square footage in excess of the exemptions provided in Table 2 shall be included in FAR, Lot Coverage, and Maximum House Size calculations for the lot. (e) When there is an ADU or JADU attached to an existing or proposed primary dwelling, the shared wall between these units shall contribute to the maximum allowable Floor Area, Lot Coverage, and Maximum House Size of the primary unit. For a single- family home, this measurement shall be taken to the outside stud wall in accordance with Section 18.04.030(a)(65)(D). For a multi-family dwelling, this measurement shall be taken to the outside surface of exterior walls in accordance with Section 18.04.030(a)(65)(B) and (C). (f) Attached units shall have independent exterior access from a proposed or existing single-family dwelling. Except for JADUs, Aattached units shall not have an interior Item 10 Attachment A - Draft Ordinance (Clean Version) Item 10: Staff Report Pg. 16 Packet Pg. 269 of 349 *NOT YET APPROVED* 9 0160107_20250417_ms29 access point to the primary dwelling (e.g. hotel door or other similar feature/appurtenance). (g) Reserved No protected tree shall be removed for the purpose of establishing an accessory dwelling unit except in accordance with Chapter 8.10. Notwithstanding any contrary provision of Chapter 8.10, to the extent the City’s application checklist requires a tree disclosure statement, it may be completed by the property owner. (h) For properties listed in the Palo Alto Historic Inventory, the California Register of Historical Resources, the National Register of Historic Places, or considered a historic resource after completion of a historic resource evaluation, compliance with the appropriate Secretary of Interior’s Standards for the Treatment of Historic Properties shall be required. (i) Noise-producing equipment such as air conditioners, water heaters, and similar service equipment that exclusively serves an ADU/JADU may be located anywhere on the site, provided they maintain the underlying front yard setback requirements of the property and, if the property is a corner lot, a 10-foot street-side setback. All such equipment shall be insulated and housed, except that the Director may permit installation without housing and insulation, provided that a combination of technical noise specifications, location of equipment, and/or other screening or buffering will assure compliance with the city’s Noise Ordinance at the nearest property line. All service equipment must meet the city’s Noise Ordinance in Chapter 9.10 of the Municipal Code. (j) Setbacks (1) Detached units shall maintain a minimum three-foot distance from the primary unit, measured from the exterior walls of structures. (2) A basement or other subterranean portion that serves an ADU/JADU may encroach into a setback required for the primary dwelling provided the following conditions are met: (A) Newly constructed basement walls are no closer than four feet to an adjacent interior side or rear property line. (B) A new lightwell associated with a basement shall not be placed closer than four feet to an adjacent interior property line. When visible from the right of way, these facilities shall be screened from view with vegetation. (C) The new basement shall not negatively impact tree roots on the subject property or on adjacent lots such that it would require to be removed or cause the protected tree to die. Item 10 Attachment A - Draft Ordinance (Clean Version) Item 10: Staff Report Pg. 17 Packet Pg. 270 of 349 *NOT YET APPROVED* 10 0160107_20250417_ms29 (D) (C) Habitable ADU/JADU basements shall contribute toward the unit’s total allowable floor area. Any floor area in excess of the exemptions provided in this Section shall contribute to the total allowable limits for the site. (3) Projections, including but not limited to windows, doors, mechanical equipment, venting or exhaust systems, are not permitted to encroach into the required setbacks, with the exception of a roof eave of up to 2 feet. (4) For corner lots developed as a single-family home only, when an existing or proposed primary dwelling unit is expanded or constructed simultaneously with the construction of a new ADU/JADU, the homeowner may elect to build all structures may be built to a 10-foot street-side setback and a 16-foot front yard setback, regardless of the presence of a more restrictive special setback, unless a fire or life-safety regulation requires a greater setback. Pursuant Government Code section 66321(b)(3), a street-side setback may not preclude the development of an 800 square foot unit. (5) When an existing, legal, nonconforming structure is converted or reconstructed to create an ADU/JADU, any portion of the ADU/JADU that is in the same location and falls within the building envelope of the original structure shall not be subject to the development standards stated in this Section. Any portion of the ADU/JADU that is in a different location or exceeds the envelope of the original structure shall comply with the development standards stated in this Section. (6) Notwithstanding the development standards stated in Table 2 and paragraph (5) above, when an existing, legal, non-conforming structure is converted in- place to an ADU/JADU, the envelope of the structure may be modified to encroach further into a setback or daylight plane as follows: (A) The height of the existing structure may be increased by no more than one linear foot in height commensurate to the existing roofline of the structure provided the height of the addition does not exceed 12 feet from grade. The roofline shall not be changed to a style other than what currently exists on the structure. (B) Each non-conforming wall may be expanded by no more than six inches in thickness based on its existing location and configuration, as measured to exterior surface of the material, to provide for greater insulation and energy requirements provided that a minimum of one foot is maintained between the addition and an adjacent interior property line. An existing wall of a structure that does not currently Item 10 Attachment A - Draft Ordinance (Clean Version) Item 10: Staff Report Pg. 18 Packet Pg. 271 of 349 *NOT YET APPROVED* 11 0160107_20250417_ms29 have a separation of one foot from a parallel property line shall not be expanded outward. (C) All other additions not specified here shall follow the standard setbacks for the ADU/JADU identified in Table 2. (k) Design (1) Except on corner lots, where feasible, the unit shall not have an entranceway facing the same lot line (property line) as the entranceway to the main dwelling unit unless the entranceway to the accessory unit is located in the rear half of the lot. Exterior staircases to second floor units shall be located toward the interior side or rear yard of the property. (2) Privacy (A) Second story doors and decks shall not face a neighboring property line. Second story decks and balconies shall utilize screening barriers to prevent views towards an adjacent interior property line. These barriers shall be a minimum five-foot, six-inch height from the floor level of the deck or balcony and shall not include perforations of any kind that would allow visibility between properties. (B) Windows on a second floor, loft, or equivalent elevated space, excluding those required for egress, shall have a five-foot sill height as measured from the second-finished floor level, or utilize opaque glazing on the entirety any window that faces an adjacent interior property line. (C) Windows on a second finished floor, loft, or equivalent elevated space, shall be offset from neighbor’s windows to maximize privacy. (D) Where feasible, egress windows on the first and second finished floor of an ADU or JADU shall not face towards an adjacent interior property line. If this is not feasible, then these windows shall utilize opaque glazing on the whole window. (E) If the first finished floor of an ADU or JADU is two feet or more above grade, then first floor windows shall include the following: i. Non-egress, operable windows facing an adjacent interior property line shall have a windowsill(s) that start five feet above the first finished floor for the unit; ii. Non-egress, non-operable windows facing an adjacent interior property line shall have the lower half of window(s) (minimum of five feet above the first finished floor) utilize opaque glazing. (F) Where feasible, the use of skylights (whether operable or not) shall be used in lieu of operable windows that face adjacent interior properties. Item 10 Attachment A - Draft Ordinance (Clean Version) Item 10: Staff Report Pg. 19 Packet Pg. 272 of 349 *NOT YET APPROVED* 12 0160107_20250417_ms29 (G) No exterior lighting shall be mounted above seven feet. All lighting mounted on walls shall be directed downwards and shall not direct light towards adjacent interior property lines. Any ground lighting shall not direct light upwards to the building or sky. (l) Parking (1) Replacement parking is not required when a garage, carport, or covered parking structure, or uncovered parking space is converted to, or demolished in conjunction with the construction of, an ADU. (2) Replacement parking is required when an existing attached garage, carport, or covered parking structure is converted to a JADU or when a required, existing, uncovered parking space is expanded into an ADU/JADU. These replacement spaces may be provided as uncovered spaces in any configuration on the lot including within the front or street side yard setback for the property. (A) The Director shall have the authority to modify required replacement parking spaces by up to one foot in width and length upon finding that the reduction is necessary to accommodate parking in a location otherwise allowed under this code and is not detrimental to public health, safety or the general welfare. (B) Existing front and street side yard driveways may be enlarged to the minimum extent necessary to comply with the replacement parking requirement above. Existing curb cuts shall not be altered except when necessary to promote public health, safety or the general welfare. (2) (3) When parking is provided, the unit shall have street access from a driveway in common with the main residence in order to prevent new curb cuts, excessive paving, and elimination of street trees, unless separate driveway access will result in fewer environmental impacts such as paving, grading or tree removal. (3) (4) When a single-family dwelling unit is permitted simultaneously with the construction of new ADU/JADUs, the primary unit’s covered parking requirements identified in Chapter 18.10 and 18.12 do not need to be provided. Two uncovered parking spaces shall be provided in any configuration on the lot including within the front or street-side setback for the property. Item 10 Attachment A - Draft Ordinance (Clean Version) Item 10: Staff Report Pg. 20 Packet Pg. 273 of 349 *NOT YET APPROVED* 13 0160107_20250417_ms29 (4) (5) If covered parking for a unit is provided in any district, the maximum size of the covered parking area for the accessory dwelling unit is 220 square feet. This space shall count towards the total floor area for the site but does not contribute to the maximum size of the unit. Any attached garage shall not have an interior access point to the ADU/JADU (e.g. hotel door or other similar feature/appurtenance). (m) Landscape (1) For the purposes of this subsection (m), “protected tree” means: (A) Any locally native tree of the species Acer macrophyllum (Bigleaf Maple), Calocedrus decurrens (California Incense Cedar), Quercus agrifolia (Coast Live Oak), Quercus douglasii (Blue Oak), Quercus kelloggii (California Black Oak), or Quercus lobata (Valley Oak) which is eleven and one-half inches in diameter (thirty-six inches in circumference) or more when measured four and one-half feet (fifty- four inches) above natural grade. (B) Any Coast Redwood tree (species Sequoia sempervirens) that is eighteen inches in diameter (fifty-seven inches in circumference) or more when measured four and one-half feet (fifty-four inches) above natural grade. (C) Any tree of any species, other than a Coast Redwood Tree, fifteen inches in diameter (forty-seven inches in circumference) or more when measured four and one-half feet (fifty-four inches) above natural grade. A “protected tree” does not include a tree of any species on the Exempt Species List put forth by the Department of Urban Forestry and available on the City’s website. (D) Any tree designated for protection during review and approval of a current or previously completed development project. (E) Any tree designated for carbon sequestration and storage and/or environmental mitigation purposes as identified in an agreement between the property owner and a responsible government agency or recorded as a deed restriction. (F) Any heritage tree previously designated by the city council. (G) Any tree previously planted as a replacement mitigation tree. (2) Except as provided in subsection (3) below, the construction of an ADU shall not impact any protected tree, on the subject property or any adjacent lot by requiring: (A) Removal of more than twenty-five percent of the functioning leaf, stem, or root area of a tree in any twenty-four-month period; or (B) Removal of more than fifteen percent of the functioning root area of any Quercus (oak) species in any thirty-six-month period; or Item 10 Attachment A - Draft Ordinance (Clean Version) Item 10: Staff Report Pg. 21 Packet Pg. 274 of 349 *NOT YET APPROVED* 14 0160107_20250417_ms29 (C) Trenching, excavating, altering the grade, or paving within the tree protection zone of a tree in a way that foreseeably leads to the death of the tree. For the purposes of this subsection (m), "tree protection zone" means the area defined by a circle with a radius ten times the diameter of the trunk when measured four and one-half feet (fifty- four inches) above natural grade. (3) If an action prohibited by section 18.09.040(m)(2) is necessary to allow the construction of an ADU that meets the minimum standards set forth in state law, the tree shall be replaced according to the objective requirements identified in the Tree Canopy Replacement Table of the Palo Alto Tree and Landscape Technical Manual. (4) The construction of an ADU must comply with applicable objective standards and specifications in the Tree and Landscape Technical Manual for the protection of trees during construction. Compliance with this subsection (4) shall not delay or cause the denial of an ADU or JADU building permit or use permit. (n) Miscellaneous requirements (1) Street addresses shall be assigned to all units prior to building permit final to assist in emergency response. (2) The unit shall not be sold separately from the primary residence except as allowed under Government Code Section 66341. (3) Rental of any unit created pursuant to this section shall be for a term of 30 days or more. (4) The installation of fire sprinklers shall not be required in an accessory dwelling unit if sprinklers are not required for the primary residence. Nothing in this section shall preclude the Fire Marshal from accepting fire sprinklers as an alternative means of compliance with generally applicable fire protection requirements. 18.09.050 Additional Requirements for JADUs (a) A JADUjunior accessory dwelling unit may only be created on a lot in a single-family residential zone with an existing or proposed single family residence. A JADUjunior accessory dwelling unit shall be attached to or created within the walls of an existing or proposed primary dwelling, including enclosed uses within the residence, such as an attached garage. (b) The JADUjunior accessory dwelling unit shall include an efficiency kitchen, requiring the following components: A cooking facility with appliances, and; food preparation Item 10 Attachment A - Draft Ordinance (Clean Version) Item 10: Staff Report Pg. 22 Packet Pg. 275 of 349 *NOT YET APPROVED* 15 0160107_20250417_ms29 counter and storage cabinets that are of reasonable size in relation to the size of the junior accessory dwelling unit. i. A cooking facility with appliances shall mean, at minimum a one burner installed range, an oven or convection microwave, a 10 cubic foot refrigerator and freezer combination unit, and a sink that facilitates hot and cold water. ii. A food preparation counter and storage cabinets shall be of reasonable size in relation to a JADU if they provide counter space equal to a minimum 24-inch depth and 36-inch length. iii. i. JADUs may share sanitation facilities (bathrooms, laundry facilities, etc.) with the primary unit. If a permitted JADU does not include a separate bathroom, the permitted junior accessory dwelling unit shall include a separate entrance from the main entrance to the structure, with an interior entry to the main living area. In this instance, the floor area and lot coverage associated with shared space shall count towards the primary unit’s maximum allowances only. The combined sanitation facilities between the units shall include shower, toilet, and sink fixtures at a minimum and shall conform to the minimum requirements specified in the Building Code. (c) For the purposes of any fire or life protection ordinance or regulation or for the purposes of providing service for water, sewer, or power, a JADUjunior accessory dwelling unit shall not be considered a separate or new unit. (d) The owner of a parcel proposed for a JADUjunior accessory dwelling unit shall occupy as a primary residence either the primary dwelling or the JADUjunior accessory dwelling. Owner-occupancy is not required if the owner is a governmental agency, land trust, or housing organization. (e) Prior to the issuance of a building permit for a JADUjunior accessory dwelling unit, the owner shall record a deed restriction in a form approved by the city that includes a prohibition on the sale of the junior accessory dwelling unit separate from the sale of the single-family residence, requires owner-occupancy consistent with subsection (d) above, does not permit short-term rentals, and restricts the size and attributes of the JADUjunior dwelling unit to those that conform with this section. (f) JADU incentive. The existing or proposed primary dwelling unit shall be afforded bonus square footage equal to the square footage of a proposed JADU when a JADU is constructed on site, provided the JADU meets the following requirements: 1) The JADU must conform to the underlying zoning district’s development standards for single family homes. Item 10 Attachment A - Draft Ordinance (Clean Version) Item 10: Staff Report Pg. 23 Packet Pg. 276 of 349 *NOT YET APPROVED* 16 0160107_20250417_ms29 2) The maximum number of units on site shall not exceed four (two ADUs, one JADU, and one primary home). 3) The maximum size of the JADU shall not exceed 500 square feet. 4) The total maximum bonus/exempt floor area provided for the site under Section 18.09.040 and 18.09.050 may not exceed 800 square feet. 5) The exterior entryway to the JADU shall not face the same direction as the entrance to the primary home. 6) All egress windows which face an adjacent residential property must utilize opaque glazing on the whole window. 7) All non-egress windows which face an adjacent residential property must have a windowsill(s) that start five feet above the first finished floor for the unit. 8) All noise producing equipment associated with the JADU must comply with the noise regulations in PAMC 9.10. SECTION 3. Subsection (a)(75)(A) of Section 18.04.030 (Definitions) of Chapter 18.04 (Definitions) of Title 18 (Zoning) of the Palo Alto Municipal Code (“PAMC”) is amended to read as follows (additions underlined and deletions struck-through): (A) For ADUs, a kitchen must have permanent provisions for eating, cooking, and sanitation as required by Government Code Section 66313 and Section 17958.1 of the Health and Safety Code. major appliances shall mean a minimum two burner installed range, and an oven or convection microwave, as well as a minimum 11 cubic foot freezer and refrigerator combination unit. Kitchens shall also include counter space for food preparation equal to a minimum 24-inch depth and 36-inch length, and a sink that facilitates hot and cold water. SECTION 4. Subsection (a) of Section 16.49.050 (Exterior Alteration of Historic Structures) of Title 16 (Building Regulations) of the Palo Alto Municipal Code (“PAMC”) is amended to read as follows (additions underlined and deletions struck-through): (a) Review Process. Except for Accessory Dwelling Units and Junior Accessory Dwelling Units proposed on properties listed in the Palo Alto local historic inventory, aAll applications for a building permit for exterior alteration to any historic structure/site in the downtown area or a significant building elsewhere in the city, new construction on a parcel where there is currently a historic structure in the downtown area or a significant building elsewhere in the city, or such application for construction within a historic district shall be reviewed as follows: SECTION 5. Footnote (5) of Table 2 in Section 18.10.040 (Development Standards) of Chapter 18.10 (Low-Density Residential (RE, R-2 and RMD) Districts) is amended to read as follows (deletions struck-through): (5) Maximum House Size: The gross floor area of attached garages and attached accessory dwelling units and junior accessory dwelling units are included in the calculation of Item 10 Attachment A - Draft Ordinance (Clean Version) Item 10: Staff Report Pg. 24 Packet Pg. 277 of 349 *NOT YET APPROVED* 17 0160107_20250417_ms29 maximum house size. If there is no garage attached to the house, then the square footage of one detached covered parking space shall be included in the calculation. This provision applies only to single-family residences, not to duplexes allowed in the R-2 and RMD districts. SECTION 6. Section 18.10.150 (Grandfathered Uses) of Chapter 18.10 (Low-Density Residential) of Title 18 (Zoning) of the Palo Alto Municipal Code (“PAMC”) is amended to read as follows (additions underlined, deletions struck-through, unchanged text omitted by bracketed ellipses): 18.10.150 Grandfathered Uses […] (d) (Reserved) Existing Accessory Dwellings and Guest Cottages In the RE district, accessory dwellings and guest cottages existing on April 28, 1986, and which prior to that date were lawful, conforming permitted uses may remain as legal nonconforming uses. Such uses shall be permitted to remodel, improve or replace site improvements on the same site, without necessity to comply with site development regulations for continual use and occupancy by the same use; provided that any such remodeling, improvement or replacement shall not add a kitchen nor result in increased floor area, number of dwelling units, height, length or any other increase in the size of the improvement without complying with the standards set forth in this subsection and applying for and receiving a conditional use permit pursuant to Chapter 18.76. […] SECTION 7. Footnote (8) of Table 2 in Section 18.12.040 (Development Standards) of Chapter 18.12 (R-1 Single Family Residential District) of Title 18 (Zoning) of the Palo Alto Municipal Code is amended to read as follows (deletions struck-through): (8) Maximum House Size: The gross floor area of attached garages and attached accessory dwelling units and junior accessory dwelling units are included in the calculation of maximum house size. If there is no garage attached to the house, then the square footage of one detached covered parking space shall be included in the calculation. SECTION 8. Chapter 18.28 (Special Purpose (PF, OS, and AC) Districts) of Title 18 (Zoning) of the Palo Alto Municipal Code is amended to read as follows (additions underlined, deletions struck-through, unchanged text omitted by bracketed ellipses): [. . .] 18.28.040 Land Uses Item 10 Attachment A - Draft Ordinance (Clean Version) Item 10: Staff Report Pg. 25 Packet Pg. 278 of 349 *NOT YET APPROVED* 18 0160107_20250417_ms29 Table 1 shows the permitted (P) and conditionally permitted (CUP) land uses for the Special Purpose Districts. Table 1 Land Uses PF OS AC Subject to Regulations in Chapter: ACCESSORY AND SUPPORT USES […] […] […] […] […] Accessory Dwelling Units, subject to regulations in Section 18.42.040 P(2) P(2) P(2) 18.0942.040 Junior Accessory Dwelling Units P(2) P(2) P(2) 18.0942.040 […] […] […] […] […] [. . .] (2) An Aaccessory dDwelling uUnit or a Junior Accessory Dwelling Unit associated with a single-family or multi-family residence on a lot in the OS District is permitted, subject to the provisions of Section Chapter 18.0942.040, and such that no more than two total units result on the lot. […] 18.28.070 Additional OS District Regulations The following additional regulations shall apply in the OS district: (a) Accessory Dwelling Units and Junior Accessory Dwelling Units Accessory Dwelling Units and Junior Accessory Dwelling Units are subject to the regulations set forth in SectionChapter 18.0942.040. [. . .] 18.28.100 Grandfathered Uses In the OS district, accessory dwellings and guest cottages existing on April 28, 1986, and which prior to that date were lawful, conforming permitted uses may remain as legal nonconforming uses. Such uses shall be permitted to remodel, improve or replace site improvements on the same site, without necessity to comply with site development regulations for continual use and occupancy by the same use; provided that any such remodeling, improvement or replacement shall not add a kitchen nor result in increased floor area, number of dwelling units, height, Item 10 Attachment A - Draft Ordinance (Clean Version) Item 10: Staff Report Pg. 26 Packet Pg. 279 of 349 *NOT YET APPROVED* 19 0160107_20250417_ms29 length or any other increase in the size of the improvement without complying with the standards set forth in Section 18.28.070(a) and without applying for and receiving a conditional use permit. SECTION 9. Section 16.04.235 (Section 202 Definitions) is added to Chapter 16.04 (California Building Code, California Code of Regulations, Title 24, Part 2, Volumes 1 &2 ) of Title 16 (Building Regulations) of the Palo Alto Municipal Code to read as follows (additions underlined, bracketed ellipses indicate text of the California Building Code, 2022 Edition, that has been adopted without amendment but is omitted for brevity): Section 202 Definitions [...] FLOOR AREA, GROSS. The floor area within the inside perimeter of the exterior walls of the building under consideration, exclusive of vent shafts and courts, without deduction for corridors, stairways, ramps, closets, the thickness of interior walls, columns or other features. The floor area of a building, or portion thereof, not provided with surrounding exterior walls shall be the usable area under the horizontal projection of the roof or floor above. The gross floor area shall not include shafts with no openings or interior courts. For the purposes of Title 18 (Zoning), the definition of “gross floor area” in Section 18.04.030 shall apply. FLOOR AREA, NET. The actual occupied area not including unoccupied accessory areas such as corridors, stairways, ramps, toilet rooms, mechanical rooms and closets. For the purposes of Title 18 (Zoning), the definition of “net floor area” in Section 18.04.030 shall apply. [...] SECTION 10. Any provision of the Palo Alto Municipal Code or appendices thereto inconsistent with the provisions of this Ordinance, to the extent of such inconsistencies and no further, is hereby repealed or modified to that extent necessary to affect the provisions of this Ordinance. SECTION 11. If any section, subsection, sentence, clause, or phrase of this Ordinance is for any reason held to be invalid or unconstitutional by a decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this Ordinance. The City Council hereby declares that it would have passed this Ordinance and each and every section, subsection, sentence, clause, or phrase not declared invalid or unconstitutional without regard to whether any portion of the ordinance would be subsequently declared invalid or unconstitutional. SECTION 12. The Council finds that the adoption of this Ordinance is exempt from the provisions of the California Environmental Quality Act (CEQA) pursuant to Public Resources Code Section 21080.17 and CEQA Guidelines sections 15061(b)(3), because it constitutes amendments to the City’s zoning ordinance to conform with preemptive State law, including Item 10 Attachment A - Draft Ordinance (Clean Version) Item 10: Staff Report Pg. 27 Packet Pg. 280 of 349 *NOT YET APPROVED* 20 0160107_20250417_ms29 Article 2 (commencing with Section 66314) and Article 3 (commencing with Section 66333) of Chapter 13 of Division 1 of Title 7 of, the Government Code, as well as other minor and non- substantive amendments. As such, it can be seen with certainty that the proposed action will not have the potential for causing a significant effect on the environment. SECTION 13. This ordinance shall be effective on the thirty-first date after the date of its adoption. INTRODUCED: PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: ____________________________ ____________________________ City Clerk Mayor APPROVED AS TO FORM: APPROVED: ____________________________ ____________________________ City Attorney or Designee City Manager ____________________________ Director of Planning and Development Services Item 10 Attachment A - Draft Ordinance (Clean Version) Item 10: Staff Report Pg. 28 Packet Pg. 281 of 349 *NOT YET APPROVED* 1 0160107_20250417_ms29 Ordinance No. _____ Ordinance of the Council of the City of Palo Alto Amending Title 16 (Building Regulations) and Title 18 (Zoning) of the Palo Alto Municipal Code to Amend Requirements Relating to Accessory Dwelling Units and Junior Accessory Dwelling Units The Council of the City of Palo Alto does ORDAIN as follows: SECTION 1. Findings and Declarations. A. In 2023, the City of Palo Alto adopted Ordinance 5585, amending the City’s requirements for ADUs and JADUs to reflect changes in State law and guidance from the California Department of Housing and Community Development (HCD). B. On October 29, 2024, the City received a letter from HCD commenting on aspects of the City’s J/ADU ordinance that HCD found inconsistent with State law. C. California Government Code section 66326(b)(2) requires that the City either amend its ordinance as indicated in the letter or adopt the ordinance without the changes and include findings that explain the reasons the City believes the ordinance complies with State J/ADU law. D. Upon recommendation of City Staff and the Planning and Transportation Commission, the Council of the City of Palo Alto now intends to amend its J/ADU ordinance in response to each of HCD’s comments. E. Additionally, the City now adopts explanatory findings to accompany the amendments in response to several of HCD’s comments. F. HCD Comment 9 states, “The Ordinance makes several references to Chapter 8.10, the City’s Tree and Landscape Preservation and Management regulations, and requires that elements of ADU development conform to Chapter 8.10…The City should amend the Ordinance to ensure that compliance with this ordinance section will not delay or cause the denial of an ADU or JADU building permit or use permit.” The City now intends to amend its ADU ordinance to eliminate references to Chapter 8.10. Additionally, the City now amends its Chapter 18.09.040 to include objective landscape requirements for those ADUs that are subject to local standards, pursuant to Government Code section 66314(b). These landscape requirements include adherence to applicable objective landscape standards in the Tree and Landscape Technical Manual for the protection of trees during construction. The City Council finds that the standards in the Tree and Landscape Technical Manual for the protection of trees during construction are industry standard best practices for construction and are typically imposed as conditions of approval. Consistent with HCD’s comment, the Item 10 Attachment B - Draft Ordinance (Annotated) Item 10: Staff Report Pg. 29 Packet Pg. 282 of 349 *NOT YET APPROVED* 2 0160107_20250417_ms29 ordinance will clarify that the Tree and Landscape Technical Manual’s standards for tree protection during construction are not a cause of delay or denial of an ADU or JADU permit. G. HCD Comment 10 states, “The Ordinance describes JADUs in the section ‘Units Subject to Local Standards’ and creates governance of JADUs that ‘do not qualify for approval under section 18.090.030.’ However, all JADUs are created pursuant to Government Code section 66323, subdivision (a)(1), and would therefore be approved under section 18.090.030. The City must remove references to JADUs in this section.” The City Council finds that this comment is incorrect; although some JADUs are created pursuant to Government Code section 66323, JADUs may also be created pursuant to Government Code sections 66333- 66339 (also known as “Article 3”), which begins with the statement “Notwithstanding Article 2 (commencing with Section 66314 [and including section 66323]), a local agency may, by ordinance, provide for the creation of junior accessory dwelling units in single- family residential zones” (emphasis added). Nonetheless, through this Ordinance, the City intends to remove all references to JADUs in Section 18.09.040, “Units Subject to Local Standards.” All JADUs that meet the requirements of Government Code section 66323(a) will be subject to the ministerial approval provisions in Chapter 18.09.030. Additionally, in order to further incentivize the construction of JADUs, the Ordinance allows a 500 square foot bonus for the primary dwelling unit where a JADU that meets the conditions in 18.09.050(f) is constructed on site. The City Council finds that this additional incentive provided in 18.09.050 does not conflict with Government Code sections 66310-66342 because it liberalizes the City’s regulations for primary residences and does not regulate the construction of JADUs. H. HCD Comment 14 states, “Section 18.09.040 (l) – Parking Exceptions – The Ordinance does not provide for exemptions to parking requirements pursuant to Government Code section 66322, subdivisions (a)(1) through (a)(6)…Therefore, the City must amend the Ordinance to add the required exemptions.” Table 1 and 2 of PAMC 18.09.030 and 18.09.040, as well as Table 1 of PAMC 18.52.040, indicate that parking is not required for newly constructed ADUs or JADUs. Additionally, this Ordinance amends PAMC 18.09.040(l) so that the City no longer requires replacement parking for ADUs or JADUs under any circumstance. Because the Ordinance as amended imposes no parking requirements for J/ADUs, it does not enumerate the exemptions to parking requirements described in Government Code section 66322(a)(1)-(6). I. On September 19, 2024, the Governor signed Senate Bill (SB) 1211, effective January 1, 2025. SB 1211 allows up to 8 detached accessory dwelling units (ADUs) on parcels with existing multifamily development and provides that cities can no longer require replacement parking for uncovered parking spaces that are removed for an ADU. J. Upon recommendation of City Staff and the Planning and Transportation Commission, the Council of the City of Palo Alto desires to amend its J/ADU ordinance to implementing SB 1211 and to make additional clerical amendments and minor amendments to conform with State law. Item 10 Attachment B - Draft Ordinance (Annotated) Item 10: Staff Report Pg. 30 Packet Pg. 283 of 349 *NOT YET APPROVED* 3 0160107_20250417_ms29 K. Section 9 of this Ordinance amends Chapter 16.04 (California Building Code, California Code of Regulations, Title 24, Part 2, Volumes 1 &2) of Title 16 (Building Regulations) of the Palo Alto Municipal Code. This is an administrative amendment to clarify and establish civil and administrative procedures, regulations, or rules to administer the enforcement of Title 16. In particular, it clarifies that while the California Building Code definitions of “gross floor area” and “net floor area” apply for the purposes of enforcing Title 16, for the purposes of enforcing the zoning code (Title 18 of the Palo Alto Municipal Code), the definitions in Title 18 apply. This amendment is not a building standard as defined in Health and Safety Code section 18909. SECTION 2. Chapter 18.09 (Accessory Dwelling Units and Junior Accessory Dwelling Units) of Title 18 (Zoning) of the Palo Alto Municipal Code (“PAMC”) is amended to read as follows (additions underlined and deletions struck-through): 18.09.010 Purpose The intent of this Chapter is to provide regulations to accommodate accessory and junior accessory dwelling units (ADU/JADU), in order to provide for variety to the city's housing stock and additional affordable housing opportunities. These units shall be separate, self-contained living units, with separate entrances from the main residence, whether attached or detached. The standards below are provided to minimize the impacts of units on nearby residents and throughout the city, and to assure that the size and location of such dwellings is compatible with the existing or proposed residence(s) on the site and with other structures in the area. 18.09.020 Applicable Zoning Districts The establishment of an accessory dwelling unit is permitted in zoning districts when single-family or multi-family residential is a permitted land use. The development of a single-family home, ADU, and/or a JADU on a lot that allows for single-family development shall not be considered a multifamily development pursuant to PAMC Section 18.04.030, nor shall they require Architectural Review pursuant to other sections of Chapter 18. 18.09.030 Units Exempt from Generally Applicable Local Regulations (a) Government Code sections 6632365852.2, subdivision (e) provides that certain units shall be approved notwithstanding State or local regulations that may otherwise apply. The following types of units shall be governed by the standards in this section. In the event of a conflict between this section and Government Code section 6632365852.2, subdivision (e), the Government Code shall prevail. Commented [A1]: HCD Comment 1. Commented [A2]: HCD Comment 1. Commented [A3]: HCD Comment 1 Item 10 Attachment B - Draft Ordinance (Annotated) Item 10: Staff Report Pg. 31 Packet Pg. 284 of 349 *NOT YET APPROVED* 4 0160107_20250417_ms29 i. An ADU and JADU within the existing space of a single-family dwelling or an ADU within the existing space of an accessory structure (i.e. conversion without substantial addition). ii. An ADU and JADU within the proposed space of a single-family dwelling. iii. A detached, new construction ADU on a lot with a proposed or existing single-family dwelling, provided the ADU does not exceed 800 square feet, sixteen feet in height, or four-foot side and rear (i.e. interior) setbacks, or the maximum height described in subparagraph (A), (B), or (C) of paragraph (4) of subdivision (b) of Government Code Section 66321, as applicable. iv. ADUs created by conversion of portions of existing multi-family dwellings not used as livable space. v. Up to two eight detached ADUs on a lot with an existing multi-family dwelling, provided that the number of ADUs does not exceed the number of existing units on the lot. vi. Up to two detached ADUs on a lot with a proposed multi-family dwelling. (b) The Development Standards for units governed by this section are summarized in Table 1. Regulations set forth in section 18.09.040 do not apply to units created under 18.09.030. The minimum and maximum sizes indicated in Table 1 do not prohibit units that are greater than 800 square feet. These sizes simply serve to distinguish when a unit transitions from regulations set forth in Table 1 and section 18.09.030 to regulations set forth in Table 2 and section 18.09.040. Table 1: Development Standards for Units Described in Government Code Section 65852.2(e) 66323 Single-Family Multi-Family Conversion of Space Within the Existing Space of a Single-Family Home or Accessory Structure Construction of Attached ADU/JADU Within the Proposed Space of a Single- Family Home New Construction of Detached ADU Conversion of Non-Habitable Space Within Existing Multi- family Dwelling Structure Conversion or Construction of Detached(4) ADU on a site with Existing Multi-family Structure Conversion or Construction of Detached(4) ADU on a site with Proposed Multi- family Structure Number of Units Allowed 1 ADU and 1 JADU 1 Attached ADU, 1 Detached ADU, and 1 JADU 25% of the existing units (at least one) Up to 8 (not to exceed the number of existing units on the lot) 2 Minimum 150 sf Commented [A4]: HCD Comment 2 Commented [A5]: HCD Comment 1 Commented [A6]: HCD Comment 3 Item 10 Attachment B - Draft Ordinance (Annotated) Item 10: Staff Report Pg. 32 Packet Pg. 285 of 349 *NOT YET APPROVED* 5 0160107_20250417_ms29 size(1) Maximum size(1) N/A2 800 sf N/A Setbacks N/A, if condition is sufficient for fire and safety Underlying zone standard for Single Family Home (ADU must be within allowable space of Single-Family Home) 4 feet from side and rear lot lines; underlying zoning for front setback N/A 4 feet from side and rear lot lines; underlying zoning for front setback Daylight Plane N/A N/A Maximum Height(3) N/A 16(5) N/A 16(5)(6) Parking None State Law Reference 65852.2(e)(1)(A ) 66323(a)(1) 65852.2(e)(1)(A ) 66323(a)(1) 65852.2(e)(1) (B) 66323(a)(2) 65852.2(e)(1)(C) 66323(a)(3) 65852.2(e)(1)(D) 66323(a)(4) (1) Lofts where the height from the floor level to the underside of the rafter or finished roof surface is 5' or greater shall count towards the unit’s floor area. (2) New construction must be consistent with allowable space (e.g. FAR, Lot Coverage) of a single family residence, except that up to 150 sf may be added for the purpose of ingress and egress only, without regard to underlying zone standards The maximum size of a JADU is 500 square feet. See PAMC 18.09.030(h) for additional information. (3) Units built in a flood zone are not entitled to any height extensions granted to the primary dwelling. (4) Units must be detached from existing primary dwellings but may be attached to each other. (5) A height of 18 feet for a detached ADU on a lot with an existing or proposed single family or multifamily dwelling unit that is within one-half of one mile walking distance of a major transit stop or a high-quality transit corridor, as those terms are defined in Section 21155 of the Public Resources Code. An additional two feet in height shall be provided to accommodate a roof pitch on an ADU that is aligned with the roof pitch of the primary dwelling unit. (6) A height of 18 feet for a detached ADU on a lot with an existing or proposed multifamily, multistory dwelling. (c) Development standards stated elsewhere in this Section or Title 18, including standards related to FAR, lot coverage, and privacy, are not applicable to ADUs or JADUs that qualify for approval under this section. When there is an ADU or JADU attached to an existing or proposed primary dwelling, the shared wall between these units shall contribute to the maximum allowable Floor Area, Lot Coverage, and Maximum House Size of the primary unit. For a single-family home, this measurement shall be taken to the outside stud wall in accordance with Section 18.04.030(a)(65)(D). For a multi-family dwelling, this measurement shall be taken to the outside surface of exterior walls in accordance with Section 18.04.030(a)(65)(B) and (C). (d) The establishment of accessory dwelling units and junior accessory dwelling units pursuant to this section shall not be conditioned on the correction of non- Item 10 Attachment B - Draft Ordinance (Annotated) Item 10: Staff Report Pg. 33 Packet Pg. 286 of 349 *NOT YET APPROVED* 6 0160107_20250417_ms29 conforming zoning conditions; provided, however, that nothing in this section shall limit the authority of the Chief Building Official to require correction of building standards relating to health and safety. Upon request of the owner for a delay in enforcement, the Chief Building Official shall delay enforcement of a building standard, subject to compliance with Section 17980.12 of the Health and Safety Code. (e) The installation of fire sprinklers shall not be required in an accessory dwelling unit if sprinklers are not required for the primary residence. The construction of an accessory dwelling unit shall not trigger a requirement for fire sprinklers to be installed in the existing multifamily dwelling. Nothing in this section shall preclude the Fire Marshal from accepting fire sprinklers as an alternative means of compliance with generally applicable fire protection requirements. (f) Rental of any unit created pursuant to this section shall be for a term of 30 days or more. (g) Attached units shall have independent exterior access from a proposed or existing single-family dwelling. Except for JADUs, attached units shall not have an interior access point to the primary dwelling (e.g. hotel door or other similar feature/appurtenance). If a permitted JADU does not include a separate bathroom, the permitted JADU shall include a separate entrance from the main entrance to the structure, with an interior entry to the main living area. (h) Conversion of an existing accessory structure pursuant to Government Code section 65852.2(e)(1)(A) 66314(d)(7) may include reconstruction in-place of a non- conforming structure, so long as the renovation orf reconstruction does not increase the degree of non-compliance, such as increased height, envelope, or further intrusion into required setbacks. An expansion of not more than 150 square feet beyond the same physical dimensions as the existing accessory structure may be provided to accommodate ingress and egress. Any portion of an ADU addition to the existing accessory structure that is not limited to providing for ingress and egress to the unit, and that exceeds the envelope of the existing accessory structure shall be subject to Section 18.09.040. (i) Street addresses shall be assigned to all units prior to building permit final to assist in emergency response. (j) The unit shall not be sold separately from the primary residence, except as allowed under Government Code Section 66341. (k) Replacement parking is not required when a garage, carport, or covered parking structure an off-street parking space is converted to, or demolished in conjunction with the construction of, an ADU. Commented [A7]: HCD Comment 4 Commented [A8]: HCD Comment 5 Commented [A9]: HCD Comment 6 Commented [A10]: HCD Comment 1 Commented [A11]: HCD Comment 7 Commented [A12]: HCD Comment 8 Item 10 Attachment B - Draft Ordinance (Annotated) Item 10: Staff Report Pg. 34 Packet Pg. 287 of 349 *NOT YET APPROVED* 7 0160107_20250417_ms29 (l) JADUs shall comply with the requirements of Section 18.09.050. (m) Notwithstanding any contrary provision of Chapter 8.10, to the extent the City’s application checklist requires a tree disclosure statement, it may be completed by the property owner. 18.09.040 Units Subject to Local Standards (a) This section shall govern applications for ADUs and JADUs that do not qualify for approval under section 18.09.030 and for which the City may impose local standards pursuant to Government Code section 65852.2, subdivisions (a) through (d)66314. Nothing in this section shall be interpreted to prohibit an ADU of up to 800 square feet, at the heights stated in Table 2, with a four foot side and rear setbacks. (b) The Development Standards for units governed by this section are provided in Table 2. These regulations do not limit the height of existing structures converted into ADU/JADUs unless the envelope of the building is proposed to be modified beyond any existing legal, non-conforming condition. Table 2: All other Units Attached Detached JADU Number of Units Allowed1 1 1 Minimum size 150 sf Maximum size 900 sf (1,000 sf for two or more bedrooms); no more than 50% of the size of the single- family home 900 sf (1,000 sf for two or more bedrooms) 500 sf Setbacks 4 feet from side and rear lot lines; Underlying zone standard for front setback Daylight Plane Underlying zone standard per footnote (7) N/A Underlying zone standard Maximum Height3 Underlying zone standard Res. Estate (RE) 30 feet Open Space (OS) 25 feet All other eligible zones 16 feet(5)(6)(7) Parking None Commented [A13]: HCD Comment 9 Commented [A14]: HCD Comment 10 Commented [A15]: HCD Comment 1 Item 10 Attachment B - Draft Ordinance (Annotated) Item 10: Staff Report Pg. 35 Packet Pg. 288 of 349 *NOT YET APPROVED* 8 0160107_20250417_ms29 Square Footage Exemption when in conjunction with a single family home(4) Up to 800 sf Up to 500 sf (1) An attached orand detached ADU may be built in conjunction with a JADU on a lot with an existing or proposed single family home. One attached or detached ADU may be built in conjunction with an existing or proposed multifamily building. (2) Lofts where the height from the floor level to the underside of the rafter or finished roof surface is 5' or greater shall count towards the unit’s floor area. (3) Units built in a flood zone are not entitled to any height extensions granted to the primary dwelling. (4) Lots with both an attached and detached ADU and a JADU may exempt a maximum combined total of 800 square feet of boththe ADUs and JADU from FAR, Lot Coverage, and Maximum House Size calculations. Any square footage that exceeds this exemption shall contribute to the FAR, Lot Coverage, and (if attached) Maximum House Size calculations for the subject property. This exemption is not afforded to lots with existing or proposed multifamily dwellings. (5) A height of 18 feet for a detached ADU on a lot with an existing or proposed single family or multifamily dwelling unit that is within one-half of one mile walking distance of a major transit stop or a high-quality transit corridor, as those terms are defined in Section 21155 of the Public Resources Code. An additional two feet in height shall be provided to accommodate a roof pitch on an ADU that is aligned with the roof pitch of the primary dwelling unit. (6) A height of 18 feet for a detached ADU on a lot with an existing or proposed multifamily, multistory dwelling. (7) A height of 25 feet or the height limitation in the underlying zone district that applies to the primary dwelling, whichever is lower, for an ADU that is attached to a primary dwelling. These ADUs shall not exceed two stories in height. (c) A single-family or multifamily dwelling shall exist on the lot or shall be constructed on the lot in conjunction with the construction of an ADU/JADU. (d) ADU and/or JADU square footage shall not be included in FAR, Lot Coverage, and Maximum House Size calculations for a lot with an existing or proposed single family home, up to the amounts stated in Table 2. ADU and/or JADU square footage in excess of the exemptions provided in Table 2 shall be included in FAR, Lot Coverage, and Maximum House Size calculations for the lot. (e) When there is an ADU or JADU attached to an existing or proposed primary dwelling, the shared wall between these units shall contribute to the maximum allowable Floor Area, Lot Coverage, and Maximum House Size of the primary unit. For a single- family home, this measurement shall be taken to the outside stud wall in accordance with Section 18.04.030(a)(65)(D). For a multi-family dwelling, this measurement shall be taken to the outside surface of exterior walls in accordance with Section 18.04.030(a)(65)(B) and (C). (f) Attached units shall have independent exterior access from a proposed or existing single-family dwelling. Except for JADUs, Aattached units shall not have an interior Commented [A16]: HCD Comment 10 Commented [A17]: HCD Comment 10 Commented [A18]: HCD Comment 11 Commented [A19]: HCD Comment 10 Commented [A20]: HCD Comment 10 Commented [A21]: HCD Comment 10 Commented [A22]: HCD Comment 10 Item 10 Attachment B - Draft Ordinance (Annotated) Item 10: Staff Report Pg. 36 Packet Pg. 289 of 349 *NOT YET APPROVED* 9 0160107_20250417_ms29 access point to the primary dwelling (e.g. hotel door or other similar feature/appurtenance). (g) Reserved No protected tree shall be removed for the purpose of establishing an accessory dwelling unit except in accordance with Chapter 8.10. Notwithstanding any contrary provision of Chapter 8.10, to the extent the City’s application checklist requires a tree disclosure statement, it may be completed by the property owner. (h) For properties listed in the Palo Alto Historic Inventory, the California Register of Historical Resources, the National Register of Historic Places, or considered a historic resource after completion of a historic resource evaluation, compliance with the appropriate Secretary of Interior’s Standards for the Treatment of Historic Properties shall be required. (i) Noise-producing equipment such as air conditioners, water heaters, and similar service equipment that exclusively serves an ADU/JADU may be located anywhere on the site, provided they maintain the underlying front yard setback requirements of the property and, if the property is a corner lot, a 10-foot street-side setback. All such equipment shall be insulated and housed, except that the Director may permit installation without housing and insulation, provided that a combination of technical noise specifications, location of equipment, and/or other screening or buffering will assure compliance with the city’s Noise Ordinance at the nearest property line. All service equipment must meet the city’s Noise Ordinance in Chapter 9.10 of the Municipal Code. (j) Setbacks (1) Detached units shall maintain a minimum three-foot distance from the primary unit, measured from the exterior walls of structures. (2) A basement or other subterranean portion that serves an ADU/JADU may encroach into a setback required for the primary dwelling provided the following conditions are met: (A) Newly constructed basement walls are no closer than four feet to an adjacent interior side or rear property line. (B) A new lightwell associated with a basement shall not be placed closer than four feet to an adjacent interior property line. When visible from the right of way, these facilities shall be screened from view with vegetation. (C) The new basement shall not negatively impact tree roots on the subject property or on adjacent lots such that it would require to be removed or cause the protected tree to die. Commented [A23]: HCD Comment 9 Commented [A24]: HCD Comment 12 Commented [A25]: HCD Comment 10 Commented [A26]: HCD Comment 10 Item 10 Attachment B - Draft Ordinance (Annotated) Item 10: Staff Report Pg. 37 Packet Pg. 290 of 349 *NOT YET APPROVED* 10 0160107_20250417_ms29 (D) (C) Habitable ADU/JADU basements shall contribute toward the unit’s total allowable floor area. Any floor area in excess of the exemptions provided in this Section shall contribute to the total allowable limits for the site. (3) Projections, including but not limited to windows, doors, mechanical equipment, venting or exhaust systems, are not permitted to encroach into the required setbacks, with the exception of a roof eave of up to 2 feet. (4) For corner lots developed as a single-family home only, when an existing or proposed primary dwelling unit is expanded or constructed simultaneously with the construction of a new ADU/JADU, the homeowner may elect to build all structures may be built to a 10-foot street-side setback and a 16-foot front yard setback, regardless of the presence of a more restrictive special setback, unless a fire or life-safety regulation requires a greater setback. Pursuant Government Code section 66321(b)(3), a street-side setback may not preclude the development of an 800 square foot unit. (5) When an existing, legal, nonconforming structure is converted or reconstructed to create an ADU/JADU, any portion of the ADU/JADU that is in the same location and falls within the building envelope of the original structure shall not be subject to the development standards stated in this Section. Any portion of the ADU/JADU that is in a different location or exceeds the envelope of the original structure shall comply with the development standards stated in this Section. (6) Notwithstanding the development standards stated in Table 2 and paragraph (5) above, when an existing, legal, non-conforming structure is converted in- place to an ADU/JADU, the envelope of the structure may be modified to encroach further into a setback or daylight plane as follows: (A) The height of the existing structure may be increased by no more than one linear foot in height commensurate to the existing roofline of the structure provided the height of the addition does not exceed 12 feet from grade. The roofline shall not be changed to a style other than what currently exists on the structure. (B) Each non-conforming wall may be expanded by no more than six inches in thickness based on its existing location and configuration, as measured to exterior surface of the material, to provide for greater insulation and energy requirements provided that a minimum of one foot is maintained between the addition and an adjacent interior property line. An existing wall of a structure that does not currently Commented [A27]: HCD Comment 10 Commented [A28]: HCD Comment 13 Commented [A29]: HCD Comment 10 Commented [A30]: HCD Comment 10 Item 10 Attachment B - Draft Ordinance (Annotated) Item 10: Staff Report Pg. 38 Packet Pg. 291 of 349 *NOT YET APPROVED* 11 0160107_20250417_ms29 have a separation of one foot from a parallel property line shall not be expanded outward. (C) All other additions not specified here shall follow the standard setbacks for the ADU/JADU identified in Table 2. (k) Design (1) Except on corner lots, where feasible, the unit shall not have an entranceway facing the same lot line (property line) as the entranceway to the main dwelling unit unless the entranceway to the accessory unit is located in the rear half of the lot. Exterior staircases to second floor units shall be located toward the interior side or rear yard of the property. (2) Privacy (A) Second story doors and decks shall not face a neighboring property line. Second story decks and balconies shall utilize screening barriers to prevent views towards an adjacent interior property line. These barriers shall be a minimum five-foot, six-inch height from the floor level of the deck or balcony and shall not include perforations of any kind that would allow visibility between properties. (B) Windows on a second floor, loft, or equivalent elevated space, excluding those required for egress, shall have a five-foot sill height as measured from the second-finished floor level, or utilize opaque glazing on the entirety any window that faces an adjacent interior property line. (C) Windows on a second finished floor, loft, or equivalent elevated space, shall be offset from neighbor’s windows to maximize privacy. (D) Where feasible, egress windows on the first and second finished floor of an ADU or JADU shall not face towards an adjacent interior property line. If this is not feasible, then these windows shall utilize opaque glazing on the whole window. (E) If the first finished floor of an ADU or JADU is two feet or more above grade, then first floor windows shall include the following: i. Non-egress, operable windows facing an adjacent interior property line shall have a windowsill(s) that start five feet above the first finished floor for the unit; ii. Non-egress, non-operable windows facing an adjacent interior property line shall have the lower half of window(s) (minimum of five feet above the first finished floor) utilize opaque glazing. (F) Where feasible, the use of skylights (whether operable or not) shall be used in lieu of operable windows that face adjacent interior properties. Commented [A31]: HCD Comment 10 Commented [A32]: HCD Comment 10 Commented [A33]: HCD Comment 10 Item 10 Attachment B - Draft Ordinance (Annotated) Item 10: Staff Report Pg. 39 Packet Pg. 292 of 349 *NOT YET APPROVED* 12 0160107_20250417_ms29 (G) No exterior lighting shall be mounted above seven feet. All lighting mounted on walls shall be directed downwards and shall not direct light towards adjacent interior property lines. Any ground lighting shall not direct light upwards to the building or sky. (l) Parking (1) Replacement parking is not required when a garage, carport, or covered parking structure, or uncovered parking space is converted to, or demolished in conjunction with the construction of, an ADU. (2) Replacement parking is required when an existing attached garage, carport, or covered parking structure is converted to a JADU or when a required, existing, uncovered parking space is expanded into an ADU/JADU. These replacement spaces may be provided as uncovered spaces in any configuration on the lot including within the front or street side yard setback for the property. (A) The Director shall have the authority to modify required replacement parking spaces by up to one foot in width and length upon finding that the reduction is necessary to accommodate parking in a location otherwise allowed under this code and is not detrimental to public health, safety or the general welfare. (B) Existing front and street side yard driveways may be enlarged to the minimum extent necessary to comply with the replacement parking requirement above. Existing curb cuts shall not be altered except when necessary to promote public health, safety or the general welfare. (2) (3) When parking is provided, the unit shall have street access from a driveway in common with the main residence in order to prevent new curb cuts, excessive paving, and elimination of street trees, unless separate driveway access will result in fewer environmental impacts such as paving, grading or tree removal. (3) (4) When a single-family dwelling unit is permitted simultaneously with the construction of new ADU/JADUs, the primary unit’s covered parking requirements identified in Chapter 18.10 and 18.12 do not need to be provided. Two uncovered parking spaces shall be provided in any configuration on the lot including within the front or street-side setback for the property. Commented [A34]: HCD Comment 14 and 15 Commented [A35]: HCD Comment 14 and 15 Commented [A36]: HCD Comment 10 Item 10 Attachment B - Draft Ordinance (Annotated) Item 10: Staff Report Pg. 40 Packet Pg. 293 of 349 *NOT YET APPROVED* 13 0160107_20250417_ms29 (4) (5) If covered parking for a unit is provided in any district, the maximum size of the covered parking area for the accessory dwelling unit is 220 square feet. This space shall count towards the total floor area for the site but does not contribute to the maximum size of the unit. Any attached garage shall not have an interior access point to the ADU/JADU (e.g. hotel door or other similar feature/appurtenance). (m) Landscape (1) For the purposes of this subsection (m), “protected tree” means: (A) Any locally native tree of the species Acer macrophyllum (Bigleaf Maple), Calocedrus decurrens (California Incense Cedar), Quercus agrifolia (Coast Live Oak), Quercus douglasii (Blue Oak), Quercus kelloggii (California Black Oak), or Quercus lobata (Valley Oak) which is eleven and one-half inches in diameter (thirty-six inches in circumference) or more when measured four and one-half feet (fifty- four inches) above natural grade. (B) Any Coast Redwood tree (species Sequoia sempervirens) that is eighteen inches in diameter (fifty-seven inches in circumference) or more when measured four and one-half feet (fifty-four inches) above natural grade. (C) Any tree of any species, other than a Coast Redwood Tree, fifteen inches in diameter (forty-seven inches in circumference) or more when measured four and one-half feet (fifty-four inches) above natural grade. A “protected tree” does not include a tree of any species on the Exempt Species List put forth by the Department of Urban Forestry and available on the City’s website. (D) Any tree designated for protection during review and approval of a current or previously completed development project. (E) Any tree designated for carbon sequestration and storage and/or environmental mitigation purposes as identified in an agreement between the property owner and a responsible government agency or recorded as a deed restriction. (F) Any heritage tree previously designated by the city council. (G) Any tree previously planted as a replacement mitigation tree. (2) Except as provided in subsection (3) below, the construction of an ADU shall not impact any protected tree, on the subject property or any adjacent lot by requiring: (A) Removal of more than twenty-five percent of the functioning leaf, stem, or root area of a tree in any twenty-four-month period; or (B) Removal of more than fifteen percent of the functioning root area of any Quercus (oak) species in any thirty-six-month period; or Commented [A37]: HCD Comment 10 Commented [A38]: HCD Comment 9 Item 10 Attachment B - Draft Ordinance (Annotated) Item 10: Staff Report Pg. 41 Packet Pg. 294 of 349 *NOT YET APPROVED* 14 0160107_20250417_ms29 (C) Trenching, excavating, altering the grade, or paving within the tree protection zone of a tree in a way that foreseeably leads to the death of the tree. For the purposes of this subsection (m), "tree protection zone" means the area defined by a circle with a radius ten times the diameter of the trunk when measured four and one-half feet (fifty- four inches) above natural grade. (3) If an action prohibited by section 18.09.040(m)(2) is necessary to allow the construction of an ADU that meets the minimum standards set forth in state law, the tree shall be replaced according to the objective requirements identified in the Tree Canopy Replacement Table of the Palo Alto Tree and Landscape Technical Manual. (4) The construction of an ADU must comply with applicable objective standards and specifications in the Tree and Landscape Technical Manual for the protection of trees during construction. Compliance with this subsection (4) shall not delay or cause the denial of an ADU or JADU building permit or use permit. (n) Miscellaneous requirements (1) Street addresses shall be assigned to all units prior to building permit final to assist in emergency response. (2) The unit shall not be sold separately from the primary residence except as allowed under Government Code Section 66341. (3) Rental of any unit created pursuant to this section shall be for a term of 30 days or more. (4) The installation of fire sprinklers shall not be required in an accessory dwelling unit if sprinklers are not required for the primary residence. Nothing in this section shall preclude the Fire Marshal from accepting fire sprinklers as an alternative means of compliance with generally applicable fire protection requirements. 18.09.050 Additional Requirements for JADUs (a) A JADUjunior accessory dwelling unit may only be created on a lot in a single-family residential zone with an existing or proposed single family residence. A JADUjunior accessory dwelling unit shall be attached to or created within the walls of an existing or proposed primary dwelling, including enclosed uses within the residence, such as an attached garage. (b) The JADUjunior accessory dwelling unit shall include an efficiency kitchen, requiring the following components: A cooking facility with appliances, and; food preparation Commented [A39]: HCD Comment 8 Commented [A40]: HCD Comment 16 Item 10 Attachment B - Draft Ordinance (Annotated) Item 10: Staff Report Pg. 42 Packet Pg. 295 of 349 *NOT YET APPROVED* 15 0160107_20250417_ms29 counter and storage cabinets that are of reasonable size in relation to the size of the junior accessory dwelling unit. i. A cooking facility with appliances shall mean, at minimum a one burner installed range, an oven or convection microwave, a 10 cubic foot refrigerator and freezer combination unit, and a sink that facilitates hot and cold water. ii. A food preparation counter and storage cabinets shall be of reasonable size in relation to a JADU if they provide counter space equal to a minimum 24-inch depth and 36-inch length. iii. i. JADUs may share sanitation facilities (bathrooms, laundry facilities, etc.) with the primary unit. If a permitted JADU does not include a separate bathroom, the permitted junior accessory dwelling unit shall include a separate entrance from the main entrance to the structure, with an interior entry to the main living area. In this instance, the floor area and lot coverage associated with shared space shall count towards the primary unit’s maximum allowances only. The combined sanitation facilities between the units shall include shower, toilet, and sink fixtures at a minimum and shall conform to the minimum requirements specified in the Building Code. (c) For the purposes of any fire or life protection ordinance or regulation or for the purposes of providing service for water, sewer, or power, a JADUjunior accessory dwelling unit shall not be considered a separate or new unit. (d) The owner of a parcel proposed for a JADUjunior accessory dwelling unit shall occupy as a primary residence either the primary dwelling or the JADUjunior accessory dwelling. Owner-occupancy is not required if the owner is a governmental agency, land trust, or housing organization. (e) Prior to the issuance of a building permit for a JADUjunior accessory dwelling unit, the owner shall record a deed restriction in a form approved by the city that includes a prohibition on the sale of the junior accessory dwelling unit separate from the sale of the single-family residence, requires owner-occupancy consistent with subsection (d) above, does not permit short-term rentals, and restricts the size and attributes of the JADUjunior dwelling unit to those that conform with this section. (f) JADU incentive. The existing or proposed primary dwelling unit shall be afforded bonus square footage equal to the square footage of a proposed JADU when a JADU is constructed on site, provided the JADU meets the following requirements: 1) The JADU must conform to the underlying zoning district’s development standards for single family homes. Commented [A41]: HCD Comment 17. Commented [A42]: HCD Comment 18 Commented [A43]: HCD Comment 19 Item 10 Attachment B - Draft Ordinance (Annotated) Item 10: Staff Report Pg. 43 Packet Pg. 296 of 349 *NOT YET APPROVED* 16 0160107_20250417_ms29 2) The maximum number of units on site shall not exceed four (two ADUs, one JADU, and one primary home). 3) The maximum size of the JADU shall not exceed 500 square feet. 4) The total maximum bonus/exempt floor area provided for the site under Section 18.09.040 and 18.09.050 may not exceed 800 square feet. 5) The exterior entryway to the JADU shall not face the same direction as the entrance to the primary home. 6) All egress windows which face an adjacent residential property must utilize opaque glazing on the whole window. 7) All non-egress windows which face an adjacent residential property must have a windowsill(s) that start five feet above the first finished floor for the unit. 8) All noise producing equipment associated with the JADU must comply with the noise regulations in PAMC 9.10. SECTION 3. Subsection (a)(75)(A) of Section 18.04.030 (Definitions) of Chapter 18.04 (Definitions) of Title 18 (Zoning) of the Palo Alto Municipal Code (“PAMC”) is amended to read as follows (additions underlined and deletions struck-through): (A) For ADUs, a kitchen must have permanent provisions for eating, cooking, and sanitation as required by Government Code Section 66313 and Section 17958.1 of the Health and Safety Code. major appliances shall mean a minimum two burner installed range, and an oven or convection microwave, as well as a minimum 11 cubic foot freezer and refrigerator combination unit. Kitchens shall also include counter space for food preparation equal to a minimum 24-inch depth and 36-inch length, and a sink that facilitates hot and cold water. SECTION 4. Subsection (a) of Section 16.49.050 (Exterior Alteration of Historic Structures) of Title 16 (Building Regulations) of the Palo Alto Municipal Code (“PAMC”) is amended to read as follows (additions underlined and deletions struck-through): (a) Review Process. Except for Accessory Dwelling Units and Junior Accessory Dwelling Units proposed on properties listed in the Palo Alto local historic inventory, aAll applications for a building permit for exterior alteration to any historic structure/site in the downtown area or a significant building elsewhere in the city, new construction on a parcel where there is currently a historic structure in the downtown area or a significant building elsewhere in the city, or such application for construction within a historic district shall be reviewed as follows: SECTION 5. Footnote (5) of Table 2 in Section 18.10.040 (Development Standards) of Chapter 18.10 (Low-Density Residential (RE, R-2 and RMD) Districts) is amended to read as follows (deletions struck-through): (5) Maximum House Size: The gross floor area of attached garages and attached accessory dwelling units and junior accessory dwelling units are included in the calculation of Commented [A44]: HCD Comment 10 Commented [A45]: HCD Comment 20 Commented [A46]: HCD Comment 12 Item 10 Attachment B - Draft Ordinance (Annotated) Item 10: Staff Report Pg. 44 Packet Pg. 297 of 349 *NOT YET APPROVED* 17 0160107_20250417_ms29 maximum house size. If there is no garage attached to the house, then the square footage of one detached covered parking space shall be included in the calculation. This provision applies only to single-family residences, not to duplexes allowed in the R-2 and RMD districts. SECTION 6. Section 18.10.150 (Grandfathered Uses) of Chapter 18.10 (Low-Density Residential) of Title 18 (Zoning) of the Palo Alto Municipal Code (“PAMC”) is amended to read as follows (additions underlined, deletions struck-through, unchanged text omitted by bracketed ellipses): 18.10.150 Grandfathered Uses […] (d) (Reserved) Existing Accessory Dwellings and Guest Cottages In the RE district, accessory dwellings and guest cottages existing on April 28, 1986, and which prior to that date were lawful, conforming permitted uses may remain as legal nonconforming uses. Such uses shall be permitted to remodel, improve or replace site improvements on the same site, without necessity to comply with site development regulations for continual use and occupancy by the same use; provided that any such remodeling, improvement or replacement shall not add a kitchen nor result in increased floor area, number of dwelling units, height, length or any other increase in the size of the improvement without complying with the standards set forth in this subsection and applying for and receiving a conditional use permit pursuant to Chapter 18.76. […] SECTION 7. Footnote (8) of Table 2 in Section 18.12.040 (Development Standards) of Chapter 18.12 (R-1 Single Family Residential District) of Title 18 (Zoning) of the Palo Alto Municipal Code is amended to read as follows (deletions struck-through): (8) Maximum House Size: The gross floor area of attached garages and attached accessory dwelling units and junior accessory dwelling units are included in the calculation of maximum house size. If there is no garage attached to the house, then the square footage of one detached covered parking space shall be included in the calculation. SECTION 8. Chapter 18.28 (Special Purpose (PF, OS, and AC) Districts) of Title 18 (Zoning) of the Palo Alto Municipal Code is amended to read as follows (additions underlined, deletions struck-through, unchanged text omitted by bracketed ellipses): [. . .] 18.28.040 Land Uses Item 10 Attachment B - Draft Ordinance (Annotated) Item 10: Staff Report Pg. 45 Packet Pg. 298 of 349 *NOT YET APPROVED* 18 0160107_20250417_ms29 Table 1 shows the permitted (P) and conditionally permitted (CUP) land uses for the Special Purpose Districts. Table 1 Land Uses PF OS AC Subject to Regulations in Chapter: ACCESSORY AND SUPPORT USES […] […] […] […] […] Accessory Dwelling Units, subject to regulations in Section 18.42.040 P(2) P(2) P(2) 18.0942.040 Junior Accessory Dwelling Units P(2) P(2) P(2) 18.0942.040 […] […] […] […] […] [. . .] (2) An Aaccessory dDwelling uUnit or a Junior Accessory Dwelling Unit associated with a single-family or multi-family residence on a lot in the OS District is permitted, subject to the provisions of Section Chapter 18.0942.040, and such that no more than two total units result on the lot. […] 18.28.070 Additional OS District Regulations The following additional regulations shall apply in the OS district: (a) Accessory Dwelling Units and Junior Accessory Dwelling Units Accessory Dwelling Units and Junior Accessory Dwelling Units are subject to the regulations set forth in SectionChapter 18.0942.040. [. . .] 18.28.100 Grandfathered Uses In the OS district, accessory dwellings and guest cottages existing on April 28, 1986, and which prior to that date were lawful, conforming permitted uses may remain as legal nonconforming uses. Such uses shall be permitted to remodel, improve or replace site improvements on the same site, without necessity to comply with site development regulations for continual use and occupancy by the same use; provided that any such remodeling, improvement or replacement shall not add a kitchen nor result in increased floor area, number of dwelling units, height, Item 10 Attachment B - Draft Ordinance (Annotated) Item 10: Staff Report Pg. 46 Packet Pg. 299 of 349 *NOT YET APPROVED* 19 0160107_20250417_ms29 length or any other increase in the size of the improvement without complying with the standards set forth in Section 18.28.070(a) and without applying for and receiving a conditional use permit. SECTION 9. Section 16.04.235 (Section 202 Definitions) is added to Chapter 16.04 (California Building Code, California Code of Regulations, Title 24, Part 2, Volumes 1 &2 ) of Title 16 (Building Regulations) of the Palo Alto Municipal Code to read as follows (additions underlined, bracketed ellipses indicate text of the California Building Code, 2022 Edition, that has been adopted without amendment but is omitted for brevity): Section 202 Definitions [...] FLOOR AREA, GROSS. The floor area within the inside perimeter of the exterior walls of the building under consideration, exclusive of vent shafts and courts, without deduction for corridors, stairways, ramps, closets, the thickness of interior walls, columns or other features. The floor area of a building, or portion thereof, not provided with surrounding exterior walls shall be the usable area under the horizontal projection of the roof or floor above. The gross floor area shall not include shafts with no openings or interior courts. For the purposes of Title 18 (Zoning), the definition of “gross floor area” in Section 18.04.030 shall apply. FLOOR AREA, NET. The actual occupied area not including unoccupied accessory areas such as corridors, stairways, ramps, toilet rooms, mechanical rooms and closets. For the purposes of Title 18 (Zoning), the definition of “net floor area” in Section 18.04.030 shall apply. [...] SECTION 10. Any provision of the Palo Alto Municipal Code or appendices thereto inconsistent with the provisions of this Ordinance, to the extent of such inconsistencies and no further, is hereby repealed or modified to that extent necessary to affect the provisions of this Ordinance. SECTION 11. If any section, subsection, sentence, clause, or phrase of this Ordinance is for any reason held to be invalid or unconstitutional by a decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this Ordinance. The City Council hereby declares that it would have passed this Ordinance and each and every section, subsection, sentence, clause, or phrase not declared invalid or unconstitutional without regard to whether any portion of the ordinance would be subsequently declared invalid or unconstitutional. SECTION 12. The Council finds that the adoption of this Ordinance is exempt from the provisions of the California Environmental Quality Act (CEQA) pursuant to Public Resources Code Section 21080.17 and CEQA Guidelines sections 15061(b)(3), because it constitutes amendments to the City’s zoning ordinance to conform with preemptive State law, including Item 10 Attachment B - Draft Ordinance (Annotated) Item 10: Staff Report Pg. 47 Packet Pg. 300 of 349 *NOT YET APPROVED* 20 0160107_20250417_ms29 Article 2 (commencing with Section 66314) and Article 3 (commencing with Section 66333) of Chapter 13 of Division 1 of Title 7 of, the Government Code, as well as other minor and non- substantive amendments. As such, it can be seen with certainty that the proposed action will not have the potential for causing a significant effect on the environment. SECTION 13. This ordinance shall be effective on the thirty-first date after the date of its adoption. INTRODUCED: PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: ____________________________ ____________________________ City Clerk Mayor APPROVED AS TO FORM: APPROVED: ____________________________ ____________________________ City Attorney or Designee City Manager ____________________________ Director of Planning and Development Services Item 10 Attachment B - Draft Ordinance (Annotated) Item 10: Staff Report Pg. 48 Packet Pg. 301 of 349 STATE OF CALIFORNIA - BUSINESS, CONSUMER SERVICES AND HOUSING AGENCY GAVIN NEWSOM, Governor DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT DIVISION OF HOUSING POLICY DEVELOPMENT 651 Bannon St, Suite 400 Sacramento, CA 95811 (916) 263-2911 / FAX (916) 263-7453 www.hcd.ca.gov October 29, 2024 Jonathan Lait, Director Planning and Development Services City of Palo Alto 250 Hamilton Ave Palo Alto, CA 94301 Dear Jonathan Lait: RE: Review of Palo Alto’s Accessory Dwelling Unit (ADU) Ordinance under State ADU Law (Gov. Code, §§ 66310 – 66342) Please Note: As of March 25, 2024, with the Chaptering of Senate Bill (SB) 477 (Chapter 7, Statutes of 2024), the sections of Government Code relevant to State ADU and Junior Accessory Dwelling Unit (JADU) Law have been re-numbered (Enclosure 1). Thank you for submitting the City of Palo Alto’s (City) ADU Ordinance No. 5585 (Ordinance), adopted June 5, 2023, to the California Department of Housing and Community Development (HCD). HCD has reviewed the Ordinance and submits these written findings pursuant to Government Code section 66326, subdivision (a). HCD finds that the Ordinance does not comply with State ADU and JADU Laws in the manner noted below. Under section 66326, subdivision (b)(1), the City has up to 30 days to respond to these findings. Accordingly, the City must provide a written response to these findings no later than November 28, 2024. The Ordinance addresses many statutory requirements; however, HCD finds that the Ordinance does not comply with State ADU Law in the following respects: 1. Statutory Numbering - The Ordinance contains several references to code sections that were deleted by SB 477, effective March 25, 2024. These include Government Code sections 65852.2, 65852.22 and 65852.26. The contents of these sections were relocated to Government Code, Title 7, Division 1, Chapter 13 (sections 66310-66342, see Enclosure). The City must amend the Ordinance to refer to the correct code sections. 2. Section 18.09.030 (a) iii. – Height – The Ordinance provides for “A detached, new construction ADU on a lot with a proposed or existing single-family dwelling, provided the ADU does not exceed 800 square feet, sixteen feet in height, or four-foot side and rear (i.e. interior) setbacks.” However, Government Code Item 10 Attachment C - HCD Response to ADU Ordinance Item 10: Staff Report Pg. 49 Packet Pg. 302 of 349 Jonathan Lait, Director Page 2 sections 66321, subdivision (b)(4)(B), which is referenced in section 66323, subdivision (a)(2)(B) as would govern a unit described here in the Ordinance, requires a height allowance of “18 feet for a detached accessory dwelling unit on a lot with an existing or proposed single family or multifamily dwelling unit that is within one-half of one mile walking distance of a major transit stop or a high- quality transit corridor… A local agency shall also allow an additional two feet in height to accommodate a roof pitch on the accessory dwelling unit that is aligned with the roof pitch of the primary dwelling unit.” Footnote 5 in Table 1 of Section 18.09.030 provides for these allowances, the City must amend the Ordinance to to comply with State ADU law and avoid contradictory provisions. 3. Section 18.09.030 Table 1 – Unit Allowance – The Ordinance states in Single Family residence only “1 ADU and 1 JADU” are permitted. This prohibits the combination of units subject to Government Code section 66323, subdivision (a)(1) and (a)(2). Government Code section 66323 states, “Notwithstanding Sections 66314 to 66322, inclusive, a local agency shall ministerially approve an application for a building permit within a residential or mixed-use zone to create any of the following: (1) One accessory dwelling unit and one junior accessory dwelling unit per lot with a proposed or existing single-family dwelling…(A) The accessory dwelling unit or junior accessory dwelling unit is within the proposed space of a single family dwelling or existing space of a single-family dwelling or accessory structure.” Subparagraph (2) permits “[o]ne detached, new construction, accessory dwelling unit that does not exceed four-foot side and rear yard setbacks.” The use of the term “any” followed by an enumeration of by-right ADU types permitted indicate that any of these ADU types can be combined on a lot zoned for single-family dwellings. This permits a homeowner, who meets specified requirements, to create one converted ADU; one detached, new construction ADU; and one JADU. Thus, if the local agency approves an ADU that is created from existing (or proposed) space, and the owner subsequently applies for a detached ADU (or vice versa) that meets the size and setbacks pursuant to the subdivision, the local agency cannot deny the application, nor deny a permit for a JADU under this section. Limiting single-family primary dwelling lots to one ADU and one JADU prevents property owners from creating ADUs by-right under section 66323. Therefore, the City must amend the Ordinance to allow for all by-right ADU combinations. 4. Section 18.09.030 (d) – Delay of Enforcement – The Ordinance states, “The establishment of accessory dwelling units and junior accessory dwelling units pursuant to this section shall not be conditioned on the correction of non- conforming zoning conditions; provided; however, that nothing in this section shall limit the authority of the Chief Building Official to require correction of building standards relating to health and safety.” However, Government Code Item 10 Attachment C - HCD Response to ADU Ordinance Item 10: Staff Report Pg. 50 Packet Pg. 303 of 349 Jonathan Lait, Director Page 3 section 66331 states, “In enforcing building standards pursuant to Article 1 (commencing with Section 17960) of Chapter 5 of Part 1.5 of Division 13 of the Health and Safety Code for an accessory dwelling unit described in subdivision (a) or (b), a local agency, upon request of an owner of an accessory dwelling unit for a delay in enforcement, shall delay enforcement of a building standard, subject to compliance with Section 17980.12 of the Health and Safety Code: (a) The accessory dwelling unit was built before January 1, 2020. (b) The accessory dwelling unit was built on or after January 1, 2020, in a local jurisdiction that, at the time the accessory dwelling unit was built, had a noncompliant accessory dwelling unit ordinance, but the ordinance is compliant at the time the request is made.” Therefore, the City must add language allowing delay of enforcement. 5. Section 18.09.030 (e) – Sprinklers – The Ordinance states, “The installation of fire sprinklers shall not be required in an accessory dwelling unit if sprinklers are not required for the primary residence.” However, Government Code section 66323, subdivision (c) states, “The installation of fire sprinklers shall not be required in an accessory dwelling unit if sprinklers are not required for the primary residence. The construction of an accessory dwelling unit shall not trigger a requirement for fire sprinklers to be installed in the existing multifamily dwelling.” Therefore, City must add the second sentence in the preceding citation to the Ordinance to be consistent with State ADU law. 6. Section 18.09.030 (g) – JADUs and Interior Entry – The Ordinance states, “Except for JADUs, attached units shall not have an interior access point to the primary dwelling.” However, Government Code section 66633, subdivision (e)(2) states, “If a permitted junior accessory dwelling unit does not include a separate bathroom, the permitted junior accessory dwelling unit shall include a separate entrance from the main entrance to the structure, with an interior entry to the main living area.” Therefore, the City must amend the Ordinance accordingly. 7. Section 18.09.030 (h) – Conversion and Expansion – Th Ordinance states, “Conversion of an existing accessory structure pursuant to Government Code section 65852.2(e)(1)(A) may include reconstruction in-place of a non- conforming structure, so long as the renovation of reconstruction does not increase the degree of non-compliance, such as increased height, envelope, or further intrusion into required setbacks. Any portion of an ADU that exceeds the envelope of the existing accessory structure shall be subject to Section 18.09.040.” However, Government Code section 66323, subdivision (a)(1)(A) provides for, “an expansion of not more than 150 square feet beyond the same physical dimensions as the existing accessory structure. An expansion beyond the physical dimensions of the existing accessory structure shall be limited to accommodating ingress and egress.” The City must amend the Ordinance to allow for such an expansion without reference to Section 18.09.040. Item 10 Attachment C - HCD Response to ADU Ordinance Item 10: Staff Report Pg. 51 Packet Pg. 304 of 349 Jonathan Lait, Director Page 4 8. Section 18.09.030 (j) and 18.09.040 (m)2. – Separate Sale1 – The Ordinance notes that ADUs “shall not be sold separately from the primary residence.” However, Government Code section 66341 creates a narrow exception to allow separate conveyance of an ADU to a qualified buyer if the property was built or developed by a qualified nonprofit corporation, among other things. The City must note the exception. 9. Section 18.09.030 (m), 18.09.040 (g) and (j) 2.C. – Tree Ordinance – The Ordinance makes several references to Chapter 8.10, the City’s Tree and Landscape Preservation and Management regulations, and requires that elements of ADU development conform to Chapter 8.10. However, Government Code section 66317, subdivision (c) states that “No local ordinance, policy, or regulation shall be the basis for the delay or denial of a building permit or a use permit under this section.” The City should amend the Ordinance to ensure that compliance with this ordinance section will not delay or cause the denial of an ADU or JADU building permit or use permit. 10. Section 18.09.040 (a), Table 2– JADUs and Development Standards – The Ordinance describes JADUs in the section “Units Subject to Local Standards” and creates governance of JADUs that “do not qualify for approval under section 18.090.030.” However, all JADUs are created pursuant to Government Code section 66323, subdivision (a)(1), and would therefore be approved under section 18.090.030. the City must remove references to JADUs in this section. 11. Section 18.09.040 (c) – Multifamily ADU Allowances – In the “Units Subject to Local Standards” section, the Ordinance states, “A single-family dwelling shall exist on the lot or shall be constructed on the lot in conjunction with the construction of an ADU/JADU.” However, Government Code section 66314, subdivision (a)(2) permits ADUs when “The lot is zoned to allow single-family or multifamily dwelling residential use and includes a proposed or existing dwelling.” The City must amend the Ordinance to include multifamily as well. 12. Section 18.09.040 (h) – Local Historic Register – The Ordinance applies special requirements to properties “listed on the Palo Alto Historic Inventory.” However, Government Code section 66314, subdivision (b)(1) states that ADU ordinances may “Impose objective standards on accessory dwelling units that include, but are not limited to, parking, height, setback, landscape, architectural review, maximum size of a unit, and standards that prevent adverse impacts on any real property that is listed in the California Register of Historical Resources.” Therefore, the use of a local historic register such as the Palo Alto 1Please note that Government Code section 66342 gives local jurisdictions the option of adopting an ordinance to provide for the separate conveyance of an ADU from its primary dwelling. Item 10 Attachment C - HCD Response to ADU Ordinance Item 10: Staff Report Pg. 52 Packet Pg. 305 of 349 Jonathan Lait, Director Page 5 Historic Inventory would be inconsistent with State ADU Law. The City must remove this reference. 13. Section 18.09.040 (j)(4) – “Street Side Setbacks” – The Ordinance states, “For corner lots developed as a single-family home only, when an existing or proposed primary dwelling unit is expanded or constructed simultaneously with the construction of a new ADU/JADU, all structures may be built to a 10-foot street-side setback and a 16-foot front yard setback, regardless of the presence of a special setback, unless a fire or life-safety regulation requires a greater setback.” A street side setback for a corner lot is in essence a front setback. Government Code section 66321, subdivision (b)(3) states that a front setback may not preclude the development of an 800 square foot unit. The City must note the exception. 14. Section 18.09.040 (l) – Parking Exceptions – The Ordinance does not provide for exemptions to parking requirements pursuant to Government Code section 66322, subdivisions (a)(1) through (a)(6): “(1) Where the accessory dwelling unit is located within one-half of one mile walking distance of public transit. (2) Where the accessory dwelling unit is located within an architecturally and historically significant historic district. (3) Where the accessory dwelling unit is part of the proposed or existing primary residence or an accessory structure. (4) When on-street parking permits are required but not offered to the occupant of the accessory dwelling unit. (5) When there is a car share vehicle located within one block of the accessory dwelling unit. (6) When a permit application for an accessory dwelling unit is submitted with a permit application to create a new single-family dwelling or a new multifamily dwelling on the same lot, provided that the accessory dwelling unit or the parcel satisfies any other criteria listed in this subdivision. Therefore, the City must amend the Ordinance to add the required exemptions. 15. 18.09.040 (l)(2) – Garage Conversion and Replacement Parking – The Ordinance states, “Replacement parking is required when an existing attached garage, carport, or covered parking structure is converted to a JADU….” Local agencies may not require parking as a condition to permitting a JADU, even when the JADU is converted from an attached garage.2 The City must amend the Ordinance accordingly. 2 Gov. Code, § 66334, subd. (a). Item 10 Attachment C - HCD Response to ADU Ordinance Item 10: Staff Report Pg. 53 Packet Pg. 306 of 349 Jonathan Lait, Director Page 6 16. 18.09.050 (a) - JADUs in Attached Garages – The Ordinance states, “A junior accessory dwelling unit may only be created on a lot in a single-family residential zone with an existing or proposed single family residence. A junior accessory dwelling unit shall be attached to or created within the walls of an existing or proposed primary dwelling.” However, Government Code section 66333, subdivision (d) states that for the purposes of siting JADUs, “enclosed uses within the residence, such as attached garages, are considered a part of the proposed or existing single-family residence.” Therefore, the City must amend the Ordinance to include a reference to enclosed uses. 17. 18.09.050 (b)(i) and (ii) – JADU Kitchen Facilities – The Ordinance states, “A cooking facility with appliances shall mean, at minimum a one burner installed range, an oven or convection microwave, a 10 cubic foot refrigerator and freezer combination unit, and a sink that facilitates hot and cold water.” It also states “[a] food preparation counter and storage cabinets shall be of reasonable size in relation to a JADU if they provide counter space equal to a minimum 24- inch depth and 36-inch length.” However, Government Code section 66333, subdivision (f) requires “the permitted junior accessory dwelling unit to include an efficiency kitchen, which shall include all of the following: (1) A cooking facility with appliances. (2) A food preparation counter and storage cabinets that are of reasonable size in relation to the size of the junior accessory dwelling unit.” The terms “appliances” and “reasonable size” are broad provisions in statute. Therefore, the Ordinance is more stringent than state JADU law. The City must remove the quoted language. 18. 18.09.050 (b) iii. – JADU Entry – The Ordinance states, “JADUs may share sanitation facilities (bathrooms, laundry facilities, etc.) with the primary unit.” However, Government Code section 66333, subdivision (e)(2) states “If a permitted junior accessory dwelling unit does not include a separate bathroom, the permitted junior accessory dwelling unit shall include a separate entrance from the main entrance to the structure, with an interior entry to the main living area.” Therefore, the City must amend the Ordinance to comply with State ADU Law. 19. 18.09.050 (e) – JADU Term Limits – The Ordinance requires that JADU deed restrictions “[do] not permit short-term rentals”. However, Government Code section 66333, subdivision (c) requires only “(1) A prohibition on the sale of the junior accessory dwelling unit separate from the sale of the single-family residence, including a statement that the deed restriction may be enforced against future purchasers. (2) A restriction on the size and attributes of the junior accessory dwelling unit that conforms with this article.” No additional provisions may be added to the listed deed restrictions in statute. JADU Law does not provide for rental limits to JADUs and therefore the City may not require these term limits. Therefore, the City must amend the Ordinance accordingly. Item 10 Attachment C - HCD Response to ADU Ordinance Item 10: Staff Report Pg. 54 Packet Pg. 307 of 349 Jonathan Lait, Director Page 7 20. 18.04.030 (a)(75)(A) – Kitchen Requirements – The Ordinance requires “major appliances” and then states, “For ADUs, major appliances shall mean a minimum two burner installed range, and an oven or convection microwave, as well as a minimum 11 cubic foot freezer and refrigerator combination unit. Kitchens shall also include counter space for food preparation equal to a minimum 24-inch depth and 36-inch length, and a sink that facilitates hot and cold water.” However, Government Code section 66313, subdivision (a) defines ADUs as needing only “permanent provisions for living, sleeping, eating, cooking, and sanitation” and does not describe them any further. Additionally, section 66313, subdivision (a)(1) allows ADUs to be an efficiency unit, which Health and Safety Code section 17958.1 states may have “partial kitchen” facilities. Therefore, the establishment of appliance and counterspace minimums are inconsistent with State ADU Law. The City must amend the Ordinance accordingly. Please note that the City has two options in response to this letter.3 The City can either amend the Ordinance to comply with State ADU Law 4 or adopt the Ordinance without changes and include findings in its resolution adopting the Ordinance that explain the reasons the City believes that the Ordinance complies with State ADU Law despite HCD’s findings.5 If the City fails to take either course of action and bring the Ordinance into compliance with State ADU Law, HCD must notify the City and may notify the California Office of the Attorney General that the City is in violation of State ADU Law.6 HCD appreciates the City efforts in the preparation and adoption of the Ordinance and welcomes the opportunity to assist the City in fully complying with State ADU Law. Please feel free to contact Mike Van Gorder at mikevangorder@hcd.ca.gov if you have any questions. Sincerely, Jamie Candelaria Senior Housing Accountability Unit Manager Housing Policy Development Division 3 Gov. Code, § 66326, subd. (c)(1). 4 Gov. Code, § 66326, subd. (b)(2)(A). 5 Gov. Code, § 66326, subd. (b)(2)(B). 6 Gov. Code, § 66326, subd. (c)(1). Item 10 Attachment C - HCD Response to ADU Ordinance Item 10: Staff Report Pg. 55 Packet Pg. 308 of 349 State ADU/JADU Law Statutory Conversion Table Article 1. General Provisions 66310 65852.150 (a) 66311 65852.150 (b) 66312 65852.150 (c) 66313 General Definition Section 65852.2 (j) Article 2. Accessory Dwelling Unit Approvals Article 3. Junior Accessory Dwelling Units Article 4. Accessory Dwelling Unit Sales Item 10 Attachment C - HCD Response to ADU Ordinance Item 10: Staff Report Pg. 56 Packet Pg. 309 of 349 November 26, 2024 Mike Van Gorder Housing & Community Development Division of Housing Policy Development 2020 W. El Camino Avenue, Suite 500 Sacramento, CA 95833 Mike.VanGorder@hcd.ca.gov Dear Mr. Van Gorder, This letter represents the City of Palo Alto’s response to HCD’s letter dated October 29, 2024. 1. HCD Comments 1, 3, 7-8, 11-12, 15, and 19: the City will update its ordinance to incorporate this feedback by June 30, 2025. 2. HCD Comments 2, 4-6, 16, and 18: Unless HCD requires local implementing ordinances match verbatim state law, no change is needed as the local ordinance complies with state law. 3. HCD Comment 9: the City’s Tree Ordinance is included in the local ADU ordinance and is not a separate policy document or ordinance; the City could restate that language but this seems unnecessarily duplicative. Accordingly, the City does not a believe a change needed. 4. HCD Comment 10: there continues to a be a misunderstanding regarding this section. Nothing about this section precludes JADU production in compliance with state law. This section sets forth incentives that allow a JADU to be constructed in conjunction with new development and not converted after the fact. Table 2 is more permissive than state law and has yielded a significant increase in JADU production in Palo Alto. 5. HCD Comment 13: This is a local incentive for homeowners on corner lots. Nothing about this incentive precludes construction of an ADU in compliance with state law. The City does not a believe a change needed. 6. HCD Comment 14: The City does not require parking for J/ADUs. The local implementing ordinance does not need include every provision or exemption of state law. 7. HCD Comments 17 and 20: State law requires J/ADUs be reviewed ministerially against objective criteria. HCD’s comment would have the City use subjective criteria to assess reasonableness and introduce discretionary decision-making. If HCD has objectively defined a reasonableness standard, please share, otherwise, the City does not believe a change is warranted. Please advise if HCD disagrees with any of the City’s responses. To meet our June 2025 timeframe reported in comment response 1 above, we request a meeting before January 31, 2025, if necessary. Sincerely, Jonathan Lait Director of Planning and Development Services Docusign Envelope ID: 329BD321-FBC3-4061-B1C0-06B783805F21 Item 10 Attachment D - Staff Response to HCD Item 10: Staff Report Pg. 57 Packet Pg. 310 of 349 City of Palo Alto-Notes re ADU reforms, 2025 John Kelley Apr 23, 2025 Ver. 0.2 These notes summarize some of the key points made in the accompanying document, “City of Palo Alto-Notes re 2025-03 ADU reforms--Revised 2025-04-23.” Please see that document for details. Based on State ADU Regulations 1. Because the City does not charge impact fees for additions to or scrapes of single-family residences (SFRs), proportionality requires that impact fees be eliminated for ADUs. [No. 26] 1.1. As a matter of equity, the City should also refund improperly charged ADU fees back to at least March 23, 2023. [No. 36] 2. Additional local design, zoning, and other standards may not be imposed on 66323 Units. The 2025-01 HCD ADU Handbook makes clear, at p. 20, that development of 66323 Units may not be curtailed by local standards that penalize such "state exemption" ADUs and JADUs. (This principle applies to all four categories of ADUs and JADUs identified in Gov. C. sec. 66323.) This principle requires modifying Palo Alto’s regulation of 66323 Units in many ways. [Nos. 30, 30A, 30B, and 30C] 2.1. Palo Alto calculates allowable heights for all ADUs differently from single-family homes in flood zones. 2.2. Palo Alto calculates FAR for basements for all ADUs differently from single-family homes. 2.3. Palo Alto incorrectly calculates FAR for ADUs, and possibly single-family homes as well, requiring measurements "to the outside of stud walls...." [ See also No. 29] 2.4. Palo Alto generally prohibits ADUs from either (i) using an existing sewer line for a single-family residence to convey sewage from an ADU to the main sewer system or (ii) running a 1 Item 10 Attachment E - Public Comments Item 10: Staff Report Pg. 58 Packet Pg. 311 of 349 separate sewer line for an ADU under a single-family home, effectively requiring long, sometimes tortuous, and frequently expensive separate sewer runs for ADUs. 2.5. Palo Alto, through the City of Palo Alto Utilities, prohibits ADUs from obtaining their own, separate municipal utilities. This too may operate as a constraint on the production of 66323 Units. Homeowners should, at their sole option, have the choice of whether to connect ADUs, both attached and detached, directly to CPAU utilities. 2.6. Just as Urban Forestry review should not be part of permitting ADUs or JADUs, CPAU should not review ADU or JADU permit applications unless the applicant specifically requests such permitting review in writing as part of the permit application. 2.7. Palo Alto should (A) use HCD tools for determining whether a given parcel is within 1/2 mile of transit, and (B) acknowledge that (i) non-VTA bus routes are relevant to determining such areas, (ii) the appropriate unit of analysis is a bus stop, not a bus route, and (iii) the requisite periodicity established by state law has changed recently. This requires that Palo Alto's current maps, wherever they are maintained and however they are shared with the public, be revised. 3. Fire review criteria should focus on "fire area," not FAR. [No. 23] 4. No assumed property line between two buildings. [No. 24] 5. Constructing an ADU does not change a Group R occupancy, unless an authorized representative of a local agency makes a specific, written finding regarding a particular project. [No. 25] 6. Palo Alto must allow an attached ADU up to 800 sf in size to be built out to four-foot side and rear setbacks. [No. 31A] 6.1. In other words, it need not be confined to the setbacks for the primary dwelling on the lot. 6.2. Such an ADU would enjoy the height benefits provided by Gov. C. subd. 66321(b)(4)(D); as a result, in most parts of the City, it could be built to 25', provided that it does not have more than two stories. 2 Item 10 Attachment E - Public Comments Item 10: Staff Report Pg. 59 Packet Pg. 312 of 349 More Effective Local Regulations For Stimulating ADU Production 1. Palo Alto should allow for separate conveyance of ADUs under Gov. C. sec. 66342. [No. 32] 2. Palo Alto should adopt a 1,200 sf size limit for all ADUs. [No. 39] 3. Palo Alto should create an alternative, local, 20' height limit, specifically for two-story, detached, Table 2 ADUs, with a daylight plane. [No. 38] 4. Palo Alto should experiment with meaningful financial incentives to increase ADU production, totaling $5 million in grants and on-bill financing over two years. [No. 41] 4.1. Up to 50 $25k grants for pre-designed ADUs. 4.2. Up to 50 $25k grants based on CalHFA program. 4.3. Up to 25 on-CPAU-bill financings for first $100k of ADU costs. 5. The City should waive all impact and permitting fees on both ADUs and JADUs. [No. 37] 5.1. If the City does charge any impact fees on ADUs, however, applicants should be allowed to defer them without recording a lien against their properties. [No. 27] 6. End the "loser lottery." Do not condition permit approval of ADUs or JADUs on charging applicants for CPAU infrastructure upgrades, a type of impermissible demand for public improvements, and give applicants, at their sole option, the ability to obtain one or more separate utility services for ADUs. [No. 34] 3 Item 10 Attachment E - Public Comments Item 10: Staff Report Pg. 60 Packet Pg. 313 of 349 1 City of Palo Alto-Notes re 2025-03 ADU reforms (selected summary points for City Staff and City Council in larger font, comments from 2024-10 HCD L 2025-04-23 Ver. 0.5 (WIP draft). Category No.Issue Reference(s) "18.09.030 Units Exempt from Generally Applicable Local Regulations "1 The HCD's comments concern additional height requirements for, , detached ADUs witihin a half mile of a major transit stop or a high-quality transit corridor, as well as additional height for matching the roof pitch of the primary dwelling. Those changes should be adopted. Please also see the further discussions below, "Additional concerns re setbacks, daylight plane, and height," and "Palo Alto should use HCD tools for determining whether a given parcel is within 1/2 mile of transit." 2024-10 HCD Letter, #2 2 These proposed changes should be adopted. 2024-10 HCD Letter, #3 3 This proposed change, which concerns Gov. C. sec. 66331, should be made. 2024-10 HCD Letter, #4 4 This proposed change, which refers to ADU construction not triggering "a requirement for fire sprinklers to be installed in the existing multifamily dwelling," should be made. 2024-10 HCD Letter, #5 5 The proposed change, which concerns JADUs without a separate bathroom needing "a separate entrance from the main entrance to the structure, with an interior entry to the main living area," should be adopted. 2024-10 HCD Letter, #6 6 As indicated by the HCD, the City should amend this portion of the Ordinance to allow for the expansion for ingress and egress pursuant to Gov. C. subd. 66323(a)(1)(A). Although not specifically noted by HCD: (a) in the Ordinance, "renovation of reconstruction..." should perhaps read, "renovation or reconstruction...."; and,2024-10 HCD Letter, #7 7 Both sections of the Ordinance should allow for the separate sale of an ADU "built or developed by a qualified nonprofit corporation, among other things," to a qualified buyer pursuant to Gov. C. sec. 66341. 2024-10 HCD Letter, #8 Section 18.09.030 (a) iii -- "Footnote 5 in Table 1 of Section 18.09.030 provides for these allowances, the City must amend the Ordinance to comply with State ADU law and avoid contradictory provisions." Section 18.09.030 Table 1 – . "This permits a homeowner, who meets specified requirements, to create one converted ADU; one detached, new construction ADU; and one JADU." Section 18.09.030(d) –. "Therefore, the City must add language allowing delay of enforcement." Section 18.09.030(d) –. "Therefore, City must add the second sentence in the preceding citation to the Ordinance to be consistent with State ADU law.." Section 18.09.030 (g) – JADUs and Interior Entry. "Therefore, the City must amend the Ordinance accordingly." Section 18.09.030(h) – . Sections 18.09.030(j) & 18.09.040(m)(2) – . Height. Unit Allowance Delay of Enforcement Sprinklers Conversion and Expansion Separate Sale e.g. Gov. C. subd. 66321(b)(4)(B) Gov. C. subd. 66323(a)(1)(C) Gov. C. subd. 66317(c) Gov. C. sec. 66323 Gov. C. sec. 66331 Gov. C. subd. 66323(d) Gov. C. subd. 66333(e)(2) Gov. C. subd. 66323(a)(1)(A) Gov. C. subd. 66341 (b) if the ADU being expanded for ingress and egress is a 66323 Unit (formerly sometimes known as a statewide exemption ADU) under Gov. C. subd. 66323(a)(1), then, in addition, such an expansion should not be subject to Section 18.09.040. Item 10 Attachment E - Public Comments Item 10: Staff Report Pg. 61 Packet Pg. 314 of 349 2 8 (a) All explicit or implicit references to any of the City's tree or landscape regulations, including those in PAMC Chap. 8.10, "Tree and Landscape Preservation and Management," should be deleted from the ADU Ordinance. (b) PAMC Chap. 8.10 should be amended to make clear that it may not be applied or enforced with regard to ADUs, pursuant to Gov. C. subd. 66317(c). (c) Any review of an ADU permit application by the City's Public Works Urban Forestry Section, or any other part of the City seeking information or review with regard to the City's tree or landscape regulations, should cease, pursuant to Gov. C. subd. 66317(c). (d) These actions are consistent with Governor Newsom's recent . As explained on February 6, 2025 in a , "The executive order issued by Governor Newsom," among other things, "[d]irects the State Board of Forestry to accelerate its work to adopt regulations known as “Zone 0,” which will require "an ember-resistant zone within 5 feet of structures located in the highest fire severity zones in the state." From the recent, devastating fires in Southern California and advances in fire science, we know that "Zone 0" protections are critical to enhancing fire safety for California homes. The current Tree Ordinance should not prohibit Palo Altans from defending their homes against the increasing and increasingly great threats of wildfires resulting from catastrophic global heating. 2024-10 HCD Letter, #9 "18.09.040 Units Subject to Local Standards." 9 As indicated by the HCD, the City should amend this portion of the Ordinance to "remove references to JADUs in this section," because JADUs are created pursuant to Gov. C. subd. 66323(a)(1), "and would therefore be approved under section 18.090.030." 2024-10 HCD Letter, #10 10 As indicated by the HCD, the City should amend this portion of the Ordinance to clarify that ADUs may be built when a "lot is zoned to allow single-family or multifamily dwelling residential use...," pursuant to Gov. C. subd. 66314. 2024-10 HCD Letter, #11 11 As indicated by the HCD, the City should amend this portion of the Ordinance to delete any reference to the Palo Alto Historic Inventory, pursuant to Gov. C. subd. 66314(b)(1). Although not specifically noted by HCD, this also means that the City should refrain from any review of an ADU permit application by the City's Planning personnel or any other part of the City with reference to the Palo Alto Historic Inventory, pursuant to Gov. C. subd. 66317(c). 2024-10 HCD Letter, #11 12 As indicated by the HCD, the City should amend this portion of the Ordinance to make clear that, in the case of a street-side setback, as well as a front setback, such a setback "may not preclude the development of an 800 square foot unit," pursuant to Gov. C. subd. Gov. C. subd. 66321(b)(3). 2024-10 HCD Letter, #13 13 As indicated by the HCD, the City should amend this portion of the Ordinance to include the parking exceptions included in Gov. C. subds. 66322(a)(1)-(a)(6), , if an ADU is within a half mile of public transit. 2024-10 HCD Letter, #14 14 As indicated by the HCD, the City "may not require parking as a condition to permitting a JADU, even when the JADU is converted from an attached garage," citing Gov. C. subd. 66334(a) in a footnote. This change should be made. 2024-10 HCD Letter, #15 Sections 18.09.030(m) & 18.09.040(g) and (j)(2)(C) – Section 18.09.040(a) – JADUs and Development Standards. Section 18.09.040(c) – Multifamily ADU Allowances. Section 18.09.040(h) – Local Historic Register. Section 18.09.040 (j)(4) – Street-Side Setback. Section 18.09.040 (l) – Parking Exceptions. 18.09.040 (l)(2) – Garage Conversion and Replacement Parking. Tree Ordinance. Executive Order N-18-25 separate announcement Gov. C. subd. 66317(c) Gov. C. subd. 66323(a)(1)(A) Gov. C. subd. 66314 Gov. C. subd. 66314(b)(1) Gov. C. subd. 66317(c) Gov. C. subd. 66321(b)(3) Gov. C. subds. 66322(a)(1)-(a)(6) Gov. C. subd. 66334(a) e.g. Item 10 Attachment E - Public Comments Item 10: Staff Report Pg. 62 Packet Pg. 315 of 349 3 "18.09.050 Additional Requireme nts for JADUs" 15 As indicated by the HCD, the City should amend this portion of the Ordinance to clarify that "'enclosed uses within the residence' include 'attached garages, [which] are considered a part of the proposed or existing single-family residence.'” Gov. C. subd. 66333(d). 2024-10 HCD Letter, #16 16 As indicated by the HCD, the City should amend this portion of the Ordinance to conform with the broad language of Gov. C. subd. 66333(f), deleting the City's more stringent requirements regarding JADU kitchens. 2024-10 HCD Letter, #17 17 As indicated by the HCD, the City should amend this portion of the Ordinance to conform with the precise terms of Gov. C. subd. 66333(e)(2). 2024-10 HCD Letter, #18 18 As indicated by the HCD, Gov. C. subd. 66333(c) does not include authority for prohibiting short term rentals, and the City must delete such provisions from its list of deed restrictions. 2024-10 HCD Letter, #19 "18.04.030 Definitions" 19 . As indicated by the HCD, Gov. C. subd. 66313(a) does not specifically define cooking facilities, and HSC sec. 17958.1 allows for "'partial kitchen'" facilities. Accordingly, the City must delete its appliance and counterspace requirements for ADUs. Although not specifically noted by HCD, relying upon those same code sections, an ADU applicant constructing an "efficiency unit" should also be allowed to provide only "partial .... bathroom facilities," as described in HSC sec. 17958.1. 2024-10 HCD Letter, #20 18.09.050 (a) - JADUs in Attached Garages. 18.09.050 (b)(i) and (ii) – JADU Kitchen Facilities. 18.09.050 (b) iii. – JADU Entry. 18.09.050 (e) – JADU Term Limits. 18.04.030(a)(75)(A) – Kitchen Requirements Gov. C. subd. 66333(d) Gov. C. subd. 66333(f) Gov. C. subd. 66333(e)(2) Gov. C. subd. 66333(c) Gov. C. subd. 66313(a) HSC sec. 17958.1 Item 10 Attachment E - Public Comments Item 10: Staff Report Pg. 63 Packet Pg. 316 of 349 4 Additional proposed regulatory changes 20 Combine building permit applications and demo permit applications for ADUs, and make responsibilities for matters typically handled by contractors (such as securing a J#) post-permit-issuance, rather than pre-permit-issuance, requirements. Such changes should be memorialized in Chp. 18.09 of the PAMC. ". Adds a requirement for a local agency to review and issue a demolition permit for “a detached garage that is to be replaced with an ADU” at the same time it reviews, and issues permits for, the ADU construction. (Gov. Code, § 66314, subd. (e).) Also prohibits permitting agencies requiring applicants to “provide written notice or post a placard for the demolition of a detached garage ... unless the property is located within an architecturally and historically significant district.” (Gov. Code, § 66314, subd. (f).)" 2025-01 HCD ADU Handbook, p. 14 21 The 60-day time limit for approving or denying an ADU or JADU permit application should be (a) strictly observed, and (b) calculated using the equivalent of a "chess clock" displayed in the City's online permitting system. Such changes should be memorialized in Chp. 18.09 of the PAMC. ". Requires a permitting agency to either approve or deny (replacing the former language “act on”) an application to create or serve an ADU or JADU within 60 days Integrate building and demo permit applications for ADUs. Demolition Permits Enforce the 60-day time limit.Permitting Process Compare: Item 10 Attachment E - Public Comments Item 10: Staff Report Pg. 64 Packet Pg. 317 of 349 5 22 Prohibit reviewers from adding new plan check comments after C1 plan check comments have been returned to an applicant unless such new plan check comments (a) only note a failure to comply with prior plan check comments, or (b) are directed to and concern only changes in submittal materials made in response to earlier plan check comments. Such changes should be memorialized in Chp. 18.09 of the PAMC. 23 The City's "Fire Department Checklist for Residential Plan Review" includes a misleading question, which can lead to an incorrect plan check comment. It asks: "Are you doing an addition that will result in the total floor area (including basements and attached garages) exceeding 3600 square feet?" This question refers impliciitly to PAMC subd. 16.06.140, "Section R313.2.2 NFPA 13D sprinkler systems increase in design requirements," whose numbered sub-part 2 states, "Structures where the combined fire area is 3600 sq ft or larger." FAR is simply not the same as fire area. Accordingly, the fire review criteria should focus on fire area, not FAR, and the Fire Department checklist should be revised accordingly. , : "[BF] FIRE AREA. The aggregate floor area enclosed and bounded by fire walls, fire barriers, exterior walls or horizontal assemblies of a building. Areas of the building not provided with surrounding walls shall be included in the fire area if such areas are included within the horizontal projection of the roof or floor next above." 24 Instead: (1) Consider the two buildings as one structure with two dwelling units. This would be the same as considering one structure with an attached ADU. (2) One of the walls between the buildings to be considered as the wall separating dwelling units would require 1-hour fire-rating with 45 min. rated opening protection (the same as fire partition requirements per CBC). CRC R302.3. " Obligates a permitting agency, when it denies an ADU or JADU application, to “return in writing a full set of comments to the applicant with a list of items that are defective or deficient and a description of how the application can be remedied by the applicant” within 60 days from when a completed application is received. (Gov. Code, §§ 66317, subd. (b); 66320, subd. (b); 66335, subd. (b).)" No new-later-cycle plan check comments.Permitting Agency Denials. Fire review criteria should focus on "fire area," not FAR. No assumed property line between two buildings. See also See, e.g., Cal. Fire Code (2022) sec. 202 PAMC subd. 16.06.140 CRC R302.3 Item 10 Attachment E - Public Comments Item 10: Staff Report Pg. 65 Packet Pg. 318 of 349 6 25 26 Palo Alto recently replaced per-unit with per-square-foot impact fees to comply with prior state law. Nonetheless, it still treats ADUs unfairly, because on parcels with existing SFRs, it does not levy impact fees on additions or even complete “scrapes.” (video recording of the .) The proportionality example at p. 23 of the HCD’s 2025 ADU Handbook refers to “a new primary dwelling on the same site.” If a parcel in Palo Alto has an existing SFR, a new primary dwelling on that site would not trigger any impact fees under the city’s procedures. Consequently, the proportionate impact fees for an ADU of any size should also be zero. Imposition of such impact fees on ADUs should cease immediately (and the City should refund amounts charged improperly to applicants, as discussed below). 2025-01 HCD ADU Handbook, p. 23. "(c) (1) A local agency, special district, or water corporation shall not impose any impact fee upon the development of an accessory dwelling unit less than 750 square feet. Any impact fees charged for an accessory dwelling unit of 750 square feet or more shall be charged proportionately in relation to the square footage of the primary dwelling unit." Gov. C. subd. 66314(d)(8) states in part: "[T]he construction of an accessory dwelling unit shall not constitute a Group R occupancy change under the local building code, as described in Section 310 of the California Building Code (Title 24 of the California Code of Regulations), unless the building official or enforcement agency of the local agency makes a written finding based on substantial evidence in the record that the construction of the accessory dwelling unit could have a specific, adverse impact on public health and safety. Nothing in this paragraph shall be interpreted to prevent a local agency from changing the occupancy code of a space that was unhabitable space or was only permitted for nonresidential use and was subsequently converted for residential use pursuant to this article." (Introductory language omitted.) Because the City does not charge impact fees for additions to or scrapes of single-family residences (SFRs), proportionality requires that impact fees be eliminated for ADUs. Constructing an ADU does not change a Group R occupancy, unless an authorized representative of a local agency makes a specific, written finding regarding a particular project. See, e.g., Palo Alto City Council meeting on November 18, 2024 Gov. C. subd. 66324(c)(1) Gov. C. subd. 66314 Item 10 Attachment E - Public Comments Item 10: Staff Report Pg. 66 Packet Pg. 319 of 349 7 27 Payment of impact fees on ADUs, among other projects, may deferred until , as now codified in , as well as , which was updated recently based on Ord. 5645. If any impact fees are assessed on ADUs, then homeowners should be allowed to defer payment of such fees, and the issuance of a permit to build an ADU should not be deferred pending their payment. But requiring that homeowners record a lien for payment of such fees is unnecessarily burdensome, time-consuming, and expensive. The City should be able to craft other means of ensuring that such fees, if any, are paid prior to final inspection or issuance of a certificate of occupancy using the City's own permitting and inspection systems, rather than requiring a recorded lien. 28 As indicated above, the City's current impact fee regime as applied to ADUs is, at best, problematic. If the City is genuinely interested in providing more and more affordable housing, and if the City wishes to meet its Housing Element goals by producing more ADUs, one of the most reasonable steps would be to eliminate impact fees on ADUs altogether. In addition, one might have doubts about the continued constitutional validity of California's impact fee system. following the vacating of the prior submission of the case in , Case Number C093682, before the 3rd District Court of Appeal, is now scheduled for June 24, 2025. , Case Number C093682. 29 The HCD has clarified how square footage of ADUs and JADUs should be calculated: "The CBC defines “Floor Area, Gross” as “[t]he floor area within the inside perimeter of the exterior walls of the building under consideration, exclusive of vent shafts and courts, without deduction for corridors, stairways, ramps, closets, the thickness of interior walls, columns or other features. The floor area of a building, or portion thereof, not provided with surrounding exterior walls shall be the usable area under the horizontal projection of the roof or floor above. The gross floor area shall not include shafts with no openings or interior courts. Government Code section 66314, subdivision (d)(8) states that a local ADU ordinance must require ADUs to comply with local building codes. Thus, when a local agency has not adopted specific changes to the CBC in its local building standards, then the CBC standards, and in this case the definition of floor area, shall apply. If the local agency has made specific amendments, additions, or deletions relating to the definition of “Floor Area” within its local building standards, then those altered definitions shall apply." 2025-01 HCD ADU Handbook, p. 39. Palo Alto does ot appear to have incorporated a change to this portion of the CBC. PAMC subds.. Consequently, Palo Alto is bound by the CBC rules, requiring measurements to "the inside perimeter of the exterior walls of the building under consideration...." But Palo Alto measures "to the outside of stud walls...." . The same considerations likely apply to lot coverage and other zoning measurements based on square footage calculations. Therefore, Palo Alto's Municipal Code and its calculation of square footages for ADUs must be changed. In addition, because the PAMC likely requires conformity with the CBC for single-family homes, absent specific local changes, this problem may affect the calculation of square footages for single-family homes as well. 2025-01 HCD ADU Handbook, p. 39 If the City does charge any impact fees on ADUs, applicants should be allowed to defer them without recording a lien against their properties Indeed, the City can and should go further and simply eliminate impact fees on ADUs Palo Alto incorrectly calculates square footages, including FAR, for ADUs, and possibly single-family homes as well. . . SB 937 Gov. C. sec. 66007 PAMC subd.16.64.030 Oral argument Docket of 16.04.230-240 PAMC subd. 18.04.030(a)(65)(C) Sheetz v. County of El Dorado See Sheetz v. County of El Dorado Item 10 Attachment E - Public Comments Item 10: Staff Report Pg. 67 Packet Pg. 320 of 349 830 2024-10 HCD Letter, #3 Additional local design, zoning, and other standards may not be imposed on 66323 Units. Palo Alto calculates allowable heights for all ADUs differently from single-family homes in flood zones. Palo Alto calculates FAR for basements for all ADUs differently from single-family homes Palo Alto incorrectly calculates FAR for ADUs, and possibly single-family homes as well, requiring measurements "to the outside of stud walls...." Palo Alto generally prohibits ADUs from either (i) using an existing sewer line for a single-family residence to convey sewage from an ADU to the main sewer system or (ii) running a separate sewer line for an ADU under a single-family home, effectively requiring long, sometimes tortuous, and frequently expensive separate sewer runs for ADUs. The 2025-01 HCD ADU Handbook makes clear, at p. 20, that development of 66323 Units may not be curtailed by local standards that penalize such "state exemption" ADUs and JADUs. (This principle applies to all four categories of ADUs and JADUs identified in Gov. C. sec. 66323.) As the HCD has explained: "What design, zoning, or other local standards can be imposed on 66323 Units? A local agency may not impose development or design standards, including both local standards and standards found in State ADU Law, on 66323 Units that are not specifically listed in Government Code section 66323. (Gov. Code, § 66323, subds. (a), (b).) This includes, but is not limited to, parking, height, setbacks, or other zoning provisions (e.g., lot size, open space, floor area ratio, etc.)." (Blue font deleted.). 2025-01 HCD ADU Handbook, p. 20. Palo Alto has many ADU-specific, local standards that may not be applied to 66323 Units, including, but not limited to, the following: (a) See, e.g., footnotes 3 and 3 to Table 1 of Section 18.09.030 and Table 2 of Section 18.09.040, respectively. (b) See, e.g., City of Palo Alto, "Guidebook 2024, Accessory Dwelling Unit" ("Palo Alto ADU Guidebook 2024"), p. 16: "Basements are permitted, but habitable basement space will contribute to unit size." Contrast one part of the definition of "Gross floor area" in PAMC subd. 18.04.030(a)(65)(D)(i): "D) Low Density Residential Exclusions: In the RE and R-1 single-family residence districts and in the R-2 and RMD two-family residence districts, 'gross floor area' shall not include the following: (i) Basements where the finished level of the first floor is not more than three feet above the grade around the perimeter of the building foundation, shall be excluded from the calculation of gross floor area, provided that lightwells, stairwells and other excavated features comply with the provisions of Section 18.12.070;....' (c) PAMC subd. 18.04.030(a)(65)(C). (See the discussion above.) (d) (This requirement is believed to be in a manual maintained at the Development Services office, to which I do not presently have access.) But these requirements as well go beyond the text of Gov. C. sec. 66323. (See also the discussion below of the limited scope of utilities review of ADU building permit applications.) . Gov. C. sec. 66323 Item 10 Attachment E - Public Comments Item 10: Staff Report Pg. 68 Packet Pg. 321 of 349 9 30 A (e) (f) Otherwise, such CPAU review may also operate as a constraint on the production of 66323 Units. The City has already determined which parts of Palo Alto have adequate water and sewer service. This is apparently includes all residential areas in Palo Alto: "ADUs are allowed on any property where single- or multi-family residential is a permited use." Palo Alto ADU Guidebook 2024, p. 6. ADU and JADU applicants should simply indicate that the parcel is located in a residential area on the title sheet of a set of plans for an ADU or a JADU. Applicants should have the option of deferring all other CPAU reviews until after a permit has issued. This will also facilitate contractor involvement with utilities issues. (See also the additional discussion of limitations on CPAU permitting review below.) (g) Palo Alto should use HCD tools for determining whether a given parcel is within 1/2 mile of transit. (PLEASE NOTE: please see the further discussion immediatley below.) 2024-10 HCD Letter, #3 Palo Alto, through the City of Palo Alto Utilities, prohibits ADUs from obtaining their own, separate municipal utilities. This too may operate as a constraint on the production of 66323 Units. Homeowners should, at their sole option, have the choice of whether to connect ADUs, both attached and detached, directly to CPAU utilities. Just as Urban Forestry review should not be part of permitting ADUs or JADUs, CPAU should not review ADU or JADU permit applications unless the applicant specifically requests such permitting review in writing as part of the permit application. Gov. C. sec. 66323 Item 10 Attachment E - Public Comments Item 10: Staff Report Pg. 69 Packet Pg. 322 of 349 10 30 B (Continued immediately below.) Additional local design, zoning, and other standards may not be imposed on 66323 Units (continued). (h) The HCD has prepared an "Affirmatively Furthering Fair Housing (AFFH), Data Viewer & Mapping Resources," which provides tools for determining whether a given parcel is or is not within 1/2 mile of transit. I have not checked this recently, but in the past I have observed that the results of using the HCD tool lead to different results from consulting with the City regarding the distance between particular parcels and transit. In general, I believe that the City should, at a minimum, accept the results from such HCD tools, even if the City wishes to be more generous than the state mandates. Reasons for this conclusion include the following: (i) I believe that non-VTA bus routes are relevant to determining such areas. Although I have not been able to find a public-facing, web-available tool from the City for determining whether or not a given parcel is within 1/2 mile of transit, based on past communications, I believe, but have not confirmed, that the City's current maps are based on VTA bus routes. But there are other transit providers whose routes should be considered, such as AC Transit, Stanford, and perhaps others, and, as far as I know, one cannot easily test the City's maps to determine whether such other routes are even being considered in determining such 1/2 mile distances. (ii) Importantly, the appropriate unit of analysis is a bus stop, not a bus route. Gov. C. subd. 66321(b)(4)(B), for example, refers to this distance: "one-half of one mile walking distance of a major transit stop or a high-quality transit corridor, as those terms are defined in Section 21155 of the Public Resources Code." The phrase "major transit stop" is significant. PRC subd. 21155(b) states, in part, " "A major transit stop is as defined in Section 21064.3, except that, for purposes of this section, it also includes major transit stops that are included in the applicable regional transportation plan. For purposes of this section, a high-quality transit corridor means a corridor with fixed route bus service with service intervals no longer than 15 minutes during peak commute hours. A project shall be considered to be within one-half mile of a major transit stop or high-quality transit corridor if all parcels within the project have no more than 25 percent of their area farther than one-half mile from the stop or corridor and if not more than 10 percent of the residential units or 100 units, whichever is less, in the project are farther than one-half mile from the stop or corridor." (Emphasis added.) (iii) PRC sec. 21064.3 was recently changed. ("Amended by Stats. 2024, Ch. 275, Sec. 2. (AB 2553) Effective January 1, 2025.). It now states: "“Major transit stop” means a site containing any of the following: (a) An existing rail or bus rapid transit station. (b) A ferry terminal served by either a bus or rail transit service. (c) The intersection of two or more major bus routes with a frequency of service interval of 20 minutes or less during the morning and afternoon peak commute periods." In terms of implications for Palo Alto's ADU ordinace, specifically with reference to height limits: (1) It is unclear how one can interrogate the City's current maps through the web. Asking regarding particular parcels is accepting a "black box" analysis which is not transparent. Homeowners are entitled to know what they can build before they incur the cost and expense of preparing a permit application, and the community should be able to know, for example, in the context of urging the City Council to amend its current ordinance, which specific areas of Palo Alto the City current considers to be within such 1/2 mile distances. PLEASE NOTE: These are additional comments provided on 2025-03-25. This concern applies specifically to 66323 Units, as well as to what might be deemed "66321 Units." Palo Alto should (A) use HCD tools for determining whether a given parcel is within 1/2 mile of transit, and (B) acknowledge that (i) non-VTA bus routes are relevant to determining such areas, (ii) the appropriate unit of analysis is a bus stop, not a bus route, and (iii) the requisite periodicity established by state law has changed recently. This requires that Palo Alto's current maps, wherever they are maintained and however they are shared with the public, be revised. 2024-10 HCD Letter, #3 Gov. C. sec. 66323 Item 10 Attachment E - Public Comments Item 10: Staff Report Pg. 70 Packet Pg. 323 of 349 11 30 C 31 PLEASE NOTE: Please see the further discussion immediately below. 2024-10 HCD Letter, #2 (2) It is unclear whether the City has even begun to update its analyses based on the recent changes to PRC sec. 21064.3 with its new, 20-min. standard. (3) It is unclear whether the City has taken account of non-VTA transit providers, including AC Transit and Stanford, among others. (4) It is unclear on what principled basis the City would substitute its own analyses for those of HCD. (5) And, perhaps most importantly, while I am not certain, I believe that the City has constructed its map based on bus routes, rather than bus stops. A "major transit stop" includes "the intersection of two or more major bus routes...." There is nothing on the face of PRC sec. 21064.3 requiring that such bus routes be orthogonal, or even at a slight angle, to one another. In the absence of such a legislative requirement, two bus routes could intersect by overlaping one another. Since the fundamental unit of analysis is a "major transit stop," this means that the number of "major transit stops" throughout Palo Alto is likely considerable greater than that suggested by the City's maps. In many instances, VTA, AC Transit, Stanford, and perhaps other transit servcie providers (including the City itself, whether now or in the future) run buses along the same major vehicular arteries, such as University, Embaracadero, San Antonio, Middlefield, etc. Although service may be provided by different agencies or carriers at such stops, because the same bus stop is served by multiple providers, there are likely far more that qualify as "major transit stops" under the new 20-min. standard. If the City has not undertaken such an analysis, in addition to acknowleging and accepting the results of the HCD's tools, it should also calculate which particular stops in Palo Alto are served with 20-min. intervals by any carrier at peak commute times. It would be sad, and, indeed, ironic, were the City not to take account of interactions between different transit providers for the purposes of assessing height limitations for ADUs when its own "Getting Around" web page champions "the free Stanford Marguerite shuttle bus network" as complementing VTA buses. Although not specifically noted by the HCD (see discussion of "Section 18.09.030 (a) iii -- Height," above, parts of both Table 1 of Section 18.09.030 and Table 2 of Section 18.09.040 are inconsistent with state law. Among other things, "66323 Units do not have to comply with lot coverage, front setbacks, and design standards." The 2025-01 HCD ADU Handbook, p. 18. Cf. paragraph immediately below table at p. 20. That 66323 Units do not have to comply with lot coverage, front setbacks, and design standards affects both Table 1 and, importantly, and Table 2 as well, in several ways: (a) The heading for the third column from the left of Table 1 reads, "Construction of Attached ADU Within the Proposed Space of a Single-Family Home," and a large cell for the rows concerning setbacks, daylight plane, and maximum height states, "Underlying zone standard for Single[-]Family Home (ADU must be within allowable space of Single-Family Home)." (b) As for setbacks, Gov. C. subd. 66323(a)(1)(C) states, "The side and rear setbacks are sufficient for fire and safety," not that the setbacks are the same as for the single-family home. (c) As for daylight plane requirements, none are mentioned in Gov. C. subd. 66323(a); therefore, for the same reasons discussed by the HCD in 2024-10 HCD Letter, #9 (discussed above), under Gov. C. subd. 66317(c), the City may not enact additional requirements to delay an ADU or JADU building permit. (d) As for maximum height, footnote (3) states, "Units built in a flood zone are not entitled to any height extensions granted to the primary dwelling." Again, under Gov. C. subd. 66317(c), the City may not enact additional requirements to delay an ADU or JADU building permit. Consequently, the City cannot rely upon other parts of the PAMC to reduce the effective height limit for ADUs. (e) In addition, the heading for the second column from the left of Table 2 merely states, "Attached," but its problems --- regarding setbacks, daylight plane, and maximum heigh --- are analogous to those of the third column in Table 1, and they too must be corrected. (f) Both tables should incorporate the current guidance from HCD regarding two-story ADUs: "If a detached two-story ADU can be built according to the height allowances required under State ADU Law while remaining compliant with the building code, a local agency cannot deny an ADU application to create a two-story ADU, irrespective of the underlying zoning that might restrict a primary dwelling to one story. (Gov. Code, §§ 66321, subd. (b)(4)(D); 66314, subd. (d)(8).)". 2025-01 HCD ADU Handbook, p. 25. 2024-10 HCD Letter, #3 Gov. C. sec. 66323 Gov. C. subd. 66321(b)(4)(B) Gov. C. subd. 66323(a)(1)(C) Gov. C. subd. 66317(c) Additional concerns re setbacks, daylight plane, and height. Item 10 Attachment E - Public Comments Item 10: Staff Report Pg. 71 Packet Pg. 324 of 349 12 31 A (g) While 66323 Units have a special status, including an explicit ministerial approval requirement, Gov. C. subd. 66323(a), additional concerns regarding Palo Alto's current ADU ordinance concerning setbacks, daylight plan, and height arise from consideration of Gov. C. subd. 66321. For example, while Gov. C. subd. 66323(a)(1)(A) does not speak separately and explicitly to rules governing attached ADU ("The accessory dwelling unit or junior accessory dwelling unit is within the proposed space of a single-family dwelling or existing space of a single-family dwelling or accessory structure...."), state ADU laws still encourage and protect the development of attached ADUs in important ways. Among other things: Gov. C. subd. 66321(a) explicitly references "both attached and detached accessory dwelling units." Gov. C. subd. 66321(b)(2) sets floors for the maximum sizes of all ADUs and those that "provide[] more than one bedroom." Gov. C. subd. 66321(b)(4)(D) generally provides greater height limits for attached ADUs: "A height of 25 feet or the height limitation in the local zoning ordinance that applies to the primary dwelling, whichever is lower, for an accessory dwelling unit that is attached to a primary dwelling. This subparagraph shall not require a local agency to allow an accessory dwelling unit to exceed two stories." And Gov. C. subd. 66321(b)(3) establishes a special set of protections for "an 800 square foot accessory dwelling unit with four-foot side and rear yard setbacks to be constructed in compliance with all other local development standards." Because all of these provisions are part of one section of the Government Code, and because Gov. C. sec. 66321 should be read in harmony with Gov. C. subd. 66323, along with the other parts of Article 2, an 800-sf ADU with four-foot side and rear setbacks, whether attached or detached, enjoys, among other things, the additional height allowances provided by Gov. C. subd. 66321(b)(4)(D), and protection from any portion of any local agency ordinance that would seek to impose "[a]ny requirement for a zoning clearance or separate zoning review or any other minimum or maximum size for an accessory dwelling unit, size based upon a percentage of the proposed or existing primary dwelling, or limits on lot coverage, floor area ratio, open space, front setbacks, and minimum lot size, for either attached or detached dwellings...." Gov. C. subd. 66321(b)(3). Applying these principles to Palo Alto's current ADU ordinance leads to several important conclusions, including, but not limited to, the following: (3) Although it is perhaps a bit of an open question, I believe that the most reasonable reading of Gov. C. sec. 66321, particulary in light of Gov. C. subd. 66323, along with the other parts of Article 2, protects such an attached ADU from Palo Alto's daylight plane requirements, provided it respects the four-foot side and rear setback requirements. 2024-10 HCD Letter, #2 Additional concerns re setbacks, daylight plane, and height. PLEASE NOTE: These are additional comments provided on 2025-03-25. (1) Palo Alto must allow an attached ADU up to 800 sf in size to be built out to four-foot side and rear setbacks; in other words, it need not be confined to the setbacks for the primary dwelling on the lot. (2) Such an ADU would enjoy the height benefits provided by Gov. C. subd. 66321(b)(4)(D); as a result, in most parts of the City, it could be built to 25', provided that it does not have more than two stories. Gov. C. subd. 66321(b)(4)(B) Gov. C. subd. 66323(a)(1)(C) Gov. C. subd. 66317(c) Item 10 Attachment E - Public Comments Item 10: Staff Report Pg. 72 Packet Pg. 325 of 349 13 OTHER POLICY CHANGES 32 Althought not required by state law, Gov. Code section 66342 gives local jurisdictions the option of adopting an ordinance to provide for the separate conveyance of an ADU, apart from its primary dwelling, as noted by the HCD in a footnote in the 2024-10 HCD letter. Palo Alto should adopt such an ordinance as a means of stimulating ADU production. Allowing for the separate conveyance of ADUs in Palo Alto would likely expand capital availability for ADU production considerably. 2024-10 HCD Letter, #8, fn.1 33 A Palo Alto worksheet for estimating existing electrcal loads (), which is referenced by implication in Palo Alto's "" at p. 2 ("COMPLETED AND SIGNED UTILITY SERVICE APPLICATION INCLUDING UTILITY DEMANDS FOR THE REQUIRED SERVICES") essentially relies upon nameplate information, with repeated instructions to specify "Volt Amps from Label." With Palo Alto's new "Advanced Meter Infrastructure" for electrical service, applicants can, in addition, use , which begins, " The calculation of a feeder or service load for existing installations shall be permitted to use actual maximum demand to determine the existing load under all of the following conditions...." Palo Alto should: (a) make clear that this alternate form of calculation existing electrical loads can be used for ADUs and JADUs; (b) provide an updated form for calculating the resultant demand in accordance with CEC (2022) 220.87; and (c) simplify and publicize clearly instructions for obtaining historical load data from CPAU customer service personnel or directly online through MyCPAU. Allow for separate conveyances of ADUs under Gov. C. sec. 66342 Gov. C. sec. 66342. res_load_calc_gh_03.24.17_dc1-em Utility Service Application CEC (2022) 220.87 Simplify and improve CPAU load calculatons. 220.87 Determining Existing Loads CEC (2022) 220.87 Item 10 Attachment E - Public Comments Item 10: Staff Report Pg. 73 Packet Pg. 326 of 349 14 34 2025-01 HCD ADU Handbook, p. 33, At present CPAU will sometimes charge a customer for electrical infrastructure upgrades. For example, if a customer seeks to upgrade a home's electrical service to electrify the home or to add an EV charger, CPAU sometimes allocates the entire cost of that infrastructure upgrade to the customer requesting a new service, even thought the capacity of the existing CPAU infrastructure reached an exhaustion threshold by the load demands of all of the customers in a given local area. This can be thought of as a "loser lottery." When this policy is applied to ADUs or JADUs in the additional regulatory context of the City's newly modified reach codes, it becomes particularly untenable. Making it extremely difficult for ADU or JADU applicants to have gas appliances while charging them for CPAU electrical infrastructure upgrades creates a "damned if you do, and damned if you don't" choice. This is also poor public policy because CPAU infrastructure upgrades, in general, should be borne by CPAU itself or all customers, not a select few. From an ADU and JADU regulatory perspective, such CPAU policies also violate state law. Gov. C. subd. 66314(a) makes clear that (a) only local water and sewer utilities have any proper participation in ADU and JADU permitting, and (b) even then, the only legitimate inquiry concerns "the adequacy of water and sewer services...."; once a local agency has consulted with local water and sewer utilities as to which regions with that agency's jurisdiction have adequate water and sewer services, further involvement of local utilities in ADU and JADU permitting should end. Thus, if a local agency (a) allows water or sewer review of a particular permit application concerning a parcel that is in an area with adequate water and sewer services, or (b) allows any other local utility to review an ADU or JADU permit application, it fails to respect and honor that portion of Gov. C. sec. 66314. Therefore, current CPAU policies concerning the "loser lottery" are doubly problematic: electrical utilities have no role in ADU and JADU permitting, and even if the state had allowed cities to consider the adequacy of electrical service in a local sub-region --- which is not the case --- once that determination had been made, an electrical utility should not be further involved in permittng for an ADU or JADU. CPAU's "loser lottery" policies are troublesome when applied to 66323 Units for other reasons as well. There is no mention of electrical infrastructure upgrades in Gov. C. sec. 66323, and Gov. C. subds. 66323(b)-(c) state: "(b) A local agency shall not impose any objective development or design standard that is not authorized by this section upon any accessory dwelling unit that meets the requirements of any of paragraphs (1) to (4), inclusive, of subdivision (a). (c) A local agency shall not require, as a condition for ministerial approval of a permit application for the creation of an accessory dwelling unit or a junior accessory dwelling unit, the correction of nonconforming zoning conditions." Taken together, the entirety of that section and those particular sub-divisions also prohibit the City from forcing ADU or JADU applicants to pay for CPAU infrastructure upgrades as price for a building permit, as well as prohibiting CPAU electrical permitting review. 2025-01 HCD ADU Handbook, p. 33, concerning non-conforming zoning. End the "loser lottery." Do not condition permit approval of ADUs or JADUs on charging applicants for CPAU infrastructure upgrades, a type of impermissible demand for public improvements, and give applicants, at their sole option, the ability to obtain one or more separate utility services for ADUs. Cf. Gov. C. sec. 66314 Gov. C. sec. 66323 Item 10 Attachment E - Public Comments Item 10: Staff Report Pg. 74 Packet Pg. 327 of 349 15 35 A homeowner seeking to build an ADU in a flood zone will frequently be directed to complete a "," which will likely result in a determination by the City, made using RS Means cost estimating data or software, which, without further work, frequently results in a determinaton by the City that the cost of adding an ADU is more than 50% of the current value of the primary home, thus preventing one from obtaining an exception to certain additional flood zone building requirements. As ordinarily followed, this procedure is irrational, failing to take reasonable account of home values in Palo Alto. Therefore, an applicant is required to seek and to pay for a custom appraisal of the home, one more expense tacked onto the price of creating the additonal housing that our community needs. A better approach is possible. Here are three suggestions (doubtless there are more possibilities): 1. The City could acknowledge that the RS Means data and software are extremely poor indicators of the value of existing homes in Palo Alto, and it could create more realistic estimates of home values in our community. This need not be a major undertaking requiring exceptional expenditures. (Perhaps there are students at local universities who might find this an interesting project and a worthwhile endeavor that could even lead to creating a profitable business. One will only know for sure by asking.) 2. The City, having made that acknowledgement, could entertain other approaches that are likely far more accurate than the RS Means data and software approach. The question ought not to be whether the alternative is perfect, but whether it's better than the current, highly tarnished, "gold standard." The City should be able to use, for example, rough data from, ., Zillow, to establish the market price of a home and then to have an optional parameter, perhaps 25% or even 20% (and maybe an variable that changes with both the size of the house relative to the size of the lot and the age of the house) of the Zillow-estimated FMV as an acceptable approximation of the FMV of the structure on property. Local relators might have even better ideas. Any such figures that accord with the experience and judgments of those who probably know these values best, such as local relators, ought to be allowed in lieu of a detailed and costly appraisal for the purposes of a flood-zone-screening analysis. Perhaps waivers or exceptions might be necessary state or federal regulators, but let's not make the process of building ADUs in Palo Alto --- even in flood zones --- any more expensive than it already is, particularly when RS Means data and software simply fail to measure actual Palo Alto home FMV values accurately. 3. Simply accept a good-faith estimate provided by a local, licensed relator. 36 In a , the HCD wrote, with respect to Palo Alto's December, 2022 draft housing element: "Fees and Exaction: While the element describes required fees for single family and multifamily housing developments, including impact fees, on (pp. 4-66) the element states that impact fees/capacity fees are considered the highest in the County. In addition, on (pp. 4-67) the City recognizes that current planning/permitting and development fees add substantial cost to residential development." By this time, if not earlier, Palo Alto reasonably should have known that there were serious problems with its per-unit impact fees as applied to ADUs, and that, as the City would acknowledge explicitly in the redlined ("V6") of the housing element, if not earlier that: "Because Palo Alto has historically charged per-unit feesfor residential development, this has led to some inequitable results, as the fees for an ADU will depend not only on the size of the ADU, but also on the size of the primary unit, with higher fees required under state law when the primary unit is smaller." V6, at p. 4-65. The City should do the right thing and refund the impact fees that were charged on ADUs improperly from at least March 23, 2023 to the present in two distinct ways: 1. At a minimum, the City should re-calculate the fees charged on a per-unit basis and refund the difference as compared with the amounts that would be charged under current rules. To follow its stated values (, Recital A(5) in the draft resolution attached to ": "Will safeguard public trust through transparent practices and open communication."), this is the minimum that the City should do even to begin to make whole the homeowners who were overcharged for ADU impact fees. 2. If the City recognizes that even the current impact fee structure is improper, as discussed above, then the City should refund the entire amount of the fees previously charged to such homeowners, as having been charged in violation of state proportionality rules for ADUs. references noted above concerning impact fees and proportionality. Create a simplified approach for flood zone appraisals. FLOOD ZONE SCREENING QUESTIONNAIRE letter dated March 23, 2023 April, 2024 version "City Council At Places Memo, From: Mayor Lauing and Vice Mayor Veenker, Meeting Date: February 24, 2025, Item Number: 8 e.g see, e.g. See Refund improperly charged ADU fees. Item 10 Attachment E - Public Comments Item 10: Staff Report Pg. 75 Packet Pg. 328 of 349 16 37 If the City is serious about meeting its goals in the Housing Element, it should simply waive all such fees. Impact fees for larger ADUs can amount to tens of thousands of dollars. In addition, permitting fees are themselves consequential, sometimes amounting to several thousand dollars or more. Building more ADUs and JADUs is, perhaps, the fastest, most effective, and most demonstrably successful means of creating more and more afforedable housing in Palo Alto. We should make it easier and less expensive for people to build ADUs and JADUs. Waiving all such fees would send the right message and address current geopolitical conditions. Homeowners are already concerned about the effects of global tariff wars on the prices of lumber, appliances, and the other goods necessary to construct ADUs and JADUs. Cutting all such fees would show that Palo Alto is committed to meeting its housing goals even as geopolitical changes create higher construction costs. references noted above concerning impact fees and proportionality, as well as the separate discussion of simply ending impact fees on ADUs. 38 By going beyond what is required by state law in terms of ADU height, the City may be able to create appropriate incentives for complying with current daylight plane standards. A simple approach would be to allow for 20' high, two-story, detached, Table 2 ADUs, on the condition that they conform with current daylight plane standards. Because the 20' height limit is greater than that contemplated in state ADU statutes for non-66323 Units, allowing for such an alternative, non-mandatory regulatory pathway might be countenanced by the HCD. 39 State law allows for 1,200 sf ADUs, and some Bay Area jurisdictions allow for such larger ADUs already. To truly reform Palo Alto's housing market and spur construction of more and more affordable housing, our community needs to embrace "next phase housing," which will meet the needs of, and be embraced by, Palo Altans seeking to downsize, but confronted with the unavailability of suitable housing alternatives. Community members who have lived for decades in larger homes are likely to be sceptical about moving into 800 sf ADUs. 1,200 sf ADUs, which could have a third bedroom, space for family members who visit occasionally, or home offices, might be attractive enough so that homeowners would consider moving our of their single-family residences into a 1,200 sf ADU, thus freeing primary dwellings up for rental (and ideally sale, if the City ever embraces Gov. C. sec. 66342). 2024-10 HCD Letter, #8, fn.1 40 To create the additional and less expensive housinng that our community needs and deserves, the City should do more than meet minimal standards; it should strive for excellence. Palo Alto should set a goal of earning a "Prohousing Designation" from the HCD. As shown on the , neighboring cities such as Mountain View and Redwood City have already achieved such designations, as have other cities such as Santa Monica. Achieving such a designation can unlock meaningful benefits for creating additional housing in Palo Alto, and changing existing regulations and creating new housing incentives will benefit the Palo Alto community along the way to earning such a designation. Waive all impact and permitting fees on both ADUs and JADUs. Create an alternative, local, 20' height limit, specifically for two-story, detached, Table 2 ADUs, with a daylight plane. Adopt a 1,200 sf size limit for all ADUs. Palo Alto should seek a "Prohousing Designation," and ADU reforms can help our community to achieve that goal. See also Gov. C. sec. 66342. HCD's website Prohousing Designation Benefits and Prohousing Designated Jurisdictions Item 10 Attachment E - Public Comments Item 10: Staff Report Pg. 76 Packet Pg. 329 of 349 17 41 To create more and more affordable housing, the City should also allocate reasonable funding. In some housing projects, the City appears to expect other government agencies to contribute significantly to construction costs. But the City has an enormous budget, much more of which could be used to create incentives for new housing. Allocating a tiny fraction of that budget, even only 25 basis points or less over a two-year period would free up $5 million in total that could be used to test different regulatory and incentive programs to determine the ease of their implementation and the likelihood of their success. The oversubscription and success of certain state-wide financial incentives has already demonstrated demand for funds to help build ADU. Palo Alto could and should experiment with such mechanisms and others. Here is a rough outline of a series of such possible experiments: Total of $5 million in grants and on-bill financing over two years: Up to 50 $25k grants for pre-designed ADUs Up to 50 $25k grants based on CalHFA program Up to 25 on-CPAU-bill financings for first $100k of ADU costs With this partricular experimental approach, $2.5 million would be returned to the City over time, which could help pay for the next, full implementation phase of such programs. Creating such incentives, even on an experimental basis, might also accelerate Palo Alto's obtaining a "Prohousing Designation." 2025-01 HCD ADU Handbook, p. 28. 2025-01 HCD ADU Handbook, p. 28 Palo Alto should experiment with meaningful financial incentives to increase ADU production. Item 10 Attachment E - Public Comments Item 10: Staff Report Pg. 77 Packet Pg. 330 of 349 1 City of Palo Alto-References & Abbreviations re 2025-03 ADU reforms Abbreviation Reference 2024-10 HCD Letter Letter to Jonathan Lait, Director, from Jamie Candelaria Senior Housing Accountability Unit Manager, HCD, dated October 29, 2024 2025-01 HCD ADU Handbook CALIFORNIA DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT, OK, January 2025ACCESSORY DWELLING UNIT HANDBO Item 10 Attachment E - Public Comments Item 10: Staff Report Pg. 78 Packet Pg. 331 of 349 City Council Staff Report Report Type: INFORMATION REPORTS Lead Department: Administrative Services Meeting Date: May 12, 2025 Report #:2412-3861 TITLE Sales Tax Digest Q4 (Oct-Dec) 2024 ANALYSIS This report transmits information regarding the City of Palo Alto’s sales tax receipts for the fourth quarter (October to December) of 2024. Listed below are highlights from the report. Detailed discussion and data can be found in the attached City of Palo Alto Sales Tax Digest (Attachment A) Regional and statewide sales tax, adjusted economic benchmark year (Attachment A, p. 2): •Palo Alto: decreased by 3.4% •San Francisco Bay Area: decreased by 2.2% •California statewide: decreased by 2.2% City’s most significant activity for this period (Attachment A, p. 1): •Leasing segment, 12.6% decrease (year-ending Q4) •New auto sales, 18% decrease (year-ending Q4) •Office equipment, 6.9% decrease (from Q4 2023 to Q4 2024) •Business services, 2.1% decrease (from Q4 2023 to Q4 2024) County Pool (Attachment A, p. 4) •The City’s share of the county pool for this quarter is 5.9%; lower from Q4 2024 •Sales tax receipts from the County pool totaled $1.8 million. ATTACHMENTS Attachment A: 2024 Q4 Sales Tax Digest Summary APPROVED BY: Lauren Lai, Administrative Services Director Item 11 Item 11 Staff Report Item 11: Staff Report Pg. 1 Packet Pg. 332 of 349 City of Palo Alto Collections through February 2025 Sales October through December 2024 (2024Q4) www.avenuinsights.com (800) 800-8181 Page 1 California Overview For the year ending in the fourth quarter of 2024, cash receipts decreased by 0.7% statewide and decreased by 2.4% in S.F. Bay Area. However, when adjusted for non-period-related payments, the overall economic sales tax activity for the year ending in the fourth quarter of 2024 decreased by 2.2% statewide and decreased by 2.2% in S.F. Bay Area. For the year ending in the fourth quarter of 2024, sales tax cash receipts for the city decreased by 6.5% from the prior year. However, when adjusted for non-period related payments, the overall economic sales tax activity in Palo Alto for the year ending in the fourth quarter of 2024 decreased by 3.4%. The primary drivers of Palo Alto's sales tax decrease were the leasing and new auto sales sectors. Leasing sales tax revenue decreased by 12.6%, representing 19.6% of the city's total sales tax. New auto sales decreased by 18.0% over the same period, contributing 13.2% to the total sales tax revenue. Same quarter sales tax cash receipts increased by 2.3% in California from Q4 2023 to Q4 2024. Palo Alto citywide sales tax cash receipts decreased by 4.7% over the Q4 2023 to Q4 2024 period. Key reasons for the Palo Alto decrease during this period were: 1) Decrease in the leasing segment of 12.6% which comprises 19.6% of the total sales tax for the city, 2) Decrease in Office Equipment segment from Q4 2023 to Q4 2024 by 6.9%, and 3) Decrease in the business services segment from Q4 2023 to Q4 2024 by 2.1%. According to the California New Car Dealers Association (CNCDA), California’s new light vehicle registrations increased by 4.8% in 2024Q4. Tesla’s sales have been on the decline in California with registrations down a significant 7.6% YTD for 2024Q4. Item 11 Attachment A - 2024 Q4 Sales Tax Digest Summary Item 11: Staff Report Pg. 2 Packet Pg. 333 of 349 City of Palo Alto www.avenuinsights.com (800) 800-8181 Page 2 %P C S S S V C S I N G 2 2 2 2 3 2 3 2 F 1 2 2 1 1 2 1 1 T 1 2 1 2 2 2 2 2 B 3 1 2 1 1 1 1 1 M 4 1 1 1 1 1 1 1 T 1 1 1 1 1 1 1 1 P C S S S V C S I N L L R R M R M R R M R R %1 1 1 1 1 1 1 1 2 R M R M R R D S A N R D S %1 1 1 1 1 1 1 1 3 A N A N A N A N R M R A N A N %1 1 8 1 1 9 1 1 E E Regional Overview The first chart on page two shows adjusted economic benchmark year amounts, which shows the year ended fourth quarter of 2024 compared to the year ended fourth quarter of 2023 (benchmark years are rolling annual comparisons through the current quarter). The growth rates are different between the state and Palo Alto because the sales tax from businesses in Palo Alto performed better overall than the statewide average. BENCHMARK YEAR 2024Q4 COMPARED TO BENCHMARK YEAR 2023Q4 Item 11 Attachment A - 2024 Q4 Sales Tax Digest Summary Item 11: Staff Report Pg. 3 Packet Pg. 334 of 349 City of Palo Alto www.avenuinsights.com (800) 800-8181 Page 3 Leasing 19.6% Restaurants 17.2% Auto Sales -New 13.2% Office Equipment 7.3%Apparel Stores 7.2% All Other 35.5% Net Pools & Adjustments 18.9% $- $ $ $ $ $ $ $ Q B Gross Historical Sales Tax Cash Receipts by Benchmark Year and Quarter (Before Adjustments) *Benchmark year (BMY) is the sum of the current and 3 previous quarters (2024Q4 BMY is sum of 2024 Q4, 2024 Q3, 2024 Q2, 2024 Q1) Item 11 Attachment A - 2024 Q4 Sales Tax Digest Summary Item 11: Staff Report Pg. 4 Packet Pg. 335 of 349 City of Palo Alto www.avenuinsights.com (800) 800-8181 Page 4 A M S A N T A N T A R T B R U H S V H S V L S W M 2 2 2 2 2 2 2 2 2 2 2 2 Q O Q T 2 2 2 2 2 2 2 2 2 2 2 3 2 J 1 1 1 1 1 1 1 1 1 1 1 1 1 J 6 5 5 6 6 6 6 6 6 6 5 5 County Pool Results The California sales tax system is referred to as a ‘sales and use tax’ system which covers both sales tax and ‘use tax’. The County Pool revenues largely reflect use tax from qualifying transactions that do not involve a California based point of sale. Businesses report their use tax quarterly based on business activity conducted throughout the county. The County Pool is distributed each quarter based upon a formula where the jurisdiction’s quarterly percentage is based upon its total sales tax receipts for the quarter as a percentage of all sales tax receipts for all jurisdictions within the county. Thus, if local business activity (sales tax receipts) within Palo Alto increases in the quarter relative to the rest of the county, then the Palo Alto County pool percentage also will increase for the quarter compared to the rest of the county. The total county pool is multiplied by the city’s quarterly percentage to determine the jurisdiction share each quarter. In the fourth quarter of 2024, cash receipts for the overall County Pool increased by 28.2% from the same quarter in the prior year. A significant reason for the increase in the County Pool this quarter was due to a large misallocation adjustment in 2023Q4, so most of the growth in 2024Q4 was the result of comparing back to an unusually low quarter in the year prior. The City’s share of the County Pool decreased to 11.9%. The City’s revenues from the County Pool increased from $1,638,965 in 2023Q4 to $1,834,044 in 2024Q4. TOP 25 SALES/USE TAX CONTRIBUTORS The following list identifies Palo Alto’s Top 25 Sales/Use Tax contributors. The list is in alphabetical order and represents the year ended fourth quarter of 2024. The Top 25 Sales/Use Tax contributors generate 58.7% of Palo Alto’s total sales and use tax revenue. Item 11 Attachment A - 2024 Q4 Sales Tax Digest Summary Item 11: Staff Report Pg. 5 Packet Pg. 336 of 349 City of Palo Alto www.avenuinsights.com (800) 800-8181 Page 5 B B Sales Tax from Largest Non-Confidential Sales Tax Segments (Economic) Item 11 Attachment A - 2024 Q4 Sales Tax Digest Summary Item 11: Staff Report Pg. 6 Packet Pg. 337 of 349 City of Palo Alto www.avenuinsights.com (800) 800-8181 Page 6 E 2 2 2 2 2 2 2 2 2 2 2 B 2 2 2 2 2 2 2 2 2 2 2 2 M 1 1 1 1 1 1 1 1 1 1 1 1 G 2 2 1 2 1 2 1 2 1 2 1 1 F 1 1 1 1 1 1 1 1 1 1 1 1 S 8 7 7 7 7 7 7 7 6 7 6 6 N 1 1 1 1 1 1 1 2 1 1 1 6 T 1 9 8 8 8 9 9 9 8 9 8 7 E 2 2 2 2 2 2 2 2 2 2 2 M 4 3 4 4 4 4 4 4 3 4 4 4 R 1 1 1 1 1 1 1 1 1 1 1 1 M 7 7 5 5 4 6 4 5 4 5 3 4 A 6 6 4 5 4 5 4 5 4 5 4 4 D 6 5 4 5 4 5 4 4 3 5 4 4 S 2 1 2 2 1 2 2 2 1 2 2 2 F 1 1 1 1 1 1 1 1 1 1 9 1 B 0 7 5 8 2 9 8 9 7 9 6 8 S 8 7 7 7 7 7 7 7 6 7 6 6 N 1 1 1 1 1 1 1 2 1 1 1 6 T 1 9 8 8 8 9 9 9 8 9 8 7 Historical Analysis by Calendar Quarter The chart above shows the categories and segments in quarterly economic basis amounts. The total amount is the net cash receipts, and it was obtained by adding up the categories/segments with the “Net Pools & Adjustments” amount. Item 11 Attachment A - 2024 Q4 Sales Tax Digest Summary Item 11: Staff Report Pg. 7 Packet Pg. 338 of 349 City of Palo Alto www.avenuinsights.com (800) 800-8181 Page 7 E 2 2 2 2 2 2 2 2 2 2 B 2 9 1 9 7 7 8 6 5 5 4 M 1 6 6 6 6 5 7 7 6 6 5 G 2 7 7 7 6 4 7 8 8 8 8 F 1 5 5 4 3 2 4 4 4 4 4 S 8 2 2 2 2 2 2 2 2 2 2 N 1 5 7 5 5 4 6 6 4 4 3 T 1 3 3 3 3 2 3 3 2 2 2 E 2 2 2 2 2 2 2 2 2 2 M 4 1 1 1 1 1 1 1 1 1 1 R 1 4 4 4 3 2 4 4 4 4 3 M 6 2 2 1 1 1 1 1 1 2 1 A 6 2 2 1 1 1 1 1 1 1 1 D 5 1 1 1 1 7 1 1 2 2 2 S 2 8 8 8 6 4 7 6 6 5 6 B 0 3 3 4 5 4 8 8 7 8 8 F 1 4 4 4 3 3 4 4 5 5 5 S 8 2 2 2 2 2 2 2 2 2 2 N 1 5 7 5 5 4 6 6 4 4 3 T 1 3 3 3 3 2 3 3 2 2 2 Historical Analysis by Calendar BMY from 2015Q4 to 2024Q4 The chart above shows the categories and segments in benchmark year economic basis amounts. The total amount is the net cash receipts, and it was obtained by adding up the categories/segments with the “Net Pools & Adjustments” amount. Benchmark year (BMY) is the sum of the current and 3 previous quarters (2024Q4 BMY is sum of 2024 Q4, 2024 Q3, 2024 Q2, 2024 Q1). Item 11 Attachment A - 2024 Q4 Sales Tax Digest Summary Item 11: Staff Report Pg. 8 Packet Pg. 339 of 349 City of Palo Alto www.avenuinsights.com (800) 800-8181 Page 8 G F T B M 2 2 %L S G L S D C -3 ---2 2 -R M L S C 1 4 --5 1 1 -M R O L G -4 --1 4 4 -R L A M L -0 -2 1 6 6 1 E L O S L 6 --1 4 1 1 -L M A R M ---4 -6 5 9 O E M S M -----2 2 -H B S L M -3 ---4 4 -R A O M P 1 5 --3 7 8 -M R A L S -1 -9 2 5 5 -O E A S S -7 4 5 1 1 1 2 O I E S C -6 ---1 1 -R E M L S 4 ----2 2 -M R S F S -2 -1 -8 8 1 B L M O Quarterly Analysis by Sales Tax Category: Change from 2023Q4 to 2024Q4 (Economic) Unlike the chart on page one which showed a ‘benchmark year’ through the fourth quarter of 2024, the chart above shows a comparison of one quarter only – fourth quarter of 2024 to fourth quarter of 2023. This chart is for local ‘brick and mortar’ businesses, and it excludes county pools and adjustments. Item 11 Attachment A - 2024 Q4 Sales Tax Digest Summary Item 11: Staff Report Pg. 9 Packet Pg. 340 of 349 City of Palo Alto www.avenuinsights.com (800) 800-8181 Page 9 C %2 2 2 2 F 1 1 9 6 6 G -2 2 1 1 A -3 4 2 2 T 3 1 1 1 1 E %2 2 2 2 F 0 1 1 4 2 G -3 4 1 7 A -1 3 4 6 T -3 5 1 1 G %2 2 2 2 F 2 5 5 6 6 G 6 2 2 3 3 B 4 4 3 5 3 C -1 4 1 4 M 1 8 7 0 0 T 3 3 3 0 0 T 1 9 9 1 1 S %2 2 2 2 G -1 1 8 7 F -1 1 8 7 A -5 3 2 1 T -1 2 1 1 City of Palo Alto Geo Areas & Citywide Chart Data: Change from 2023Q4 to 2024Q4 (Economic) Item 11 Attachment A - 2024 Q4 Sales Tax Digest Summary Item 11: Staff Report Pg. 10 Packet Pg. 341 of 349 City of Palo Alto www.avenuinsights.com (800) 800-8181 Page 10 T %2 2 2 2 F -1 1 5 5 G 1 8 7 4 3 A -7 7 0 3 T -1 1 1 1 A %2 2 2 2 B -2 2 3 3 G -2 2 3 2 F 1 1 1 1 1 T -8 1 1 2 M 8 8 4 1 0 C -2 5 0 0 T -6 7 1 1 A %2 2 2 2 B -2 3 4 4 S -1 2 2 3 G 1 9 9 1 1 E -3 5 5 7 T -1 1 2 2 C 3 1 1 2 2 T -6 7 1 1 P %2 2 2 2 G 1 2 2 3 2 B -2 2 3 3 F 5 1 1 1 1 T -8 1 1 2 M 2 3 2 4 3 C 8 1 6 1 0 T -7 8 1 1 City of Palo Alto Geo Areas & Citywide Chart Data: Change from 2023Q4 to 2024Q4 (Economic) Cont. Item 11 Attachment A - 2024 Q4 Sales Tax Digest Summary Item 11: Staff Report Pg. 11 Packet Pg. 342 of 349 City of Palo Alto www.avenuinsights.com (800) 800-8181 Page 11 F , 1 1 , 6 G , -2 2 , 1 A , -1 3 , 2 C F ,9 , 6 T G , $2 ,1 T A ,4 , 2 T C F , 0 C 1 , 4 T G , -3 3 , 1 T A , -4 $1 , 4 T E 2 S F ,1 , 2 T G , $7 T A , 6 T E 2 S City of Palo Alto Geo Area Pie Charts Item 11 Attachment A - 2024 Q4 Sales Tax Digest Summary Item 11: Staff Report Pg. 12 Packet Pg. 343 of 349 City of Palo Alto www.avenuinsights.com (800) 800-8181 Page 12 F , 2 C 5 , 6 T G , 6 $2 , 3 T B , 4 4 , 5 T C , -7 1 , 1 T M , 1 8 , 0 T T , 3 3 , 0 T G 2 S F , $5 ,6 T G , $2 ,3 T B , $3 ,3 T C ,4 , 4 T M ,7 , 0 T T ,3 , 0 T G 2 S G $1 , 7 T F ,1 , 7 T A ,3 , 1 T S 2 S G , -2 1 , 8 T F , -0 $1 , 8 T A ,-8 $5 ,2 T S 2 S City of Palo Alto Geo Areas Pie Charts Item 11 Attachment A - 2024 Q4 Sales Tax Digest Summary Item 11: Staff Report Pg. 13 Packet Pg. 344 of 349 City of Palo Alto www.avenuinsights.com (800) 800-8181 Page 13 F , -5 C 1 , 5 T G , 1 8 , 4 T A ,-8 7 ,0 T T 2 S F , $1 , 5 T G , $7 , 3 T A ,7 ,3 T T 2 S B , -5 C $2 , 3 T G -1 3 F 1 $ 1 T , -4 8 , 1 T M , $8 ,1 T C -5 2 , 0 T A 2 S B , $2 , 3 T G 2 F $ 1 T , $1 , 2 T M , $4 ,0 T C , $5 ,0 T A 2 S City of Palo Alto Geo Area Pie Charts Item 11 Attachment A - 2024 Q4 Sales Tax Digest Summary Item 11: Staff Report Pg. 14 Packet Pg. 345 of 349 City of Palo Alto www.avenuinsights.com (800) 800-8181 Page 14 B , -1 C $2 , 4 T S , -1 1 , 2 T G , 1 $9 ,1 T E , -3 3 , 5 T T , -2 1 ,2 T C , $1 ,2 T A 2 S B , $3 ,4 T S , $2 ,3 T G , $9 ,1 T E , $5 ,7 T T , $1 ,2 T C , $1 ,2 T A 2 S G , 1 2 , 3 T B , -6 2 , 3 T F , 5 $1 , 1 T T , -4 $8 , 1 T M , $3 ,4 T C , 8 1 , 1 T P 2 S G , $2 , 2 T B , $2 ,3 T F , $1 , 1 T T , $1 2 T M ,2 , 3 T C ,6 , 0 T P 2 S City of Palo Alto Geo Area & Citywide Pie Charts Item 11 Attachment A - 2024 Q4 Sales Tax Digest Summary Item 11: Staff Report Pg. 15 Packet Pg. 346 of 349 Item No. 3. Page 1 of 1 City Council Supplemental Report From: Mahealani Ah Yun, City Clerk Meeting Date: May 12, 2025 Item Number: 3 Report #:2505-4630 TITLE Supplemental Memo - Review List of Applicants and Select Candidates to Interview for the Architectural Review Board (ARB) Vacancies RECOMMENDATION Staff recommends the City Council review the nine (9) applicants from the Architectural Review Board Extended Recruitment and select candidates using the BCC Candidate Interview Selection Policy adopted on May 5, 2025. Each Councilmember may use up to six (6) votes. BACKGROUND City Council adopted the policy as follows: The number of candidates to interview varies based on the number of vacancies. Councilmembers will vote on whom to interview, getting twice the number of votes as there are openings. The candidates who receive the most votes will move on to the Interview Phase. •Interview all candidates if there are 6 or fewer applicants •Interview up to 6 candidates when there are 1-2 openings •Interview up to 8 candidates when there are 3 openings •Interview up to 10 candidates when there are 4 openings APPROVED BY: Mahealani Ah Yun, City Clerk Item 3 Item 3 Supplemental Report Item 3: Staff Report Pg. 1 Packet Pg. 347 of 349 City Council Staff Report From: City Manager Report Type: STUDY SESSION Lead Department: Administrative Services Meeting Date: May 12, 2025 Report #:2503-4317 TITLE FY 2026 Proposed Operating and Capital Budget - Finance Committee Update and Council Budget Discussion. CEQA Status – Not a project RECOMMENDATION This study session is intended to facilitate next steps in the FY 2026 Budget process. Facilitation of a forum for Finance Committee to discuss with the City Council the status of FY 2026 budget review in preparation for the Committee’s budget wrap-up work on May 20, 2025. Staff recommends that the City Council: •Review the current proposed budget adjustments to the Fiscal Year 2026 Proposed Operating and Capital Budgets and Municipal Fee Schedule in alignment with the work completed by the Finance Committee on May 6, 2025 and May 7, 2025; •Review the areas of focus for the City Council as identified by the Finance Committee and staff; and •Provide feedback to the Finance Committee on any areas of focus or additional deliberations to review as part of the Budget Wrap-up Meeting scheduled for May 20, 2025. ANALYSIS Finance Committee reviewed the FY 2026 Proposed Operating and Capital Budgets and Municipal Fee Schedule at the Finance Committee Meeting on May 6, 2025 and May 7, 2025. This report supports the discussion on the Finance Committee proposed adjustments to the FY 2026 budgets and/or Municipal Fee schedule. FY 2026 Budget documents are referenced below: - FY 2026 City Manager Proposed Budget Transmittal Letter - FY 2026 Proposed Operating Budget - FY 2025 Proposed CIP Budget Item 4 Item 4 Late Packet Report Item 4: Staff Report Pg. 1 Packet Pg. 348 of 349 - Budget Transmittal to City Council (May 5, 2025) - Agenda Report - Finance Committee Review of Proposed Budgets (May 6 and May 7, 2025) Agenda Report - Finance Committee Review of Proposed Municipal Fee (May 7, 2025) Agenda Report As new materials are released during the Finance Committee review, all materials can be found on https://www.paloalto.gov/budget FISCAL/RESOURCE IMPACT This report is a study session for the City Council to review the Finance Committee’s analysis and tentatively recommended changes to the FY 2026 Proposed Budget. No financial impacts will occur as a result of this report; however, recommendations from this study session will inform the Finance Committee’s final recommendations for adjustments to the FY 2026 Proposed Budgets to the City Council for adoption on June 16, 2025. STAKEHOLDER ENGAGEMENT Community members are encouraged to review budget publications available online and engage throughout the budget process with City Council and Finance Committee to inform priorities and service needs. ENVIRONMENTAL REVIEW Council action on this item is not a project as defined by the California Environmental Quality Act (CEQA) because providing recommendations regarding the FY 2026 Proposed Budgets is fiscal activity which does not involve any commitment to any specific project which may result in a potentially significant physical impact on the environment. CEQA Guidelines section 15378(b)(4). APPROVED BY: Lauren Lai, Administrative Services Director Item 4 Item 4 Late Packet Report Item 4: Staff Report Pg. 2 Packet Pg. 349 of 349