HomeMy WebLinkAbout2025-06-17 City Council Agenda PacketCITY COUNCIL
Special Meeting
Tuesday, June 17, 2025
Council Chambers & Hybrid
5:30 PM
Amended Agenda
Amended agenda items appear below in RED (Time Estimates Updated)
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 June 17, 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 - 5:35 PM)
1.Proclamation Honoring Juneteenth
CLOSED SESSION (5:35 - 6:20 PM)
AA1.CONFERENCE WITH LABOR NEGOTIATORS
City Designated Representatives: City Manager and his Designees Pursuant to Merit
System Rules and Regulations(Ed Shikada, Kiely Nose, Sandra Blanch, Nick Raisch, Tori
Post, Molly Stump, Lauren Lai, Paul Harper, and Jennifer Fine)
Employee Organization: Service Employees International Union, (SEIU) Local 521
Hourly Unit, Utilities Management andProfessional Association of Palo Alto (UMPAPA),
Palo Alto Peace Officers’ Association (PAPOA), Palo Alto Police Management
Association (PMA), International Association of Fire Fighters (IAFF) local 1319, Palo
Alto Fire Chiefs’ Association (FCA);
Authority: Government Code Section 54957.6 (a)
New Item Added
AGENDA CHANGES, ADDITIONS AND DELETIONS
PUBLIC COMMENT (6:20 - 6:50 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 (6:50 - 7:00 PM)
Members of the public may not speak to the item(s).
CONSENT CALENDAR (7:00 - 7:05 PM)
Items will be voted in one motion unless removed from the calendar by three Council Members.
2.Approval of the Office of the City Auditor Annual Risk Assessment and FY 2026 Audit Plan
and Corresponding Task Orders
3.Climate Action and Sustainability Committee Recommendation to Council to Direct Staff
to Develop an Affordable Multi-Family Housing Electrification Grant Program and to
Approve a Budget Amendment in the Gas Utility Funds; CEQA Status: Under CEQA
Guidelines section 15183, projects consistent with an existing general or comprehensive
plan do not require additional CEQA review
2 June 17, 2025
Materials submitted after distribution of the agenda packet are available for public inspection
at www.paloalto.gov/agendas.
4.Adopt a Resolution Declaring Surface Parking Lot T (APN: 120-15-100) Exempt Surplus
Land and Approve an Exclusive Negotiation Agreement with Alta Housing for
Development of 100% Affordable Housing on City-Owned Property Located at the Corner
of Kipling Street and Lytton Avenue in Downtown Palo Alto; CEQA Status – Not a Project.
5.Approval of the 2025 update to the Sewer System Management Plan (SSMP) and
Authorization for Staff to Make Future Administrative or Minor Updates to the SSMP as
Needed; CEQA Status – Exempt under CEQA Guidelines sections 15301, 15302, 15308.
6.Approval for the City Manager or their Designee to Execute Contract No. C25194016 with
SCA of CA, LLC, Utilizing Sourcewell Cooperative Contract No. 062421-SWP, to Procure
Services for the Sweeping of Residential and Commercial Streets for a Period of Five
Years for a Total Not-to-Exceed Amount of $9,883,850; CEQA Status – Not a Project
7.Approval of General Services Contract No. C25193659 With Community Tree Service LLC
for Utility Line Clearance Services in an Amount Not-to-Exceed $16,500,000 for a Period
of Five Years; CEQA Status – Exempt Under Section 15301(h)
8.Approval of and Authorization for the City Manager or Designee to Negotiate and
Execute a Purchase and Sale Agreement with C H LLC to Acquire the Industrial Property
Located at 2575 East Bayshore Road (Assessor’s Parcel Number 008-03-015) for $8.5
million, with Six-Month Leaseback to Insulation Sources, Inc. (dba Ico Rally) for
$12,600/Month; CEQA Status – Exempt Under CEQA Guidelines Section 15301 Title
Updated, Late Packet Report Added, Supplemental Report Added
9.Approval of Professional Services Contract Number C26193797 with Chandler Asset
Management, Inc. in an Amount Not to Exceed $750,000 for Investment Management
Services for a Period of Three Years; CEQA Status - Not A Project
10.Approval of Professional Services Contract Number C25193814 with Alta Housing BMR
Services LLC in an Amount Not to Exceed $450,600 for Administration and Consulting
Services for the City's Below Market Rate Housing Program for a Period of Two Years
and Approve a FY 2026 Budget Amendment in the Residential Housing In-Lieu Fund.
CEQA Status: Exempt under CEQA Guidelines 15262.
11.Approval of Authorize the City Manager to Negotiate and Execute 14 Professional
Services Contracts for GIS On-Call Services, supplemental staffing, and programming
services: C26193271A with Lynx Technologies Inc, C26193271B with Seven Tablets Inc,
C26193271C with iSpatial Techno Solutions Inc, C26193271D with Geodesy,
3 June 17, 2025
Materials submitted after distribution of the agenda packet are available for public inspection
at www.paloalto.gov/agendas.
C26193271E with UDC, C26193271F with NV5 Geospatial Inc, C26193271G with SSP
Innovations, C26193271H with Timmons Group, C26193271I with Infojini Inc,
C26193271J with Sybyte Technologies Inc, C26193271K with 360S2G, C26193271L with
Enterprise Maps, C26193271M with Farallon Geographics, C26193271N with Arini
Geographics in an Amount Not-to-Exceed $2,000,000 for a Term of One Year in Fiscal
Year 2026; CEQA Status – Not a Project. Title Updated, Supplemental Report added
12.Approval of Authorize the City Manager to Negotiate and Execute Professional Services
Contracts for SAP Enterprise Resource System On-call Programming Services: Contract
C26193272A with 360S2G, C26193272B with Sage Group Technologies Inc, C26193272C
with Avertra Corp, C26193272D with Amick Brown LLC, C26193272E with 2iSolutions
Inc, C26193272F with the Peloton Group, C26193272G with Phoenix Business Inc,
C26193272H with EPI-USE America in an Amount Not-to-Exceed $2,000,000 for a Term
of One Year in Fiscal Year 2026; CEQA status – Not a project. Title Updated,
Supplemental Report added
13.Approval of Authorize the City Manager to Negotiate and Execute Eight Professional
Services Contracts for On-Call IT Project Support and supplemental staffing: Contract
C26193247A with INSPYR Solutions, C26193247B with AgreeYa Solutions, C26193247C
with TechLink Systems, C26193247D with Compunnel Software Group, C26193247E
with Progile Tech Inc, C26193247F with Omm IT Solutions, C26193247G with Infojini
Inc, and C26193247H with California Creative Solutions Inc in an Amount Not to Exceed
$1,500,000 for a Term of One Year in Fiscal Year 2026; CEQA Status – Not a Project Title
Updated, Supplemental Report added
14.Approval of Professional Services Contract No. C26193874 with Palo Alto Community
Child Care in an Amount Not-to-Exceed $3,228,146 to Provide Management of the City’s
Childcare Subsidy Program for a Term of Five Years. CEQA Status – Not A
Project Supplemental Report added, Updated Consent Questions
15.Approval of Seven (7) On-Call Consulting Contracts to Provide Planning Application
Processing and Supplemental Staffing for the Planning and Development Services
Department over a Five-Year Term, as needed: 1) Arnold Mammarella, Architecture +
Consulting, 2) CTC Media Group INC., 3) Good City Company 4) Metropolitan Planning
Group, 5) Michael Baker International Inc., 6) Stantec Consulting Services, Inc., 7) Urban
Planning Partners Inc. in the Amount not to exceed $2,000,000 ; CEQA Status: Not a
Project.
16.Amend the Fiscal Year (FY) 2026 Budget Appropriation for the Community Development
Block Grant (CDBG) Fund to Reflect Final Entitlement Grant Allocation. CEQA Status:
Exempt under CEQA Guidelines Section 15378(b)(4).
4 June 17, 2025
Materials submitted after distribution of the agenda packet are available for public inspection
at www.paloalto.gov/agendas.
AA2.Approval of Amendment No. 3 to Contract Number C23184827 with Nomad Transit,
LLC (Via) in the Amount of $1,100,000 for a total not to exceed $4,901,550 over a
Four-Year Term to Continue the City of Palo Alto On-Demand Transit Service through
June 30, 2026; CEQA status - not a project. (Originally Published on the June 16, 2025
City Council Meeting Agenda Item Number #18 - Deferred to June 17, 2025 City
Council Meeting) New Item Added
BREAK (15 MINUTES)
ACTION ITEMS (7:20 - 8:20 PM)
Include: Report of Committees/Commissions, Ordinances and Resolutions, Public Hearings, Report of Officials, Unfinished
Business and Council Matters.
17.Approve a Resolution to Allow Dining and Retail Encroachments on Car Free California
Avenue under PAMC Ch. 12.11; Direct Staff to Approve the Car Free California Avenue
Outdoor Activation Program Regulations Including Reference to the Program fees in the
FY 2026 Municipal Fee Schedule; Adopt a Resolution Allowing Open Containers in
Conjunction with Third Thursday Performances in 2025; Direct Staff to Review
Differences Between the Open Container Resolution and an Entertainment Zone as
Recommended by the Retail Committee. CEQA Status – categorically exempt.
ADJOURNMENT
INFORMATION REPORTS
Information reports are provided for informational purposes only to the Council and the public but are not listed for action or
discussion during this meeting’s agenda.
A.Semiannual Update on the Status of Capital Improvement Program Projects; CEQA Status
– Not a Project
OTHER INFORMATION
Standing Committee Meetings this week
Finance Committee June 17, 2025 CANCELED Retail Committee June 18, 2025
Public Comment Letters Schedule of Meetings
AMENDED AGENDA ITEMS
AA1.CONFERENCE WITH LABOR NEGOTIATORS
5 June 17, 2025
Materials submitted after distribution of the agenda packet are available for public inspection
at www.paloalto.gov/agendas.
City Designated Representatives: City Manager and his Designees Pursuant to Merit System Rules and
Regulations(Ed Shikada, Kiely Nose, Sandra Blanch, Nick Raisch, Tori Post, Molly Stump, Lauren Lai, Paul Harper,
and Jennifer Fine)
Employee Organization: Service Employees International Union, (SEIU) Local 521 Hourly Unit, Utilities
Management andProfessional Association of Palo Alto (UMPAPA), Palo Alto Peace Officers’ Association (PAPOA),
Palo Alto Police Management Association (PMA), International Association of Fire Fighters (IAFF) local 1319, Palo
Alto Fire Chiefs’ Association (FCA);
Authority: Government Code Section 54957.6 (a)
New Item Added
8.Approval of and Authorization for the City Manager or Designee to Negotiate and Execute a Purchase and Sale
Agreement with C H LLC to Acquire the Industrial Property Located at 2575 East Bayshore Road (Assessor’s Parcel
Number 008-03-015) for $8.5 million, with Six-Month Leaseback to Insulation Sources, Inc. (dba Ico Rally) for
$12,600/Month; CEQA Status – Exempt Under CEQA Guidelines Section 15301 Title Updated, Late Packet Report
Added, Supplemental Report Added
11.Approval of Authorize the City Manager to Negotiate and Execute 14 Professional Services Contracts for GIS On-Call
Services, supplemental staffing, and programming services: C26193271A with Lynx Technologies Inc, C26193271B
with Seven Tablets Inc, C26193271C with iSpatial Techno Solutions Inc, C26193271D with Geodesy, C26193271E with
UDC, C26193271F with NV5 Geospatial Inc, C26193271G with SSP Innovations, C26193271H with Timmons Group,
C26193271I with Infojini Inc, C26193271J with Sybyte Technologies Inc, C26193271K with 360S2G, C26193271L with
Enterprise Maps, C26193271M with Farallon Geographics, C26193271N with Arini Geographics in an Amount Not-to-
Exceed $2,000,000 for a Term of One Year in Fiscal Year 2026; CEQA Status – Not a Project. Title Updated,
Supplemental Report
12.Approval of Authorize the City Manager to Negotiate and Execute Professional Services Contracts for SAP Enterprise
Resource System On-call Programming Services: Contract C26193272A with 360S2G, C26193272B with Sage Group
Technologies Inc, C26193272C with Avertra Corp, C26193272D with Amick Brown LLC, C26193272E with 2iSolutions
Inc, C26193272F with the Peloton Group, C26193272G with Phoenix Business Inc, C26193272H with EPI-USE America
in an Amount Not-to-Exceed $2,000,000 for a Term of One Year in Fiscal Year 2026; CEQA status – Not a project. Title
Updated, Supplemental Report added
13.Approval of Authorize the City Manager to Negotiate and Execute Eight Professional Services Contracts for On-Call IT
Project Support and supplemental staffing: Contract C26193247A with INSPYR Solutions, C26193247B with AgreeYa
Solutions, C26193247C with TechLink Systems, C26193247D with Compunnel Software Group, C26193247E with
Progile Tech Inc, C26193247F with Omm IT Solutions, C26193247G with Infojini Inc, and C26193247H with California
Creative Solutions Inc in an Amount Not to Exceed $1,500,000 for a Term of One Year in Fiscal Year 2026; CEQA Status
– Not a Project Title Updated, Supplemental Report added
14.Approval of Professional Services Contract No. C26193874 with Palo Alto Community Child Care in an Amount Not-to-
Exceed $3,228,146 to Provide Management of the City’s Childcare Subsidy Program for a Term of Five Years. CEQA
Status – Not A Project Supplemental Report added
AA2.Approval of Amendment No. 3 to Contract Number C23184827 with Nomad Transit, LLC (Via) in the Amount of
$1,100,000 for a total not to exceed $4,901,550 over a Four-Year Term to Continue the City of Palo Alto On-
Demand Transit Service through June 30, 2026; CEQA status - not a project. (Originally Published on the June 16,
2025 City Council Meeting Agenda Item Number #18 - Deferred to June 17, 2025 City Council Meeting) New Item
Added
6 June 17, 2025
Materials submitted after distribution of the agenda packet are available for public inspection
at www.paloalto.gov/agendas.
PUBLIC COMMENT INSTRUCTIONS
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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,
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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
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person who files an application for, or is the subject of, a proceeding involving a license, permit, or other
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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.
7 June 17, 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: June 17, 2025
Report #:2506-4801
TITLE
Proclamation Honoring Juneteenth
ATTACHMENTS
Attachment A: Proclamation Honoring Juneteenth
APPROVED BY:
Mahealani Ah Yun, City Clerk
Item 1
Item 1 Staff Report
Item 1: Staff Report Pg. 1 Packet Pg. 8 of 413
Proclamation
JUNETEENTH
WHEREAS, June 19th is observed as Juneteenth, a nationally recognized day that celebrates the culture,
heritage and perseverance of Black and African American people;
WHEREAS, Juneteenth commemorates the country’s second independence day. On June 19, 1865, Union
Army General Gordon Granger arrived in Galveston, Texas and announced that the state’s 25,000 enslaved people
were freed by executive decree, marking the effective end to slavery in the United States; and
WHEREAS, this was two and a half years after President Abraham Lincoln’s issued the Emancipation
Proclamation on January 1, 1863; and
WHEREAS, Constitutional amendments passed between 1865 and 1870 profoundly changed the legal status
of those once enslaved. The Thirteenth Amendment abolished slavery, the Fourteenth Amendment conferred
citizenship upon those once enslaved and guarantees equal protection under the law, and the Fifteenth Amendment
enfranchised men once held in bondage; and
WHEREAS, today, Juneteenth celebrates Black and African American people’s freedom and achievements,
and encourages everyone to reflect, learn about, and honor the rich diversity of our nation and the ongoing
movement towards equity and belonging; and
WHEREAS, communities across the Bay Area will be hosting cultural events including food and vendor
festivals, music and dance performances, and parades.
NOW, THEREFORE, I, Ed Lauing, Mayor of the City of Palo Alto on behalf of the entire City Council, do
hereby proclaim and celebrate June 19th as Juneteenth, and call upon our community to reaffirm our commitment
to eradicating hate, racism, and inequity and continuing the work of justice and hope.
PRESENTED: June 17, 2025
__________________________
Ed Lauing
Mayor
Item 1
Attachment A -
Proclamation Honoring
Juneteenth
Item 1: Staff Report Pg. 2 Packet Pg. 9 of 413
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City Council
Staff Report
From: City Auditor
Report Type: CONSENT CALENDAR
Lead Department: City Auditor
Meeting Date: June 17, 2025
Report #:2505-4691
TITLE
Approval of the Office of the City Auditor Annual Risk Assessment and FY 2026 Audit Plan and
Corresponding Task Orders
RECOMMENDATION
The City Auditor and the Policy and Services Committee recommend the City Council approve
the following reports:
1. Fiscal Year 2025 Risk Assessment Report
2. Fiscal Year 2026 Audit Plan Report
3. Fiscal Year 2026 Audit Plan Task Orders
EXECUTIVE SUMMARY
Baker Tilly, serving as the City Auditor, surveyed City Council, Executive Leadership Team and
staff members about citywide and departmental risks. The Auditor received responses from 11
departments across the organization. Baker Tilly analyzed the results of these responses and
other data and information gathered from industry associations and publications.
Identified risks were scored and then ranked based on likelihood and impact. The FY2026 Audit
Plan was prepared based on the results of the FY2025 risk assessment and other relevant
factors such as other planned assessments and studies.
BACKGROUND
The Palo Alto Municipal Code (Section 2.08.1301) requires the City Auditor prepare and submit
an annual audit plan to the City Council for review and approval. In its capacity serving as the
City Auditor function, and in accordance with Baker Tilly’s agreement with the City, Baker Tilly
1 https://codelibrary.amlegal.com/codes/paloalto/latest/paloalto_ca/0-0-0-60361
Item 2
Item 2 Staff Report
Item 2: Staff Report Pg. 1 Packet Pg. 10 of 413
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performed a citywide risk assessment (Task 1 of the agreement2). The purpose of the
assessment was to identify and prioritize risks to develop the annual audit plan (Task 2). During
the risk assessment, Baker Tilly assessed a wide range of risk areas, including strategic, financial,
technological, human capital, operational, reputational, economic, and including compliance
risk categories.
ANALYSIS
2 https://www.cityofpaloalto.org/files/assets/public/v/1/agendas-minutes-reports/reports/city-manager-reports-
cmrs/year-archive/2020-2/id-11624.pdf?t=64761.15
Item 2
Item 2 Staff Report
Item 2: Staff Report Pg. 2 Packet Pg. 11 of 413
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Council. Furthermore, one responsibility of the Office of the City Auditor (OCA) is to follow up
on management’s corrective actions. The follow-up activities require periodic inquiries with
management on outstanding corrective actions and verifying implementation of the corrective
actions as well as testing of the effectiveness of the implemented controls.
FISCAL/RESOURCE IMPACT
STAKEHOLDER ENGAGEMENT
ENVIRONMENTAL REVIEW
ATTACHMENTS
APPROVED BY:
Item 2
Item 2 Staff Report
Item 2: Staff Report Pg. 3 Packet Pg. 12 of 413
1
May 15, 2025
City of Palo Alto
Office of the City Auditor
FY2025 Annual Risk Assessment
Item 2
Attachment A - OCA -
FY2025 Risk Assessment
Report
Item 2: Staff Report Pg. 4 Packet Pg. 13 of 413
Contents
Baker Tilly Advisory Group, LP and Baker Tilly US, LLP, trading as Baker Tilly, operate under an alternative practice structure and are members of the global
network of Baker Tilly International Ltd., the members of which are separate and independent legal entities. Baker Tilly US, LLP is a licensed CPA firm that
provides assurance services to its clients. Baker Tilly Advisory Group, LP and its subsidiary entities provide tax and consulting services to their clients and are
not licensed CPA firms.
INTRODUCTION...............................................................................................................1
RISK ASSESSMENT APPROACH...................................................................................2
RISK ASSESSMENT RESULTS......................................................................................3
APPENDICES...................................................................................................................9
Item 2
Attachment A - OCA -
FY2025 Risk Assessment
Report
Item 2: Staff Report Pg. 5 Packet Pg. 14 of 413
1
Introduction
Overview
According to City Ordinance of the City of Palo Alto (the City), the mission of the Office of the City Auditor (OCA)
is to promote honest, efficient, effective, economical, and fully accountable and transparent city government. To
fulfill this mission, the OCA conducts performance audits and performs financial/operational analyses of
city departments, programs, services, or activities as approved by the City Council. (Section 2.08.130). In its
capacity serving as the City Auditor function, and in accordance with Baker Tilly’s agreement with the City (Task
#1 of the agreement), Baker Tilly Advisory Group, LP (Baker Tilly) conducted the fiscal year (FY) 2025 citywide
risk assessment in order to develop the FY2026 annual audit plan (Task #2).
The California Government Code Section 1236 requires all cities that conduct audit activities to conduct their
work under the general and specified standards prescribed by the Institute of Internal Auditors (IIA) or the
Government Auditing Standards (GAO) issued by the Comptroller General of the United States, as appropriate.
According to the IIA Standard 2010, the head of internal audit function “must establish a risk-based plan to
determine the priorities of the internal audit activity, consistent with the organization’s goals” and consider the
input of senior management and a governing board.
The purpose of the risk assessment is to develop an internal audit plan that assigns internal audit resources to
the activities that add the most value to the City. The risk assessment process involves identifying, measuring,
and prioritizing risks associated with the audit universe (list of specific departments, functions, processes,
programs, etc. that can be subject to an audit). Risk is defined as “the possibility of an event or condition
occurring that will have an impact on the ability of an organization to achieve its objectives.”1
Due to management changes in the OCA at the end of FY2024, the FY2024 Risk Assessment was delayed and
presented to City Council for approval in December 2024. As the FY2025 risk assessment is being conducted
just 6 months later, the OCA conducted an assessment process to preserve City resources. The OCA surveyed
City Council, Executive Leadership Team and other key management staff across the organization. OCA
received responses from 11 departments. This report summarizes our risk assessment methodology, analysis,
and results. The FY2026 annual audit plan is based on the results of this risk assessment.
Through the risk assessment, we observed certain strengths of the City. Key strengths include:
Commitment to public service by a dedicated and highly professional management team
High value placed on efficient and effective government
Focus on strategic planning and implementation
Demonstrated investment in innovation and commitment to sustainability
Dedication to continuous improvement
Risk Assessment Process Considerations
The starting point of internal auditing is to conduct a risk assessment that is the basis for determining internal
audit activities. However, it is not a one-size-fits-all process. The scope and complexity of the risk assessment
are affected by various factors such as the maturity level of the internal audit function’s products and services,
the organization’s enterprise risk management efforts, coordination with other monitoring and risk management
functions, and the stakeholders’ expectations. As every organization is subject to a changing environment, the
results of the annual risk assessment represent the information considered at the time of the assessment.
In addition to the annual macro-level risk assessment, the internal audit function is required to perform an
engagement-level risk assessment when starting each audit listed in the approved audit plan. The IIA Standard
2200 states, “Internal auditors must develop and document a plan for each engagement, including the
engagement’s objectives, scope, timing, and resource allocations. The plan must consider the organization’s
strategies, objectives, and risks relevant to the engagement.”
1 Rick A. Wright Jr., CIA, “The Internal Auditor’s Guide to Risk Assessment” The Institute of Internal Auditors Research Foundation (IIARF),
2018
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Risk Assessment Approach
Baker Tilly’s risk assessment approach this year focused on gathering information from the following inputs:
•Surveying City Council, Executive Leadership Team members and other key management staff
•Analyzing key documents such as City Council Priorities, budget documents, the annual comprehensive
financial report, and other relevant documents
•Updating the risk assessment matrix with the gathered information
•Scoring the auditable units (listed in Appendix A) in the risk assessment matrix based on the likelihood
and impact of potential adverse events
•Identifying potential internal audit topics for the auditable units with high-risk scores
•Summarizing the approach and results for presentation
At the start of our contract with the City, Baker Tilly conducted an initial comprehensive risk assessment in
FY2021 by interviewing all Council Members and Executive Leadership Team (ELT) members to create a risk
assessment matrix. Each year, this matrix is updated to redevelop a comprehensive picture of the risk
landscape which is continuously changing. For FY2025, Baker Tilly conducted a survey of City Council, ELT and
other management staff, as well as meeting with available City Council members to identify strategic and
operational challenges and risks.
While the risk assessment primarily measures inherent risk (the risk without mitigating controls/factors) for each
risk factor, it also considers specific risks based on the above information and the City’s processes, controls,
and other factors surfaced through internal audit activities. Using the information gathered, OCA identified risks
and determined the likelihood and impact of those risks.
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Risk Assessment Results
Department Descriptions and Key Risk Areas
When identifying risk areas throughout the City, Baker Tilly considered each department and associated risks.
Based on the concerns described by interviewees, departments’ functions, and their inherent risks, Baker Tilly
identified the auditable risk areas for each department. Below is an overview of the City’s departments and their
key risk areas.
Administrative Services
The Administrative Services Department provides financial and
analytical support to the City. Departmental functions include
finance and accounting, purchasing, administration, budget, real
estate, and others.
Key Risk Areas
Purchasing Card Program
Procurement Process
Property Management
Contract & Consultant Oversight
City Attorney’s Office
The City Attorney’s Office provides legal services to the City,
including providing legal advice and training to City leaders,
negotiating on behalf of the City, drafting contracts and other
legal documents, investigating claims, and defending the City in
litigation
Key Risk Areas
Identification of Legal Risks
Contracts & Legal Documents
Public Records Act
City Clerk’s Office
The City Clerk serves as a liaison between the public and City
Council. Office functions include Public Records Act requests,
public hearings, local elections, board and commission
recruitments, record management, and others.
Key Risk Areas
Election Administration
Record Retention & Management
Council Meeting Management
City Manager’s Office
The City Manager’s Office provides leadership to the City
departments and is responsible for facilitating City Council
legislative actions, managing special interdepartmental projects,
and more. The Communications Office is housed under the City
Manager’s Office and is the primary correspondent between the
City and the public.
Key Risk Areas
Citywide Risk Management
Government Efficiency
Economic Development
Strategic Planning
Consultant Management
Office of Transportation
The Office of Transportation works to enhance quality of life and
improve the safety of the users of all modes of transportation.
The Office is responsible for sustainable transportation systems,
managing parking, and oversees the City’s traffic and
transportation capital improvement projects.
Key Risk Areas
Traffic Safety Improvements
Federal Railroad Administration (FRA)
Quiet Zone
Transit-Related Growth
Community Services Department
The Community Services Departments offers a variety of
services administered through the following three divisions and
the Office of Human Services: Arts and Sciences; Open Spaces,
Parks, and Golf; and Recreation.
Key Risk Areas
Human Services Resource Allocation
Process (HSRAP)
Junior Museum and Zoo (JMZ)
Operation
Equipment & Materials Management
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Fire
The Fire Department oversees emergency response such as
ambulance transports and fire response/rescue, emergency
protection services such as fire prevention, and hazardous
materials planning. The department highlights safeguarding the
community and compassionate care.
Key Risk Areas
Emergency Preparedness (Foothills
Fire Master Plan)
Staffing
Fleet Electrification
Human Resources
The Human Resources (HR) Department is responsible for
recruiting, developing, and retaining a well-qualified and
professional workforce. The Department ensures compliance with
relevant labor laws, adheres to record keeping practices, and
serves as a strategic partner for executive decision making.
Key Risk Areas
Recruitment
Succession Planning
HR Strategy & Risk Management
Workplace Safety
Information Technology
The Information Technology Department's provides innovative
technology solutions that support City departments. The
department oversees IT project management, operations,
enterprise systems, and security services.
Key Risk Areas
- PCI/DSS Compliance
- AMI Implementation
- ERP Upgrade
- Adoption & Integration of New Tech
Library
The Library Department operates five libraries throughout the
City, each offering unique resources. The Library provides
educational programming, multi-cultural events, and large and
diverse book, information and technology resources.
Key Risk Areas
Operations
Events and Programming
Volunteer Engagement
Office of Emergency Services
The Office of Emergency Services is designed to prevent,
prepare for, and recover from various hazards. The Office is
responsible for overseeing various risk management programs.
Key Risk Areas
Emergency Preparedness (Foothills
Fire Mitigation Program; Evacuation
Plans, COOPs, Interlocal Agreements)
Training Compliance
Planning and Development Services
The Planning Department supports the City in land use
development, planning, transportation, housing and
environmental policies, and plans and programs that “maintain
and enhance the City as a safe, vital, and attractive community”.
Key Risk Areas
Building Permit & Inspection Processes
Building Permit & Inspection Fees
Zoning Ordinance
Code Enforcement
Long Range Planning
Below Market Rate Housing
Police
The Police Department oversees technical services such as
dispatch and record management, field services such as patrol
and emergency response, and animal control. The Police
Department also places a high value on community relations.
Key Risk Areas
Crime Reduction
Psychiatric Emergency Response Team
(PERT) Program
Safety and Wellness
Training
Staffing
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Overall Risk Scoring Distribution
Baker Tilly structured the audit universe based on the department/division/program from the budget document
and management’s feedback, which resulted in 96 auditable units (Appendix A). We scored them based on the
information gathered for each risk factor related to the likelihood, impact, or fraud. Appendix B lists the risk
factors, definitions, and scoring method. The maximum score for an auditable unit is 30. The following chart
shows the distribution of overall risk scoring.
Baker Tilly rated the auditable units as follows:
•High Risk – Scores 14 and above
•Moderate Risk – Scores more than 9 and less than 14
•Low Risk – Scores below 9
Listed in the following pages are the auditable units with a score over 12 (out of 30) based on our scoring. The
list includes 26 functions rated as high risk (with a score between 14 and 30) and 49 functions rated as
Public Works
The Public Works Department is broken into four divisions:
Engineering, Airport, Public Services, and Environmental
Services. The Divisions are responsible for a variety of tasks
including design and implementation of capital projects,
maintenance of City-owned and leased structures, and
management of the solid waste programs.
Key Risk Areas
Wastewater Treatment Capital Program
The Americans with Disabilities Act
(ADA) Compliance
Flood Protection Capital Project
Fleet Operations
Airport Operations
Utilities
The Utilities Department owns and operates electric, gas, water,
wastewater and fiber optic services to the City. The City
purchases all their power from external sources. The mission of
the Department is to “provide safe, reliable, environmentally
sustainable and cost effective services.”
Key Risk Areas
Power Purchase Agreements
Utility Billing
Fiber Optics Billing & Rates
Rate Setting and Adjustment
Utility Asset Management
Reserves
21
49
26
2 - 8 (LOW)9 - 13 (MODERATE)14 - 30 (HIGH)
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moderate risk (with a score between 9 and 14). In determining the audit activities to be performed in FY2026,
we further evaluated specific risks and functional areas and considered risk-based priorities as well as other
factors such as requirements by law or regulation, timing of activities, special projects, and requests from City
Council and management. The proposed audit plan will be included in a separate FY2026 Annual Audit Plan
Report.
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Appendix A: Resumes
Appendices
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Appendix A: Audit Universe
City Attorney’s Office
Administration
Consultation and Advisory
Litigation and Dispute Resolution
Official and Administration Duties
City Clerk’s Office
Administration
Administrative Citations
Council Support Services
Election/Conflict of Interest
Legislative Records Management
City Manager’s Office
Administration and City Management
Economic Development
Public Communication
Administrative Services Department
Accounting
Administration
Office of Management and Budget
Printing and Mailing
Purchasing
Real Estate
Treasury/Revenue Collection/Warehouse
Community Services Department
Administration and Human Services
Animal Shelter
Aquatics
Arts and Sciences
Open Space, Parks and Golf
Recreation and Cubberley
Fire Department
Administration
Emergency Response
Environmental Safety Management
Records and Information Management
Training and Personnel
Human Resources Department
Administration, Employee Org Development and HR Systems
Benefits and Compensation
Employee and Labor Relations
Recruitment
Risk Management, Safety, Workers’ Compensation
Information Technology Department
Enterprise Systems
Office of the CIO
Operations
Project Services
Library Department
Administration
Collection and Technical Services
Public Services
Office of Emergency Services
Emergency Services
Office of Transportation
Administration
Parking Districts
Programs
Special Revenue Funds
Planning and Development Services Department
Administration
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Building
Development Services
Planning and Transportation
Special Districts
Police Department
Administration
Animal Control
Field Services
Investigations and Crime Prevention Services
Law Enforcement Services
Parking Services
Police Personnel Selection
Technical Services
Traffic Services
Department of Public Works
Administration
Airport
Engineering Services
Refuse
Storm Drainage
Streets
Structures and Grounds
Sustainability
Trees
Vehicle Replacement and Maintenance
Wastewater Treatment
Utilities Department
Electric Administration
Electric Customer Service
Electric Demand Side Management
Electric Engineering (Operating)
Electric Operations and Maintenance
Electric Resource Management
Fiber Optics Administration
Fiber Optics Customer Service
Fiber Optic Operations and Maintenance
Gas Administration
Gas Customer Service
Gas Demand Side Management
Gas Engineering (Operating)
Gas Operations and Maintenance
Gas Resource Management
Wastewater Collection Administration
Wastewater Collection Customer Service
Wastewater Collection Engineering (Operating)
Wastewater Collection Operations and Maintenance
Water Administration
Water Customer Service
Water Engineering (Operating)
Water Operations and Maintenance
Water Resource Management
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Appendix B: Risk Factor Definition
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May 15, 2025
City of Palo Alto
Office of the City Auditor
FY2026 Annual Audit Plan
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Contents
Baker Tilly Advisory Group, LP and Baker Tilly US, LLP, trading as Baker Tilly, operate under an alternative practice structure and are members of the global
network of Baker Tilly International Ltd., the members of which are separate and independent legal entities. Baker Tilly US, LLP is a licensed CPA firm that
provides assurance services to its clients. Baker Tilly Advisory Group, LP and its subsidiary entities provide tax and consulting services to their clients and are
not licensed CPA firms.
INTRODUCTION...............................................................................................................1
RISK ASSESSMENT RESULTS......................................................................................3
PROPOSED AUDIT PROJECTS FOR FY2024................................................................4
APPENDICES...................................................................................................................6
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Introduction
Introduction
The purpose of the audit activities performed by Baker Tilly Advisory Group, LP (Baker Tilly) as the outsourced
Office of the City Auditor (OCA) for the City of Palo Alto (the City) is “to ensure that city management is using its
financial, physical, and informational resources effectively, efficiently, economically, ethically, and equitably, and
in compliance with laws, regulations, contract and grant requirements, and city policies and procedures”,
according to the Palo Alto Municipal Code (Section 2.08.130). It requires the City Auditor to prepare an annual
audit plan for the City Council’s approval.
Conformance with Local Ordinances and Standards
Section 2.08.130 of the Palo Alto Municipal Code defines that the mission of the OCA is to promote honest,
efficient, effective, economical, and fully accountable and transparent city government. Audits are conducted
and non-audit services provided in accordance with Government Auditing Standards, as established by the
Comptroller General of the United States, Governmental Accountability Office.
The following duties of the City Auditor exist regarding the plan and scope of internal audits.
Palo Alto City Charter
Article IV Sec. 12 requires the City Auditor to perform the following:
–Conduct audits in accordance with a schedule approved by the City Council and may conduct
unscheduled audits from time to time.
–Conducts internal audits of all the fiscal transactions of the City.
Title 2 Administrative Code
Section 2.08.130 requires the City Auditor to perform the following:
–Prepare an annual audit plan for City Council approval.
–Identify the preliminary objectives of each audit to be performed, reflecting the purpose of the
engagement and a preliminary description of the areas that may be addressed.
–Conduct performance audits and perform non-audit services of any City department, program, service,
or activity as approved by the City Council.
California Government Code
Section 1236 requires all cities that conduct audit activities to conduct their work under the general and
specified standards prescribed by the Institute of Internal Auditors (IIA) or the Government Auditing
Standards (GAO) issued by the Comptroller General of the United States, as appropriate.
Audit Activity Type
The OCA will conduct performance audits and perform financial/operational analyses of any City department,
program, service, or activity as approved by the City Council in accordance with the Baker Tilly agreement.
Performance Audits
According to the Government Auditing Standards (GAO-18-568G, Section 1.21 and 1.22, page 10-12),
performance audits provide objective analysis, findings, and conclusions to assist management and those
charged with governance and oversight with, among other things, improving program performance and
operations, reducing costs, facilitating decision making by parties responsible for overseeing or initiating
corrective action, and contributing to public accountability. Performance audits may include the following four
(4) audit objectives:
–Program effectiveness and results
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INTRODUCTION
–Internal control design and effectiveness
–Compliance with laws, regulations, and policies
–Prospective analysis
Audit Planning Considerations
While maintaining its independence and objectivity in accordance with standards, the City Auditor considers a
variety of matters when developing the Annual Audit Plan, including but not limited to:
–Risk Assessment – the OCA performed a risk assessment and summarized the results in a separate
report (Task #1). Generally speaking, audit activities target high(er) risk areas. The results are shown
on the following page.
–Ability to Add Value – audit seeks to add value through independent and objective analysis.
–City Council – the City Auditor reports to the City Council and seeks input on audit priorities.
–Coverage and Prior Audits – the City Auditor considers prior audits conducted by the OCA, the financial
audit, and other audit and consulting reports recently issued.
–“Ripeness” and On-Going Initiatives – certain risk areas may be addressed through operational
activities, which could mean they are not ripe for audit to add value.
–Scheduling – the City Auditor takes into consideration the timing of an audit and other on-going
initiatives that directly relate. Putting an undue burden on City staff may exacerbate the risk at hand or
other interrelated risks.
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Risk Assessment Results
The OCA performed a citywide risk assessment to plan for FY2026 audit activities and documented the
methodology and the detailed results in a separate Risk Assessment Report. In summary, we identified the
following areas rated as High or Moderate risks. In determining the audit activities to be performed in FY2026,
we further reviewed these risks and functional areas and considered the matters listed in the previous page.
Summary
The proposed audits, special advisory projects and follow-up project for FY2026 are listed on the next page. The
projects were selected from the auditable units that were rated as High or Moderate in the results of our risk
assessment and selected based on some factors such as risk rating, the pervasiveness of the processes or
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PROPOSED PROJECTS FOR FY2026
controls, the audit coverage, the timing of projects, and the value-adding activities that help the City enhance the
ability to manage risks, strengthen accountability, and improve efficiency and effectiveness.
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Proposed Audit Plan for FY2026
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Appendix A: Resumes
Appendices
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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 below are incorporated into
this Task Order by this reference. The Consultant shall furnish the necessary facilities, professional,
technical and supporting personnel required by this Task Order as described below.
CONTRACT NO. C21179340
OR PURCHASE ORDER REQUISITION NO. (AS APPLICABLE)
1A. MASTER AGREEMENT NO. (MAY BE SAME AS CONTRACT / P.O. NO. ABOVE): C21179340
1B. TASK O RDER NO.: FY25-4.29
2. CONSULTANT NAME: Baker Tilly Advisory Group, LP
3. PERIOD OF PERFORMANCE: START: July 1, 2025 COMPLETION: May 31, 2026
4. TOTAL TASK ORDER PRICE: $97,575
BALANCE REMAINING IN MASTER AGREEMENT/CONTRACT TBD
5. BUDGET CODE_______________ COST CENTER________________ COST
ELEMENT______________ WBS/CIP__________ PHASE__________
6. CITY PROJECT MANAGER’S NAME & DEPARTMENT:
Lydia Kou, Chair of the City Council’s Policy and Services Committee
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): N/A
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: Baker Tilly Advisory Group,
LP
BY:____________________________________
Name __________________________________
Title___________________________________
Date ___________________________________
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Attachment A
Introduction
•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)
Services & Deliverables
•Step 1: Audit Planning
•Step 2: Fieldwork and Testing
•Step 3: Reporting
Step 1 – Audit Planning
•Gather information to understand the environment under review
o Understand the environment under assessment
o Assess the City code, regulations, and other standards and expectations
o Assess prior audit results, as applicable
o Assess additional documentation and conduct interviews as necessary
•Assess the audit risk
•Prepare an audit planning memo and audit program
o Refine audit objectives and scope
o Identify the audit procedures to be performed and the evidence to be obtained and examined
•Announce the initiation of the audit and kick-off meeting with key stakeholders
o Discuss audit objectives, scope, audit process, timing, resources, and expectations
o Discuss documentation and interview requests for the audit
Step 2 – Fieldwork and Testing
•Interviewing the appropriate individuals to gain an understanding of the organizational structure,
processes, and controls related to the Program
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•Analyze policies and procedures as well as the legislative and regulatory requirements to identify
the criteria to be used for evaluation of control design and effectiveness
•Select samples of applications and projects to determine if in compliance with rules and
regulations
•Compare processes and controls against best practices
Step 3 – Reporting
In Step 3, the project team will perform tasks necessary to finalize audit working papers, prepare and
review a draft report with stakeholders, and submit a final report for management response. Tasks include:
•Developing findings, conclusions, and recommendations based on the supporting evidence
gathered
•Validating findings with appropriate individuals and discuss the root cause of the identified
findings
•Complete supervisory review of working papers and a draft audit report
•Distribute a draft audit report and conduct a closing meeting with key stakeholders
o Discuss the audit results, findings, conclusions, and recommendations
o Discuss management responses
•Obtain written management responses and finalize a report
•Review report with members of City Council and/or the appropriate Council Committee
Deliverables:
The following deliverables will be prepared as part of this engagement:
•Audit Report
•Policy & Services Committee Audit Report Presentation
Schedule of Performance
Anticipated Start Date: July 1, 2025
Anticipated End Date: May 31, 2026
Maximum Compensation Amount and Rate Schedule
The not-to-exceed maximum, inclusive of reimbursable expenses (as summarized below) for this Task is $97,575.
The not-to-exceed budget is based on an estimate of 475 total project hours, of which a minimum of 70 are
estimated to be completed by the City Auditor.
Reimbursable Expenses
We plan to complete all work remote including all interviews and documentation review. However, during the
planning and fieldwork phases of this audit, the City and Baker Tilly may mutually determine it will be beneficial to
perform a portion of the work on-site. Given this possibility, Baker Tilly could incur expenses for this Task.
The not-to-exceed maximum for reimbursable expenses for this Task is $6,500.
The following summarizes anticipated reimbursable expenses:
•Round-trip Airfare – $2,000 (1 round trip flight x 2 auditors)
•Ground transportation – $800 (car rental or Uber/taxi)
•Hotel accommodation – $3,000 (2 rooms x 4 nights)
•Food & Incidentals – $2,100
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PROFESSIONAL SERVICES TASK ORDER
TASK ORDER FY25-4.36 Fleet Resources & Sustainability / Climate Action Plan
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 below are incorporated into
this Task Order by this reference. The Consultant shall furnish the necessary facilities, professional,
technical and supporting personnel required by this Task Order as described below.
CONTRACT NO. C21179340
OR PURCHASE ORDER REQUISITION NO. (AS APPLICABLE)
1A. MASTER AGREEMENT NO. (MAY BE SAME AS CONTRACT / P.O. NO. ABOVE): C21179340
1B. TASK ORDER NO.: FY25-4.30
2. CONSULTANT NAME: Baker Tilly Advisory Group, LP
3. PERIOD OF PERFORMANCE: START: July 1, 2025 COMPLETION: May 31, 2026
4. TOTAL TASK ORDER PRICE: $90,255
BALANCE REMAINING IN MASTER AGREEMENT/CONTRACT TBD
5. BUDGET CODE_______________ COST CENTER________________ COST
ELEMENT______________ WBS/CIP__________ PHASE__________
6. CITY PROJECT MANAGER’S NAME & DEPARTMENT:
Lydia Kou, Chair of the City Council’s Policy and Services Committee
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): N/A
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: Baker Tilly Advisory Group,
LP
BY:____________________________________
Name __________________________________
Title___________________________________
Date ___________________________________
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Attachment A
Introduction
•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)
Services & Deliverables
•Step 1: Audit Planning
•Step 2: Fieldwork and Testing
•Step 3: Reporting
Step 1 – Audit Planning
•Gather information to understand the environment under review
o Understand the environment under assessment
o Assess the City code, regulations, and other standards and expectations
o Assess prior audit results, as applicable
o Assess additional documentation and conduct interviews as necessary
•Assess the audit risk
•Prepare an audit planning memo and audit program
o Refine audit objectives and scope
o Identify the audit procedures to be performed and the evidence to be obtained and examined
•Announce the initiation of the audit and kick-off meeting with key stakeholders
o Discuss audit objectives, scope, audit process, timing, resources, and expectations
o Discuss documentation and interview requests for the audit
Step 2 – Fieldwork and Testing
•Interviewing the appropriate individuals to gain an understanding of the organizational structure,
processes, and controls related to the Fleet & S/CAP Programs
•Analyze policies and procedures as well as the legislative and regulatory requirements to identify
the criteria to be used for evaluation of control design and effectiveness
•Gather data on fleet vehicles, including maintenance, disposal, driver training and safety programs
•Analyze fleet utilization to identify underused or overused vehicles
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•Analyze maintenance and repair records
•Assess progress in achieving S/CAP goals
•Other steps as identified during planning
•Compare processes and controls against best practices
Step 3 – Reporting
In Step 3, the project team will perform tasks necessary to finalize audit working papers, prepare and
review a draft report with stakeholders, and submit a final report for management response. Tasks include:
•Developing findings, conclusions, and recommendations based on the supporting evidence
gathered
•Validating findings with appropriate individuals and discuss the root cause of the identified
findings
•Complete supervisory review of working papers and a draft audit report
•Distribute a draft audit report and conduct a closing meeting with key stakeholders
o Discuss the audit results, findings, conclusions, and recommendations
o Discuss management responses
•Obtain written management responses and finalize a report
•Review report with members of City Council and/or the appropriate Council Committee
Deliverables:
The following deliverables will be prepared as part of this engagement:
•Audit Report
•Policy & Services Committee Audit Report Presentation
Schedule of Performance
Anticipated Start Date: July 1, 2025
Anticipated End Date: May 31, 2026
Maximum Compensation Amount and Rate Schedule
The not-to-exceed maximum, inclusive of reimbursable expenses (as summarized below) for this Task is $90,255.
The not-to-exceed budget is based on an estimate of 440 total project hours, of which a minimum of 60 are
estimated to be completed by the City Auditor.
Reimbursable Expenses
We plan to complete some fieldwork steps for this audit on-site if the City and Baker Tilly mutually determine it
will be beneficial to perform a portion of the work on-site. Given this possibility, Baker Tilly could incur expenses
for this Task.
The not-to-exceed maximum for reimbursable expenses for this Task is $6,500.
The following summarizes anticipated reimbursable expenses:
•Round-trip Airfare – $2,000 (1 round trip flight x 2 auditors)
•Ground transportation – $800 (car rental or Uber/taxi)
•Hotel accommodation – $3,000 (2 rooms x 4 nights)
•Food & Incidentals – $2,100
Item 2
Attachment B - OCA -
FY2026 Annual Audit Plan
Item 2: Staff Report Pg. 31 Packet Pg. 40 of 413
13
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 below are incorporated into
this Task Order by this reference. The Consultant shall furnish the necessary facilities, professional,
technical and supporting personnel required by this Task Order as described below.
CONTRACT NO. C21179340
OR PURCHASE ORDER REQUISITION NO. (AS APPLICABLE)
1A. MASTER AGREEMENT NO. (MAY BE SAME AS CONTRACT / P.O. NO. ABOVE): C21179340
1B. TASK ORDER NO.: FY25-4.30
2. CONSULTANT NAME: Baker Tilly Advisory Group, LP
3. PERIOD OF PERFORMANCE: START: July 1, 2025 COMPLETION: April 30, 2026
4. TOTAL TASK ORDER PRICE: $97,575
BALANCE REMAINING IN MASTER AGREEMENT/CONTRACT TBD
5. BUDGET CODE_______________ COST CENTER________________ COST
ELEMENT______________ WBS/CIP__________ PHASE__________
6. CITY PROJECT MANAGER’S NAME & DEPARTMENT:
Lydia Kou, Chair of the City Council’s Policy and Services Committee
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): N/A
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: Baker Tilly Advisory Group,
LP
BY:____________________________________
Name __________________________________
Title___________________________________
Date ___________________________________
Item 2
Attachment B - OCA -
FY2026 Annual Audit Plan
Item 2: Staff Report Pg. 32 Packet Pg. 41 of 413
14
Attachment A
Introduction
•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)
Services & Deliverables
•Step 1: Audit Planning
•Step 2: Fieldwork and Testing
•Step 3: Reporting
Step 1 – Audit Planning
•Gather information to understand the environment under review
o Understand the environment under assessment
o Assess the City code, regulations, and other standards and expectations
o Assess prior audit results, as applicable
o Assess additional documentation and conduct interviews as necessary
•Assess the audit risk
•Prepare an audit planning memo and audit program
o Refine audit objectives and scope
o Identify the audit procedures to be performed and the evidence to be obtained and examined
•Announce the initiation of the audit and kick-off meeting with key stakeholders
o Discuss audit objectives, scope, audit process, timing, resources, and expectations
o Discuss documentation and interview requests for the audit
Step 2 – Fieldwork and Testing
•Interviewing the appropriate individuals to gain an understanding of the organizational structure,
processes, and controls related to the Office of Transportation and Public Works Departments as
they relate to the design and implementation of traffic safety improvements
•Analyze policies and procedures as well as the legislative and regulatory requirements to identify
the criteria to be used for evaluation of control design and effectiveness
•Gather data on traffic safety programs and initiatives including calming measures, engineering
design and implementation, data collection, performance measurement and public education
Item 2
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FY2026 Annual Audit Plan
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•Analyze project plans and justification and evaluate design criteria
•Analyze cost estimates and budgeting
•Assess stakeholder input and engagement
•Assess installation/implementation of traffic safety features
•Assess performance data
•Compare processes and controls against best practices
Step 3 – Reporting
In Step 3, the project team will perform tasks necessary to finalize audit working papers, prepare and
review a draft report with stakeholders, and submit a final report for management response. Tasks include:
•Developing findings, conclusions, and recommendations based on the supporting evidence
gathered
•Validating findings with appropriate individuals and discuss the root cause of the identified
findings
•Complete supervisory review of working papers and a draft audit report
•Distribute a draft audit report and conduct a closing meeting with key stakeholders
o Discuss the audit results, findings, conclusions, and recommendations
o Discuss management responses
•Obtain written management responses and finalize a report
•Review report with members of City Council and/or the appropriate Council Committee
Deliverables:
The following deliverables will be prepared as part of this engagement:
•Audit Report
•Policy & Services Committee Audit Report Presentation
Schedule of Performance
Anticipated Start Date: July 1, 2025
Anticipated End Date: April 30, 2026
Maximum Compensation Amount and Rate Schedule
The not-to-exceed maximum, inclusive of reimbursable expenses (as summarized below) for this Task is $97,575.
The not-to-exceed budget is based on an estimate of 475 total project hours, of which a minimum of 70 are
estimated to be completed by the City Auditor.
Reimbursable Expenses
We plan to complete some fieldwork steps for this audit on-site if the City and Baker Tilly mutually determine it
will be beneficial to perform a portion of the work on-site. Given this possibility, Baker Tilly could incur expenses
for this Task.
The not-to-exceed maximum for reimbursable expenses for this Task is $6,500.
The following summarizes anticipated reimbursable expenses:
•Round-trip Airfare – $2,000 (1 round trip flight x 2 auditors)
•Ground transportation – $800 (car rental or Uber/taxi)
•Hotel accommodation – $3,000 (2 rooms x 4 nights)
•Food & Incidentals – $2,100
Item 2
Attachment B - OCA -
FY2026 Annual Audit Plan
Item 2: Staff Report Pg. 34 Packet Pg. 43 of 413
16
PROFESSIONAL SERVICES TASK ORDER
TASK ORDER FY25-4.38 City of Palo Alto Utilities Reserves
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 below are incorporated into
this Task Order by this reference. The Consultant shall furnish the necessary facilities, professional,
technical and supporting personnel required by this Task Order as described below.
CONTRACT NO. C21179340
OR PURCHASE ORDER REQUISITION NO. (AS APPLICABLE)
1A. MASTER AGREEMENT NO. (MAY BE SAME AS CONTRACT / P.O. NO. ABOVE): C21179340
1B. TASK ORDER NO.: FY25-4.32
2. CONSULTANT NAME: Baker Tilly Advisory Group, LP
3. PERIOD OF PERFORMANCE: START: July 1, 2025 COMPLETION: December 31, 2025
4. TOTAL TASK ORDER PRICE: $70,815
BALANCE REMAINING IN MASTER AGREEMENT/CONTRACT TBD
5. BUDGET CODE_______________ COST CENTER________________ COST
ELEMENT______________ WBS/CIP__________ PHASE__________
6. CITY PROJECT MANAGER’S NAME & DEPARTMENT:
Lydia Kou, Chair of the City Council’s Policy and Services Committee
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): N/A
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: Baker Tilly Advisory Group,
LP
BY:____________________________________
Name __________________________________
Title___________________________________
Date ___________________________________
Item 2
Attachment B - OCA -
FY2026 Annual Audit Plan
Item 2: Staff Report Pg. 35 Packet Pg. 44 of 413
17
Attachment A
Introduction
•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)
Services & Deliverables
•Step 1: Assessment Planning
•Step 2: Fieldwork and Testing
•Step 3: Reporting
Step 1 – Assessment Planning
•Gather information to understand the environment under review
o Understand the environment under assessment
o Assess the City code, regulations, and other standards and expectations
o Assess prior audit results, as applicable
o Assess additional documentation and conduct interviews as necessary
•Prepare an assessment program
o Refine assessment objectives and scope
o Identify the procedures to be performed and the evidence to be obtained and examined
•Announce the initiation of the assessment and kick-off meeting with key stakeholders
o Discuss assessment objectives, scope, audit process, timing, resources, and expectations
o Discuss documentation and interview requests for the audit
Step 2 – Fieldwork and Testing
•Interviewing the appropriate individuals to gain an understanding of current procedures including
how the Utility projects peak demand, calculates reserve margins, models demand growth, etc.
•Analyze policies and procedures related to reserves
•Assess compliance with regulatory reserve margin requirements and other relevant standards
•Compare processes and controls against best practices
Item 2
Attachment B - OCA -
FY2026 Annual Audit Plan
Item 2: Staff Report Pg. 36 Packet Pg. 45 of 413
18
Step 3 – Reporting
In Step 3, the project team will perform tasks necessary to finalize assessment working papers, prepare and
review a draft report with stakeholders, and submit a final report for management response. Tasks include:
•Developing observations and recommendations based on the supporting evidence gathered
•Validating observations with appropriate individuals
•Complete supervisory review of working papers and a draft audit report
•Distribute a draft assessment report and conduct a closing meeting with key stakeholders
o Discuss the observations and recommendations
o Discuss management responses
•Obtain written management responses if appropriate and finalize a report
•Review report with members of City Council and/or the appropriate Council Committee
Deliverables:
The following deliverables will be prepared as part of this engagement:
•Assessment Report
•Policy & Services Committee Assessment Report Presentation
Schedule of Performance
Anticipated Start Date: July 1, 2025
Anticipated End Date: December 31, 2025
Maximum Compensation Amount and Rate Schedule
The not-to-exceed maximum, inclusive of reimbursable expenses (as summarized below) for this Task is $70,815.
The not-to-exceed budget is based on an estimate of 345 total project hours, of which a minimum of 40 are
estimated to be completed by the City Auditor.
Reimbursable Expenses
We plan to complete all work remote including all interviews and documentation review. However, during the
planning and fieldwork phases of this audit, the City and Baker Tilly may mutually determine it will be beneficial to
perform a portion of the work on-site. Given this possibility, Baker Tilly could incur expenses for this Task.
The not-to-exceed maximum for reimbursable expenses for this Task is $6,500.
The following summarizes anticipated reimbursable expenses:
•Round-trip Airfare – $2,000 (1 round trip flight x 2 auditors)
•Ground transportation – $800 (car rental or Uber/taxi)
•Hotel accommodation – $3,000 (2 rooms x 4 nights)
•Food & Incidentals – $2,100
Item 2
Attachment B - OCA -
FY2026 Annual Audit Plan
Item 2: Staff Report Pg. 37 Packet Pg. 46 of 413
19
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 below are incorporated into
this Task Order by this reference. The Consultant shall furnish the necessary facilities, professional,
technical and supporting personnel required by this Task Order as described below.
CONTRACT NO. C21179340
OR PURCHASE ORDER REQUISITION NO. (AS APPLICABLE)
1A. MASTER AGREEMENT NO. (MAY BE SAME AS CONTRACT / P.O. NO. ABOVE): C21179340
1B. TASK ORDER NO.: FY25-4.33
2. CONSULTANT NAME: Baker Tilly Advisory Group, LP
3. PERIOD OF PERFORMANCE: START: August 1, 2025 COMPLETION: March 31, 2026
4. TOTAL TASK ORDER PRICE: $57,165
BALANCE REMAINING IN MASTER AGREEMENT/CONTRACT TBD
5. BUDGET CODE_______________ COST CENTER________________ COST
ELEMENT______________ WBS/CIP__________ PHASE__________
6. CITY PROJECT MANAGER’S NAME & DEPARTMENT:
Lydia Kou, Chair of the City Council’s Policy and Services Committee
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): N/A
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: Baker Tilly Advisory Group,
LP
BY:____________________________________
Name __________________________________
Title___________________________________
Date ___________________________________
Item 2
Attachment B - OCA -
FY2026 Annual Audit Plan
Item 2: Staff Report Pg. 38 Packet Pg. 47 of 413
20
Attachment A
Introduction
•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)
Services & Deliverables
•Step 1: Audit Planning
•Step 2: Fieldwork and Testing
•Step 3: Reporting
Step 1 – Assessment Planning
•Gather information to understand the environment under review
o Understand the environment under assessment
o Assess the City code, regulations, and other standards and expectations
o Assess prior audit results, as applicable
o Assess additional documentation and conduct interviews as necessary
•Prepare an assessment program
o Refine assessment objectives and scope
o Identify the procedures to be performed and the evidence to be obtained and examined
•Announce the initiation of the assessment and kick-off meeting with key stakeholders
o Discuss assessment objectives, scope, audit process, timing, resources, and expectations
o Discuss documentation and interview requests for the audit
Step 2 – Fieldwork and Testing
•Interviewing the appropriate individuals to gain an understanding of the organizational structures,
processes, and controls related to soliciting consulting services and understand outcomes
•Assess challenges the City has experienced with consulting services
•Review best practices and provide recommendation frameworks related to determining when to
engage consulting services vs. keeping services “in house” and project management practices to
optimize consulting project deliverables and results.
Item 2
Attachment B - OCA -
FY2026 Annual Audit Plan
Item 2: Staff Report Pg. 39 Packet Pg. 48 of 413
21
Step 3 – Reporting
In Step 3, the project team will perform tasks necessary to finalize assessment working papers, prepare and
review a draft report with stakeholders, and submit a final report for management response. Tasks include:
•Developing observations and recommendations based on the supporting evidence gathered
•Validating observations with appropriate individuals
•Complete supervisory review of working papers and a draft audit report
•Distribute a draft assessment report and conduct a closing meeting with key stakeholders
o Discuss the observations and recommendations
o Discuss management responses
•Obtain written management responses if appropriate and finalize a report
•Review report with members of City Council and/or the appropriate Council Committee
Deliverables:
The following deliverables will be prepared as part of this engagement:
•Assessment Report
•Policy & Services Committee Assessment Report Presentation
Schedule of Performance
Anticipated Start Date: August 1, 2025
Anticipated End Date: March 31, 2026
Maximum Compensation Amount and Rate Schedule
The not-to-exceed maximum, inclusive of reimbursable expenses (as summarized below) for this Task is $29,440.
The not-to-exceed budget is based on an estimate of 345 total project hours, of which a minimum of 20 are
estimated to be completed by the City Auditor.
Reimbursable Expenses
We plan to complete all work remotely including all interviews and documentation review. However, during the
planning and fieldwork phases of this audit, the City and Baker Tilly may mutually determine it will be beneficial to
perform a portion of the work on-site. Given this possibility, Baker Tilly could incur expenses for this Task.
The not-to-exceed maximum for reimbursable expenses for this Task is $6,500.
The following summarizes anticipated reimbursable expenses:
•Round-trip Airfare – $2,000 (1 round trip flight x 2 auditors)
•Ground transportation – $800 (car rental or Uber/taxi)
•Hotel accommodation – $3,000 (2 rooms x 4 nights)
•Food & Incidentals – $2,100
Item 2
Attachment B - OCA -
FY2026 Annual Audit Plan
Item 2: Staff Report Pg. 40 Packet Pg. 49 of 413
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 below are incorporated into
this Task Order by this reference. The Consultant shall furnish the necessary facilities, professional,
technical and supporting personnel required by this Task Order as described below.
CONTRACT NO. C21179340
OR PURCHASE ORDER REQUISITION NO. (AS APPLICABLE)
1A. MASTER AGREEMENT NO. (MAY BE SAME AS CONTRACT / P.O. NO. ABOVE): C21179340
1B. TASK ORDER NO.: FY25-4.33
2. CONSULTANT NAME: Baker Tilly Advisory Group, LP
3. PERIOD OF PERFORMANCE: START: August 1, 2025 COMPLETION: February 28, 2026
4. TOTAL TASK ORDER PRICE: $54,165
BALANCE REMAINING IN MASTER AGREEMENT/CONTRACT TBD
5. BUDGET CODE_______________ COST CENTER________________ COST
ELEMENT______________ WBS/CIP__________ PHASE__________
6. CITY PROJECT MANAGER’S NAME & DEPARTMENT:
Lydia Kou, Chair of the City Council’s Policy and Services Committee
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): N/A
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: Baker Tilly Advisory Group,
LP
BY:____________________________________
Name __________________________________
Title___________________________________
Date ___________________________________
Item 2
Attachment B - OCA -
FY2026 Annual Audit Plan
Item 2: Staff Report Pg. 41 Packet Pg. 50 of 413
23
Attachment A
Introduction
•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)
Services & Deliverables
•Step 1: Audit Planning
•Step 2: Fieldwork and Testing
•Step 3: Reporting
Step 1 – Assessment Planning
•Gather information to understand the environment under review
o Understand the environment under assessment
o Assess the City code, regulations, and other standards and expectations
o Assess prior audit results, as applicable
o Assess additional documentation and conduct interviews as necessary
•Prepare an assessment program
o Refine assessment objectives and scope
o Identify the procedures to be performed and the evidence to be obtained and examined
•Announce the initiation of the assessment and kick-off meeting with key stakeholders
o Discuss assessment objectives, scope, audit process, timing, resources, and expectations
o Discuss documentation and interview requests for the audit
Step 2 – Fieldwork and Testing
•Interviewing the appropriate individuals to gain an understanding of current thresholds and
authority levels
•Conduct a benchmarking study to determine thresholds in similar sized cities
•Assess best practices in establishing thresholds
Item 2
Attachment B - OCA -
FY2026 Annual Audit Plan
Item 2: Staff Report Pg. 42 Packet Pg. 51 of 413
24
Step 3 – Reporting
In Step 3, the project team will perform tasks necessary to finalize assessment working papers, prepare and
review a draft report with stakeholders, and submit a final report for management response. Tasks include:
•Developing observations and recommendations based on the supporting evidence gathered
•Validating observations with appropriate individuals
•Complete supervisory review of working papers and a draft audit report
•Distribute a draft assessment report and conduct a closing meeting with key stakeholders
o Discuss the observations and recommendations
o Discuss management responses
•Obtain written management responses if appropriate and finalize a report
•Review report with members of City Council and/or the appropriate Council Committee
Deliverables:
The following deliverables will be prepared as part of this engagement:
•Assessment Report
•Policy & Services Committee Assessment Report Presentation
Schedule of Performance
Anticipated Start Date: August 1, 2025
Anticipated End Date: March 31, 2026
Maximum Compensation Amount and Rate Schedule
The not-to-exceed maximum, inclusive of reimbursable expenses (as summarized below) for this Task is $54,165.
The not-to-exceed budget is based on an estimate of 285 total project hours, of which a minimum of 30 are
estimated to be completed by the City Auditor.
Reimbursable Expenses
We plan to complete all work remote including all interviews and documentation review. However, during the
planning and fieldwork phases of this audit, the City and Baker Tilly may mutually determine it will be beneficial to
perform a portion of the work on-site. Given this possibility, Baker Tilly could incur expenses for this Task.
The not-to-exceed maximum for reimbursable expenses for this Task is $6,500.
The following summarizes anticipated reimbursable expenses:
•Round-trip Airfare – $2,000 (1 round trip flight x 2 auditors)
•Ground transportation – $800 (car rental or Uber/taxi)
•Hotel accommodation – $3,000 (2 rooms x 4 nights)
•Food & Incidentals – $2,100
Item 2
Attachment B - OCA -
FY2026 Annual Audit Plan
Item 2: Staff Report Pg. 43 Packet Pg. 52 of 413
25
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 below are incorporated into
this Task Order by this reference. The Consultant shall furnish the necessary facilities, professional,
technical and supporting personnel required by this Task Order as described below.
CONTRACT NO. C21179340
OR PURCHASE ORDER REQUISITION NO. (AS APPLICABLE)
1A. MASTER AGREEMENT NO. (MAY BE SAME AS CONTRACT / P.O. NO. ABOVE): C21179340
1B. TASK ORDER NO.: FY25-4.34
2. CONSULTANT NAME: Baker Tilly Advisory Group, LP
3. PERIOD OF PERFORMANCE: START: July 1, 2025 COMPLETION: June 30, 2026
4. TOTAL TASK ORDER PRICE: $59,390
BALANCE REMAINING IN MASTER AGREEMENT/CONTRACT TBD
5. BUDGET CODE_______________ COST CENTER________________ COST
ELEMENT______________ WBS/CIP__________ PHASE__________
6. CITY PROJECT MANAGER’S NAME & DEPARTMENT:
Lydia Kou, Chair of the City Council’s Policy and Services Committee
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): N/A
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: Baker Tilly Advisory Group,
LP
BY:____________________________________
Name __________________________________
Title___________________________________
Date ___________________________________
Item 2
Attachment B - OCA -
FY2026 Annual Audit Plan
Item 2: Staff Report Pg. 44 Packet Pg. 53 of 413
26
Attachment A
Introduction
•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)
Services & Deliverables
•Track and monitor progress on all audit recommendations
•Obtain sufficient evidence to support conclusions regarding the status of audit recommendations
•Annually report on the status of recommendations
Deliverables:
•Annual Status of Audit Recommendations Report
•Policy & Services Committee Report Presentation
Schedule of Performance
Maximum Compensation Amount and Rate Schedule
Item 2
Attachment B - OCA -
FY2026 Annual Audit Plan
Item 2: Staff Report Pg. 45 Packet Pg. 54 of 413
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5
1
5
City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Public Works
Meeting Date: June 17, 2025
Report #:2506-4785
TITLE
Climate Action and Sustainability Committee Recommendation to Council to Direct Staff to
Develop an Affordable Multi-Family Housing Electrification Grant Program and to Approve a
Budget Amendment in the Gas Utility Funds; CEQA Status: Under CEQA Guidelines section
15183, projects consistent with an existing general or comprehensive plan do not require
additional CEQA review
RECOMMENDATION
Staff and the Climate Action and Sustainability Committee recommend that the City Council:
1. Direct staff to develop a program to provide incentives for electrification of dedicated
affordable multi-family housing central and in-unit gas equipment;
2. Direct staff to explore including a provider cost-share contribution in the program;
3. Authorize staff to use up to $6.6 million in Gas Utility Cap and Trade Revenues for the
program, and
4. Amend the FY 2026 Budget Appropriation (requires a 2/3 vote) for the Gas Utility Funds:
a. Increase Gas Resource Management Operating Expenses for Contract Services by
$6.6 million; and
b. Decrease the Cap and Trade Reserve by $6.6 million.
EXECUTIVE SUMMARY
This action would enact an affordable housing electrification retrofit pilot program with the
objective of helping local affordable housing providers take advantage of State and Federal
incentive programs. This program has been on an accelerated timeline as these programs have
limited budgets, have expressed great demand and need, and critical Federal funding support is
uncertain so timing of the City support program is important.
The proposed budget for the program is $6.6 million, funded from the Gas Cap and Trade
Reserves. The program budget will not directly impact utility rates or the General Fund budget,
but will indirectly affect both by facilitating the conversion of gas equipment to electricity. The
Item 3
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7
5
1
5
Climate Action and Sustainability Committee also unanimously recommended that the City
Council direct staff to explore including a provider cost-share contribution in the program. The
program will have the capacity to electrify central heating or water heating systems serving up
to 500 units (about 20% of Palo Alto affordable housing units) and equipment in up to 275
individual units (about 10% of Palo Alto affordable housing units). In addition, this program will
have the capacity to save about 800 to 1,000 metric tons of carbon-dioxide equivalent (MT CO2-
e) per year, comparable to the emissions savings of the Advanced Heat Pump Water Heater
Pilot Program’s capacity.
BACKGROUND
1,
299 below market rate (BMR) rental units in market-rate rental complexes, and 265 BMR
ownership units in 48 market-rate condo developments. 2023-2025 S/CAP Work Plan work
items 2.1(I) (Affordable Housing EV Charging and Electrification Pilot) and 2.1(K) (Multi-family
and Affordable Housing Electrification and EV Charger Access Strategy Development) both focus
on piloting scalable strategies for electrifying these units and providing EV charging. In addition,
work item 4.A (Multi-Family and Commercial End Use Study) focuses on doing studies to
identify opportunities for electrifying equipment in multi-family buildings.
1 23 managed by Alta Housing, three by Front Porch, two by Eden, two by MidPen Housing, two by Abode, one by
Bridge Housing, as well as Stevenson House, Terman Apartments, the Moldaw Residences, and the HomeKey
transitional housing project still under development
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electrification opportunities (along with other studies).2 The study is nearly complete and will
be ready for Council review once the final report is written. Over the course of the study
Willdan visited several multi-family buildings, including buildings managed by three different
affordable housing providers who between them manage most of Palo Alto's dedicated
affordable housing (27 properties out of 37 total). Staff consulted a fourth provider for data
from a study they did on their own. The studies identified aging equipment representing good
opportunities for building electrification in six buildings with 428 units of affordable housing in
them. Equipment nearing end of life across all six surveyed properties included six central water
heaters, one central space heater, as many as 240 in-unit space heaters, and a central kitchen.
The providers are ready or close to ready to replace the equipment and eager to electrify it,
providing a unique opportunity to electrify equipment serving about 20% of the dedicated
affordable units in Palo Alto. Some of these replacements could be showcase projects for which
the provider and the City could submit for awards, allowing the community to demonstrate that
fully electrified affordable housing is an attainable goal.
ANALYSIS
•The Home Energy Efficiency Retrofits and Residential Assistance (HEEHRA) program
offers rebates of up to $14,000 per household, covering up to 100% of electrification
costs for low- and moderate-income households, including heat pumps, electric panel
upgrades, and energy-efficient appliances (note that project costs tend to exceed the
incentive cap). The program is funded by the Inflation Reduction Act, and California’s
share of the funding that has been allocated specifically for multi-family housing is $35
million. Initial interest in the program is high, which may result in limits on per-project
or per-provider incentives that can be received. This program is unlikely to be available
in the near term or at all, however, due to Federal funding currently being withheld.
•The State has allocated over $120 million to the Low-Income Weatherization Program
(LIWP) Multi-Family Program since State Fiscal Year 2014/2015,3 providing incentives on
a $/MT CO2-e basis for energy efficiency and solar photovoltaic systems, and
electrification upgrades, focusing on reducing energy costs for low-income individuals
and greenhouse gas emissions.
2 Staff Report 2308-1939, https://www.cityofpaloalto.org/files/assets/public/v/1/administrative-services/budget-
adjustments-and-monitoring/fy-2024-budget-adjustments/january/january-18-ccm-item-4.pdf
3 Low Income Weatherization Program Guidelines, State Dept of Community Services & Development, June 8,
2022. https://www.csd.ca.gov/Shared%20Documents/LIWP-2022-Multi-Family-2.0-Final-Program-Guidelines.pdf
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•The Technology and Equipment for Clean Heating (TECH) multifamily program has
offered incentives of up to $1,200 per unit in the past for multi-family central water
heating. Renewed funding and adjustments to incentive levels are expected to be
announced soon.4
While the above programs provide significant incentives, electrification projects are costly and
most housing providers will need local matching funds to be able to take advantage of the State
and Federal programs, particularly for in-unit improvements. Assuming that these incentive
funds remain available, staff believes affordable housing providers in Palo Alto may be eligible
to receive nearly $7 million in State and Federal incentives for these projects, based on the
equipment to be electrified and the incentive program rules, though over half of that is Federal
funds unlikely to be delivered. However, these projects are estimated to cost over $10 million
(of which an estimated $6.5 million would be related to in-unit measures). Costs average about
$10,400 per unit for projects focused primarily on central systems and $34,500 for projects that
include in-unit heating electrification as well. This implies a need for at least $3.7 million in local
incentives to cover 100% of known project costs, likely closer to $6 million without Federal
funding.
Other providers, aside from those who participated in the Willdan study, may also wish to
apply, which would necessitate an increased budget to support those projects as well. Staff is
proposing a budget of $6.6 million; $2.5 million for central system incentives and $4.1 million
for in-unit + central incentives. This provides adequate funding for 500 units of central heating
incentives plus 275 units of in-unit incentives, assuming the City will provide incentives of up to
$7000 per unit for projects involving central systems only and an additional $15000 per unit
when both central and in-unit electrification measures are included. These incentives would
only be available after the provider has applied for all State and Federal incentives and would
only cover any residual cost. Staff proposes funding these incentives from the Electric Utility
Public Benefits reserves and Gas Cap and Trade reserves as described in the “Fiscal Impact”
section below.
In practice, the program budget might not be used completely. As noted above, if estimated
State and Federal incentives were received, the known electrification projects would require $6
million in local incentives. However, logistical challenges may prevent some projects from
proceeding. In some cases project costs may come in lower or higher than expected. Staff could
report back to Council in late 2025, once State and Federal incentive allocations are known and
projects are underway, and unused budget could be returned to reserves.
Another factor is the potential provider contribution, which the Climate Action and
Sustainability Committee (Committee) recommended the City Council direct staff to explore.
This would involve requiring a funding contribution from providers (a cost share) representing
4 Technology and Equipment for Clean Heating
https://techcleanca.com/documents/3829/Multifamily_Incentives_for_Heat_Pump_Water_Heaters_240102.pdf
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the cost of like for like replacement. Replacing equipment at end of life would normally be a
provider’s responsibility. Staff could determine the funding contribution required for each
project to electrify by having a building consultant calculate a cost estimate for a like for like gas
replacement, with the option for the affordable housing vendor to provide actual contractor
quotes as an alternative.
The budget for the program could be reduced using this approach, but the exact amount of
reduction is difficult to estimate without having actual quotes for like for like gas replacements.
Willdan performed a rough analysis of one property that estimated like for like replacement
costs at 20% of the cost of central water heating and 40% of the cost of in-unit space heating.
This analysis relied on average costs in the Bay Area for gas equipment replacement and likely
did not include some project-specific additional costs that would be incurred. Based on those
numbers, the maximum provider contribution could reach up to $1.9 million, or $460,000 if
only a central equipment program is considered. But these numbers are very uncertain and will
depend on actual project design and quotes, and a lower provider contribution may be needed
to avoid deterring participants who have not yet accumulated the capital to pay for their
contribution.
Staff is only aware of one other program providing similar grants, the Silicon Valley Clean
Energy (SVCE) Multifamily Retrofit program, which provides direct install services for affordable
housing owners or up to $450,000 in grants to affordable housing owners who hire their own
contractors. The program budget is about $12 million. Sacramento Municipal Utility District
(SMUD) provides multifamily building electrification rebates in the range of $1000 to $2000 per
unit served. Other multifamily services in PG&E territory focus primarily on energy efficiency.
Committee Review
On March 21, 2025, the Committee considered the staff proposal and budgets for a set of
potential alternatives5 that included:
•A grant program with no provider contribution
•Starting with a smaller budget and increasing if necessary
•Requiring a provider contribution, or
•A smaller grant program only covering central equipment.
Variations on these themes were also presented, including the possibility of loans rather than
grants for the provider contribution. The Committee recommended that that Council approve
the staff proposal with the recommended direction that staff consider a provider contribution
at a size that would not deter potential participants.
5 For more detail, see Staff Report 2503-4392
https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=46204&dbid=0&repo=PaloAlto Climate Action and
Sustainability Committee, March 21, 2025, Recommendation to Council to Direct Staff to Develop an Affordable
Multi-Family Housing Electrification Grant Program and to Approve a Budget Amendment in the Gas Utility Funds
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Comments and questions from the Committee included:
•Questions aimed at demonstrating the public purpose return on investment for the
program, that is, how many metric tons of emissions reduction would be obtained at
what cost, how that compared to other programs, and the overall impact of the
program. Staff explained how the program had a scale of impact and cost-effectiveness
comparable to the 1000-unit Advanced Heat Pump Water Heater Program in those
terms.
•Questions about the regulations governing the use of Cap and Trade funds, a
clarification that transformer upgrades and induction cooktops would be eligible aspects
of the grant funding, and whether parts of the gas system would be retired as a result
(staff did not see obvious opportunities to do so from these projects).
•Explorations of possible additional funding sources, including philanthropy and
rehabilitation grants, as well as the potential alternatives and the idea of a provider
contribution, which ultimately settled on this report’s recommendations.
FISCAL/RESOURCE IMPACT
The staff recommendation would be implemented using existing staff, but would increase
program spending by up to $6.6 million, funded by the Gas Cap and Trade reserves. Those
reserves are currently at $13.5 million, with projected annual revenues of $3 million to $4
million per year as authorized through 2030. This spending would not directly impact gas rates.
The use of Gas Cap and Trade revenues is governed by Title 17 California Code of Regulations
Section 95893(d), which requires that it be used for the primary benefit of retail natural gas
ratepayers, subject to any limitations imposed by Council, and must be used for:
•Energy efficiency, including energy efficiency equipment rebates, building retrofits and
other projects that reduce energy demand;
•GHG emissions reducing activities, which include projects to reduce gas leaks that are
not mandated by federal, state or local health and safety requirements;
•Non-volumetric return to some or all ratepayers in the form of a climate credit;
•Administrative and outreach costs and educational programs.
The Council adopted a policy on the use of Gas Cap and Trade Revenue on January 26, 2015
(Resolution 5397) and updated it October 3, 2022 (Resolution 10077),6 which stated that:
The following uses of the City’s auction proceeds from the sale of Allocated Allowances are
permitted, with a preference that greenhouse gas reduction measures be pursued before
providing rebates:
a.Investment in energy efficiency programs for the natural gas portfolio and retail customers;
b.Purchases or investment in cost effective renewable bio-gas resources for the gas portfolio;
c.Fuel switching from natural gas to electricity that reduces greenhouse gas emissions;
6 Resolution 10077 https://recordsportal.paloalto.gov/Weblink/DocView.aspx?id=61567
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d. Investment in other carbon reduction activities for the natural gas utility, including system
maintenance or replacement to reduce fugitive gas emissions;
e.Rebates to natural gas retail ratepayers. Rebates, if provided, must be allocated on a non-
volumetric basis as stated in Title 17 CCR Section 95893 (d)(3).
STAKEHOLDER ENGAGEMENT
Affordable housing electrification has been discussed extensively as part of the stakeholder
engagement for the S/CAP as a whole, and during adoption of the 2023-2025 S/CAP Work Plan,
but this program has not received any stakeholder engagement due to the rapid turnaround
needed to avoid missing out on access to State and Federal incentives. In developing this
program staff consulted with various affordable housing providers to understand their needs
and relied on studies performed by Willdan of various properties.
ENVIRONMENTAL REVIEW
Potential environmental impacts of an affordable housing building electrification pilot program
were analyzed as part of the Sustainability and Climate Action Plan (S/CAP) Addendum to the
Comprehensive Plan Environmental Impact Report. On June 5, 2023 (Staff Report #2303-1158)
Council certified the Addendum, which found that the S/CAP programs would not result in any
significant or substantially more severe effects beyond what was previously analyzed in the
Comprehensive Plan EIR. Under CEQA Guidelines section 15183, projects consistent with an
existing general or comprehensive plan do not require additional CEQA review.
ATTACHMENTS
None.
APPROVED BY:
Brad Eggleston, Director Public Works/City Engineer
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City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Planning and Development Services
Meeting Date: June 17, 2025
Report #:2504-4487
TITLE
Adopt a Resolution Declaring Surface Parking Lot T (APN: 120-15-100) Exempt Surplus Land and
Approve an Exclusive Negotiation Agreement with Alta Housing for Development of 100%
Affordable Housing on City-Owned Property Located at the Corner of Kipling Street and Lytton
Avenue in Downtown Palo Alto; CEQA Status – Not a Project.
RECOMMENDATION
Staff recommends that the City Council:
1. Adopt a Resolution (Attachment A) declaring the City-owned property located at the
corner of Kipling Street and Lytton Avenue ("Lot T") as Exempt Surplus Land pursuant to
Government Code Section 54221(f)(1)(A) and 54221(f)(1)(B); and
2. Approve and authorize the City Manager or their designee to execute an Exclusive
Negotiation Agreement (ENA) with Alta Housing (Attachment B) to develop 100%
affordable housing on Lot T.
BACKGROUND
Implementation Program 1.4 of the City’s 2023–2031 Housing Element identifies
redevelopment of City-owned surface parking lots for 100% affordable housing projects,
prioritizing opportunities to incorporate replacement public parking and housing serving
households earning up to 80% of Area Median Income (AMI) or designated workforce housing
for City and school district employees.
In 2022 and 2023, the City conducted a Request for Information (RFI) process identifying Lot T
as a preferred site for implementation of Program 1.4. In 2024, the City Council adopted
Priority ED&T 8, which directed staff to pursue refined proposals for Lot T. Following a Request
for Refined Proposals issued in September 2024, the Council on January 21, 2025, directed staff
to prepare an ENA with Alta Housing for Council action to advance predevelopment work.
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ANALYSIS
Surplus Land Act Compliance
Before a local government agency may sell or enter into a long-term lease of land for
development, the Surplus Land Act (California Government Code Sections 54220–54234)
requires agencies to follow certain notice procedures to make the land available for the
development of affordable housing. Under certain circumstances, an agency may declare the
land "exempt surplus" in which case the notice procedures do not apply. Two such
circumstances exist for Lot T.
First, and perhaps most obvious, under Government Code 54221(f)(1)(A), surplus land may be
declared exempt if it will be transferred for the purpose of developing affordable housing.
Under the proposed Exclusive Negotiating Agreement, Alta will design, and submit for the City’s
planning approval, a proposal to develop Lot with 100% affordable housing, which will be deed
restricted to preserve affordability to extremely low, very low, and low-income households, for
a term no shorter than 30 years. Therefore Lot T qualifies for an exemption on this basis.
Second, under Government Code 54221(f)(1)(B), surplus land may be declared exempt if it is
smaller than one-half acre (21,780 square feet) in area, and is not adjacent to publicly-owned
land used for open space or affordability housing purposes. According to City records, Lot T is
approximately 19,236 square feet in area and the adjacent properties are privately owned and
used for commercial purposes. Therefore, Lot T separately qualifies for an exemption on this
basis.
These findings are included in the Resolution (Attachment A). City staff received technical
assistance from HCD in preparing the Resolution, and once adopted, the Resolution will be
transmitted to the California Department of Housing and Community Development (HCD) as
required by Government Code Section 54222.3.
Exclusive Negotiation Agreement with Alta Housing
The ENA formalizes the City’s partnership with Alta Housing and outlines the framework for
negotiating a long-term ground lease, project financing terms, regulatory agreements, and
other documents necessary to support project development. The ENA:
•Does not entitle or approve a specific development project;
•Requires good faith negotiations toward a Disposition and Development Agreement
(DDA) for a project that satisfies the affordability requirements of the Surplus Land Act
and other direction that may be provided by the Council during the term of the ENA;
•Sets a timeline and terms for predevelopment due diligence and community
engagement;
•Establishes roles, responsibilities, and deliverables during the ENA term;
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•Allows Alta Housing to request reimbursement of actual costs incurred, not to exceed
$200,000, if the City does not proceed with the Lot T project.
The ENA was prepared by the City Attorney’s Office and negotiated with Alta Housing and
reflects typical provisions used in similar public-private affordable housing projects.
FISCAL/RESOURCE IMPACT
Approval of the ENA and declaration of exempt surplus status do not have a fiscal impact as
work associated with these efforts is already accounted for in department budgets. Should the
City cancel the project, staff will return to Council at a future date to request the necessary
appropriation from the Housing In Lieu Residential Fund to reimburse Alta Housing. Future
agreements, including the DDA and potential funding commitments for the ultimate
development of the parcel, will have fiscal implications and will be presented to Council for
review and approval.
STAKEHOLDER ENGAGEMENT
The proposed ENA and exemption resolution were publicly noticed as part of the June 16, 2025
City Council agenda. Prior engagement activities included:
•Issuance of a Request for Refined Proposals in 2024;
•Council review of refined proposals and direction to staff to prepare the subject ENA in
January 2025;
•Housing Element community meetings and discussions identifying Lot T as a City-owned
site suitable for affordable housing.
Additional engagement is anticipated during the ENA term and future project review process.
ENVIRONMENTAL REVIEW
Approval of the ENA and exemption resolution is not a project subject to environmental review
under the California Environmental Quality Act (CEQA) per CEQA Guidelines Section
15378(b)(2). Any future development of Lot T will require CEQA review prior to entitlement.
ATTACHMENTS
Attachment A: Draft Resolution Declaring Lot T as Exempt Surplus Land
Attachment B: Exclusive Negotiation Agreement with Alta Housing
APPROVED BY:
Jonathan Lait, Planning and Development Services Director
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Resolution No. _______
Resolution of the Council of the City of Palo Alto Declaring Property Known as Lot T (APN 120-15-100)
Exempt Surplus Land under the Surplus Land Act (Government Code 54220 et. seq)
RECITALS
The City of Palo Alto (“City”) is the owner in fee simple of that certain real property approximately
19,236 square feet in size and situated at the corner of Lytton Avenue and Kipling Street in Palo Alto, CA
(“Lot T Property”), APN 120-15-100.
The parcels adjacent to the Lot T Property are privately-owned and are not currently used as open
space, or for low- or moderate-income housing purposes.
The Lot T property was acquired through City of Palo Alto Parking Assessment District Project 75-63,
which proceedings were conducted through the Special Assessment Investigation, Limitation, and
Majority Protest Act of 1931 and Sections 13.12.040 and 13.12.050 of Title 13 of the Palo Alto Municipal
Code.
Since being acquired by the City, the Lot T property has been constructed and used as a surface parking
lot with approximately 52 parking spaces.
Subdivision (g) of Section 13.12.050 of the Palo Alto Municipal Code provides that the Council may lease
one or more parking spaces and facilities, when, its opinion, the public interest and economy will be
served thereby.
Cities across California are facing a severe housing shortage. The housing shortage is particularly acute in
the San Francisco Bay Area region, where the demand for housing—specifically affordable housing—
vastly exceeds the available supply.
The City’s 2023-2031 Housing Element seeks to develop significant additional housing in the City’s
downtown area to meet its Regional Housing Needs Allocation targets.
Program 1.4 of the City’s 2023-2031 Housing Element contemplates increasing the City’s affordable
housing stock through redevelopment of City-owned surface parking lots with a stated objective of
providing replacement public parking and 100% affordable housing units serving households earning up
to 80% of the Area Median Income or for workforce housing for City employees and Palo Alto Unified
School District employees.
In furtherance of Housing Element Program 1.4, the City has identified the Lot T Property for
redevelopment with affordable housing.
In January 2023, City staff issued a Request for Information seeking development concepts for
affordable housing and public parking structures on one or more of the City’s twelve surface parking lots
in the downtown and received submittals from two firms, Alta Housing and MidPen Housing.
In December 2023, the Council directed City staff to solicit refined proposals that focused on
redeveloping the Lot T Property with 100% affordable housing.
In September 2024, City staff issued a Request for Refined Proposals for an affordable housing
development on the Lot T Property from Alta Housing and MidPen Housing.
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Attachment A - Draft
Resolution Declaring Lot T
as Exempt Surplus Land
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On December 2, 2024, the Council approved a contract for design, environmental review, and
construction administration services for a new downtown parking garage on a City-owned surface
parking lot situated at the corner of Hamilton Avenue and Waverley Street (Lot D Garage Project). The
Lot D Garage Project is intended to provide the replacement public parking contemplated by, and in
furtherance of, Housing Element Program 1.4.
On January 21, 2025 the Council selected Alta Housing as its preferred development partner and
provided preliminary direction on key project components, including the provision of parking, maximum
building height, and the number, composition, and affordability levels of the housing units.
On April 14, 2025, the Council reviewed design options for the Lot D Garage Project and directed City
staff to proceed with design on a six-level structure that would provide approximately 274 parking
spaces.
On June 16, 2025, the City and Alta Housing entered into an exclusive negotiating agreement to provide
Alta Housing the exclusive right to, for a limited term, to design and submit a planning application for an
affordable housing development on the Lot T that meets the requirements Housing Element Program
1.4 and the development and affordability requirements of Government Code 54221(f)(1)(A).
The Surplus Land Act, Government Code sections 54220 et seq., imposes certain procedural
requirements when a local agency “disposes” of “surplus land,” as those terms are defined in
Government Code section 54221, to promote affordable housing development on unused or
underutilized public land throughout the State to respond to the affordable housing crisis.
The Surplus Land Act requires public agencies, including charter cities, to follow certain procedures to
dispose of “surplus land” or declare land to be “exempt surplus land” at a public hearing prior to
disposition.
NOW, THEREFORE, the Council of the City of Palo Alto RESOLVES as follows:
SECTION 1. The recitals above are true and correct and are incorporated by this reference as findings of
fact by the Council.
SECTION 2. Consistent with subdivision (g) of Section 13.12.050 of the Palo Alto Municipal code, the
Council finds that the public interest and economy will be served by entering into a long-term ground
lease of the Lot T Property. Such lease will facilitate the development of the Lot T property with
affordable housing and provide below market rate housing opportunities for individuals and families in a
desirable area of the city, consistent with Program 1.4 of the City’s 2023-2031 Housing Element. The
Council further finds that new residential development in downtown will increase the number of
potential employees and customers to work in and patronize the shops, services, and restaurants. The
Council further finds that the construction of the Lot D Garage Project will adequately replace the public
parking currently provided on the Lot T property.
SECTION 3. The Council finds and declares the Lot T property is exempt surplus land as defined by
Government Code section 54221(f)(1)(B) in that the Lot T property is less than one-half acre in area, and
is not contiguous to land owned by a state or local agency that is used for open-space or low- and
moderate-income housing purposes.
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Attachment A - Draft
Resolution Declaring Lot T
as Exempt Surplus Land
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SECTION 3. Alternatively, the Council finds and declares the Lot T property is also exempt surplus land as
defined by Government Code section 54221(f)(1)(A) because the Lot T property will be developed to
provide 100% affordable housing; and the housing units will be deed-restricted to remain continually
affordable for the time required, and at the affordability levels, required by Government Code section
37364.
SECTION 4. The Council finds and declares that its determination that the Lot T property is exempt
surplus land is not a “project” as defined by the California Environmental Quality Act (CEQA) because
this determination does not authorize any disposition or entitle development of the property and is
therefore an administrative activity that will not result in direct or indirect physical changes in the
environment. CEQA Guidelines Section 15378(b)(4).
INTRODUCED AND PASSED: June ___, 2025
AYES:
NOES:
ABSENT:
ABSTENTIONS:
ATTEST:
City Clerk
APPROVED AS TO FORM:
Chief Assistant City Attorney
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Attachment A - Draft
Resolution Declaring Lot T
as Exempt Surplus Land
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EXCLUSIVE NEGOTIATION AGREEMENT FOR THE
DEVELOPMENT OF AFFORDABLE HOUSING ON LOT T
PROPERTY BY AND BETWEEN THE CITY OF PALO ALTO
AND ALTA HOUSING CORPORATION
This EXCLUSIVE NEGOTIATION AGREEMENT (ENA) is entered into by and between the City OF PALO
ALTO, a chartered municipal corporation (City) and ALTA HOUSING, a California nonprofit public benefit
corporation (Developer) under the terms and conditions set forth below. The City and Developer shall
collectively be referred to herein as the “Parties” and individually as “Party.”
RECITALS
Cities across California are facing a severe housing shortage. The housing shortage is particularly acute in
the San Francisco Bay Area region, where the demand for housing—specifically affordable housing—
vastly exceeds the available supply.
The City’s 2023-2031 Housing Element seeks to develop significant additional housing in the City’s
downtown area to meet its Regional Housing Needs Allocation targets.
Program 1.4 of the City’s 2023-2031 Housing Element contemplates increasing the City’s affordable
housing stock through redevelopment of City-owned surface parking lots with a stated objective of
providing replacement public parking and 100% affordable housing units serving households earning up
to 80% of the Area Median Income or for workforce housing for City employees and Palo Alto Unified
School District employees.
The City is the fee title owner of a surface parking lot, APN 120-15-100, situated at the corner of Lytton
Avenue and Kipling Street in Palo Alto, CA (Lot T Property).
In furtherance of Housing Element Program 1.4, the City has identified the Lot T Property for
redevelopment with affordable housing.
In January 2023, the City issued a Request for Information seeking development concepts for affordable
housing and public parking structures on one or more of the City’s twelve surface parking lots in the
downtown and received submittals from two firms, Alta Housing and MidPen Housing.
In December 2023, the City directed City staff to solicit refined proposals that focused on redeveloping
the Lot T Property with 100% affordable housing.
In September 2024, the City issued a Request for Refined Proposals for an affordable housing
development (Project) on the Lot T Property from Alta Housing and MidPen Housing.
On December 2, 2024, the City Council approved a contract for design, environmental review, and
construction administration services for a new downtown parking garage on a City-owned surface
parking lot situated at the corner of Hamilton Avenue and Waverley Street (Lot D Garage). The Lot D
Garage is intended to provide replacement public parking in furtherance of Housing Element Program
1.4.
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Attachment B - Exclusive
Negotiation Agreement
with Alta Housing
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On January 21, 2025 the Palo Alto City Council directed City staff to enter into an exclusive negotiating
agreement with Alta Housing and provided preliminary direction on key project components, namely
parking, building height, and the number and composition of housing units.
The City and Developer wish to negotiate and reach agreement on the terms and conditions for the
ground lease of the Lot T Property and a project to design, construct, operate, and maintain an
affordable housing development, all in furtherance of Housing Element Program 1.4.
The purpose of this ENA is to establish the procedures and desired outcomes for the Parties’ negotiation
of a ground lease, project agreement, project financing, regulatory agreements, and any ancillary
agreements necessary to design, construct, and operate the affordable housing development on the Lot
T Property.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing Recitals and the mutual covenants and
promises contained herein and for other valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the City and Developer mutually agree as follows:
ARTICLE 1. Negotiations
A. Agreement Term.
This agreement shall commence on the date on which the agreement is executed by the Parties
(“Effective Date”). If the agreement is executed in counterparts, the Effective Date shall be the later of
the dates indicated on either counterpart. Unless earlier terminated in accordance with Article 3,
Section D, the Parties shall exclusively negotiate with one another in good faith regarding the items set
forth in Article 2 for a period of One Year (“Term”), commencing on the Effective Date, or as such Term
may be extended pursuant to Article 1, Section D below. The Term of this agreement shall be tolled
during any period of time in which either Party’s is enjoined from performing its obligations by order of
a court with competent jurisdiction.
B. Good Faith Negotiations
During the Term, the Parties shall negotiate a proposed Disposition and Development Agreement
(“DDA”) for the Project. The DDA shall incorporate provisions from the Term Sheet attached hereto and
incorporated herein as “Exhibit A” (the “Term Sheet”), which will be subject to modification, the
addition of greater details regarding the proposed Project, and such other matters as the Parties shall
mutually agree, as set forth in Article 2 below. The Term Sheet is not intended to be binding on either
Party, but rather to a starting point for the negotiations anticipated herein.
The parties shall meet and confer with one another as is reasonably necessary to discharge their
respective obligations under this ENA.
C. Scope of Exclusivity
During the Term, the City shall not: (1) solicit, receive, entertain, negotiate with, or consider any offers
or solicitations from any person or entity other than from Developer, to acquire or lease all or any
portion of the Lot T Property; (2) propose or process any legislative or administrative actions,
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authorizations, or entitlements for any change of use of the Lot T Property from its present use other
than pursuant to this ENA; (3) conduct any public hearing to consider approve, or conditionally approve
any development of the Lot T Property other than pursuant to this ENA.
D. Extension of ENA Term by City
If this ENA has not been terminated in accordance with Article 3 Section D and Developer, as
determined by the Palo Alto City Manager (“City Manager”) in the exercise of his/her reasonable and
good faith discretion, is in substantial compliance with this ENA, and the Parties’ negotiation of the
items set forth in Article 2 have not been completed, the City Manager may approve an extension for up
to twelve (12) months.
E. Extension of ENA Term by Mutual Agreement of the Parties
If this ENA has not been terminated in accordance with Article 3 Section D and completion of the
Negotiation Tasks set forth in Article 2 is delayed, through no action or omission of Developer, then
Developer and the City Manager may mutually agree to an extension for a period no longer than twelve
(12) months. The Parties may agree to an extend this ENA under this Section separately from, or in
addition to, an extension granted by the City under Article 1 Section D above.
ARTICLE 2. Negotiation Tasks
A. Drafting of Disposition and Development Agreement (DDA)
The Parties will prepare a mutually acceptable DDA Term Sheet addressing and expanding upon each of
the issues identified in Term Sheet, including but not limited to the description, uses, configuration,
design, and timeline of a mutually acceptable Project.
The Parties shall agree upon a definition and timeline of key pre-development and development
milestones (e.g., design development drawings, entitlement submissions, etc.) that will form the basis of
Project progress in the DDA.
The Parties shall prepare a mutually acceptable DDA setting forth the terms and conditions upon which
Develop will lease the Lot T Property from the City consistent with the agreed upon DDA Term Sheet.
The Parties shall prepare mutually acceptable terms for property management and resident/supportive
services to be provided in connection with the Project.
B. Community Outreach and Engagement Plan
City and Developer will confer and jointly prepare a plan for community outreach and engagement
regarding the proposed Project.
C. Developer’s Obligations in Connection with Negotiation Tasks
Developer shall, at its sole cost and expense consistent with the proposed Project and the Term Sheet:
1. Retain such architects, engineers, market analysts, financial Developers, attorneys and
environmental consultant as are necessary to assist Developer in the discharge of its
responsibilities under this ENA.
2. During the Term, the Developer will prepare and submit the following to the City for
the DDA:
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a.A proposed draft DDA Term Sheet, which builds from the Term Sheet at
Exhibit A;
b.A market feasibility study for all aspects of the Project;
c.A proposed draft DDA based upon and consistent with the DDA Term Sheet;
d.A detailed pro forma showing the financial feasibility for all aspects of the
Project consistent with the proposed draft DDA; and
e.Such additional analysis, information, documents and reports for the City’s
review, processing, and approval as are requested by the City to enable the
City to comply with its obligations.
C. City’s Obligations in Connection with Negotiation Tasks
1.Comply with the City’s lead agency responsibilities, as applicable, under the California
Environmental Quality Act (“CEQA”), subject to reimbursement for any necessary
environmental review documents.
2.The City shall retain such architects, engineers, market analysts, financial Developers,
attorneys and environmental and planning Developers as are necessary to assist the
City in the discharge of its obligations under this ENA.
D. Due diligence
1.Due Diligence. Developer shall conduct, at its sole cost and expense, all due diligence
investigation in connection with its potential lease of the Lot T Property and its
suitability for development of the Project as Developer deems appropriate and
necessary in its absolute and sole discretion.
2.Within thirty (30) business days after the Effective Date, the City will provide copies of
all leases, agreements, covenants, tests, surveys, maps, plans, records, studies,
reports, operating statements, rent rolls, property records, documents, permits and
entitlements and materials, soils and hazardous materials reports and other relevant
documents pertaining to the Lot T Property, that are in City’s possession or reasonable
control. City will reasonably cooperate with Developer as required in connection with
all of Developer’s due diligence investigations, at Developer’s sole cost and expense,
and will timely provide Developer with all additional documents and other materials in
City’s possession or control reasonably requested by Developer.
3.During the term of this ENA, Developer and its representatives may, during normal
business hours and upon not less than one (1) business day prior notice (which may be
oral notice) to City, enter upon the Lot T Property to conduct such inspections,
investigations and tests of the Lot T Property (including, but not limited to geologic,
soil and water testing) as Developer deems appropriate in its sole and absolute
discretion. Prior to entering upon the the Lot T Property to conduct any invasive or
potentially destructive testing, including without limitation a Phase II environmental
survey or any testing or investigation that might disrupt or materially interfere with
City’s normal use of the Lot T Property or cause physical disturbance or damage to the
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Lot T Property or any buildings or infrastructure thereon, Developer shall obtain City’s
written approval of a written scope of work and protocol prepared by Developer for
conducting such invasive or potentially destructive testing. Developer shall conduct its
invasive or potentially destructive testing only in accordance with such approved
protocol. Upon the conclusion of Developer’s inspections, investigations and tests,
Developer shall promptly restore the Lot T Property to substantially the same
condition as it was in prior to such inspections, investigations and tests at Developer’s
sole cost and expense. Developer shall cause Developer’s inspections, investigations
and tests to be conducted (i) in a safe and professional manner, (ii) so as not to create
any dangerous or hazardous condition on or the Lot T Property, and (iii) in compliance
with all applicable laws and only after obtaining all permits required to be obtained
with respect to such activities. Developer shall have no obligation to repair any
problems or defects disclosed by Developer’s inspections, investigations and tests.
Upon City’s request thereof, Developer shall provide copies of all tests and reports
generated in connection with Developer’s investigation activities on the Lot T
Property, at no cost to City. Developer shall indemnify, hold harmless, and defend City,
its officers, employees and agents from and against any and all claims, demands, suits,
liabilities, losses, damages and payments, including reasonable attorney fees and court
costs, claimed or made against City, its officers, employees or agents resulting from or
arising out of Developer’s inspection activities on the Lot T Property, except to the
extent caused by City’s gross negligence or willful misconduct. Developer and
Developer’s contractors performing any work or conducting any investigations on the
Lot T Property, if any, shall obtain and maintain in full force and effect during the
Term, insurance consistent with the requirements in Attachment One to this ENA
which is incorporated herein by this reference.
E. Planning Approvals
The Parties acknowledges that the proposed Project will require the City’s approval of certain land use
or other discretionary approvals and/or other entitlements and permits (collectively, “Entitlements”).
Developer will be required to obtain any and all discretionary approvals and Entitlements for the
proposed Project.
Developer shall be responsible for submitting all planning applications and required information
required for Entitlements, including, but not limited to site plans, preliminary designs, building plans and
specifications for the proposed Project.
The Parties acknowledge and agree that: (1) nothing in this ENA shall obligate the City to approve any
Entitlement, approve the DDA, or sell or convey all or any part of the Property to Developer; (2) nothing
in this ENA shall obligate Developer to enter into the DDA, acquire, or lease all or any part of the
Property from the City, or develop all or any part of the Project.
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ARTICLE 3. General Terms and Conditions
A. Notices
Formal notices, demands and communications between the City and Developer shall be sufficiently
given if, and shall not be deemed given unless, dispatched by certified mail, postage prepaid, return
receipt requested, or sent by express delivery or overnight courier service, to the office of the Parties
shown as follows, or such other address as the Parties may designate in writing from time to time:
To City:
City of Palo Alto
250 Hamilton Avenue
Palo Alto, CA 94301
Attn: Ed Shikada, City Manager
With a Copy to:
Jonathan Lait, Director of Planning and Development Services
To Developer:
Alta Housing
3460 West Bayshore Road, Suite 104
Palo Alto, CA 94303
Attn: Randy Tsuda, President and CEO
Such formal notices, demands and communications shall be effective on the date shown on the delivery
receipt as the date delivered or the date on which delivery was refused. For purposes of obligations to
be performed by the City or of calculation of noticing under this Agreement, a business day on which the
City is closed will not constitute a business day under this Agreement.
B. Limited Right of Entry to Property
During the Term of this Agreement, Developer shall have the right to enter upon the Property for
purposes of fulfilling the terms, conditions, and obligations of this Agreement, including but not limited
to Developer’s due diligence tasks described in Article 2.
C. Defaults and Remedies
1. Default. If a Party defaults with regard to any of the provisions of this Agreement, then the non-
defaulting Party shall give formal notice of a default to the defaulting Party, specifying the
nature of the default and the required action to cure the default. If a default remains uncured
thirty (30) calendar days after receipt by the defaulting Party of such formal notice, the non-
defaulting Party may immediately exercise the remedies set forth in Paragraph 2, below. If such
default cannot reasonably be satisfactorily cured in such thirty-day (30-day) period, then,
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provided Developer has and continues to diligently pursue the cure, Developer shall have up to
such additional time as is reasonably necessary to cure, but in no event more than ninety (90)
days to cure, satisfactorily, the failure or material breach, as long as Developer has initiated the
cure of the same within such thirty-day (30-day) period and thereafter diligently prosecutes
such cure to completion.
2. Remedies. Neither Party would have agreed to any part of this ENA if it were to be liable to the
other Party for any amount of monetary damages. Accordingly, except for a default or breach of
Developer with respect to Developer’s indemnification, defense and hold harmless obligations
set forth in this ENA or any amendment thereto, for which the City shall have all remedies
available at law or in equity, the non-defaulting Party’s sole and exclusive remedy in the event of
an uncured default by the City or Developer shall be to terminate this Agreement or seek
specific performance of this ENA, as applicable. Following such termination, no Party shall have
any further duties, obligations, rights, or liabilities under this Agreement, except that
Developer’s indemnification, defense and hold harmless obligations set forth in this Agreement
shall survive such termination and be enforceable against Developer. The prevailing Party in any
action brought pursuant to this subsection shall also be entitled to an award of actually incurred
and reasonable attorney’s fees and costs.
3. No Liability. Except as expressly provided in Paragraphs 1 and 2, above, no Party shall have any
liability to any other Party for damages or otherwise for any default or breach, nor shall any
Party have any other claims with respect to performance under this Agreement. Each Party
specifically waives and releases any such rights or claims it may otherwise have at law or in
equity.
D. Termination
1. Failure of Good Faith Negotiations. Either Party may terminate this ENA at any time by formal
notice given in accordance with Section A above to the other Party in the event that the
terminating Party is in compliance with its obligations under the ENA and the Parties, after good
faith negotiations in accordance with this ENA, have been unable to agree on a mutually
acceptable Project and proposed DDA for processing by the City.
2. Termination after City Council Consideration. In the event this ENA is not otherwise terminated
pursuant to the provisions of this Section D, this ENA shall automatically be terminated at the
end of the Term, unless extended as otherwise provided herein, whether or not the parties
were able to successfully negotiate a proposed DDA for the Project. This ENA shall automatically
terminate after the City Council’s consideration and final actions regarding the proposed DDA
and the City’s Discretionary Actions, in which case this ENA shall be superseded by the City
Council’s final actions regarding the DDA and the City’s Discretionary Actions, whether approved
or denied by the City Council.
3. Developer’s Breach. In the event Developer materially breaches any of its obligations under this
ENA, then, provided the City is not in material breach of its obligations, the City Manager may
terminate this ENA provided the City has given Developer formal notice of the failure or material
breach and Developer has failed to cure such failure or material breach in the allowable period.
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4. Termination as a Result of Litigation. If the Parties mutually determine, in their reasonable
discretion, that City’s performance of its obligations under this ENA will be made impossible or
impracticable as a result of litigation initiated by a third party then either or both Parties may
terminate this Agreement upon 30 days' written notice. Such termination will be effective on
the date stated in the notice. Notwithstanding any provision in this ENA to the contrary,
Developer shall be entitled to reimbursement of its actual costs to the date of such termination
incurred in connection with its performance of its obligations under this ENA, which
reimbursement shall not exceed Two Hundred Thousand Dollars ($200,000.00). As used in this
paragraph, the phrase actual costs shall mean costs, including Developer staff time, and
expenses incurred and paid by Developer to third party architects, consultants, and engineers
hired by Developer for the performance of Negotiation Tasks from the effective date of this ENA
through the effective date of termination. Developer shall request reimbursement in writing and
provide an accounting of actual costs, along with any other supporting documentation
reasonably request by City. City shall use reasonable efforts to provide reimbursement in a
prompt manner, not to exceed ninety (90) days from the date of receipt of the reimbursement
request and supporting documentation. All of Developer’s work product, including but not
limited to designs, drawings, analyses, and applications for funding assistance, shall become the
sole property of City, and Developer agrees to execute all necessary documents to assign all
rights, title, and interest in such work product to City.
E. Assignment
Developer understands the City is entering into this Agreement based on the experience and
qualifications of Developer and of the key individuals representing or employed by Developer as of the
date of this Agreement. Therefore, Developer will not assign, sell, or otherwise transfer any or all of its
rights under this Agreement, or interest herein, without the prior written approval of the City, which
approval may be withheld in the City’s sole and absolute discretion. Further, no voluntary or involuntary
successor in interest of Developer will acquire any rights or powers under this Agreement except as
expressly set forth herein. For the reasons cited herein, Developer represents and agrees for itself and
any successor in interest that prior to the expiration of the Term, and without the prior written approval
of the City (which approval may be withheld in the City’s sole and absolute discretion), there will be no
significant change in the management or control of Developer. Developer will promptly notify the City of
all changes whatsoever in the identity of the parties in control of or exercising the management of
Developer, or the degree of control or management, of which it or any of its officers have been notified
or otherwise have knowledge or information. This Agreement may be terminated by the City if there is
any significant change (voluntary or involuntary) in membership, management or control, of Developer.
For purposes of this paragraph, a significant change will mean any change in the identity of the CEO,
President, or similar person or persons having ultimate control over the day to day management of
Developer, or the appointment of a receiver or trustee to operate or exercise direct or indirect control
over Developer). Periodic, routine changes in membership that cumulatively affect less than 50% of the
membership of the Developer’s board of directors will not be considered a “significant change”.
F. No Third-Party Beneficiaries.
This Agreement is made and entered into solely for the benefit of the City and Developer and no other
person shall have any right or cause of action under or by reason of this Agreement.
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G. Governing law; venue.
This Agreement and the legal relations between the Parties will be governed by and enforced in
accordance with the Palo Alto Municipal Code and the laws of the State of California without reference
to the rules governing the conflict of laws. This Agreement is made and entered into in the County of
Santa Clara, California, and any legal actions or proceedings arising from or related to this Agreement
will be brought in the Superior Court of California, County of Santa Clara.
H. Time is of Essence
Time is of the essence of every portion of this Agreement in which time is a material part.
I. Headings/Captions
The headings and captions of the various sections and paragraphs of this Agreement have been inserted
only for the purpose of convenience and are not a part of this Agreement and will not be deemed in any
manner to modify, explain, expand or restrict any of the provisions of this Agreement.
J. Severability
Every provision of this Agreement is intended to be severable. If any provision of this Agreement or the
application of any provision hereof to any Party or circumstance is declared to be illegal, invalid or
unenforceable for any reason whatsoever by statute or a court of competent jurisdiction, such invalidity
will not affect the other terms and provisions hereof or the application of the provision in question to
any other Party or circumstance, all of which will continue in full force and effect.
K. Waivers/Amendments
All waivers of the provisions of this Agreement must be in writing and signed by the appropriate
authorities of the Party to be charged, and all amendments and modifications hereto must be in writing
and signed by the appropriate authorities of the Parties. Except as otherwise expressly provided in this
Agreement, any failure or delay by any Party in asserting any of its rights or remedies as to any default
will not operate as a waiver of said default or of any rights or remedies in connection therewith or of any
subsequent default or any rights or remedies in connection therewith, or deprive such Party of its right
to institute and maintain any actions or proceedings which it may deem necessary to protect, assert or
enforce any such rights or remedies.
L. Independent Contractor
Developer acknowledges and agrees that Developer and any agent or employee of Developer 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 Developer performs the Services requested by City under this Agreement. Developer
and any agent or employee of Developer 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. Developer 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 Developer’s performance of the Services, or any agent or
employee of Developer providing same. Nothing in this Agreement shall be construed as creating an
employment or agency relationship between City and Developer or any agent or employee of
Developer. Any terms in this Agreement referring to direction from City shall be construed as providing
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for direction as to policy and the result of Developer’s provision of the Services only, and not as to the
means by which such a result is obtained.
M. Conflicts of Interest
In executing this Agreement, Developer 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.
Developer further covenants that, in the performance of this Agreement, it will not employ
subcontractors or other persons or parties having such an interest. Developer 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. Developer
agrees to notify City if any conflict arises.
If the Developer meets the definition of a “Consultant” as defined by the Regulations of the Fair Political
Practices Commission, Developer 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.
N. Nondiscrimination; Compliance with the Americans with Disabilities Act
As set forth in Palo Alto Municipal Code Section 2.30.510, as amended from time to time, Developer
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. Developer 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.
Developer understands and agrees that pursuant to the Americans with 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. Developer
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. Developer will not discriminate against persons with disabilities in the provision of services,
benefits or activities provided under this Agreement.
O. Environmentally Preferred Purchasing and Zero Waste Requirements
Developer 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.
Developer 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, Developer shall comply with the
following Zero Waste requirements:
1. All printed materials provided by Developer to City generated from a personal computer and
printer including but not limited to, proposals, quotes, invoices, reports, and public
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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.
2. Goods purchased by Developer 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.
3. Reusable/returnable pallets shall be taken back by Developer, at no additional cost to City,
for reuse or recycling. Developer shall provide documentation from the facility accepting the
pallets to verify that pallets are not being disposed.
P. Counterparts.
This Agreement may be executed in counterparts, each of which when so executed will be deemed an
original, and all of which, when taken together, will constitute but one and the same instrument.
Q. Entire Agreement.
This Agreement represents the entire agreement of the Parties hereto and integrates all of the terms
and conditions mentioned herein or incidental hereto, and supersedes all negotiations or previous
agreements, oral or written, between the Parties with respect to acquisition and development of the
Property or the proposed Project.
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For Alta Housing: For City of Palo Alto:
____________________
____________________
Name: Ed Shikada
Title: City Manager
Date:_______________ Date:_______________
Approved as to form
_________________
Caio Arellano
Chief Assistant City Attorney
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City of Palo Alto - Lot T Affordable Housin
Scenario A - 54 Units Updated 6/4/202
UNIT MI
Unit Size No. Units % AMI RRH Units Family PB Base Rent Subsid Income
1 BR 10 30% 10 114,960 114,960
2 BR 8 30% 2 6 109,248 135,936 245,184
3 BR 9 30% 2 7 140,616 216,216 356,832
3 BR 3 50% 3 81,396 58,140 139,536
1 BR 13 60% 311,220 311,220
2 BR 6 60% 171,504 171,504
3 BR 4 60% 131,520 131,520
2 BR 1 Mgr Unit 0
TOTAL 54 44.2% 14 16 1,060,464 410,292 1,470,756
PERMANENT SOURCES
Amoun Per Unit Interest Term-Yrs DCR
Permanent Loan 7,373,950 136,555 7.14% 35 1.15
CA HCD MHP 13,500,000 250,000 3% 55
City of Palo Alto 4,140,000 76,667 3% 55
Gap (County, Regional, FHLB) 2,034,314 37,672
Equity from LIHTC (Federal & State) 30,802,206 570,411
Total Sources 57,850,470 1,071,305
CONSTRUCTION SOURCES
Amoun Per Unit Interest Term-Mos
Tax Exempt Construction Loan 29,090,000 538,704 7.16% 28
Taxable Construction Loan 18,921,454 350,397 7.26% 28
City of Palo Alto 4,140,000 76,667 3% 28
Costs Deferred until Perm Closing 2,618,795 48,496
Equity from LIHTC 3,080,222 57,041
Total Sources 57,850,470 1,071,305
USES
Amoun Per Unit
Hard Costs 41,345,415 765,656
Design & Engineering 2,139,801 39,626
Development Impact & Permit Fees 986,205 18,263
Insurance During Construction 1,364,399 25,267
Developer Fee 2,500,000 46,296
Other Soft Costs 2,134,717 39,532
Financing Costs 7,379,932 136,665
Total Development Cost 57,850,469 1,071,305
CASH FLOW ANALYSI
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8
Gross Potential Income
Gross TCAC Rent 1,060,464 1,086,976 1,114,150 1,142,004 1,170,554 1,199,818 1,229,813 1,260,558
Section 8 Incremental Income 410,292 420,549 431,063 441,840 452,886 464,208 475,813 487,708
Miscellaneous Income 6,750 6,919 7,092 7,269 7,451 7,637 7,828 8,024
Less Vacancy/Loss - TCAC Rents (53,023) (54,349) (55,707) (57,100) (58,528) (59,991) (61,491) (63,028)
Less Vacancy/Loss - Sec 8 Incr (20,515) (21,027) (21,553) (22,092) (22,644) (23,210) (23,791) (24,385)
Effective Gross Income 1,403,968 1,439,067 1,475,044 1,511,920 1,549,718 1,588,461 1,628,173 1,668,877
Less Operating Expenses (648,000) (670,680) (694,154) (718,449) (743,595) (769,621) (796,557) (824,437)
Less Replacement Reserve (27,000) (27,000) (27,000) (27,000) (27,000) (27,000) (27,000) (27,000)
Less HCD Annual Fee 0.42%(56,700) (56,700) (56,700) (56,700) (56,700) (56,700) (56,700) (56,700)
Less City Annual Fee 125 (12,150) (12,150) (12,150) (12,150) (12,150) (12,150) (12,150) (12,150)
Net Operating Income 660,118 672,537 685,040 697,621 710,273 722,990 735,765 748,590
Less Debt Service (574,016) (574,016) (574,016) (574,016) (574,016) (574,016) (574,016) (574,016)
Less Issuer Fee 4,000 (4,000) (4,000) (4,000) (4,000) (4,000) (4,000) (4,000) (4,000)
Net Cash Flow, First Cut 82,102 94,522 107,024 119,605 132,257 144,975 157,749 170,574
Debt Coverage Ratio 1.15 1.17 1.19 1.22 1.24 1.26 1.28 1.30
Less Ptrship Mgmt Fee - LP 7,500 (7,500) (7,725) (7,957) (8,195) (8,441) (8,695) (8,955) (9,224)
Less Ptrship Mgmt Fee - GP 19,500 (19,500) (20,085) (20,688) (21,308) (21,947) (22,606) (23,284) (23,983)
Net Cash Flow, 2nd Cut 55,102 66,712 78,380 90,102 101,869 113,674 125,510 137,368
Deferred Fee/Incentive Mgmt Fee 33%(18,349) (22,215) (26,101) (30,004) (33,922) (37,854) (41,795) (45,743)
Cash Distribution
CA HCD 13,500,000 69.1%(25,400) (30,751) (36,130) (41,533) (46,957) (52,399) (57,855) (63,321)
Gap Source 2,034,314 10.4%(3,828) (4,634) (5,444) (6,259) (7,076) (7,896) (8,718) (9,542)
Cit 4,000,000 20.5%(7,526) (9,111) (10,705) (12,306) (13,913) (15,526) (17,142) (18,762)
19,534,314 100.0%
Remaining Cash Flow 0 0 (0) (0)0 (0)0 0
Year 9 Year 10 Year 11 Year 12 Year 13 Year 14 Year 15
Gross Potential Income
Gross TCAC Rent 1,292,072 1,324,374 1,357,484 1,391,421 1,426,206 1,461,861 1,498,408
Section 8 Incremental Income 499,901 512,398 525,208 538,339 551,797 565,592 579,732
Miscellaneous Income 8,224 8,430 8,641 8,857 9,078 9,305 9,538
Less Vacancy/Loss - TCAC Rents (64,604) (66,219) (67,874) (69,571) (71,310) (73,093) (74,920)
Less Vacancy/Loss - Sec 8 Incr (24,995) (25,620) (26,260) (26,917) (27,590) (28,280) (28,987)
Effective Gross Income 1,710,599 1,753,364 1,797,198 1,842,128 1,888,181 1,935,386 1,983,770
Less Operating Expenses (853,292) (883,157) (914,068) (946,060) (979,172) (1,013,444) (1,048,914)
Less Replacement Reserve (27,000) (27,000) (27,000) (27,000) (27,000) (27,000) (27,000)
Less HCD Annual Fee 0.42%(56,700) (56,700) (56,700) (56,700) (56,700) (56,700) (56,700)
Less City Annual Fee 125 (12,150) (12,150) (12,150) (12,150) (12,150) (12,150) (12,150)
Net Operating Income 761,457 774,356 787,280 800,218 813,159 826,092 839,006
Less Debt Service (574,016) (574,016) (574,016) (574,016) (574,016) (574,016) (574,016)
Less Issuer Fee 4,000 (4,000) (4,000) (4,000) (4,000) (4,000) (4,000) (4,000)
Net Cash Flow, First Cut 183,441 196,341 209,264 222,202 235,143 248,076 260,990
Debt Coverage Ratio 1.33 1.35 1.37 1.39 1.42 1.44 1.46
Less Ptrship Mgmt Fee - LP 7,500 (9,501) (9,786) (10,079) (10,382) (10,693) (11,014) (11,344)
Less Ptrship Mgmt Fee - GP 19,500 (24,702) (25,443) (26,206) (26,993) (27,802) (28,636) (29,495)
Net Cash Flow, 2nd Cut 149,238 161,112 172,978 184,827 196,647 208,426 220,151
Deferred Fee/Incentive Mgmt Fee 33%(49,696) (53,650) (57,602) (61,548) (65,484) (69,406) (73,310)
Cash Distribution
CA HCD 13,500,000 69.1%(68,792) (74,266) (79,736) (85,198) (90,646) (96,076) (101,480)
Gap Source 2,034,314 10.4%(10,366) (11,191) (12,015) (12,838) (13,659) (14,478) (15,292)
Cit 4,000,000 20.5%(20,383) (22,005) (23,625) (25,244) (26,858) (28,467) (30,068)
19,534,314 100.0%
Remaining Cash Flow (0) (0) (0) (0)0 0 (0)
Exhibit AItem 4
Attachment B - Exclusive
Negotiation Agreement
with Alta Housing
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City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Utilities
Meeting Date: June 17, 2025
Report #:2504-4486
TITLE
Approval of the 2025 update to the Sewer System Management Plan (SSMP) and Authorization
for Staff to Make Future Administrative or Minor Updates to the SSMP as Needed; CEQA Status
– Exempt under CEQA Guidelines sections 15301, 15302, 15308.
RECOMMENDATION
Staff recommends that the City Council:
1. Approve the 2025 update to the SSMP1, as required by the State Water Resources
Control Board (SWRCB) Order No. WQO-2022-0103-DWQ, Statewide Waste Discharge
Requirements General Order for Sanitary Sewer Systems (General Order).2
2. Authorize future SSMP updates that are administrative or minor in nature to be
approved by staff without returning to Council for approval.
EXECUTIVE SUMMARY
The 2025 update to the SSMP aligns the City with current regulatory requirements under
SWRCB’s General Order. The SSMP serves as the City's guiding document for managing,
operating, maintaining, and improving the sanitary sewer system, and aims to reduce sanitary
sewer overflows (SSOs). The SSMP documents the City’s Sanitary Sewer System, defines the
City’s goals for improving its sewer system infrastructure, and establishes an implementation
plan and schedule for achieving these goals. This update reflects current system conditions and
includes improvements in maintenance practices, spill response, and infrastructure planning.
The General Order requires that the City Council approve the document prior to submittal to
the SWRCB.
1 2025 SSMP: Link to SSMP:
2 State Water Resources Control Board (SWRCB) Order No. WQO-2022-0103-DWQ, Statewide Waste Discharge
Requirements General Order for Sanitary Sewer Systems (General Order)
https://www.waterboards.ca.gov/board_decisions/adopted_orders/water_quality/2022/wqo_2022-0103-dwq.pdf
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BACKGROUND
3
to address two (2) key requirements of the re-issued 2022 General Order, both due before June
5, 2023:
4 is now necessary to reflect current conditions and for
compliance with the 2022 General Order, which is due on August 2, 2025. Revisions focus on
improving clarity, consistency, and structure through editorial updates, elimination of duplicate
content, and reorganization of sections of the Plan to align with SSMP elements. A redline version
of the revised Plan is available for reference. The revisions also include updated staffing details,
performance data through 2024, refined system mapping, and simplified appendices to reflect
current operational practices and regulatory standards. The updated SSMP must be presented to
the Council at a public meeting and formally adopted to ensure that the public has the
opportunity to comment on the collection systems policies and procedures.
DISCUSSION
3 Staff Report ID #2301-0789 https://cityofpaloalto.primegov.com/Portal/Meeting?meetingTemplateId=11197
4 2023 Sanitary Sewer Management Plan https://www.paloalto.gov/files/assets/public/v/1/utilities/utilities-
engineering/wastewater/2023-ssmp-final.pdf
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The 2022 General Order requires internal audits of the SERP annually and the SSMP every three
years and updates as needed. The City’s Utilities Department will complete the required audits,
update the SERP and SSMP, and implement identified changes based on the audit findings. The
SSMP will be reviewed and updated annually to ensure any significant program changes, after
audits, or when there are changes in the Implementation Team's membership or responsibilities.
To streamline future updates, staff recommends that administrative and minor program changes
be approved by staff without returning to Council. These changes will be documented in the
SSMP’s Appendix O: SSMP Change Log for transparency. The SSMP will continue to be reviewed
annually, audited every three (3) years, and certified by Council every six (6) years, in compliance
with State requirements.
FISCAL/RESOURCE IMPACT
STAKEHOLDER ENGAGEMENT
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5 City of Palo Ato Utilities Department Website https://www.paloalto.gov/Departments/Utilities/Utilities-Services-
Safety/Safety#panel-1-4
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ENVIRONMENTAL REVIEW
Implementation of the SSMP will apply to sanitary sewer collection systems that constitute
"existing facilities" of the City, or may require the installation of minor sewer system facilities
which will involve either minor alterations to existing facilities, or repair or replacement of
existing facilities involving negligible or no expansion of sewer capacity. Such activities are
exempt from review under the California Environmental Quality Act (CEQA). (CEQA Guidelines
sections 15301 and 15302.) The adoption of the SSMP is also exempt from environmental review
because it requires the implementation of management operations programs and plans to
enhance and protect the environment by limiting the occurrence of SSOs in the City. (CEQA
Guideline section 15308.).
ATTACHMENTS
None.
Link to 2025 SSMP: https://www.paloalto.gov/files/assets/public/v/1/agendas-minutes-
reports/agendas-minutes/city-council-agendas-minutes/2025/june-16/staff-report-2504-
4486/sewer-system-management-plan-2025-update-2.pdf
APPROVED BY:
Alan Kurotori, Director of Utilities
Staff: Matt Zucca, Utilities Assistant Director WGW Engineering & Operations
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City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Public Works
Meeting Date: June 17, 2025
Report #:2504-4545
TITLE
Approval for the City Manager or their Designee to Execute Contract No. C25194016 with SCA
of CA, LLC, Utilizing Sourcewell Cooperative Contract No. 062421-SWP, to Procure Services for
the Sweeping of Residential and Commercial Streets for a Period of Five Years for a Total Not-
to-Exceed Amount of $9,883,850; CEQA Status – Not a Project
RECOMMENDATION
Staff recommends that the City Council approve and authorize the City Manager or their
designee to execute Contract No. C25194016 with SCA of CA, LLC, utilizing Sourcewell
Cooperative Contract No. 062421-SWP to procure street cleaning services for a 5-year term
(July 1, 2025 to June 30, 2030) with a Year 1 annual amount of $1,658,772 and 4% annual
increases rate for a total amount Not-to-Exceed $9,883,850, which includes $8,985,318 for
basic services and $898,532 for additional services.
BACKGROUND
The Public Works Department’s Public Services Division is responsible for the maintenance of
most City-owned facilities and public areas, including the annual sweeping of over 18,000 curb
miles of roadways within the City. Street sweeping keeps the community clean and safe by
removing dirt, fine metals, petroleum products, vegetation, and other debris that regularly
collect on the streets and bike lanes. This routine maintenance prevents pollutants from
entering storm drains, which ultimately discharge into local creeks and the San Francisco Bay.
Keeping the storm drains clear not only helps to reduce pollution but also reduces the
likelihood of flooding during heavy rain.
SCA of CA, LLC1, the current contractor, has provided reliable sweeping services to the City over
the past ten years, meeting City staff standards for quality and responsiveness. Their personnel
1 SCA of CA, LLC, Street Sweeping Contract Amendment No. 1 C20177684A;
https://www.paloalto.gov/files/assets/public/v/1/public-works/public-
services/contracts/c20177684a_sca_amend-1-fully-executed.pdf
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have demonstrated flexibility in accommodating service requests and have been effective in
addressing concerns raised by City staff and residents.
ANALYSIS
2, also known as the Municipal
Regional Permit (MRP), requires the City to use an effective approach to reduce trash from
entering the City’s storm water system. Street sweeping is an accepted service to reduce trash
generation and meets the requirements of the MRP. In the absence of a contractor, the City
would be required to hire additional staff and purchase additional equipment to provide
sweeping services in-house. This is estimated to include hiring five staff members and
purchasing five street sweepers.
on March 24, 2025, and received it on
April 11, 2025.
3, and included an increase for both Department of Industrial Relations (DIR) and
Consumer Price Index (CPI) adjustment for the extension period. The newly proposed 2025-
2030 Street Sweeping Contract will not include a price increase for the first year (see Table 1).
2 Municipal Regional Stormwater NPDES Permit, May 11, 2022;
https://www.waterboards.ca.gov/sanfranciscobay/board_decisions/adopted_orders/2022/R2-2022-0018.pdf
3 SCA of CA, LLC, Street Sweeping Contract Amendment No. 2;
https://www.paloalto.gov/files/assets/public/v/1/public-works/public-
services/contracts/c20177684a_sca_amend2_3.24.2025_docusign.pdf
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After the first year of the contract, a 4% price increase will be added to each subsequent
contract year (see Table 2).
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Table 1: Comparison of contract rate schedules
Sweeping Categories Annual Quantity
2020-2025
Contract
Rate
2025 Contract
Extension Rate
2025-2030
Proposed
Rate, Year 1
Residential and Light
Commercial (Task 1)
13,617.28 Curb Miles $79.50 $83.48 $83.48
University Downtown (Task 1)2,052.33 Curb Miles $79.50 $83.48 $83.48
California Downtown (Task 1)1,679.18 Curb Miles $79.50 $83.48 $83.48
El Camino Real (Task 1)971.73 Curb Miles $79.50 $83.48 $83.48
Sweeping Services for
Protected Bike Lanes & Other
Obstructed Areas (Task 3)
250 Hours $200.00 $225.00 $225.00
Non-Routine (Task 4)250 Hours $200.00 $225.00 $225.00
Emergency Service (Task 4)75 Hours $200.00 $225.00 $225.00
Table 2: Compensation by contract year
Year Sweeping Services
Contract Year 1 $1,658,772
Contract Year 2 $1,725,122
Contract Year 3 $1,795,001
Contract Year 4 $1,865,892
Contract Year 5 $1,940,528
Total $8,985,318
FISCAL/RESOURCE IMPACT
4 SCA of CA, LLC Street Sweeping Contract No. C25194016;
https://www.paloalto.gov/files/assets/public/v/1/public-works/public-services/contracts/c25194016-sca-of-
ca_street-sweep-svc_halfexecv2.pdf
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The funding breakdown for Year 1 is as follows:
•Refuse Fund: $1,347,266
•University Avenue Parking District Fund: $171,329
•California Avenue Parking District Fund: $140,178
STAKEHOLDER ENGAGEMENT
ENVIRONMENTAL REVIEW
ATTACHMENT
APPROVED BY:
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City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Public Works
Meeting Date: June 17, 2025
Report #:2505-4621
TITLE
Approval of General Services Contract No. C25193659 With Community Tree Service LLC for
Utility Line Clearance Services in an Amount Not-to-Exceed $16,500,000 for a Period of Five
Years; CEQA Status – Exempt Under Section 15301(h)
RECOMMENDATION
Staff recommends that the City Council approve and authorize the City Manager or their
designee to execute Contract No. C25193659, with Community Tree Service LLC for utility line
clearing services in an amount not to exceed $16,500,000 over a five-year term.
BACKGROUND
The City has contracted services for utility vegetation management since the mid-1980s to
ensure the clearing of trees and other vegetation from electrical conductors, poles, substations,
fiber optic lines, traffic signals, streetlights and other relevant electrical facilities throughout
Palo Alto. The most recent utility vegetation management contract was with Davey Tree
Surgery, Inc. for a five-year term ending on May 31, 2025, with a not-to-exceed total of
$14,486,057 1.
The work to be performed under the contract includes the resolution of utility-related
vegetation conflicts: mainly the clearing of trees and other vegetation from the overhead
electric system throughout the City. Clearing vegetation from power lines is an on-going
operation necessary to ensure that the City provides safe, reliable power to the City’s utility
customers. Clearance requirements have been established by the California Public Utilities
Commission for Investor-Owned Utilities and these requirements have been accepted as the
applicable standard for vegetation clearance in the City of Palo Alto. All tree work must
conform to the techniques and standards specified in the Tree Care Industry Association
1 City Council, June 1, 2020; Agenda Item #3; SR #10883;
https://recordsportal.paloalto.gov/Weblink/DocView.aspx?id=80658
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standard of care (ANSI A300 – Tree, Shrub and Other Woody Plant Maintenance – Standard
Practices). As a utility operator, the City of Palo Alto is subject to thorough regulatory
requirements to keep all vegetation away from utility infrastructure regardless of ownership of
said vegetation. This contract for vegetation management is separate from the City’s overall
tree trimming contract in that it specifically addresses utility line clearance. Utility line
clearance work requires additional personnel certifications and equipment requirements not
needed for standard tree trimming. The proposed contract with Community Tree Service LLC
requires adherence to these standards and equipment requirements for utility line clearing.
Grid Modernization and Fiber to the Premise projects are currently underway and are
supported by the line clearance contract. Continuing to support these projects will require
additional line clearance resources and coordination. For Fiber to the Premise, much of the
communication space in the overhead system has been historically under-maintained from a
vegetation perspective by the communication companies who lease that space. This vegetation
overgrowth encroaches into the City’s utility space. This has led to additional work assigned to
the line clearance contractor so the equipment can be safely and efficiently installed. For grid
modernization, additional resources are also needed from the line clearance contractor, mostly
through vegetation clearing for personnel and equipment access.
In the past few years, the Foothills Undergrounding project has also been supported by the line
clearance contract. Line clearance resources will continue to be utilized in support of this
project until its completion. For example, vegetation clearing of the right of way (ROW) has
been key in supporting the undergrounding of electrical lines in elevated fire threat areas of the
service territory. While much of the electrical lines in the elevated fire threat areas have been
undergrounded, the project will continue and is likely to expand as the areas considered to
have elevated fire risks become more expansive.
ANALYSIS
2 Staff has found that a multi-year contract is
advantageous to the City as it allows a contractor to better amortize major equipment
purchases and retain highly qualified workers, and in turn lower prices are offered for the work.
Familiarity with the trees in the City also improves efficiency as areas are returned to by the
same contractor within that five-year time frame. Tree growth is highly dependent on
precipitation and other conditions; therefore, the actual work levels and costs in each work
item may be higher or lower than the estimated quantities in the contract documents. The rate
schedule establishes the unit, hourly and span unit rates for each type of work included in the
contract scope.
2 Community Tree Service LLC, Utility Line Clearance Contract, C25193659;
https://www.paloalto.gov//files/assets/public/v/1/public-works/tree-section/new-folder/contracts/community-
tree-service-llc-utility-line-clearing-contract-c25193659-partially-executed.pdf
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Summary of RFP Process
The Request for Proposals (RFP) for utility vegetation management services was distributed to
potential contractors via opengov.com and a competitive solicitation notification was sent
directly to companies on February 20, 2025. A pre-proposal meeting was held on March 5,
2025. The proposal period was 43 days and proposals were received from 9 contractors.
RFP Name/Number 193659 Utility Line Clearing Services
RFP Issued February 20, 2025
Proposals Due April 4, 2025
# of Tree Industry Firms Notified 1144 RFP views, 54 Tree Firms Downloaded RFP
Total Days to Respond to RFP 43
# of Proposals Received 9
Non-responsive bidders/ Responsive bidders 0 / 9
Public Link to Solicitation https://procurement.opengov.com/portal/palo-alto-
ca/projects/148575
Proposals Price Range $12,741,910 - $33,153,181
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Year Five hourly crew rate for the previous contract was $252.00 per hour, while the CTS
proposal’s average hourly crew rate is $240.00 per hour, a reduction of 4.8%.
Staff confirmed with the Contractor’s State License Board that CTS has an active license on file.
CTS has performed satisfactory work for other utilities and agencies on a similar multi-year
contract basis.
FISCAL/RESOURCE IMPACT
FY2026 FY2027 FY2028 FY2029 FY2030 5 YR TOTAL
Base Amount $2,828,075 $2,909,419 $2,996,728 $3,086,582 $3,179,196 $15,000,000
Contingency $282,808 $290,942 $299,673 $308,658 $317,920 $1,500,000
Annual
Contract Total
$3,110,883 $3,200,361 $3,296,401 $3,395,239 $3,497,116 $16,500,000
STAKEHOLDER ENGAGEMENT
ENVIRONMENTAL REVIEW
ATTACHMENTS
APPROVED BY:
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City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Administrative Services
Meeting Date: June 17, 2025
Report #:2506-4806
TITLE
Approval of a Purchase and Sale Agreement with C H LLC to Acquire the Industrial Property
Located at 2575 East Bayshore Road (Assessor’s Parcel Number 008-03-015) for $8.5 million,
with Six-Month Leaseback to Insulation Sources, Inc. (dba Ico Rally) for $12,600/Month
This will be a late packet report to be published on June 12, 2025.
APPROVED BY:
Lauren Lai, Administrative Services Director
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City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Administrative Services
Meeting Date: June 17, 2025
Report #:2504-4587
TITLE
Approval of Professional Services Contract Number C26193797 with Chandler Asset
Management, Inc. in an Amount Not to Exceed $750,000 for Investment Management Services
for a Period of Three Years; CEQA Status - Not A Project
RECOMMENDATION
Staff recommends that Council approve and authorize the City Manager or designee to execute
Contract No. C26193797 (Attachment A), with Chandler Asset Management, Inc. to provide
investment management services for a period of Three Years and a total amount not-to-exceed
of $750,000.
EXECUTIVE SUMMARY
Staff recommends transitioning investment management services to a specialized asset
portfolio management firm. It is best practice to periodically evaluate and update our City
policies and procedures and this action is in alignment with findings from an audit completed
by Baker Tilly on Investment Management services citing risk in redundancies in service
delivery. The City’s current investment management structure is supported by Administrative
Services staff and in a recent survey, it was determined that two-thirds of cities within Santa
Clara County enlist the expertise of professional investment portfolios managers from
specialized firms.
Staff recommend a blend of leveraging local knowledge with a professional specialized firm to
further optimize performance, results and adapt to increasing market complexity while
supporting a service delivery model that ensures continuity of the City’s investment program,
regardless of changes or fluctuations in City staff resources.
This report includes an overview of the City’s investment management function, the benefits of
partnering with a specialized investment management firm, and discussion of the competitive
solicitation process in selecting Chandler Asset Management, Inc. as the City’s investment
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management firm. Additionally, on June 3, 20251, the Finance Committee reviewed and
recommended that the City Council amend the City Investment Policy to reflect best practices
in broker/dealer due diligence, timeliness of reporting and including consultants within the
listing of authorized investment personnel. Should the City Council approve this contract,
Chandler Asset Management, Inc. will onboard with Staff and the City Council/Finance
Committee through an initial discussion of roles, responsibilities, objectives and onboard
workplan. Then upon implementation, Chandler will have a follow-up discussions on
observations, recommendations, workplan for related improvements and clarify periodic
discussions and reporting of portfolio performance and compliance. The plan is to have an
onboard study session with the Finance Committee.
BACKGROUND
2, the policy that governs the investment of
City funds, on October 22, 1984. Key philosophies of the City’s Investment Policy are:
1 Finance Committee, June 3, 2025, Item #3:
https://cityofpaloalto.primegov.com/Portal/Meeting?meetingTemplateId=16128
2 Adopted by Council on June 17, 2024: https://www.paloalto.gov/files/assets/public/v/1/administrative-
services/investment-policies/adopted-investment-policy-1-39-asd.pdf
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California Government Code Section 53600 et seq., strictly governs which investments public
agencies can hold. In some cases, State law also governs what percentage of the portfolio can
be invested in certain security types, maximum maturities, and minimum credit ratings by the
major rating agencies (Standard & Poor’s and Moody’s Investors Service). Public agencies can
only invest in fixed income securities. The purchase of stock is prohibited. Therefore, the City
primarily invests in highly rated securities such as U.S. Treasury, Federal agencies, and
government sponsored enterprise debt.
The City’s investment strategy has been focused on making short-term investments in
anticipation of rising interest rates and holding investments until maturity dates to avoid the
incurrence of losses that result from disposition of investments at market value lower than
cost. For the past three years, the City’s investment portfolio statistics are as follows:
Table 1: Investment Balance, Yield, and Years-to-Maturity
Fiscal Year
(Ending 6/30)Investment Balance Yield Years-to-Maturity
2024 $640.9M 2.6%2.6
2023 $623.2M 2.3%2.3
2022 $584.7M 1.6%1.6
Investment advisory and portfolio management firms have specialized expertise, technology
skills, and research tools necessary to reasonably achieve a higher rate of return and they can
design and manage an investment portfolio that meet individual needs and preferences of
public agencies and comply with applicable federal laws and California Government Codes.
The recent Investment Management Audit conducted by the City Auditor, Baker Tilly, and
adopted by the City Council on January 16, 20243, identified segregation of duties and oversight
of investment activities as a finding. This finding recommends that staff implement a formal
process for review and approval of investment activities and that ASD should continue efforts
to adjust the staffing of the investment function. Staff has made progress on these
improvements and this recommended hybrid approach with a specialized firm will further
segregate the duties, with appropriate oversight and internal controls.
ANALYSIS
It is best practice to periodically evaluate and update City policies and procedures. The
Administrative Services Department (ASD) reviewed other agency practices and current trends.
Staff found that two-thirds of the cities within Santa Clara County utilize a specialized firm to
professionally manage their investment portfolios. These services are either fully or partially
3 City Council, January 16, 2024: https://recordsportal.paloalto.gov/Weblink/DocView.aspx?id=82641
; Office of the City Auditor Investment Management
Audit: https://cityofpaloalto.primegov.com/Portal/viewer?id=0&type=7&uid=45e60ff6-0073-4805-bd0f-
d06b82d471ac
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supported and include services such as cash flow forecasting, investment advisory and strategy
services, and investment policy updates.
Table 2: Summary of Request for Proposals
Proposal Description/Number Investment Management Services
RFP #193797
Proposed Length of Project July 1, 2025 to June 30, 2028 (Three Years)
Number of Vendors Notified 3,471
Number of Proposal Packages Downloaded 36
Total Days to Respond to RFP 28
Pre-Proposal Meeting and Date N/A
Number of Proposals Received 10
Proposal Price Range $540,000 to $1,440,000
(Proposed Three Year Cost)
Public Link to Solicitation https://procurement.opengov.com/portal/palo-alto-
ca/projects/145131
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managed $27.3 billion for over 165 public agency clients in California, including over 80
California cities. For over 35 years, Chandler has assisted public agencies with fiduciary duties
related to investment solutions and investment framework. Total asset under management
(AUM) is $41.6 billion including $36.5 billion for over 200 local government clients, as of
December 31, 2024.
•Proprietary software to ensure all transactions meet Government Code and the City’s
Investment Policy guidelines
•Analysis of the City’s cash flow needs,
•Active management of the City’s investments,
•Access to market resources such as Bloomberg, Trade Web and proprietary optimizing
models,
•Volume pricing optimization on transactions and other services,
•Monthly online reporting and monitoring tools for all transactions and current balances,
Assurance of portfolio compliance with all federal and State of California laws as well as
ordinances, resolutions and policies of the City relating to the investment of public
funds,
•Annually perform due diligence reviews of the broker/dealer, custodian bank and
financial institutions utilized by the City and provide supporting documentation to the
City,
•Keep the City informed of changing economic conditions through flash communications
and formal periodic reports including discussions of key economic indicators relevant to
the regional, State, national and global economies, and
•Continuity of the investment program regardless of changes or fluctuations in staff
levels or City personnel.
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FISCAL/RESOURCE IMPACT
Table 3: Chandler Asset Management Fee Structure
Assets Under Management
(Market Value)Investment Management Fee Estimated Fee
First $150 million 0.06 of 1% (6 basis points)$90,000
Next $100 million 0.04 of 1% (4 basis points)$40,000
Assets in Excess of $250 million 0.03 of 1% (3 basis points)$96,000
STAKEHOLDER ENGAGEMENT
ENVIRONMENTAL REVIEW
ATTACHMENTS
APPROVED BY:
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CITY OF PALO ALTO CONTRACT NO. C26193797
AGREEMENT FOR PROFESSIONAL SERVICES
BETWEEN THE CITY OF PALO ALTO AND CHANDLER ASSET MANAGEMENT
INC.
This Agreement for Professional Services (this “Agreement”) is entered into as of the 16th day of
June, 2025 (the “Effective Date”), by and between the CITY OF PALO ALTO, a California
chartered municipal corporation (“CITY”), and CHANDLER ASSET MANAGEMENT INC.,
a California Corporation, located at 9255 Towne Centre Drive Suite 600, San Diego, CA 92121
(“CONSULTANT”).
The following recitals are a substantive portion of this Agreement and are fully incorporated herein
by this reference:
RECITALS
A. CITY intends to transition the management of the City’s investment portfolio to a
specialized investment management firm (the “Project”) and desires to engage a consultant to
provide comprehensive portfolio oversight in connection with the Project (the “Services”, as
detailed more fully in Exhibit A).
B. CONSULTANT represents that it, its employees and subconsultants, if any, possess the
necessary professional expertise, qualifications, and capability, and all required licenses and/or
certifications to provide the Services.
C. CITY, in reliance on these representations, desires to engage CONSULTANT to provide
the Services as more fully described in Exhibit A, entitled “SCOPE OF SERVICES”.
NOW, THEREFORE, in consideration of the recitals, covenants, terms, and conditions, in this
Agreement, the parties agree as follows:
SECTION 1. SCOPE OF SERVICES. CONSULTANT shall perform the Services described
in Exhibit A in accordance with the terms and conditions contained in this Agreement. The
performance of all Services shall be to the reasonable satisfaction of CITY.
SECTION 2. TERM.
The term of this Agreement shall be from July 1, 2025 through June 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
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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 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.
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.
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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
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 Carlos Oblites
Email: coblites@chandlerasset.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
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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 Christine Paras, Administrative Services Department, 250 Hamilton
Ave Palo Alto, CA, zipcode: 94301, Telephone: (650) 329-2486. 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. CITY is assigning
Tarun Narayan, Administrative Services Department, and Jessie Deschamps, Administrative
Services Department, to represent CITY during day-to-day work on the Project.
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.
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
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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
such damage, injury, or loss arising after the Agreement is terminated or the term has expired.
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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.
CONSULTANT shall provide written notice to CITY of any change of address.
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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,
third, recycling or composting waste. In particular, CONSULTANT shall comply with the
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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).
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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,
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.
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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.
29.9. This Agreement may be signed in multiple counterparts, which, when
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executed by the authorized representatives of the parties, shall together constitute a single binding
agreement.
SECTION 30. EXHIBITS. Each of the following exhibits, if the check box for such exhibit is
selected below, is hereby attached and incorporated into this Agreement by reference as though
fully set forth herein:
EXHIBIT A: SCOPE OF SERVICES
EXHIBIT B: SCHEDULE OF PERFORMANCE
EXHIBIT C: COMPENSATION
EXHIBIT C-1: SCHEDULE OF RATES
EXHIBIT D: INSURANCE REQUIREMENTS
EXHIBIT E: ADDITIONAL TERMS AND CONDITIONS
THIS AGREEMENT IS NOT COMPLETE UNLESS ALL SELECTED EXHIBITS
ARE ATTACHED.
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CONTRACT No. C26193797
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
CHANDLER ASSET MANAGEMENT
INC.
Officer 1
By:
Name:
Title:
Officer 2
By:
Name:
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CEO
Nicole Dragoo
Secretary
Jayson Schmitt
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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 will provide the following services:
1. Full-time investment management services in accordance with the City’s Investment
Policy and State law.
2. Assist with reviewing and recommending any appropriate amendments to the City's
Investment Policy at the outset of the contract term and assist with the annual review and
update of the Investment Policy.
3. Assist CITY with developing an appropriate cash flow model to minimize balances held
in highly liquid but low interest accounts (e.g., bank accounts and LAIF).
4. Assist the City with maturity analysis.
5. Establish and recommend appropriate investment benchmarks.
6. Provide credit analysis and assess risk of portfolio investments.
7. Work with CITY’s third-party custodian (currently US Bank) for safekeeping of
securities and provide services required to execute and settle investment trades.
8. Recommend and justify appropriate investment benchmarks.
9. Provide detailed monthly and quarterly reports to City Council of investment portfolio
activity, performance, holdings by investment type, maturity, broker, weighted average
maturity, duration, benchmark comparison, and other such reports normally provided to
governmental clients. Provide separate annual portfolio holding, activity, and
performance reports and relevant GASB reports based on the City’s fiscal year (July 1 –
June 30).
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10. Be available to Administrative Services Department staff in a timely manner by
telephone or email and meet with and provide information to Administrative Services
Department staff upon request, and if requested, to other interested parties such as the
Finance Committee, City Council and/or City Manager.
11. Attend City Council meetings for the annual review of the investment policy.
12. Provide assurance of portfolio compliance with all federal and State of California laws as
well as ordinances, resolutions, and policies of the City relating to the investment of
public funds.
13. Annually perform due diligence reviews of the broker/dealers, custodian bank, and
financial institutions utilized by the City and provide supporting documentation to the
City.
14. Will not act as a CITY’s custodian of assets in the account or have possession of any
such assets.
15. Will act as a fiduciary agent to CITY, serving as an independent advisor to represent the
best interests of the CITY.
16. Demonstrate independence from any financial institution or securities brokerage firm, or
fully disclose any such relationships relevant to qualified investments for public sector
entities.
17. Keep CITY informed of changing economic conditions through flash emails, daily,
weekly, and/or monthly reports including discussion of key economic indicators relevant
to the regional, State, national, and global economies.
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EXHIBIT B
SCHEDULE OF PERFORMANCE
CONSULTANT shall perform the Services so as to complete each milestone within the number
of days/weeks specified below. The time to complete each milestone may be increased or
decreased by mutual written agreement of the Project Managers for CONSULTANT and CITY so
long as all work is completed within the term of the Agreement. CONSULTANT shall provide a
detailed schedule of work consistent with the schedule below within 2 weeks of receipt of the
notice to proceed (“NTP”) from the CITY.
Milestones Number of Days/Weeks (as specified below)
1. City Council reports of investment
portfolio, as described in SCOPE OF
appropriate amendments to the City’s
and financial institutions utilized by the
City and provide supporting
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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: NONE up to the not-to-exceed amount of: $0.00.
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EXHIBIT C-1
SCHEDULE OF RATES
CONSULTANT’s schedule of rates is as follows:
CITY will compensate CONSULTANT monthly on an amount calculated on the average market
value of CITY’s non-pool, non-money market investment portfolio, including accrued interest, in
accordance with the following schedule:
Asset Under Management Investment Management Fee
The fees above do not include any custody fees that may be charged by CITY’s bank or other
third-party custodian.
Fees will be prorated to the effective date of termination on the basis of actual days elapsed, and
any unearned potion of prepaid fees shall be refunded. CITY is not required to pay any start-up
or closing fees. CONSULTANT may not assess penalty fees against the CITY.
CONSULTANT shall bill fees monthly, in arrears.
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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@PaloAlto.Gov
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.
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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@PaloAlto.Gov
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EXHIBIT E
ADDITIONAL TERMS AND CONDITIONS
1. Investment Policy. In investing and reinvesting the CITY’s assets, CONSULTANT shall
comply with the CITY’s Investment Policy, as may be amended. The Investment Policy
as of the date of this Agreement is attached hereto as Exhibit E-1.
2. Authority of Chandler. CONSULTANT is hereby granted full discretion to invest and
reinvest all assets under its management in any type of security it deems appropriate,
subject to the instructions given or guidelines set by Representative.
3. Proxy Voting. CONSULTANT will vote proxies on behalf of the CITY unless otherwise
instructed. CONSULTANT has adopted and implemented written policies and
procedures and will provide the CITY with a description of the proxy voting procedures
upon request. CONSULTANT will provide information regarding how the CITY’s
proxies were voted upon request. To request proxy policies or other information, please
contact us by mail at the address provided, by calling 800-317-4747 or by emailing your
request to info@chandlerasset.com.
4. Custody of Securities and Funds. CONSULTANT shall not have custody or possession
of the funds or securities that the CITY has placed under its management. The CITY
shall appoint a custodian to take and have possession of its assets. The CITY recognizes
the importance of comparing statements received from the appointed custodian to
statements received from CONSULTANT. The CITY recognizes that the fees expressed
above do not include fees the CITY will incur for custodial services.
5. Valuation. CONSULTANT will value securities held in portfolios managed by
CONSULTANT no less than monthly. Securities or investments in the portfolio will be
valued in a manner determined in good faith by CONSULTANT to reflect fair market
value.
6. Investment Advice. The CITY recognizes that the opinions, recommendations and
actions of CONSULTANT will be based on information deemed by it to be reliable, but
not guaranteed to or by it. Provided that CONSULTANT acts in good faith, the CITY
agrees that CONSULTANT will not in any way be liable for any error in judgment or for
any act or omission, except as may otherwise be provided for under the Federal Securities
laws or other applicable laws.
7. Payment of Commissions. CONSULTANT may place buy and sell orders with or
through such brokers or dealers as it may select. It is the policy and practice of
CONSULTANT to strive for the best price and execution and for commission and
discounts which are competitive in relation to the value of the transaction and which
comply with Section 28(e) of the Securities and Exchange Act. Nevertheless, it is
understood that CONSULTANT may pay a commission on transactions in excess of the
amount another broker or dealer may charge, and that CONSULTANT makes no
warranty or representation regarding commissions paid on transactions hereunder.
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8. Other Clients. It is further understood that CONSULTANT may be acting in a similar
capacity for other institutional and individual clients, and that investments and
reinvestments for the CITY's portfolio may differ from those made or recommended with
respect to other accounts and clients even though the investment objectives may be the
same or similar. Accordingly, it is agreed that CONSULTANT will have no obligation to
purchase or sell for the CITY's account any securities which it may purchase or sell for
other clients.
9. Confidential Relationship. The terms and conditions of this Agreement, and all
information and advice furnished by either party to the other shall be treated as
confidential and shall not be disclosed to third parties except (i) as required by law, rule,
or regulation, (ii) as requested by a regulatory authority, (iii) for disclosures by either
party of information that has become public by means other than wrongful conduct by
such party or its officers, employees, or other personnel, (iv) for disclosures by either
party to its legal counsel, accountants, or other professional advisers, (v) as necessary for
CONSULTANT to carry out its responsibilities hereunder, or (vi) as otherwise expressly
agreed by the parties.
10. Receipt of Brochure and Privacy Policy. The CITY hereby acknowledges receipt of the
disclosure statement or "brochure" and “brochure supplement” also known as Part 2A
and Part 2B of Form ADV, required to be delivered pursuant to Rule 2043 of the
Investment Advisers Act of 1940 (Brochure). The CITY further acknowledges receipt of
CONSULTANT’s Privacy Policy, as required by Regulation S-P.
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City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Planning and Development Services
Meeting Date: June 17, 2025
Report #:2504-4489
TITLE
Approval of Professional Services Contract Number C25193814 with Alta Housing BMR Services
LLC in an Amount Not to Exceed $450,600 for Administration and Consulting Services for the
City's Below Market Rate Housing Program for a Period of Two Years and Approve a FY 2026
Budget Amendment in the Residential Housing In-Lieu Fund. CEQA Status: Exempt under CEQA
Guidelines 15262.
RECOMMENDATION
Staff recommends that the City Council:
1. Approve and authorize the City Manager or their designee to execute Contract No.
C25193814 (Attachment A) with Alta Housing BMR Services LLC, to provide
administration and consulting services for the Below Market Rate Housing Program over
a two-year term in the amount not-to-exceed $450,600; and
2. Amend the Fiscal Year 2026 Budget Appropriation in the Residential Housing In-Lieu
Fund (requires 2/3 approval) by:
1. Increasing the Planning and Development Services contract services
appropriation in the amount of $31,000; and
2. Decreasing the Ending Fund Balance in the amount of $31,000.
EXECUTIVE SUMMARY
The City of Palo Alto released a Request for Proposals (RFP) for administration of the City’s
Below Market Rate (BMR) housing program in February 2025. Staff reviewed the proposals and
selected Alta Housing BMR Services LLC to provide administration and consulting services for
the City’s BMR Program. Staff recommends that City Council approve and enter into a twenty-
four-month contract with Alta Housing for an amount not to exceed $450,600.
BACKGROUND
Palo Alto adopted one of the nation’s first inclusionary zoning policies requiring that all
residential development include ten percent of units as BMR units. In 1972, the policy required
a mix of housing types and affordability levels within residential Planned Unit Developments. In
1973, the City Council expanded the policy to all new residential developments. In 1974,
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anticipating the sale of BMR units in several new developments, the City contracted with Alta
Housing to administer the City’s BMR Program. The BMR program Administrator’s
responsibilities include managing the initial sale and re-sale of BMR ownership units and the
occupancy of BMR rental units. Since the program’s inception, BMR administration has been
funded through the Residential Housing Fund.
•Administering the sale and re-sale of new and existing BMR owner units;
•Maintaining the home purchase waiting list;
•Monitoring occupancy of BMR ownership units;
•Conducting annual income certifications of BMR rental units; and
•Addressing special issues related to the program.
ANALYSIS
Table 1: Summary of Request for Proposal
Proposal Description RFP193814 Below Market Rate Housing
Administrator
Proposed Length of Project 2 years
Number of Vendors Notified 3,465
Number of Proposal Packages Downloaded 24
Total Days to Respond to Proposal 42
Pre-Proposal Meeting No
Pre-Proposal Meeting Date N/A
Number of Proposals Received 3
Proposal Price Range $84,680 - $316,136
Public Link to Solicitation https://procurement.opengov.com/portal/palo-
alto-ca/projects/144215
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MNS Engineers, Inc., and Housing Inc. were deemed to be complete. The proposed cost of the
scope of services provided by the firms ranged between $84,680 and $316,136 per year, with
Alta Housing submitting a proposed budget of $225,300 per year.
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for homeownership, understanding credit and mortgage financing, and the regulations of the
BMR program.
POLICY IMPLICATIONS
FISCAL/RESOURCE IMPACT
STAKEHOLDER ENGAGEMENT
ENVIRONMENTAL REVIEW
ATTACHMENTS
APPROVED BY:
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CITY OF PALO ALTO CONTRACT NO. C26193814
AGREEMENT FOR PROFESSIONAL SERVICES
BETWEEN THE CITY OF PALO ALTO AND ALTA HOUSING BMR SERVICES LLC
This Agreement for Professional Services (this “Agreement”) is entered into as of the 1st day of
July, 2025 (the “Effective Date”), by and between the CITY OF PALO ALTO, a California
chartered municipal corporation (“CITY”), and ALTA HOUSING BMR SERVICES LLC, a
California corporation (#200318610121), located at 3460 W. Bayshore Road Suite # 104 Palo
Alto, CA 94303 (“CONSULTANT”).
The following recitals are a substantive portion of this Agreement and are fully incorporated herein
by this reference:
RECITALS
A. CITY intends to provide administrative services for the City’s Below Market Rate Program
(the “Project”) and desires to engage a consultant to manage program outreach, ownership, rental,
and the Stanford West BMR unit programs within the policy framework set forth by the City in
connection with the Project (the “Services”, as detailed more fully in Exhibit A).
B. CONSULTANT represents that it, its employees and subconsultants, if any, possess the
necessary professional expertise, qualifications, and capability, and all required licenses and/or
certifications to provide the Services.
C. CITY, in reliance on these representations, desires to engage CONSULTANT to provide
the Services as more fully described in Exhibit A, entitled “SCOPE OF SERVICES”.
NOW, THEREFORE, in consideration of the recitals, covenants, terms, and conditions, in this
Agreement, the parties agree as follows:
SECTION 1. SCOPE OF SERVICES.CONSULTANT shall perform the Services described
in Exhibit A in accordance with the terms and conditions contained in this Agreement. The
performance of all Services shall be to the reasonable satisfaction of CITY.
SECTION 2. TERM.
The term of this Agreement shall be from the effective date of this agreement through June 30,
2027, 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.
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Attachment A - Alta
Housing BMR Services
LLC, Contract C25193814
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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 Four Hundred Fifty
Thousand Six Hundred Dollars ($450,600). 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
email address PCEContracts@paloalto.gov 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
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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.
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 Sheryl Klein, Email:
sklein@altahousing.org, Telephone: 650-321-9709 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
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persons or property.
CITY’s Project Manager is Robert Feign, Planning and Development Services Department, 250
Hamilton Ave. Palo Alto, CA, 94301, Telephone: 650-329-2195. 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.
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
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
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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
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
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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.
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.
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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,
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
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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).
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”.
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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,
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.
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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.
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:
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EXHIBIT A: SCOPE OF SERVICES
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.
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CONTRACT No. C26193814
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
CONSULTANT
ALTA HOUSING BMR SERVICES LLC
Officer 1
By:
Name: Randy Tsuda
Title: CEO & President, Alta Housing
rtsuda@altahousing.org
Officer 2 (Required for Corp. or LLC)
By:
Name: Sheryl Klein
Title: COO, Alta Housing
sklein@altahousing.org
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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 professional services for the City’s Below Market Rate (BMR)
housing program in compliance with policy, guidelines, applicable deed restrictions, BMR
Program Procedures Manual and in a manner which increases affordable housing opportunities
for low- and moderate-income households. The CONSULTANT shall manage program outreach,
ownership, rental, and the Stanford West BMR unit programs within the policy framework set
forth by the City and act with independent judgement to ensure deliverables are met in
accordance with the terms of this exhibit.
TASK 1 - PROGRAM OUTREACH:
CONSULTANT shall handle all questions and comments through CONSULTANT’S office.
CONSULTANT’S BMR assistant and Program Administrator are to be available to take phone
calls, e-mails, and walk-ins Monday through Friday from 8:00 a.m. to 5:00 p.m.
CONSULTANT shall do program marketing and outreach via CONSULTANT’S search-engine
optimized program information on CONSULTANT’S website, posting flyers at local community
centers, libraries, and affordable housing communities as well as to other local affordable
housing providers to spread the word about the programs offered by the CONSULTANT.
TASK 2 - OWNERSHIP PROGRAM:
1. Maintain all applicant information and perform an annual update to ensure applicants
are still interested and/or qualified for the BMR program and to assist in managing
the size of the waiting list.
2. Provide a list of primary lender contacts, serve as an intermediary between the buyer
and lender to make sure the buyer understands all costs and details associated with the
loan and if needed, point the buyer towards other subordinate loans to assist with the
purchase. CONSULTANT shall also actively look to add new lenders to the BMR
lender list.
3. Use the most current version of the California Association of Realtors (CAR)
purchase forms for use of each BMR sale. CONSULTANT shall coordinate the
review, explanation, and signing of the Purchase Agreement. CONSULTANT shall
coordinate with the escrow company to send over all signed documents and escrow
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instructions. CONSULTANT shall assist in holding open houses and ordering
necessary inspections. CONSULTANT shall stay in contact with escrow officer
throughout the escrow period to ensure the sale closes on time. Copies of all closing
documents to be sent to the CONSULTANT’S office after closing and filed in the
respective BMR owner’s file.
4. Committing to promoting longevity of the BMR housing inventory shall make every
effort to ensure BMR owners’ compliance by maintaining consistent contact with
relevant HOA’s and to investigate every complaint and/or concern received regarding
a BMR owner potentially being in violation of the Deed Restrictions, e.g., renting out
a portion of or their entire home.
5. Troubleshoot homeownership problems that arise with BMR owners that may
endanger the BMR Purchase stock. CONSULTANT shall have an open-door policy
to encourage BMR owners and renters to seek assistance on any situation which may
jeopardize their home. CONSULTANT shall reach out to Alta Housing Resident
Services Department for referrals and/or resources to assist owners with various
services.
6. Work with a local HUD approved housing agency to provide a bi-annual workshop in
Palo Alto, covering topics ranging from program eligibility requirements to loan
financing. The workshop is offered at no charge to attendees. A prospective buyer
must have attended a workshop to be eligible to purchase a BMR home.
CONSULTANT shall be present at every seminar to meet applicants and to answer
program questions.
7. Mail a letter out annually to each BMR owner requiring copies of documentation
verifying primary owner-occupancy. Documentation includes utility bills, pay stubs,
tax returns and property tax bills.
8. Work closely with the CITY to formalize a screening and eligibility process whereby
BMR owners facing financial hardship due to unforeseen special assessments could
get assistance from the CITY. CONSULTANT shall interview the BMR owner,
obtain all relevant income vs. expense documents to prove hardship and either refers
the BMR owner to the CITY for approval or denial of the request based on written
criteria.
9. Work closely with CITY to assist with creation of and assessment of new BMR
Agreements for upcoming housing developments. CONSULTANT shall be involved
prior to Regulatory/Development Agreements are signed, CONSULTANT shall
review and provide feedback on the language to ensure the Agreements are
understandable from the perspective of implementation.
10. Assist the CITY in the growth of the BMR Purchase program by acquisition and
rehabilitation of BMR units and properties.
11. Coordinate with CITY staff in the implementation of any BMR Ordinance revisions.
12. Provide advice, consultation, and assistance to CITY staff in negotiations of BMR
agreements for new housing developments.
13. Coordinate the process of evaluation, negotiation and financing related to the
acquisition and rehabilitation, if necessary, of off-site units or properties contributed
under the BMR program.
14. Maintain records and statistics as required by CITY, specifically;
a. Annual statistics about the BMR ownership and rental units and the households
served; and
b. A permanent database and record of all ownership units placed in the program
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and statistics about current BMR owners, and all households served over the life
of the program, including maintenance of files on each BMR owner unit and
retention of copies of the actual recorded deed restrictions for the ownership units;
and
c. Contact information for current BMR owners with mailing labels and, when
available, telephone numbers and e-mail addresses.
15. Conduct bi-annual workshops for BMR owners about estate planning. The workshops
will include information about what is a living trust, the potential benefits, and the
process of putting their residence in a living trust.
TASK 3 - RENTAL PROGRAM:
16. Work closely with applicants who are next in line for BMR rental units, not including
Stanford West Apartments, to answer questions about the property and help gather all
necessary documentation for income verification. Applications are approved once all
verifications and background checks have been received, income and asset
calculations are complete, and a determination is made regarding a household’s
eligibility. Applicants who do not meet the eligibility criteria are sent denial letters
with an option to appeal within 14 days.
17. Send out notices to all BMR tenants approximately 90 days in advance of the
effective date, schedules re-certification interviews, obtains relevant income and asset
documents, completes income calculations, and determines continued eligibility by
the process described above. Tenants who are deemed over income are notified that
they have 90 days to either move out of the unit or start paying market rate rent.
CONSULTANT shall notify site managers of the results of the tenant recertification
immediately following the completion of the calculations.
18. Review and approve all new BMR rental move-in files prior to occupation of a BMR
unit. Annually monitor all BMR rental units to ensure that all BMR rental obligations
are being met at each property and that the rents do not exceed the maximum
allowable for each respective unit.
19. Maintain contact with site staff and provide on-going training with property managers
at BMR properties to ensure compliance with the CITYs BMR program.
20. AH staff calculates annual rent increases based on CPI and provides Developers &
BMR site staff with updated move in income limits and rents based on published
HCD Income limits.
TASK 4 – STANFORD WEST BMR UNITS
21. Continue to provide on-going training to site managers and staff to ensure compliance
with the CITYs BMR program.
22. Receive quarterly reports from site managers and reviews best practices at the site
level as it relates to waitlist management and tenant selection to ensure compliance
with the BMR program.
23. Perform initial certification reviews, re-certification interviews, obtain relevant
income and asset documents, complete income calculations and determine continued
eligibility of all BMR units to assure compliance with the BMR program.
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EXHIBIT B
SCHEDULE OF PERFORMANCE
CONSULTANT shall perform the Services so as to complete each milestone within the number
of days/weeks specified below. The time to complete each milestone may be increased or
decreased by mutual written agreement of the Project Managers for CONSULTANT and CITY so
long as all work is completed within the term of the Agreement.
Milestones Schedule
1. TASK 1 - PROGRAM OUTREACH Daily/Ongoing
2. TASK 2 - OWNERSHIP PROGRAM Daily/Ongoing
3. TASK 3 - RENTAL PROGRAM Daily/Ongoing
4. TASK 4 – STANFORD WEST BMR Daily/Ongoing
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EXHIBIT C
COMPENSATION
CITY agrees to compensate CONSULTANT for Services performed in accordance with the terms
and conditions of this Agreement, and as set forth in the budget schedule below. Compensation
shall be calculated based on the rate schedule attached as Exhibit C-1 up to the not to exceed
budget amount for each task set forth below.
CITY’s Project Manager may approve in writing the transfer of budget amounts between any of
the tasks or categories listed below, provided that the total compensation for the Services,
including any specified reimbursable expenses, and the total compensation for Additional Services
(if any, per Section 4 of the Agreement) do not exceed the amounts set forth in Section 4 of this
Agreement.
CONSULTANT agrees to complete all Services, any specified reimbursable expenses, and
Additional Services (if any, per Section 4), within this/these amount(s). Any work performed or
expenses incurred for which payment would result in a total exceeding the maximum amount of
compensation set forth in this Agreement shall be at no cost to the CITY.
BUDGET SCHEDULE
TASKS Fiscal Year
2026
AMOUNT
Fiscal Year
2027
AMOUNT
TASK 1 - PROGRAM OUTREACH $54,000 $54,000
TASK 2 - OWNERSHIP PROGRAM $118,000 $118,000
TASK 3 & 4- RENTAL PROGRAM
and STANFORD WEST BMR
$51,300 $51,300
Reimbursable Expenses $2,000 $2,000
Annual Compensation $225,300 $225,300
Total Not to Exceed (Fiscal Years 2026+2027) $450,600
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: postage and photocopying up to the not-to-exceed amount of: $4,000.
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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.
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EXHIBIT C-1
SCHEDULE OF RATES
CONSULTANT’s schedule of rates is as follows:
POSITION HOURLY RATE
President & CEO $300
Chief Financial Officer $190
Program Director/COO $190
BMR Administrator $100
BMR Manager $145
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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.
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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
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City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: IT Department
Meeting Date: June 17, 2025
Report #:2504-4544
TITLE
Approval of 14 Professional Services Contracts for GIS On-Call Services, supplemental staffing,
and programming services: C26193271A with Lynx Technologies Inc, C26193271B with Seven
Tablets Inc, C26193271C with iSpatial Techno Solutions Inc, C26193271D with Geodesy,
C26193271E with UDC, C26193271F with NV5 Geospatial Inc, C26193271G with SSP
Innovations, C26193271H with Timmons Group, C26193271I with Infojini Inc, C26193271J with
Sybyte Technologies Inc, C26193271K with 360S2G, C26193271L with Enterprise Maps,
C26193271M with Farallon Geographics, C26193271N with Arini Geographics in an Amount
Not-to-Exceed $2,000,000 in Fiscal Year 2026; CEQA Status – Not a Project.
RECOMMENDATION
Staff recommends that Council approve and authorize the City Manager or designee to execute
fourteen separate five-year contracts for time-limited, on-call, as-needed, GIS project support
services for a collective total not-to-exceed amount of $2,000,000 in Fiscal Year 2026 with:
1. Lynx Technologies Inc, Contact Number C26193271A1;
2. Seven Tablets Inc, Contract Number C26193271B2;
3. iSpatial Techno Solutions Inc, Contract Number C26193271C3;
4. Geodesy, Contract Number C26193271D4;
5. Utility Data Contractors, LLC, Contract Number C26193271E5;
6. NV5 Geospatial Inc, Contract Number C26193271F6;
1 Lynx Technologies: https://www.paloalto.gov/files/assets/public/v/1/it-department/cmr-attachments/gis-on-
call/lynx-technologies-c26193271a.pdf
2 Seven Tablets: https://www.paloalto.gov/files/assets/public/v/1/it-department/cmr-attachments/gis-on-
call/seven-tablets-c26193271b.pdf
3 iSpatial Techno Solutions: https://www.paloalto.gov/files/assets/public/v/1/it-department/cmr-attachments/gis-
on-call/ispatial-techno-solutions-c26193271c.pdf
4 Geodesy: https://www.paloalto.gov/files/assets/public/v/1/it-department/cmr-attachments/gis-on-call/geodesy-
c26193271d.pdf
5 Utility Data Contractors: https://www.paloalto.gov/files/assets/public/v/1/it-department/cmr-attachments/gis-
on-call/udc-c26193271e.pdf
6 NV5 Geospatial: https://www.paloalto.gov/files/assets/public/v/1/it-department/cmr-attachments/gis-on-
call/nv5-geospatial-c26193271f.pdf
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7. SSP Innovations, Contract Number C2619327G7;
8. Timmons Group, Contract Number C26193271H8;
9. Infojini Inc, Contract Number C26193271I9;
10. Sybyte Technologies Inc, Contract Number C26193271J10;
11. 360S2G, Contract Number C26193271K11;
12. Enterprise Maps, Contract Number C26193271L12;
13. Farallon Geographics Contract Number C26193271M13; and
14. Arini Geographics, Contract Number C26193271N14.
Staff will return for City Council approval in Fiscal Year 2027 through Fiscal Year 2030 based on
anticipated needs in the future.
EXECUTIVE SUMMARY
With the expiration of the City’s previous GIS on-call contracts awarded in 2019, staff issued a
new Request for Proposals (RFP No. 19327115) in early 2025 to identify multiple qualified
vendors who can provide project-based, time-limited professional services on an as-needed
basis. Following a competitive and structured evaluation process, fourteen firms are
recommended for contract award based on qualifications, experience, past performance, and
competitive pricing. These contracts will enable the City to meet evolving GIS project needs
over the next five years.
BACKGROUND
In 2019, the City’s Information Technology Department (ITD) issued RFP (CMR #1041316) and
awarded ten contracts for GIS on-call services. These contracts allowed City departments to
engage qualified firms to support time-limited GIS projects through task orders.
7 SSP Innovations: https://www.paloalto.gov/files/assets/public/v/1/it-department/cmr-attachments/gis-on-
call/ssp-innovations-c26193271g.pdf
8 Timmons Group: https://www.paloalto.gov/files/assets/public/v/1/it-department/cmr-attachments/gis-on-
call/timmons-group-c26193271h.pdf
9 Infojini: https://www.paloalto.gov/files/assets/public/v/1/it-department/cmr-attachments/gis-on-call/infojini-
c26193271i.pdf
10 Sybyte Technologies: https://www.paloalto.gov/files/assets/public/v/1/it-department/cmr-attachments/gis-on-
call/sybyte-technologies-c26193271j.pdf
11 360S2G: https://www.paloalto.gov/files/assets/public/v/1/it-department/cmr-attachments/gis-on-call/360s2g-
c26193271k.pdf
12 Enterprise Maps: https://www.paloalto.gov/files/assets/public/v/1/it-department/cmr-attachments/gis-on-
call/enterprise-maps-c26193271l.pdf
13 Farallon Geographics: https://www.paloalto.gov/files/assets/public/v/1/it-department/cmr-attachments/gis-on-
call/farallon-geographics-c26193271m.pdf
14 Arini Geographics: https://www.paloalto.gov/files/assets/public/v/1/it-department/cmr-attachments/gis-on-
call/arini-geographics-c26193271n.pdf
15 January 15, 2025 GIS On-Call Professional Services RFP: https://procurement.opengov.com/portal/palo-alto-
ca/projects/140924
16 May 11, 2020 City Council Staff Report: https://www.cityofpaloalto.org/files/assets/public/v/1/agendas-
minutes-reports/reports/city-manager-reports-cmrs/year-archive/2020/id-10413.pdf?t=50115.8
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In support of the City's transition to a modern, enterprise-level GIS architecture centered on
ArcGIS Enterprise, staff issued RFP No. 193271 in early 2025 to replace the expiring contracts.
The goal was to establish a new pool of qualified vendors capable of delivering these services
from July 1, 2025, through June 30, 2030. The on-call structure allows the City to access GIS
expertise as needed, without committing to full-time staffing.
ANALYSIS
•Currently, electric service orders are tracked using manual workflows and
multiple SharePoint sites. ESOS will provide a centralized, GIS-integrated portal
to streamline customer service from planning through construction. This will
reduce delays, improve coordination, and automate a process that is currently
inefficient and fragmented.
•Migrated to Esri’s Utility Network Model (UNM) from outdated CAD-based
mapping.
•Integration with SAP, Accela, Outage Management System (OMS), and
Automated Utility Design (AUD) is still pending—this is a multi-year effort.
•These utilities will require similar migrations and integrations in upcoming years.
•Replacing outdated, custom tools with modern ArcGIS-based systems across all
utilities.
•GIS support needed for smart grid projects: Advanced Metering Infrastructure
(AMI), Distribution Management System (DMS), Fault Location, Isolation, and Service
Restoration (FLISR), Electric Vehicle (EV) load forecasting, and analytics.
•Includes: Water sampling, hydrant maintenance, backflow prevention, and main
replacement tracking.
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•Laserfiche: Department-specific integrations starting FY2026.
•Accela: BuildingEye replacement in progress, projected to save $60K/year in
license fees.
8. Public Works Asset Management
•Transitioning from DaveyTree to an ArcGIS-based in-house system, improving
SAP/Accela integration and reducing external license costs.
9. Rapid GIS Infrastructure Growth
•The City’s ArcGIS platform has quadrupled in size in two years due to rising
demand for internal and public-facing apps.
Professional Services may include:
•Upgrading and maintaining the City’s GIS system
•Supporting data migration from older mapping systems to newer platforms
•Building and improving web maps, dashboards, and mobile apps for staff and public use
•Helping departments track and manage assets and infrastructure, such as electric lines,
water pipes, and street trees
•Automating routine GIS workflows to save time and reduce errors
•Connecting GIS with other City systems, for example customer service, utility
management, and permitting tools
•Keeping foundational maps and spatial data up to date, such as parcels, utilities, and
maintenance records
•Technical support to ensure systems/applications are secure, highly available, and
performing efficiently.
•Assisting with real-time mapping and data tools for operations like outage tracking or
field inspections
•Utility GIS Consultants to support migration of Water, Gas, and Wastewater data to
Esri’s Utility Network Model
•System Integration Experts to connect UNM with ancillary systems (SAP, Accela, OMS,
AUD, etc.)
•Electrical Utility Consultants with expertise in Smart Grid technologies and GIS
alignment
•GIS Integration Specialists for linking GIS with AMI, DMS, OMS, and FLISR systems
•Data Scientists/Machine Learning Engineers to develop forecasting and optimization
tools (e.g., load prediction, EV planning) and supporting integration of CAD drawings
into GIS, especially for utilities and public works projects
Vendors were asked to provide hourly rates for roles such as project managers, software
engineers, GIS analysts, database administrators, CAD engineers, and system administrators,
among others.
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Table 1: Summary of Request for Proposal
Proposal Description GIS On-Call Professional Services RFP 193271
Date Solicitation was Issued January 15, 2025
Date Solicitation was Closed February 13, 2025
Proposed Length of Project 5 years
Number of Vendors Notified 3361
Number of Proposal Packages Downloaded 104
Total Days to Respond to Proposal 29
Pre-Proposal Meeting No
Pre-Proposal Meeting Date N/A
Number of Proposals Received 25
Proposal Price Range $25 – $325/hour depending on consultant
roles
Public Link to Solicitation https://procurement.opengov.com/portal/pa
lo-alto-ca/projects/140924
Proposals were evaluated by staff from the Information Technology Department based on
criteria outlined in the RFP, including proposal quality, feasibility and effectiveness of the
proposed solution, relevant experience and staff qualifications, financial stability, ability to
meet deadlines, past performance with the City and other agencies, and capacity to provide
ongoing support. This is an on-call contract for as-needed services, and each vendor submitted
hourly rates that vary by level of service and expertise, reflecting their specialization in different
areas of the scope of work. The selected vendors submitted well-structured proposals,
demonstrated proven experience, and showed a strong ability to meet current and future City
needs. Several have successfully worked with the City in the past and received positive
feedback for their responsiveness and service delivery. In addition to technical qualifications,
vendors were selected for their ability to meet operational and compliance requirements and
to support the City’s long-term goals.
On-call services will be assigned on a Task Order basis. A contractor will be selected based on
their resource availability and relevant expertise. Staff will be responsible for evaluating the
adequacy of each task order's proposed scope of work, contractor experience, and billing rates.
To provide checks and balances, department directors or designee will be required to approve
all task orders, reviewing contractor selection and budget adherence. The City Manager or
designee will approve any task order over $100,000. Designated staff will manage the
deliverables and budget of each task order, approving invoices to ensure that the billed hours
match the hours actually worked as well as acceptance of work progress and products.
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Before entering into a task order, staff will review whether work demands and specialized skills
not available internally require use of a consultant. Task orders will also require consultants
provide documentation and effective knowledge transfer.
FISCAL/RESOURCE IMPACT
STAKEHOLDER ENGAGEMENT
ENVIRONMENTAL REVIEW
LINKS TO CONTRACTS
•Lynx Technologies Inc, Contact Number C26193271A17
•Seven Tablets Inc, Contract Number C26193271B18
17 https://www.paloalto.gov/files/assets/public/v/1/it-department/cmr-attachments/gis-on-call/lynx-technologies-
c26193271a.pdf
18 https://www.paloalto.gov/files/assets/public/v/1/it-department/cmr-attachments/gis-on-call/seven-tablets-
c26193271b.pdf
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•iSpatial Techno Solutions Inc, Contract Number C26193271C19
•Geodesy, Contract Number C26193271D20
•Utility Data Contractors, LLC, Contract Number C26193271E21
•NV5 Geospatial Inc, Contract Number C26193271F22
•SSP Innovations, Contract Number C2619327G23
•Timmons Group, Contract Number C26193271H24
•Infojini Inc, Contract Number C26193271I25
•Sybyte Technologies Inc, Contract Number C26193271J26
•360S2G, Contract Number C26193271K27
•Enterprise Maps, Contract Number C26193271L28
•Farallon Geographics Contract Number C26193271M29
•Arini Geographics, Contract Number C26193271N30
APPROVED BY:
Darren Numoto, Chief Information Officer
19 https://www.paloalto.gov/files/assets/public/v/1/it-department/cmr-attachments/gis-on-call/ispatial-techno-
solutions-c26193271c.pdf
20 https://www.paloalto.gov/files/assets/public/v/1/it-department/cmr-attachments/gis-on-call/geodesy-
c26193271d.pdf
21 https://www.paloalto.gov/files/assets/public/v/1/it-department/cmr-attachments/gis-on-call/udc-
c26193271e.pdf
22 https://www.paloalto.gov/files/assets/public/v/1/it-department/cmr-attachments/gis-on-call/nv5-geospatial-
c26193271f.pdf
23 https://www.paloalto.gov/files/assets/public/v/1/it-department/cmr-attachments/gis-on-call/ssp-innovations-
c26193271g.pdf
24 https://www.paloalto.gov/files/assets/public/v/1/it-department/cmr-attachments/gis-on-call/timmons-group-
c26193271h.pdf
25 https://www.paloalto.gov/files/assets/public/v/1/it-department/cmr-attachments/gis-on-call/infojini-
c26193271i.pdf
26 https://www.paloalto.gov/files/assets/public/v/1/it-department/cmr-attachments/gis-on-call/sybyte-
technologies-c26193271j.pdf
27 https://www.paloalto.gov/files/assets/public/v/1/it-department/cmr-attachments/gis-on-call/360s2g-
c26193271k.pdf
28 https://www.paloalto.gov/files/assets/public/v/1/it-department/cmr-attachments/gis-on-call/enterprise-maps-
c26193271l.pdf
29 https://www.paloalto.gov/files/assets/public/v/1/it-department/cmr-attachments/gis-on-call/farallon-
geographics-c26193271m.pdf
30 https://www.paloalto.gov/files/assets/public/v/1/it-department/cmr-attachments/gis-on-call/arini-geographics-
c26193271n.pdf
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City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: IT Department
Meeting Date: June 17, 2025
Report #:2504-4543
TITLE
Approval of Professional Services Contracts for SAP Enterprise Resource System On-call
Programming Services: Contract C26193272A with 360S2G, C26193272B with Sage Group
Technologies Inc, C26193272C with Avertra Corp, C26193272D with Amick Brown LLC,
C26193272E with 2iSolutions Inc, C26193272F with the Peloton Group, C26193272G with
Phoenix Business Inc, C26193272H with EPI-USE America in an Amount Not-to-Exceed
$2,000,000 in Fiscal Year 2026; CEQA status – Not a project.
RECOMMENDATION
Staff recommends that Council approve and authorize the City Manager or their designee to
execute eight separate five-year contracts for time-limited, on-call, as-needed, SAP project
support services for a collective total not-to-exceed amount of $2,000,000 in Fiscal Year 2026
with:
1. 360S2G, Contract Number C26193272A1;
2. Sage Group Technologies Inc, Contract Number C26193272B2;
3. Avertra Corp, Contract Number C26193272C3;
4. Amick Brown LLC, Contract Number C26193272D4;
5. 2iSolutions Inc, Contract Number C26193272E5;
6. The Peloton Group, Contract Number C26193272F6;
1 360S2G SAP On-Call Contract No. C26193272A; https://www.paloalto.gov/files/assets/public/v/1/it-
department/cmr-attachments/sap-on-call/amick-brown-c26193272d.pdf
2 Sage Technologies Group SAP On-Call Contract No. C26193272B;
https://www.paloalto.gov/files/assets/public/v/1/it-department/cmr-attachments/sap-on-call/sage-technologies-
group-c26193272b.pdf
3 Avertra SAP On-Call Contract No. C26193272C; https://www.paloalto.gov/files/assets/public/v/1/it-
department/cmr-attachments/sap-on-call/avertra-c26193272c.pdf
4 Amick Brown SAP On-Call Contract No. C26193272D; https://www.paloalto.gov/files/assets/public/v/1/it-
department/cmr-attachments/sap-on-call-project-support-services/2025-contracts/amick-brown-c26193272d.pdf
5 2iSolutions SAP On-Call Contract No. C26193272E; https://www.paloalto.gov/files/assets/public/v/1/it-
department/cmr-attachments/sap-on-call/2isolutions-c26193272e.pdf
6 Peloton Group SAP On-Call Contract No. C26193272F; https://www.paloalto.gov/files/assets/public/v/1/it-
department/cmr-attachments/sap-on-call/peloton-group-c26193272f.pdf
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7. Phoenix Business Inc, Contract Number C26193272G7; and
8. EPI-USE America, Contract Number C26193272H8.
Staff will return for City Council approval for services in Fiscal Year 2027 through Fiscal Year
2030 based on anticipated needs in the future.
EXECUTIVE SUMMARY
SAP is the City’s Enterprise Resource Planning (ERP) software platform for citywide financial and
personnel management, and evolving business operations require a wide range of software
programming projects. With the expiration of the City’s previous SAP on-call contracts awarded
in 2019, staff issued a new Request for Proposals (RFP No. 193272) in early 2025 to identify
multiple qualified vendors who can provide project-based, time-limited professional services on
an as-needed basis. Following a competitive and structured evaluation process, eight firms are
recommended for contract award based on qualifications, experience, past performance, and
competitive pricing. These contracts will enable the City to meet evolving SAP requirements,
upgrades and support needs over the next five years.
BACKGROUND
In 2019, the City’s Information Technology Department (ITD) issued RFP (CMR #113609) and
awarded six contracts for SAP on-call services. These contracts allowed City departments to
engage qualified firms to support time-limited SAP projects through task orders.
Staff issued RFP No. 19327210 in January 2025 to replace the expiring contracts. The goal was to
establish a new pool of qualified vendors for contracts from July 1, 2025, through June 30,
2030. As the City continues to upgrade and expand its SAP platform - including tools like Fiori
apps, business intelligence dashboards, and utility-specific solutions - specialized support is
needed for tasks such as system configuration, data integration, troubleshooting, and project
delivery. The on-call structure allows the City to access skilled resources for any department on
a limited time basis.
ANALYSIS
The solicitation was posted on OpenGov, the City’s eProcurement platform, for 32 days; 3,339
vendors were notified of the opportunity. The RFP closed on February 17, 2025. Work under
each contract will be assigned through individual Task Orders. The City is not obligated to assign
any specific amount of work or budget to any contractor. The proposed annual not-to-exceed
7 Phoenix Business SAP On-Call Contract No. C26193272G; https://www.paloalto.gov/files/assets/public/v/1/it-
department/cmr-attachments/sap-on-call/phoenix-business-c26193272g.pdf
8 EPI-USE America SAP On-Call Contract No. C26193272H; https://www.paloalto.gov/files/assets/public/v/1/it-
department/cmr-attachments/sap-on-call/epi-use-america-c26193272h.pdf
9 June 22, 2020 City Council Staff Report no. 11360: https://www.paloalto.gov/files/assets/public/v/1/agendas-
minutes-reports/reports/city-manager-reports-cmrs/year-archive/2020/id-11360.pdf
10 January 16, 2025 SAP On-Call Professional Services RFP: https://procurement.opengov.com/portal/palo-alto-
ca/projects/141183
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amount increases these contracts by $350,000 over the Fiscal Year 2025 contract year. In
FY2025 the department spent 95% of the not-to-exceed amount. It is estimated that 40% of the
task orders will be funded by the Utilities Department in Fiscal Year 2026. Staff has received an
increase in request for enhancements and process improvements which warrants the increase
of the not-to-exceed amount.
FY26 through FY27 Consulting Needs:
•$1.12M for Ongoing Production Support
(Payroll/HR, CRM, Utilities, Finance, Budget) — tied to staff vacancies and operational
continuity
•$1.05M for In-Progress & Planned Enhancements
(e.g., Fiori upgrades, Year-End closing automation, SAP integration, HR and utility
reporting)
Tentative Pipeline Projects (FY26–FY27):
•SAP S/4 HANA Migration (Administrative Services Department, HR, Utilities)
•Fiber Billing Integration
•SEW Portal Upgrade Project (Utilities)
•Telecom OSS/BSS Project (Utilities)
•Bill Redesign Project (Utilities)
•OMS Upgrade Project (Utilities)
•Upgrading and customizing the City’s SAP software to meet changing business needs
•Improving user interfaces and staff experience
•Supporting payroll, timekeeping, benefits, and HR processes
•Enhancing financial and utility billing systems
•Developing dashboards and reports
•Troubleshooting technical issues and keeping critical systems highly available
•Integrating SAP with other City systems
•Providing expert advice and hands-on support for specialized projects across
departments
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Table 1: Summary of Request for Proposal
Proposal Description SAP On-Call Professional Services RFP 193272
Date Solicitation was Issued January 16, 2025
Date Solicitation was Closed February 17, 2025
Proposed Length of Project 5 years
Number of Vendors Notified 3339
Number of Proposal Packages Downloaded 67
Total Days to Respond to Proposal 32
Pre-Proposal Meeting No
Pre-Proposal Meeting Date N/A
Number of Proposals Received 26
Proposal Price Range $45 – $250/hour (depending on consultant
roles as outlined above)
Public Link to Solicitation https://procurement.opengov.com/portal/pa
lo-alto-ca/projects/141183
Proposals were evaluated by staff from the Information Technology and Utilities Departments
based on criteria outlined in the RFP, including proposal quality, feasibility and effectiveness of
the proposed solution, relevant experience and staff qualifications, financial stability, ability to
meet deadlines, past performance with the City and other agencies, and capacity to provide
ongoing support. This is an on-call contract for as-needed services, and each vendor submitted
hourly rates that vary by level of service and expertise, reflecting their specialization in different
areas of the scope of work. The selected vendors submitted well-structured proposals,
demonstrated proven experience, and showed a strong ability to meet current and future City
needs. Several have successfully worked with the City in the past and received positive
feedback for their responsiveness and service delivery. In addition to technical qualifications,
vendors were selected for their ability to meet operational and compliance requirements and
to support the City’s long-term goals.
On-call services will be assigned on a Task Order basis. A contractor will be selected based on
their resource availability and relevant expertise. Staff will be responsible for evaluating the
adequacy of each task order's proposed scope of work, contractor experience, and billing rates.
To provide checks and balances, department directors or designee will be required to approve
all task orders, reviewing contractor selection and budget adherence. The City Manager or
designee will approve any task order over $100,000. Designated staff will manage the
deliverables and budget of each task order, approving invoices to ensure that the billed hours
match the hours actually worked as well as acceptance of work progress and products.
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Before entering into a task order, staff will review whether work demands and specialized skills
not available internally require use of a consultant. Task orders will also require consultants
provide documentation and effective knowledge transfer.
FISCAL/RESOURCE IMPACT
STAKEHOLDER ENGAGEMENT
ENVIRONMENTAL REVIEW
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LINKS TO CONTRACTS
SAP On-Call Project Support Services Contracts:
•360S2G SAP On-Call Contract No. C26193272A11
•Sage Group Technologies SAP On-Call Contract No. C26193272B12
•Avertra SAP On-Call Contract No. C26193272C13
•Amick Brown SAP On-Call Contract No. C26193272D14
•2iSolutions SAP On-Call Contract No. C26193272E15
•Peloton Group SAP On-Call Contract No. C26193272F16
•Phoenix Business SAP On-Call Contract No. C26193272G17
•EPI-USE America SAP On-Call Contract No. C26193272H18
:
Darren Numoto, Chief Information Officer
11 https://www.paloalto.gov/files/assets/public/v/1/it-department/cmr-attachments/sap-on-call/360s2g-
c26193272a.pdf
12 https://www.paloalto.gov/files/assets/public/v/1/it-department/cmr-attachments/sap-on-call/sage-
technologies-group-c26193272b.pdf
13 https://www.paloalto.gov/files/assets/public/v/1/it-department/cmr-attachments/sap-on-call/avertra-
c26193272c.pdf
14 https://www.paloalto.gov/files/assets/public/v/1/it-department/cmr-attachments/sap-on-call/amick-brown-
c26193272d.pdf
15 https://www.paloalto.gov/files/assets/public/v/1/it-department/cmr-attachments/sap-on-call/2isolutions-
c26193272e.pdf
16 https://www.paloalto.gov/files/assets/public/v/1/it-department/cmr-attachments/sap-on-call/peloton-group-
c26193272f.pdf
17 https://www.paloalto.gov/files/assets/public/v/1/it-department/cmr-attachments/sap-on-call/phoenix-
business-c26193272g.pdf
18 https://www.paloalto.gov/files/assets/public/v/1/it-department/cmr-attachments/sap-on-call/epi-use-america-
c26193272h.pdf
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City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: IT Department
Meeting Date: June 17, 2025
Report #:2504-4542
TITLE
Approval of Eight Professional Services Contracts for On-Call IT Project Support and
supplemental staffing: Contract C26193247A with INSPYR Solutions, C26193247B with AgreeYa
Solutions, C26193247C with TechLink Systems, C26193247D with Compunnel Software Group,
C26193247E with Progile Tech Inc, C26193247F with Omm IT Solutions, C26193247G with
Infojini Inc, and C26193247H with California Creative Solutions Inc in an Amount Not to Exceed
$1,500,000 in Fiscal Year 2026; CEQA Status – Not a Project;
RECOMMENDATION
Staff recommends that Council approve and authorize the City Manager or designee to execute
eight separate five-year contracts for time-limited, on- call, as-needed, IT project support
services for a collective total not-to-exceed amount of $1,500,000 in Fiscal Year 2026 with:
1. INSPYR Solutions, Contract Number C26193247A1;
2. AgreeYa Solutions, Contract Number C26193247B2;
3. TechLink Systems, Contract Number C26193247C3;
4. Compunnel Software Group, Contract Number C26193247D4;
5. Progile Tech, Contract Number C26193247E5;
6. Omm IT Solutions, Contract Number C26193247F6;
1 INSPYR Solutions, Contract No. C26193247A; https://www.paloalto.gov/files/assets/public/v/1/it-
department/cmr-attachments/it-on-call/inspyr-solutions-llc-c26193247a.pdf
2 AgreeYa Solutions, Contract No. C26193247B; https://www.paloalto.gov/files/assets/public/v/1/it-
department/cmr-attachments/it-on-call/agreeya-solutions-c26193247b.pdf
3 TechLink Systems, Contract No. C26193247C; https://www.paloalto.gov/files/assets/public/v/1/it-
department/cmr-attachments/it-on-call/techlink-systems-c26193247c.pdf
4 Compunnel Software Group, Contract No. C26193247D; https://www.paloalto.gov/files/assets/public/v/1/it-
department/cmr-attachments/it-on-call/compunnel-software-group-c26193247d.pdf
5 Progile Tech, Contract No. C26193247E; https://www.paloalto.gov/files/assets/public/v/1/it-department/cmr-
attachments/it-on-call/progile-tech-c26193247e.pdf
6 Omm IT Solutions, Contract No. C26193247F: https://www.paloalto.gov/files/assets/public/v/1/it-
department/cmr-attachments/it-on-call/omm-it-solutions-c26193247f.pdf
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7. Infojini, Contract Number C26193247G7; and
8. California Creative Solutions, Contract Number C26193247H8.
Staff will return for City Council approval for services in Fiscal Year 2027 through Fiscal Year
2030 based on anticipated needs in the future.
EXECUTIVE SUMMARY
With the expiration of the City’s previous IT on-call contracts awarded in 2020, staff issued a
new Request for Proposals (RFP No. 1932479) in early 2025 to identify multiple qualified
vendors who can provide project-based, time-limited professional services on an as-needed
basis. Following a competitive and structured evaluation process, eight firms are recommended
out of 34 proposals (two proposals were deemed unresponsive) for contract award based on
qualifications, experience, past performance, and competitive pricing. These contracts will
enable the City to meet evolving IT project needs over the next five years.
BACKGROUND
In 2019, the City’s Information Technology Department (ITD) issued RFP (CMR #1136010) and
awarded seven contracts for IT on-call services. These contracts allowed City departments to
engage qualified firms to support time-limited IT projects through task orders.
Recognizing the continuing and evolving need for specialized IT support across various domains
and departments, staff issued RFP No. 193247 in early 2025 to replace the expiring contracts.
The goal was to establish a new pool of qualified vendors capable of delivering these services
from July 1, 2025, through June 30, 2030. The on-call structure allows the City to access skilled
resources as needed for any department for a limited time. The proposed annual not-to-exceed
amount increases by $250,000 over the Fiscal Year 2025 contract year.
ANALYSIS
Solicitation Process
The solicitation was posted on OpenGov, the City’s eProcurement platform, for 32 days. 3,339
vendors were notified of the opportunity. The RFP closed on February 17, 2025. Work under
each contract will be assigned through individual Task Orders. The City is not obliged to assign
any specific amount of work to any contractor. Historically, the department has utilized 50% of
the not-to-exceed amount in recent years. As the City’s reliance on technology continues to
7 Infojini, Contract No. C26193247G; https://www.paloalto.gov/files/assets/public/v/1/it-department/cmr-
attachments/it-on-call/infojini-c26193247g.pdf
8 California Creative Solutions, Contract No. C26193247H; https://www.paloalto.gov/files/assets/public/v/1/it-
department/cmr-attachments/it-on-call/california-creative-solutions-c26193247h.pdf
9 January 16, 2025 IT On-Call Professional Services RFP: https://procurement.opengov.com/portal/palo-alto-
ca/projects/141382/addenda
10 June 22, 2020 City Council Staff Report: https://www.paloalto.gov/files/assets/public/v/1/agendas-minutes-
reports/reports/city-manager-reports-cmrs/year-archive/2020/id-11360.pdf
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grow, there is an increasing demand for enhanced capabilities such as workflow automation,
interactive dashboards, SharePoint improvements, and data governance. Staff has received an
increase in requests for enhancements and process improvements which warrants the increase
of the not-to-exceed amount.
•Server, network, and infrastructure
•Cloud migration and evaluation
•Security and audit compliance
•Disaster recovery and business continuity
•System architecture, VoIP, SharePoint, Exchange, and firewall
•Application development, report generation, and mobile device management
•Project Manager
•Systems Administrator
•Helpdesk Technician (Levels 1 and 2)
•Network Engineer
•Application Developer
•Web/SharePoint Developer
•Financial Analyst
•Business Analyst
•BI Developer
Table 1: Summary of Request for Proposal
Proposal Description
Date Solicitation was Issued
Date Solicitation was Closed
Proposed Length of Project
Number of Vendors Notified
Number of Proposal Packages Downloaded
Total Days to Respond to Proposal
Pre-Proposal Meeting
Pre-Proposal Meeting Date
Number of Proposals Received
Proposal Price Range
Public Link to Solicitation
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Proposals were evaluated by staff from the Information Technology Department based on
criteria outlined in the RFP, including proposal quality, feasibility and effectiveness of the
proposed solution, relevant experience and staff qualifications, financial stability, ability to
meet deadlines, past performance with the City and other agencies, and capacity to provide
ongoing support. This is an on-call contract for as-needed services, and each vendor submitted
hourly rates that vary by level of service and expertise, reflecting their specialization in different
areas of the scope of work. The selected vendors submitted well-structured proposals,
demonstrated proven experience, and showed a strong ability to meet current and future City
needs. Several have successfully worked with the City in the past and received positive
feedback for their responsiveness and service delivery. In addition to technical qualifications,
vendors were selected for their ability to meet operational and compliance requirements and
to support the City’s long-term goals.
FISCAL/RESOURCE IMPACT
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Funding for subsequent years of the contract will be subject to approval through the annual
budget development process. ITD is funded by an internal service fund. Approximately 49% of
the department is General Fund funded with the remaining 51% funded by enterprise and
special revenue funds.
STAKEHOLDER ENGAGEMENT
ENVIRONMENTAL REVIEW
LINKS TO CONTRACTS
•INSPYR Solutions, Contract Number C26193247A11
•AgreeYa Solutions, Contract Number C26193247B12
•TechLink Systems, Contract Number C26193247C13
•Compunnel Software Group, Contract Number C26193247D14
•Progile Tech, Contract Number C26193247E15
•Omm IT Solutions, Contract Number C26193247F16
•Infojini, Contract Number C26193247G17
•California Creative Solutions, Contract Number C26193247H18
APPROVED BY: Darren Numoto, Chief Information Officer
11 https://www.paloalto.gov/files/assets/public/v/1/it-department/cmr-attachments/it-on-call/inspyr-solutions-llc-
c26193247a.pdf
12 https://www.paloalto.gov/files/assets/public/v/1/it-department/cmr-attachments/it-on-call/agreeya-solutions-
c26193247b.pdf
13 https://www.paloalto.gov/files/assets/public/v/1/it-department/cmr-attachments/it-on-call/techlink-systems-
c26193247c.pdf
14 https://www.paloalto.gov/files/assets/public/v/1/it-department/cmr-attachments/it-on-call/compunnel-
software-group-c26193247d.pdf
15 https://www.paloalto.gov/files/assets/public/v/1/it-department/cmr-attachments/it-on-call/progile-tech-
c26193247e.pdf
16 https://www.paloalto.gov/files/assets/public/v/1/it-department/cmr-attachments/it-on-call/omm-it-solutions-
c26193247f.pdf
17 https://www.paloalto.gov/files/assets/public/v/1/it-department/cmr-attachments/it-on-call/infojini-
c26193247g.pdf
18 https://www.paloalto.gov/files/assets/public/v/1/it-department/cmr-attachments/it-on-call/california-creative-
solutions-c26193247h.pdf
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City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Community Services
Meeting Date: June 17, 2025
Report #:2505-4680
TITLE
Approval of Professional Services Contract No. C26193874 with Palo Alto Community Child Care
in an Amount Not-to-Exceed $3,228,146 to Provide Management of the City’s Childcare Subsidy
Program for a Term of Five Years. CEQA Status – Not A Project
RECOMMENDATION
Staff recommends that the Council approve and authorize the City Manager or designee to
execute Contract No. C261938741 with Palo Alto Community Child Care (PACCC), to provide
management of the City’s Childcare Subsidy program for low-income children, for a term of five
years and a total not to exceed $3,228,146.
EXECUTIVE SUMMARY
The scope of services in this contract covers the administration and management of a childcare
subsidy program for up to 45 low-income children annually enrolled in PACCC’s childcare and
afterschool programs. Services include all paperwork and processes related to eligibility
certification, maintenance of an eligibility list, data tracking and compilation, program revenue
and expenditure tracking, contract reporting, as well as other subsidy administration services as
requested by the City.
BACKGROUND
The City of Palo Alto has had a long commitment to childcare in the community and PACCC as
illustrated by the key historical points listed below:
1 Palo Alto Community Child Care, provide management of the City’s Childcare Subsidy program for low-income
children, Contract # C26193874; https://www.paloalto.gov/ /files/assets/public/v/1/community-services/human-
services/palo-alto-community-child-care-contract-c26193874.pdf
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•In 1974, the Council established a Childcare Task Force to develop and implement
priorities for childcare services. The Task Force recommended the City take an active
role in childcare and that a nonprofit be created to coordinate these efforts.
•As a result, Palo Alto Community Child Care (PACCC) was formed and incorporated as a
501(c)(3). On March 25, 1974, the Council approved a contract with PACCC to fund
administrative support and implement components of the Task Force Plan.
•In 1984, the City reduced administrative funding, retaining only a contract with PACCC
to administer the City’s childcare subsidy program. PACCC’s funding continued through
the Human Services Resource Allocation Process (HSRAP).
•In 2014 (FY15), Council approved direct contracts with Avenidas and PACCC, removing
them from the HSRAP review process, with 2015–2020 (FY16-FY21) being the first
contract term.
•The current contract (C21178948) term is July 1, 2020, to June 30, 2025, and was
approved by the Council on November 9, 2020.2
PACCC was removed from the HSRAP process in May 2014, and separately contracts with the
City for management of the City‘s Childcare Subsidy Program. These contracts have each had
five-year terms with CPI increases applied when funding was available. The table below
summarizes these contracts.
Table #1: Contracts with PACCC since FY2016
FY2016-FY2020 $2,425,925
FY2021-FY2025 $2,775,614
PACCC is the only childcare provider in the community with sufficient organizational capacity
and experience to perform the services requested, justifying award as a sole source contract
and exempt from solicitation. An exemption from competitive solicitation per Palo Alto
Municipal Code 2.230.360(d) was approved by the City Manager.
PACCC is also the only local provider of financial aid support for families and children who
qualify through the State of California, Child Development Division. PACCC can therefore
combine City and State subsidy funds, when appropriate, to assist low-income families,
therefore leveraging city funds to provide assistance to more children.
Families also benefit from PACCC’s ability to manage both City and State funding because
2 City Council, November 9, 202; Summary Minutes, Item 9;
https://recordsportal.paloalto.gov/Weblink/DocView.aspx?id=42696
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parents need only work with one agency regardless of the funding stream. Since PACCC
operates infant, preschool and afterschool childcare (TK-5th), children who remain eligible for a
subsidy can receive continuity of care for several years, greatly reducing both the financial
burden and stress placed on low-income families. If PACCC were no longer the administrator of
the program, the currently enrolled 37 children of low-income families would most likely lose
Staff prepared the proposed contract to align with the standards for nonprofit contracts
identified3. These standards include defining specific service levels, goals and objectives, and
reporting requirements. This contract will be closely monitored by staff in the Office of Human
Services (OHS), including review of semi-annual reports and payments requests. Additionally,
on a biennial basis, PACCC will submit a copy of an independent financial audit and OHS staff
will conduct a status review of PACCC’s agreed upon performance indicators that may include a
site visit.
ANALYSIS
Access to affordable and quality childcare is key to the ability of parents to work. The burden to
pay for market rate childcare is out of reach financially for many low-income parents, therefore
subsidized care is a lifeline.
A 2023 study commissioned by the Santa Clara County Office of Education reports4 that the
average annual cost for full-time infant care in the County is $33,456, while full-time preschool
care averages $20,256. Staff analysis indicates that costs in Palo Alto are at least 20% higher,
though often significantly more. Direct comparisons are challenging due to variations in how
programs define age groups, services included in full-time care, and how fees are
presented. Despite these variables, the cost of full-time childcare in Palo Alto is unaffordable
for most low-income families. For currently enrolled families in the City funded childcare
subsidy program, over 65% are headed by a single parent and the average family (one- or two-
income earners) income is around $5,000/month or $60,000/year. This makes it extremely
difficult to pay for childcare and other essential expenses such as housing in Palo Alto without
assistance.
The City’s childcare subsidy program allows parent(s) to work and provide for their families -
often at multiple jobs - and/or go to school to increase their ability to earn higher wages. Access
to high quality childcare at a young age can improve a child’s social and emotional well-being
and help get children “kindergarten ready”. Childcare centers such as those operated by PACCC
also help connect parents to vital services in the community such as social services, healthcare
3 Policy and Services Committee, June 14, 2022; Item 1;
https://recordsportal.paloalto.gov/Weblink/DocView.aspx?id=34809
4 Santa Clara County Child Care Average Tuition Rate Survey 2023;
https://www.sccoe.org/supoffice/lpc/Documents/Reports/Average_Rate_Survey_Brief_Digital.pdf
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and mental health support, which further sustains the low-income families in the subsidy
program.
Eligibility in the program is based on meeting residency and income guidelines (Attachment A,
Exhibit B) and a stated priority list governs the process as a space becomes available. Once in
the program, participants are required to re-certify for continued eligibility on an annual basis.
A co-payment is determined based on total family income and an established Family Fee
Schedule (see contract, Exhibit B-25).
Contract Specifics
The following tasks currently performed by PACCC in the management of the City’s Childcare
Subsidy Program will continue for the next five years, 2025 – 2030, if Council approves the staff
recommendation. The work plan includes but is not limited to the following tasks:
5 Palo Alto Community Child Care, provide management of the City’s Childcare Subsidy program for low-income
children, Contract # C26193874; https://www.paloalto.gov/ /files/assets/public/v/1/community-services/human-
services/palo-alto-community-child-care-contract-c26193874.pdf
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9.Provide referrals to local community service agencies and programs that offer resources
that PACCC cannot for low-income families.
For the full scope of services including program goals and objectives, see the Palo Alto
Community Child Care Contract C26193874.6
FISCAL/RESOURCE IMPACT
The FY 2026 Proposed Operating Budget includes $606,794 for this contract in the Community
Services Department budget, which is sufficient to fund year one of the agreement. For Fiscal
Years 2027 - 2030, the cost for the contract will be subject to the City Council review and
annual appropriation of funds.
STAKEHOLDER ENGAGEMENT
The Human Relations Commission held a Listening Session on childcare issues on May 8,
2025.7 Human Services staff worked closely with PACCC leadership to review and develop the
agreement.
ENVIRONMENTAL REVIEW
Council action on this item is exempt from review under the California Environmental Quality
Act (CEQA) because it can be seen with certainty that there is no possibility that a contract to
administer the City’s Childcare Subsidy Program will have a significant effect on the
environment. CEQA Guidelines 15061(b)(3).
ATTACHMENTS
None.
APPROVED BY:
Kristen O'Kane, Community Services Director
6 Palo Alto Community Child Care, provide management of the City’s Childcare Subsidy program for low-income
children, Contract # C26193874; https://www.paloalto.gov/ /files/assets/public/v/1/community-services/human-
services/palo-alto-community-child-care-contract-c26193874.pdf
7 Human Relations Commission, May 8, 2025; Item 1;
https://recordsportal.paloalto.gov/Weblink/DocView.aspx?id=34808
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City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Planning and Development Services
Meeting Date: June 17, 2025
Report #:2505-4690
TITLE
Approval of Seven (7) On-Call Consulting Contracts to Provide Planning Application Processing
and Supplemental Staffing for the Planning and Development Services Department over a Five-
Year Term, as needed: 1) Arnold Mammarella, Architecture + Consulting, 2) CTC Media Group
INC., 3) Good City Company 4) Metropolitan Planning Group, 5) Michael Baker International
Inc., 6) Stantec Consulting Services, Inc., 7) Urban Planning Partners Inc. in the Amount not to
exceed $2,000,000 ; CEQA Status: Not a Project.
RECOMMENDATION
Staff recommends that the City Council approve and authorize the City Manager or their
designee to execute Contract No. C25193458K – C25193458Q (Attachments A-G) for consulting
services in an amount not to exceed $2,000,000 through June 2030. The firms will provide on-
call staffing support associated with general planning services. The use of the contracts must be
consistent with the funding available in the adopted budget(s). The contracts are:
1. C25193458K - Arnold Mammarella, Architecture + Consulting
2. C25193458L - CTC Media Group INC
3. C25193458M - Good City Company
4. C25193458N - Metropolitan Planning Group
5. C25193458O - Michael Baker International Inc.
6. C25193458P - Stantec
7. C25193458Q - Urban Planning Partners Inc.
EXECUTIVE SUMMARY
The Planning and Development Services Department utilizes planning consultant firms to
augment staffing levels in development review and application processing. These firms offer
planners capable of processing development applications, drafting notices and decision letters,
supporting the City’s Single-Family Individual Review (IR) program, and conducting entitlement
reviews. They also offer expert support in community development functions such as
Community Development Block Grant (CDBG) administration and wireless facility siting analysis,
including Radio Frequency (RF) engineering expertise. Through a competitive request for
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proposal (RFP) process, seven firms have been selected to provide services for these general
planning functions. Staff recommends the approval of seven contracts and a shared not to
exceed amount of $2,000,000 over a five-year term. The use of these contracts will be subject
to available funding within the annually adopted budget.
BACKGROUND
Solicitation Process
City staff issued a Request for Proposals (RFP) on December 27, 2024, for the provision of
planning on-call services.
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* For standardization purposes, the hourly billing rates for principals are listed.
The proposals were evaluated, and 32 proposals were determined to be responsive to the
criteria identified in the RFP. An evaluation committee consisting of PDS managers convened to
evaluate the proposals that met the RFP criteria. Seven firms were selected as planning staffing
on-call support.
ANALYSIS
Process for Selecting On-Call Consultant
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deliverables and budget of each task order, approving invoices to ensure that the billed hours
match the hours actually worked as well as acceptance of work progress and products. This
internal process will allow the Department to be effective in managing concurrent initiatives
while leveraging the capabilities and technical expertise of on call consultants.
FISCAL/RESOURCE IMPACT
STAKEHOLDER ENGAGEMENT
ENVIRONMENTAL REVIEW
ATTACHMENTS
APPROVED BY:
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Attachment A
Links to Contracts
In order to reduce paper consumption, the contract documents are available online at the below links.
•C25193458K Arnold Mammarella Architecture Consulting
http://paloalto.gov/files/assets/public/v/1/city-clerk/staff-report-links/new-folder/c25193458k-
arnold-mammarella-architecture-consulting.pdf
•C25193458L CTC Media Group Inc
http://paloalto.gov/files/assets/public/v/1/city-clerk/staff-report-links/staff-report-2505-
4690/c25193458l-ctc-media-group-inc.pdf
•C25193458M Good City Company
http://paloalto.gov/files/assets/public/v/1/city-clerk/staff-report-links/staff-report-2505-
4690/c25193458m-good-city-company.pdf
•C25193458N Metropolitan Planning Group
http://paloalto.gov/files/assets/public/v/1/city-clerk/staff-report-links/staff-report-2505-
4690/c25193458n-metropolitan-planning-group.pdf
•C25193458O Michael Baker International Inc
http://paloalto.gov/files/assets/public/v/1/city-clerk/staff-report-links/staff-report-2505-
4690/c25193458o-michael-baker-international-inc.pdf
•C25193458P Stantec Consulting Services Inc
http://paloalto.gov/files/assets/public/v/1/city-clerk/staff-report-links/staff-report-2505-
4690/c25193458p-stantec-consulting-services-inc.pdf
•C25193458Q Urban Planning Partners Inc
http://paloalto.gov/files/assets/public/v/1/city-clerk/staff-report-links/staff-report-2505-
4690/c25193458q-urban-planning-partners-inc.pdf
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City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Planning and Development Services
Meeting Date: June 17, 2025
Report #:2505-4728
TITLE
Amend the Fiscal Year (FY) 2026 Budget Appropriation for the Community Development Block
Grant (CDBG) Fund to Reflect Final Entitlement Grant Allocation. CEQA Status: Exempt under
CEQA Guidelines Section 15378(b)(4).
RECOMMENDATION
Staff recommend City Council amend the FY 2026 Budget Appropriation for the Community
Development Block Grant Fund (2/3 vote needed) by:
1. Increasing Revenue estimate from Other Agencies by $616,233; and
2. Increasing General Expense appropriation by $616,233.
BACKGROUND
On June 9, 2025 (Attachment A), City Council will consider the FY 2025-2026 Annual Action Plan
(AAP) and 2025-2030 Consolidated Plan, including the associated funding allocations for the
City’s CDBG Program. In the June 9 report, staff recommended that Council provide direction to
staff to return following budget adoption to amend the FY 2026 Budget to reflect the City’s
actual CDBG entitlement allocation. If necessary, a late packet will be brought forward with any
amendments based on Council direction prior to the Council’s final consideration.
ANALYSIS
The U.S. Department of Housing and Urban Development (HUD) notified the City of a CDBG
entitlement award of $516,233 for FY 2025-2026. In addition, staff estimates that $100,000 in
Program Income will be available for allocation. This Program Income is derived from loan
repayments of previously funded CDBG housing projects. To implement the AAP and enable
expenditure of CDBG funds, the adopted FY 2026 City budget must be amended to reflect this
revenue and associated expenses.
This budget amendment ensures compliance with Federal requirements and supports the
continued administration of CDBG-funded activities benefiting low- and moderate-income Palo
Alto residents.
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FISCAL/RESOURCE IMPACT
STAKEHOLDER ENGAGEMENT
ENVIRONMENTAL REVIEW
ATTACHMENTS
APPROVED BY:
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CITY OF PALO ALTO
CITY COUNCIL
Monday, June 09, 2025
Council Chambers & Hybrid
5:30 PM
Agenda Item
16.Adoption of the Community Development Block Grant (CDBG) Fiscal Year (FY) 2025-2026
Annual Action Plan, 2025-2030 Consolidated Plan, and a Resolution Approving Use of
CDBG Funds for FY 2025-2026 as Recommended by the Human Relations Commission.
CEQA Status: Exempt under CEQA Guidelines Section 15378(b)(4).
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City Council
Staff Report
From: City Manager
Report Type: ACTION ITEMS
Lead Department: Planning and Development Services
Meeting Date: June 9, 2025
Report #:2505-4614
TITLE
Adoption of the Community Development Block Grant (CDBG) Fiscal Year (FY) 2025-2026
Annual Action Plan, 2025-2030 Consolidated Plan, and a Resolution Approving Use of CDBG
Funds for FY 2025-2026 as Recommended by the Human Relations Commission. CEQA Status:
Exempt under CEQA Guidelines Section 15378(b)(4).
RECOMMENDATION
The Human Relations Commission (HRC) and staff recommend City Council take the following
actions:
1. Adopt the draft Fiscal Year (FY) 2025-2026 Annual Action Plan (AAP), 2025-2030
Consolidated Plan (ConPlan)1, and the associated resolution (Attachment A) allocating
Community Development Block Grant (CDBG) funding for FY 2025-2026;
2. Authorize the City Manager to execute the FY 2025-2026 CDBG application to fund the
FY 2025-2026 AAP and any other necessary documents concerning the application, and
to otherwise bind the City with respect to the applications and commitment of funds;
3. Authorize staff to submit the FY 2025-2030 Consolidated Plan and 2025-2026 AAP to
U.S. Department of Housing and Urban Development (HUD) by the extended deadline of
August 16, 2025;
4. Authorize the City Manager or designee to draft and execute amendments to a loan
agreement, regulatory agreement, and related documents necessary to implement City
Council direction on the Alma Garden Rehabilitation Project in a form consistent with
the City’s affordable housing loan documents and approved by the City Attorney; and
5. Direct staff to return to Council following budget adoption to amend the FY 2026 Budget
Appropriation for the Community Development Block Grant Fund (2/3 vote needed) by:
1 https://www.paloalto.gov/files/assets/public/v/3/planning-amp-development-services/cdbg-general-
information/plans-and-reports/consolidated-plans/attachment-a-2025-2030-conplan-and-2025-2026-aap.pdf
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1. Increasing Revenue from Other Agencies by $616,233.
2. Increasing General Expenses by $616,233.
EXECUTIVE SUMMARY
HUD requires jurisdictions to prepare a five-year strategic plan, the ConPlan, which outlines
priority housing and community development needs and establishes related goals. Each year,
jurisdictions must also submit an AAP that identifies the specific projects and activities to be
funded during the upcoming program year to implement the ConPlan’s strategies.
On May 8, 2025, the HRC developed funding recommendations for the CDBG FY 2025-2026
funding cycle. Given that the City’s CDBG grant entitlement amount for FY 2025-2026 was
unknown at the time, the HRC also recommended the implementation of a contingency plan to
be used if FY 2025-2026 funds differed from the amount estimated by staff.
On May 14 2025, the City received HUD’s formal notification of the City’s CDBG FY 2025-2026
entitlement grant amount. Subsequently, staff updated the draft FY 2025-2026 AAP to:
Incorporate the City’s CDBG FY 2025-2026 entitlement grant amount; and
Update the CDBG FY 2025-2026 funding allocation amounts to implement the HRC’s
recommended contingency plan because the HUD allocation exceeded the staff
estimate by $16,233.
The draft 2025-2030 ConPlan and FY 2025-2026 AAP contains proposed funding allocations to
spend all available CDBG funds. CDBG funds available for allocation in FY 2025-2026 total
$616,233, including the City’s entitlement grant and estimated program income to be received.
It is not possible to fund all applications at the requested amounts due to the limitations of
available funds. However, the proposed recommendations:
Allocate all available CDBG program funds;
Are consistent with the City’s CDBG ConPlan;
Are consistent with the City’s 6th Cycle Housing Element goals and programs as they
pertain to CDBG; and
Will result in funding key services and projects that benefit many low and very low-
income Palo Alto residents.
Staff recommends that Council review and approve the draft FY 2025-2030 ConPlan and 2025-
2026 AAP2, the associated draft Resolution (Attachment A), and authorize staff to submit and
execute associated documents necessary to implement the FY 2025-2030 ConPlan and 2025-
2026 AAP.
2 https://www.paloalto.gov/files/assets/public/v/3/planning-amp-development-services/cdbg-general-
information/plans-and-reports/consolidated-plans/attachment-a-2025-2030-conplan-and-2025-2026-aap.pdf
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On May 2, 2025, the White House Office of Management and Budget released its topline
discretionary budget request for Fiscal Year 2026 to Congress, which proposes the elimination
of the CDBG program. If this request is enacted, the City would be unable to award CDBG funds
in FY 2026-2027. Staff will continue to monitor the status of the FY 2026 federal budget and
keep potential CDBG subrecipients informed regarding the availability of funds in the upcoming
funding cycle.
BACKGROUND
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Projects funded through the City by the CDBG program must be consistent with the goals
outlined in the draft 2025-2030 ConPlan. The projects identified for funding in the draft AAP are
consistent with these goals and, following the City Council's final approval of funding
allocations, will be reported to HUD in the FY 2025-2026 AAP.
3" ensure adequate citizen
participation in the CDBG funding process.
ANALYSIS
3 Adopted Citizen Participation Plan: https://www.paloalto.gov/files/assets/public/v/1/planning-amp-
development-services/cdbg-general-information/plans-and-reports/amended-citizen-participation-plan-2022-
approved-by-city-council-9-12-22-final.pdf
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Funds Available for Allocation in FY 2025-2026
Table 1. FY 2025-2026 CDBG Estimated Funds Available
CDBG Funds Available Available for Funding
Estimated Total CDBG Funds Available for Allocation $616,233.00
Public Services (15% Cap) — The amount of any CDBG funds that may be obligated
toward Public Services during a program year is capped at 15 percent of the sum of the
grant allocation plus the total amount of program income received during the prior
program year.
Planning & Administration (20% Cap) — The amount of any CDBG funds that may be
obligated toward Planning & Administration during a program year is capped at 20
percent of the sum of the grant allocation plus the total amount of program income
received during the current program year.
Table 2. FY 2025-2026 Breakdown of Capped/Un-Capped Funds
CDBG Amount
15% x [Grant allocation ($516,233) + prior year FY 2024-2025 program income
($129,950)]
20% x [Grant allocation ($516,233) + current year FY 2025-2026 estimated
program income ($100,000)]
Estimated Total Available for CDBG Allocation $616,233.00
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CDBG 2025-2026 Funding Allocations
Table 3: Fiscal Year 2025-2026 CDBG Budget
Applicant Agency Requested Funding Recommended
Allocation
CDBG Applicants
Subtotal $96,927.40
Subtotal $90,000.00
Subtotal $236,059.00
Subtotal $70,000.00
Subtotal $123,246.60
Grand Total for CDBG Budget $616,233.00
*“N/A” indicates that no formal application was submitted. These uncapped projects were previously awarded
funds, and additional funding was determined to be necessary through staff and HRC review based on identified
need.
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Should the 2025-2030 ConPlan and FY 2025-2026 AAP be adopted by City Council, it would be
submitted to HUD prior to the August 16, 2025, extended deadline.
POLICY IMPLICATIONS
FISCAL/RESOURCE IMPACT
STAKEHOLDER ENGAGEMENT
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ENVIRONMENTAL REVIEW
ATTACHMENTS
APPROVED BY:
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Resolution No. ______XXXX_________
Resolution of the City Council of the City of Palo Alto Approving
The Use of Community Development Block Grant Funds for
Fiscal Year 2025-2026
A. On June 9, 2025, the Palo Alto City Council approved and adopted a document entitled “Consolidated
Plan” which identified and established the Palo Alto housing and non-housing community
development needs, objectives, and priorities for the period July 1, 2025, to June 30, 2030.
B. The Fiscal Year 2025-2026 Annual Action Plan, the annual funding update to the Consolidated Plan,
was subjected to public review and commentary during the period from May 5, 2025, through June
4, 2025.
C. The potential uses of Community Development Block Grant (CDBG) funds were evaluated in light of
the needs and objectives identified in the Consolidated Plan and reflected in the recommendations
and comments of the Human Relations Commission Selection Committee, Human Relations
Commission, and other interested citizens.
D. Under the CDBG program, the highest priority is given to activities which will benefit persons with low
and moderate incomes.
E. The City Council and the Human Relations Commission have held publicly noticed public hearings on
the proposed uses of the CDBG funds for Fiscal Year 2025-2026.
F. CDBG funds allocated to the City for Fiscal Year 2025-2026 are proposed to implement the programs
described in this resolution.
NOW, THEREFORE, the Council of the City of Palo Alto does RESOLVE as follows:
SECTION 1. The uses of CDBG funds for Fiscal Year 2025-2026 are hereby approved and
authorized for the following programs:
Name of Program Amount
1. Catholic Charities of Santa Clara County –
Program. Advocate for the rights of seniors and disabled residents in long
term care facilities.
$8,500.00
2. LifeMoves – Opportunity Services Center. Provide case management
services to Opportunity Services Center and Hotel De Zink clients in locating
housing and/or employment and be connected to benefits.
$39,154.64
3. Silicon Valley Independent Living Center – Housing and Emergency Services.
Provide case management services to low-income individuals with disabilities
to secure affordable and accessible housing.
$20,067.43
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4. Project Sentinel –
including complaint investigation, counseling, advocacy and community
education
$22,005.33
5. Upwards/WeeCare. A microenterprise business that will provide Palo Alto
childcare business improvement services. $90,000.00
6. Next Door Solutions to Domestic Violence. Provide client-centered services
to residents identifying as victims/survivors of domestic/intimate partner $7,200.00
7. Rebuilding Together Peninsula – Safe at Home. Provision of critical health
and safety related home repair needs for low-income Palo Alto
homeowners.
$73,585.00
8. Community Working Group/Abode – Alma Garden. The rehabilitation of a
10-unit affordable housing development. $162,474.00
9. Homekey Palo Alto – Recreation Project. This project will provide a
recreation area and recreation equipment at the Homekey Palo Alto
shelter.
$70,000.00
10. CDBG Program Planning and Administration. $123,246.60
Total CDBG Funds $616,233.00
SECTION 2. The total amount set forth under Section 1 of this resolution represents the
proposed allocation of $516,233, in CDBG funds from the United States Department of Housing and Urban
Development (HUD) for Fiscal Year 2025-2026, and $100,000, in anticipated program income for Fiscal
Year 2025-2026 from Palo Alto Housing Corporation.
SECTION 3. The City staff is hereby authorized to submit the Fiscal Year 2025-2030
Consolidated Plan and Fiscal Year 2025-2026 Annual Action Plan, update and appropriate funding to HUD
for the Fiscal Year 2025-2026 CDBG funds, and such money shall be spent as set forth in this resolution.
The Mayor, City Manager and any other designated City staff or officials are hereby authorized to execute
such application forms and any other necessary documents to secure these funds. The City Manager or
designee is authorized to sign all necessary grant agreements with the program providers set forth in
Section 1.
SECTION 4. The funding amounts set forth in Section 1 of this resolution are based on
final allocation amounts from the Federal Fiscal Year 2025-26 HUD appropriations; City Staff is authorized
to adjust increasing or decreasing the funding amounts set forth herein as consistent with the adopted
Citizen Participation Plan.
SECTION 5. The City Council hereby finds that the Fiscal Year 2025-2026 CDBG program
authorized under Section 1 of this resolution is not a project under the California Environmental Quality
Act (CEQA). However, the Council further authorizes and directs City staff to prepare certifications that
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may be required, under CEQA and the National Environmental Policy Act (NEPA), for each project under
the Fiscal Year 2025-2026 CDBG program prior to the release of funds for any such project.
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Staff Report 2505-4614
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INTRODUCED AND PASSED:
AYES:
NOES:
ABSTENTIONS:
ABSENT:
ATTEST: APPROVED:
City Clerk Mayor
APPROVED AS TO FORM:
City Manager
Sr. Assistant City Attorney Director of Planning and
Development Services
APPROVED AS TO CONTENT:
Director of Administrative Services
CDBG Coordinator
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City Council
Staff Report
From: City Manager
Report Type: ACTION ITEMS
Lead Department: City Manager
Meeting Date: June 17, 2025
Report #:2506-4786
TITLE
Approve a Resolution to Allow Dining and Retail Encroachments on Car Free California Avenue
under PAMC Ch. 12.11; Direct Staff to Approve the Car Free California Avenue Outdoor
Activation Program Regulations Including Reference to the Program fees in the FY 2026
Municipal Fee Schedule; Adopt a Resolution Allowing Open Containers in Conjunction with
Third Thursday Performances in 2025; Direct Staff to Review Differences Between the Open
Container Resolution and an Entertainment Zone as Recommended by the Retail Committee.
CEQA Status – categorically exempt.
RECOMMENDATION
The Retail Committee and staff recommend that the City Council:
1. Approve the Car Free California Avenue Outdoor Activation Program Regulations
(Attachment A)
a. Set program fees (application fee, renewal fee, license fee for use iof the public
right-of-way, and deposit) in alignment with the existing Ongoing Parklet Program as
recommended in the FY 2026 Municipal Fee Schedule (scheduled for Council
adoption on June 16);
2. Adopt a Resolution allowing dining and retail encroachments on Car Free California Avenue
under existing PAMC Ch. 12.11 (Parklets) Attachment B.
3. Adopt a Resolution to allow open containers in conjunction with the Third Thursday music
performances in 2025 (Attachment C); and
Refer to staff a review of differences between the expired open container resolution and an
entertainment zone for future consideration.
EXECUTIVE SUMMARY
The Outdoor Activation Program sets forth the permit design requirements for outdoor dining
and merchandising for the car-free section of California Avenue in alignment with the City
Council direction for staff to return with guidelines for outdoor activation in advance and in
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preparation for the 2025 winter weather months. The proposed program, reviewed and
recommended for Council approval by the Retail Committee (“Committee”)1, will facilitate
flexible outdoor dining and merchant activities, enabling the commercial use of public
sidewalks and roadway space. This staff report highlights:
Vision for outdoor dining
Merchant feedback regarding outdoor dining
Key differences between parklets and the outdoor activation program
Outdoor dining requirements and guidance
Signage
Impact of outdoor dining on sanitary sewer infrastructure
Restroom capacity
Outdoor Activation fees
Issues with building structures in the public right-of-way
Revisions per Retail Committee feedback
Implementation timeline
Open Container Resolution and Entertainment Zone
BACKGROUND
1 Retail Committee voted two (2) in support of recommending City Council approval and one (1) absent
(Councilmember Burt).
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the Car Free California Avenue Outdoor Activation Program to the Retail Committee,2 which
voted to advance the program to the City Council.
rd Thursday Events, effective from June through December 2024.3
ANALYSIS
A community-oriented, car-free street environment
Prioritizing economic vitality, pedestrian experience and social interaction
Flexible, open, visually cohesive public space
Lively, inclusive atmosphere for residents and visitors
Accessible, safe, high design quality, and regularly maintained
Desire for design equity and aesthetic improvements
Interest in weather protection (shelter, wind screens, heating)
Support choice in materials, colors, signage
2 Retail Committee, May 21, 2025,
https://cityofpaloalto.primegov.com/Portal/Meeting?meetingTemplateId=17618
3 Staff Report 2405-3093 on Consumption of Alcohol on California Ave:
https://cityofpaloalto.primegov.com/Portal/viewer?id=0&type=7&uid=7b643945-3828-4941-8858-ff95939f6fb3
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Permit variety of seating and merchandizing, decorative lighting, flowers and plants on
the enclosures, outdoor host stations, hanging blade signs and other elements
Preference to avoid temporary-looking or low-cost construction that avoids such things
as corrugated plastic roofing, overly brightly colored furniture, post and rope barriers
and unneeded traffic safety elements
Outdoor Dining Requirements
The program is organized into general requirements and design elements as presented in the
following table:
Design ElementsGeneral Requirements
(applies to all permits)Required Optional
Planters
Lighting
Electrical
Waste management
Railings
Sidewalls
Overhead shelter
Branding and signage
Heating
Platforms (where
appropriate)
Location
Setbacks
Use
Accessibility
Operator
responsibilities
Permitting process
and conditions
Design Guidance applies to each element
Design elements are either required, or optional per the applicant‘s discretion. When an
applicant selects a design element, they must meet all of the requirements for that element.
Design Guidance is to encourage best practice, promote high quality design, and ensure
consistency for the aesthetics of the street. This structure allows businesses to customize their
outdoor space while maintaining safety, accessibility, and a cohesive street environment.
Signage
Staff recommends allowing limited use of sandwich boards within designated outdoor
activation areas to support visibility of businesses for pedestrians walking down the center of
the street. The City’s sign code currently prohibits freestanding signs in the public right-of-way,
including sandwich boards. This allowance would support merchant visibility while maintaining
pedestrian flow and safety. Per discussion at Retail Committee, Merchants will be permitted up
two signs in outdoor activation areas, with no more than one sandwich board sign. Staff will
need to coordinate to make any necessary adjustments to the City’s Sign Ordinance.
Differences from Ongoing Parklet Program
The program draws from the City’s Parklet Program (currently in place for University Avenue
and other streets with vehicles) while responding to the unique conditions of a car-free
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environment. At the May 21, 2025 Retail Committee, staff noted the following differences
from the City’s parklet program:
Sanitary Sewer Infrastructure: The expansion of outdoor dining on California Avenue has
significantly increased total restaurant capacity, leading to more meals served and a higher
potential discharge of fats, oils, and grease (FOG) into the City’s sanitary sewer system. Grease
Control Devices (GCDs) in many restaurants were originally sized for pre-pandemic indoor
seating. Expanded seating is increasing the risk of FOG entering building drainage systems and
the City's sanitary sewer (SS).
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Staff recommends continuing proactive inspections, requiring businesses to more frequently
maintain restaurant GCD systems, identifying higher-risk systems for improvement, and
mitigating future problems through plan review to correct GCD type, size and fixture
connections. Depending on the success of these efforts, supplemental fees may be required for
outdoor dining permits to fund increased City maintenance costs.
Restroom Capacity: Similar to sanitary sewer system demands, outdoor dining also increases
the demand for restroom capacity. Increasing dining capacity or occupancy load can increase
the need for additional restroom fixtures. Given the increased demand for restrooms with the
overall expansion of dining, provision of public restrooms to serve multiple establishments may
offer a more cost-effective and space-efficient alternative to businesses providing their own
additional bathrooms. Possible locations will depend on the number and size of facilities.
Operations and Maintenance: Operating and maintenance costs are heightened in the car-free
street of California Ave. with staffing needed to support the program initiation and
implementation, additional cleaning, and installation and maintenance of infrastructure. Costs
for additional restrooms are being evaluated.
An initial application fee (FY 2026 fee expected to be $5,004)
An annual renewal fee (FY 2026 fee expected to be $604)
A fully refundable deposit (FY 2026 expected to be $2,750)
A license fee for use of the public right-of way (Downtown charge currently
$10.71/square foot annually)
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Initial Application Fee: An initial application fee is required to establish an outdoor activation
space to fully recover cost necessary to process an application, conduct site inspections,
including Public Works, Utilities, and others such as Planning if applicable review. A portion is
also based on staff time required for ongoing program administration such as customer service,
compliance with standards, and complaint response. The Committee and staff recommend
maintain the fee consistent with the ongoing parklet program.
Annual Renewal Fee: An annual renewal fee is required to review the encroachment permit
annually to fully recover costs at a flat rate. An application renewal is not expected to require
the same level of staff effort as processing a new application and therefore the fee is less than
the initial fee. The Committee and staff recommend maintain the fee consistent with the
ongoing parklet program.
Deposit Fee: Consistent with other programs in the City, a deposit fee may be considered to
address any unrepaired damage to the roadway or sidewalk or any costs that may be incurred
due to the City having to remove things in the activated space. Given the recommended
guidelines, this fee could be lowered or eliminated for the car-free portion of California Avenue
as parklet structures are currently not authorized, however staff would recommend retaining
use of it for consistency with the existing programs as there remains a cost to remove an
installation from the permitted space in the event of a necessary removal.
License Fee: A license fee for use of the public right-of-way is proposed. This fee can be set
based on the City Council’s reasonable assessment of the value of the land used by the
operator and incorporate a certain amount of discount or subsidy for that use. The Retail
Committee recommended maintaining use of the rate used for the ongoing parklet program
with a request for alternative scenarios that considered the value of the use of the land in a car-
free environment, without the same restrictions of space that regulate parklets. When
considering the license fee, the Council may consider establishing different rates based on the
permitted use of the space to align with the impacts more closely, namely, retail use versus
restaurant uses and increased value of the land such as if the City provided supplemental
restroom capacity as noted earlier. These variations could be studied and implemented at a
later time.
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As of Q1 2025 as reported by CoStar, the average rent in the University Avenue (downtown
‘DT’) analysis area is reported at $76 per square foot. On California Avenue, the average rent
for Q1 2025 is $59 per square foot. Outdoor spaces will vary in size with some of the larger
spaces currently reflecting upwards of 1,000 square feet in the public right-of-way. The table
below shows the California Avenue rates with Downtown in grey for reference.
A $10.71 per square foot fee would result in approximately $118,000 in annual revenue,
or $5,355 for a 500 square foot space.
A 70% discount, or $18 per square foot rate would generate $198,000 in annual
revenue, and cost a 500 square foot activation space $9,000 annually.
A 50% discount, or $30 per square foot rate would generate $300,000 in annual
revenue, and cost a 500 square foot activation space $15,000 annually.
No discount, or $59 per square foot rate would generate $649,000 in annual revenue,
and cost a 500 square foot activation space $29,500 annually
Discount
DT CA DT CA DT CA DT CA
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
*Calculation reflects use of the building code standard of 15 square feet per person
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permitted parklet area limits?” Also raised, by a restauranteur, is their interest to build a
permanent outdoor dining structure extending out from their building and onto the public
roadway and across the sidewalk. They envision something similar to outdoor dining at
Stanford Shopping Center, as it offers the following advantages:
Weather protection from the sun, wind and rain throughout the year, with lighting and
heating.
Design consistency with interior restaurant space
One-time merchant investment in long-term, high-quality solution
Utility access: many utilities (water, gas, sewer, stormwater, electrical, other) run
beneath the right-of-way and require unimpeded emergency and maintenance access.
Structures impeding access will need to be removed, with associated replacement costs
and business disruption.
Fire safety: structures can pose a fire hazard and obstruct fire access. Fire can move
from one structure to another, rapidly engulfing the entire street.
Restricts storefront visibility: structures would be larger in area and taller than parklets,
and there could be several along both sides of the street, blocking visibility of adjacent
retail storefronts and reducing the openness of the environment.
Building Code requirements: structures require attachment to the roadway, foundation
work and plan review by the Building Division, improvements which will increase
merchant costs, time delays and conflict with below grade utilities.
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Lease complexity: structures on public property would require long-term leases,
requiring analysis of market value and legal restrictions on use of specific property
parcels.
Architectural Review: structures will trigger Architectural Review Board oversight,
extending timelines and increasing costs.
Removal: Long-term maintenance and removal concerns if a business closes.
The success of this program relies on the interest of merchants to improve their outdoor
activation areas based on the design guidance to evolve the street as a whole to be an open
and vibrant. As a part of the longer-term design of California Avenue, appropriate locations for
structures within the public right-of-way can be more appropriately considered.
Car Free California Avenue Outdoor Activation Program revisions based on Retail Committee
feedback
Increase number of permitted signs from one to two, with a limit of one sandwich board
Other overhead shelters may be permitted (beyond large format umbrellas and
awnings), provided they are not attached to the roadway, are easily and quickly
removable for utility access and meet clearance and design requirements.
Limit requiring overhead electrical service only to areas with glass mosaic sidewalks.
Implementation Timeline (Tentative)
Staff recommend a phased implementation approach that mirrors the approach used when the
ongoing parklet program was implemented. Below outlines an approximate timeline:
JUNE: Council review and approval of outdoor activation guidelines and accompanying
resolutions and fees
JULY: Adopted standards go into effect, pre- applications / re-applications would be
open and due to the City including associated fees (application and license)
AUGUST: Applications accepted and installations without a pre application or
application on fill will begin to be enforced for removal.
SEPTEMBER/OCTOBER: Transition of outdoor spaces to follow the activation guidelines
NOVEMBER: Outdoor activations must be in compliance with new standards
Open Container Resolution and Entertainment Zone
The Retail committee expressed a desire and recommended that Council refer to staff further
exploration of establishing an Entertainment Zone for the Car Free portion of California Ave.
Recognizing this interest, staff proactively prepared a resolution extending the open container
ordinance previously in effect for Third Thursdays that sunset December 2024. Although not an
Entertainment Zone, if adopted, could provide allowance for open containers throughout 2025
while the referral for further work on an Entertainment Zone in undertaken by staff.
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FISCAL/RESOURCE IMPACT
STAKEHOLDER ENGAGEMENT
rd Thursday and Earth
Day events, in-person presentation to facilities managers at Stanford Research Park, and in
person meetings at the Sunday Farmers’ Market as well as feedback from the Architectural
Review Board on March 20, 2025. The chronology of outreach can be found on the Car-Free
Streets webpage4.
ENVIRONMENTAL REVIEW
ATTACHMENTS
APPROVED BY: Ed Shikada, City Manager
4 Car-Free Streets: Cal Ave & Ramona Street Webpage:
https://www.paloalto.gov/Departments/Transportation/Transportation-Projects/Car-Free-Streets-Cal-Ave.-
Ramona-Street
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Outdoor Activation Program Guidelines
California Avenue Community Street
Outdoor Activation
Permit Requirements and Design Guidance
for Outdoor Dining and Merchandising
➔City of Palo Alto
➔Effective starting xx 2025
1
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Table of Contents
01. Introduction
02. General Requirements
03. Design Elements
04. Encroachment Permit Application
Car-Free California Ave
2
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Outdoor Activation Program Guidelines
Introduction
Topics
➔Purpose
➔Vision
➔Objectives
01
3One Seaport
Boston, Massachusetts
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Outdoor Activation Program Guidelines
01.1 Purpose
4
The Outdoor Activation Program is an initiative by the City of Palo Alto to transform the car-free
section of California Avenue into a vibrant Community Street, supporting local business activity
and enhancing the community experience.
01 Introduction
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01.1 Purpose (continued)
5
The document describes requirements and design
guidance that apply to the commercial to use public
sidewalks and roadway spaces for outdoor dining,
retail and entertainment uses. This document sets
forth the City's expectations for issuing encroachment
permits for the commercial use of portions of the
street to ensure that public spaces remain accessible,
safe, equitable, and well-designed and maintained. It
serves as guidance to businesses, City staff,
designers, and the public to create a welcoming, open,
and attractive community-oriented environment.
01 Introduction
California Ave
Palo Alto, California
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The vision for Car Free California
Avenue is to be a community-oriented
main street that is an open, car-free
environment that prioritizes community
experience, meaningful social
interaction, and commercial vitality.
01.2 Vision
6
01 Introduction
One Seaport
Boston, Massachusetts
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01.2 Vision (continued)
7
By removing vehicle traffic and repurposing space
for pedestrian use, the street becomes a welcoming
community hub that invites spontaneous
gatherings, fosters neighborhood identity, and
stimulates economic vitality. Commercial use of
outdoor space supports local businesses, enhances
customer experience, and directly contributes to a
thriving community destination. Activation spaces
extend business activity into the public realm,
creating opportunities for flexible, creative, and
visually cohesive commercial use of the street. Well-
designed activation areas contribute to a lively,
inclusive, and safe atmosphere where residents and
visitors feel a strong sense of belonging.
01 Introduction
Car-Free Montreal
Montreal, Canada
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01.3 Objectives
8
This document advances
the following objectives:
A.Enhance Customer Experience and Local Business Vitality
○Create visually appealing, comfortable outdoor spaces
that attract and retain customers
○Support diverse business needs through flexible
activation space configurations
○Encourage private investment with consistent program
standards and clear expectations
B.Ensure Safety and Accessibility
○Maintain ADA-compliant pedestrian pathways and
emergency access
○Use safe, durable, weather-resistant materials for all
installations
01 Introduction
C.Advance the Aesthetics and Livability of the Street
○Promote a unified yet diverse aesthetic that reinforces
Cal Ave's unique character
○Provide aesthetic guidance for design elements to
enhance the overall ambiance of the street
○Preserve visibility to adjacent storefronts and maintain
open sightlines
D.Encourage Adaptive Design
○Encourage Adaptive Design
○Promote adaptability to respond to seasonal changes in
weather
○Maintain flexibility of the use of public space
E.Foster Community Connection
○Promote the activation of street environments to invite
shared experiences, events, and informal gatherings
○Enable Cal Ave to function as a true community
destination and cultural hub
F.Efficient and Equitable Use of Public Space
○Ensure efficient, equitable outdoor use of public right-
of-way
○Avoid conflict with utilities, infrastructure and public
safety features
○Support of long-term investment in well-managed
outdoor spaces
○Enable a single, streamlined encroachment permit
process
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General
Requirements
Topics
➔Street Zones
➔Location
➔Setbacks
➔Permitted Activities
➔Operator Responsibilities
02
Broadway Street
Redwood City, California 9
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02 General Requirements
02.1 Street Zones
This section describes the location, setback, permitted uses and
operational requirements for outdoor activation areas.
The car-free portion of the California Avenue right-of-way
consists of five zones, as shown in Figure 2.1.
Frontage
Zone
Pedestrian
Zone
Curbside/Street
Furniture Zone
Access Zone
Area designated for pedestrian,
bicycle, emergency vehicle and
certain service vehicles with
permission.
Sidewalk SidewalkRoadway
Activity Zone
Figure 2.1. Street Zones
10
Activity Zone Frontage
Zone
Pedestrian
Zone
Curbside/Street
Furniture Zone
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Area designated for
pedestrian, bicycle,
emergency vehicle and
certain service vehicles
with permission.
Provides pedestrian,
emergency, and
disabled access to the
building.
02.1 Street Zones (continued)
Extension of the
building with entryways,
recesses, doors,
windows, awnings, and
overhangs that extend
into the street right-of-
way.
Frontage Zone Pedestrian
Zone Access ZoneActivity ZoneCurbside/Street
Furniture Zone
Designated for street
furniture, landscape,
street trees, lighting,
benches, green
infrastructure, utilities,
bicycle parking,
planting, and other
amenities.
Area designated for
outdoor dining, retail
merchandise, and public
space for use, such as
the Farmers’ Market,
events, public art, and
other community,
cultural or public uses to
attract pedestrian
activity to the street.
02 General Requirements
11
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Businesses are required to locate their Outdoor Activation
space directly in front of the operator’s storefront.
Commercial outdoor activation is permitted in the following
three zones as shown in Figure 2.3. Location Map
●Frontage Zone
●Curbside/Street Furniture Zone
●Activity Zone
Outdoor Activation spaces shall notobstruct or
encroach upon the following:
●8-foot pedestrian through zone on sidewalks
●22-foot shared zone
●Designated pedestrian paths of travel
●Property Emergency Access Way
●Designated bike lanes
12
02.2 Location
Bu
i
l
d
i
n
g
P
r
o
p
e
r
t
y
L
i
n
e
Bu
i
l
d
i
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P
r
o
p
e
r
t
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L
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02 General Requirements
Figure 2.2. Location Diagram
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Area A Area B
02 General Requirements
Figure 2.3. Location Map
CAL AVE CAL AVE
02.2 Location (continued)
Area A spans between El Camino Real and
Mimosa Lane, and Area B spans from
Mimosa Lane to Birch Street.
As
h
S
t
Bi
r
c
h
S
t
El
C
a
m
i
n
o
R
e
a
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Cambridge Ave
Sherman Ave
Grant Ave
Mi
m
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s
a
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02.3 Setbacks
Setbacks are required and define the
permitted area for outdoor activation.
Setbacks apply to all design elements
including –railings, screens, planters,
structures, cantilevered awnings,
umbrellas, or other elements.
02 General Requirements
Smith Street,
Brooklyn, New York
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02.3 Setbacks (continued)
Area A
02 General Requirements
Legend
Potential Permitted Zones
Property Emergency Access Way
Min. of 4 feet from each property edge, creating an 8-
foot emergency access zone between adjacent
properties
Fire Hydrant Setback, 15’
Tree Setback, 3’
Drain Setback, 5’
Fire Hydrant Light Post
Setback
Note: Pedestrian Zone can
vary in location on sidewalk,
aligning at the curb or
building front or in between.
However ped zone is to be
consistent across property
frontage, and not by tenant
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02.3 Setbacks (continued)
Area B
02 General Requirements
Ma
t
c
h
L
i
n
e
Legend
Potential Permitted Zones
Property Emergency Access Way
Min. of 4 feet from each property edge, creating an 8-
foot emergency access zone between adjacent
properties
Fire Hydrant Setback, 15’
Tree Setback, 3’
Drain Setback, 5’
Fire Hydrant Light Post
Setback
Note: Pedestrian Zone can
vary in location on sidewalk,
aligning at the curb or
building front or in between.
However ped zone is to be
consistent across property
frontage, and not by tenant
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02.3 Setbacks (continued)
For Fire Safety
●Two means of emergency access to and from buildings to the
street right of way are required.
●Minimum of 4-feet from each property line, creating an 8-
foot emergency accessway between adjacent properties.
●Minimum of 8-feet between structures to allow for
emergency access.
●Structures must not overhang more than 12-inches into the
emergency vehicle accessway.
●For multi-tenant buildings, boundary elements can adjoin,
provided building setback requirements are met.
For Street Trees
●Maintain a 3-foot clearance from tree trunks or major
branches.
●Closer encroachment requires urban forestry approval.
●To protect tree roots, boundary elements may be installed
adjacent to tree wells to direct foot traffic away from roots.
For Utilities
No utilities access points shall be covered by the Outdoor
Activation space improvements, this includes storm drain catch
basins and all telecommunication vaults and manholes. A minimum
of 5 linear feet clearance must be maintained between
improvements and any storm drainage feature such as catch
basins. Outdoor Activation space improvements must allow access
to the catch basin and shall not obstruct the catch basin.
Improvements must not obstruct:
●Public utilities:(e.g., water, gas, wastewater, electric, fiber,
streetlight, telecommunication vaults).
●Gas mains or services:(to avoid potential hazards).
●Fire Hydrants:Minimum 15-foot clearance required.
●Manhole Covers:Maintain a 5-foot radius for access.
●Storm Drain Catch Basins:Minimum 5-foot clearance required;
outdoor activation area must allow maintenance access.
If improvements to an outdoor activation area conflict with public
infrastructure (e.g., signage, benches), applicants must consult
Public Works for potential relocation. If relocation isn’t feasible,
outdoor activation area must accommodate existing infrastructure.
For Access Zone
Include two foot planter setback in the outdoor activation area,
facing the center of the street, along the accessway. Only planters,
sandwich boards, hostess stations and ADA ramping up to a
platform are permitted. No screens, tables, chairs, umbrellas,
furniture, lighting, heaters, etc. are permitted.
02 General Requirements
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Guidelines
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Outdoor Activation Program Guidelines
Commercial & Non-Commercial Activities
All activity must be contained within the applicant’s
permitted outdoor activation space.
The following commercial and non-commercial activities
are allowed within a permitted outdoor activation space:
●Dining
●Retail
●Community events
●Live music
●Pop-up installations
●Public art
18
02.4 Permitted Activities
02 General Requirements
The Shop
Iowa City, Iowa
12Degree Brewing
Louisville, Colorado
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Outdoor Activation Program Guidelines
02.4 Permitted Activities (continued)
For dining, businesses are required to:
●Hours of operation are the same as approved hours for the establishment or per
approved Conditional Use Permit.
●Provide all furnishings.
●Tables shall be placed in conformance with the health and safety standards
established by Santa Clara County and State of California.
●Be ADA compliant both on the roadway and sidewalk.
●Fire of any kind is prohibited -this includes tea lights or firepits.
●Conditional Use Permit is required for a business to serve alcohol. No amendment to an
approved business’ Conditional Use Permit is required to serve alcohol in outdoor
activation areas.
●Businesses are required to comply with California Department of Alcoholic Beverage
Control (ABC) for licensing and regulation of alcohol service.
Dining
02 General Requirements
19
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Outdoor Activation Program Guidelines
02.4 Permitted Activities (continued)
For retail sales businesses are required to:
●Businesses must leave a minimum of 8’ of unobstructed walkway space for
pedestrians.
●All displays must be removed daily. Nothing is permitted overnight.
Retail
02 General Requirements
20
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Outdoor Activation Program Guidelines
Non-Commercial Activities
Non-commercial activities, such as community events, live
music, pop-up installations and public art are permitted and
welcomed contributors to vibrant street life.
These uses are:
●Temporary and open to the public
●Not associated with a specific business or private benefit
●May include events hosted by non-profits, cultural
groups, or community members
Non-commercial activations may not require an
encroachment permit but could require other city approvals
such as a temporary use permit. Contact the City of Palo Alto
for requirements.
21
02.4 Permitted Activities (continued)
02 General Requirements
3rdThursday
California Ave, Palo Alto
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Outdoor Activation Program Guidelines
02.4 Permitted Activities (continued)
For live entertainment, businesses are required to:
●Live entertainment will not spill outside of permitted activation space
●Any cords spanning the pedestrian through zone on the sidewalk must be secured to
avoid tripping hazards with a cable cover or other ADA accessible cover
●Businesses must comply with the Palo Alto Municipal Code for noise limits.
Entertainment
02 General Requirements
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Outdoor Activation Program Guidelines 23
02.5 Operator Responsibilities
Compliance
●Businesses owners must abide by the guidelines set forth in
this document and the terms of their permit.
●If a business does not comply with these guidelines, the city
reserves the right to enforce, modify or revoke a permit
based on public safety, accessibility, operational conflicts, or
other concerns.
Maintenance
●Businesses owners must maintain and upkeep outdoor
activation space. This includes cleaning furnishings daily,
removing trash and recycling, replacing damaged lighting or
heaters if applicable, and maintaining landscaping.
●Businesses must comply with the city requests to temporarily
remove furnishings, such as seating and tables, for city
maintenance or special events.
●Business owners are responsible for staying up to-date with
permit fees, renewing their license and complying with
standards/guidelines that may be implemented in the future.
02 General Requirements
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Outdoor Activation Program Guidelines
Design Elements
Topics
➔Platforms
➔Boundary Elements -Planters,
Railings, Sidewalls and Weather Screens
➔Overhead Shelter
➔Branding and Signage
➔Lighting
➔Heating
➔Electrical
➔Trash and Recycling
➔ADA Accessibility
03
Star Progetti
Modular Perimeter Structure 24
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Outdoor Activation Program Guidelines 25
03 Design Elements
03.0 Design Elements
Outdoor activation spaces on California Avenue will consist of a
range of design elements to create a welcoming, open, visually
attractive and safe public environment. Design elements include:
Platforms Boundary Elements
Planters
Boundary Elements
Railings & Partitions
Boundary Elements
Sidewalls and
Weather Screens
Overhead Shelter Branding & Signage
Lighting Heating Electrical Trash and Recycling ADA Accessibility
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Outdoor Activation Program Guidelines
03 Design Elements
03.0 Design Elements (continued)
This is an example of a possible
configuration of design elements. This
is one of many possible
configurations.
26
Planters
Weather Screens
Overhead Shelter
Furniture
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Outdoor Activation Program Guidelines
03.0 Design Elements (continued)
Design Element Applies to All
Activation Areas
Required for
Outdoor Dining Optional
Required for all activation areas
(dining, retail, other)
Required specifically
for outdoor dining
To enhance customer comfort
and year-round usability
3.1 Platforms ✓
3.2.a Boundary Elements -Planters ✓✓
3.2.b Boundary Elements -Railings ✓
3.2.c Boundary Elements -Sidewalls and
Weather Screens ✓
3.3 Overhead Shelter ✓
3.4 Branding and Signage ✓
3.5 Lighting ✓(for evening service)
3.6 Heating ✓
3.7 Electrical ✓
3.8 Trash and Recycling ✓✓
3.9 ADA Accessibility ✓✓
Design elements are required or optional per the table below.
03 Design Elements
27
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Outdoor Activation Program Guidelines
03.1 Platforms
Platforms are a level, horizontal surface
extending from the sidewalk into the
roadway, bringing the restaurant dining
experience outdoors, providing a stable,
accessible floor surface and protecting
patrons from water runoff on the street.
Applicants can choose whether to make platform
improvements depending on the level of the sidewalk and
roadway.
Washington DC Pilot Streatery
Adams Morgan, Washington DC
03 Design Elements
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Outdoor Activation Program Guidelines
Platform Requirements (continued)
1.Layout
a.Be level with the sidewalk
b.Comply with ADA standards
2.Materials
a.Durable, weather-resistant, and safe for pedestrian use
b.Constructed with exterior-rated, high-quality materials, including:
■Natural, durable wood (e.g., redwood, cedar)
■Preservative-treated wood
■Light-gauge steel
■Other engineered materials suitable for exterior conditions
c.The floor shall have finish and slip resistance (BH is a minimum of 0.6
coefficient of friction).
3.Structural
a.Support a live load of 100 pounds per square foot.
b.All fastening hardware and fasteners used with preservative treated
wood must be made of:
■Hot-dipped zinc-coated galvanized steel
■Stainless steel
■Silicon bronze
■Copper
4.Edge Conditions
a.Platform must be partially covered with the planters perpendicular to
the line of travel.
b.Platform edge along the access way cannot be more than 25%
covered
c.For a long platform, railings mounted on the platform are permitted
here.
5. Drainage, Ventilation & Rodent Proofing
a.Platform underside must be constructed to allow for seasonal
drainage.
b.Adequate cross-ventilation to enable the surface to dry within 12–24
hours.
c.Openings beneath the platform must be screened with corrosion-
resistant material with a maximum mesh size of 0.25 inches.
d.Platforms must not impede curbside drainage.
■A minimum clearance of 6.5 inches from the sidewalk curb must
be maintained along the platform's entire length.
■Openings at either end of the platform must be covered with
screens to prevent debris accumulation beneath the platform
and in the gutter.
e.Closure decking must be removable to allow for under-platform
inspections as needed.
f.Platform to be sloped a minimum ⅛ inch per linear foot towards the
sidewalk for drainage.
g.Any debris and leaves shall be removed immediately by the permittee
to allow free flow of water.
h.Leaves and litter shall not be blown in the street and shall be bagged
and placed in the appropriate disposal bin.
i.Refer to drainage detail below for platform attachment to sidewalk.
03 Design Elements
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Outdoor Activation Program Guidelines
03.2 Boundary Elements
Planters, Railings and Sidewalls
The commercial use of outdoor space requires boundary
elements to spatially separate outdoor dining areas yet
maintain an open, welcoming pedestrian environment.
Boundary elements are not intended to obstruct views to or
from dining areas, retail storefronts, bicycle lanes, or
pedestrian routes. The openness of the street —visually and
acoustically —is essential to fostering a community-
friendly, vibrant environment.
Boundary elements:
●Define and organize active spaces
●Enhance customer comfort for year-round use
●Improve aesthetics for both the business and the street
●Maintain clear, safe circulation routes
●Enhance the overall public realm without enclosing or
privatizing public space
03 Design Elements
30
Santana Row
San Jose, California
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Outdoor Activation Program Guidelines
Boundary Element Guidelines (continued)
1.For Platforms
For those choosing to install a platform, the following guidelines on
boundary elements must be implemented:
a.The edges of the platform shall be enclosed on three sides with
planters or railings (only sidewalk open)
b.Boundary elements must ensure visibility to pedestrians and not
create a visual barrier.
c.The edge treatment shall be substantially secured to the platform.
2.For Outdoor Dining or Retail Uses
The following table summarizes key differences in boundary requirements
between outdoor dining and retail uses on sidewalk and roadway areas.
Outdoor Dining Retail
Activity Seated, longer stays
(eating/drinking)
Browsing, movement
(shopping)
Need for
Boundary
Yes
(defines service area, meet
ABC/alcohol regulations if
serving alcohol, can be
minimal)
Optional
(prioritize openness for
browsing)
Boundary Type Planters
Railings
or partial screens that
suggest an “area” without
fully enclosing
Planters
Movable displays
No fixed railings
Movable screens
Flexibility Moderate
Furniture and fixtures can
remain overnight, no fixed
furniture to sidewalk or
roadway
High
Merchandise can be moved
in/out daily; no overnight
merchandise and furnishings,
maintain flexibility for use of
roadway for Farmers’ Market
and street events
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Outdoor Activation Program Guidelines
03.2.a Boundary Elements:
Planters
Planters are a required design element for
all outdoor activation areas. They serve as
buffers, introduce garden planting and
color to enhance the appeal of the street,
and address limited in-ground landscaping.
03 Design Elements
32
Examples of
Preferred Planter
Types
Low, powder coated steel
Modular, movelable, with drought
tolerant planting
Wood planters with aluminum frame
Modular, movelable, with drought
tolerant planting
Wood planter, steel frame
Modular, moveable with integrated
casters, drought tolerant planting
Modular planter with integrated
glass screen
Attached to adjacent buildings
to provide broad coverage and
integration with architecture.
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Outdoor Activation Program Guidelines
Planter Requirements (continued)
1.Types
a.Free standing planters of various materials ranging in height from 24”-3O”.
May be integrated with other boundary elements such as stanchions,
railings, or wind screens.
2.Placement
a.Planters are required on sides of outdoor activation zones, perpendicular to
the path of travel without blocking pedestrian access, emergency access,
or visibility between storefronts.
b.A two foot planter setback is required where outdoor dining faces the
center of the street along the accessway.
c.Planters are required a minimum of 25 percent of the frontage facing the
center of the street and are optional facing the sidewalk for outdoor dining
areas.. Each activation zone must provide a 4’ wide minimum accessible
entry from the sidewalk.
3.Specifications
a.Planters must be freestanding, movable, and made of durable, weather-
resistant materials
b.Must include planting, with regular maintenance by the business owner
c.Not exceed 30 inches in height where creating the boundary of an outdoor
dining area
d.Support seasonal planting or drought-tolerant species
4.Material Palette
a.Use high-quality materials such as:
b.Powder-coated metal
c.Fiberglass
d.ceramic
e.Finished wood with weatherproof seal
5.Avoid
a.Bright plastic, untreated wood, DIY containers, concrete or CMU blocks
b.No plants shall have thorns, spikes, or sharp edges.
c.Poisonous or invasive plants are not permitted.
Planter Design Guidelines
1.Selecting one planter shape, whether round, rectangular, or tapered, and
then varying sizes, maintains uniformity of design, and can be arranged to
create a layered garden, rather than mix of planter shapes of the same size
which can be visually confusing.
2.Utilizing a diversity of plantings can enliven retail areas and support a
colorful, active street life.
3.Arranging small, medium, and large planters together in a cluster increases
the amount of planting visible at eye level than repetition of one planter
size, for retail areas.
4.Coordinated plant palettes (native grasses, succulents, seasonal flowers)
can unify the street experience.
Outdoor Dining
1.Planters should define a clear border around dining areas to promote visual
harmony
2.Aim for unified planting design —consistent planter types, material
palettes, and/or coordinated plant selections along each frontage.
Outdoor Merchandising
1.Planters may be arranged in flexible, clustered groupings to create an open
and informal, and not a strictly bounded, environment.
03 Design Elements
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Outdoor Activation Program Guidelines
03.2.b Boundary Elements:
Railings and Partitions
Railings and Partitions can define the
boundary of each outdoor dining area and
adjacent pedestrian and bike path areas.
They are to support safety, maintain
visibility, and foster cohesive streetscape
design. They must meet minimum size,
stability, and accessibility standards
while creating a functional, attractive
urban aesthetic.
Free standing partition / planter
combination
Free standing, powder coated steel
partition with graphic elements
Metal railings affixed to sidewalk
Examples of
Prefered Railing
Types
03 Design Elements
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Railing & Partition Requirements (continued)
1.Location
a.Permitted to be attached to sidewalks and platform edges
b.Not permitted to be attached to roadway
2.Height
a.Maximum of 42 inches
b.Minimum of 36 inches where required for separation or fall prevention
3.Transparency
a.Maintain at least 50% openness above 30 inches to preserve sightlines
between the dining area and public realm
4.Stability
a.Modular systems should have interlocking connections or corner
bracing
5.Clearances
a.Must not encroach on the 8-foot pedestrian path or ADA-compliant
access routes
b.Railings must not obstruct fire hydrants, utility vaults, or emergency
access zones
6.Materials
a.Use weather-resistant, durable materials such as:
i.Powder-coated metal (steel, aluminum)
ii.Treated hardwood
iii.Composite or engineered wood
iv.Painted steel cable systems
b.Avoid:
i.Corrugated plastic, fabric barriers, chain link, or unpainted raw
wood
c.Finish:
i.Matte or satin, avoiding reflective or mirrored surfaces
ii.Use neutral or coordinated colors unless the business is applying
branded colors that align with Cal Ave’s design palette. See
Appendix page [x] for more information on this.
Railing & Partition Design Guidelines
1.Visual Quality
a.Railings should enhance the architectural character of the building
and neighboring storefronts
b.Where possible, integrate planter boxes, branded panels, or integrated
signage within the railing system
2.Flexibility & Modularity
a.Modular Systems
■Freestanding railing systems that can be easily removed,
reconfigured, or relocated are encouraged
■Where multiple businesses share a continuous frontage, systems
should align or coordinate across property lines
b.Integrate with other elements
■Attach to platforms, if present (and not installed resulting in
damage to city infrastructure)
■Combine with planter boxes, lighting elements, or sidewall
systems
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Outdoor Activation Program Guidelines
03.2.c Boundary Elements:
Sidewalls & Weather Screens
Modular weather screens are to provide
flexible, seasonal weather protection for
dining spaces and preserve the openness,
pedestrian visibility, and access between
the street and storefronts.
Modular screens
Prefabricated modular panels with
glass wind screen
Wood planter with screen
Wood planters integrated glass
screen
Examples of
Prefered Sidewalls
& Weather Screen
Types
03 Design Elements
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Movable planter
Moveable planter with integrated
glass screen
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Outdoor Activation Program Guidelines
Sidewall & Weather Screen Requirements
(continued)
1.Materials
a.Anodized aluminum, tempered glass, or durable composite
2.Transparency
a.Areas above 30 inches must be at least 50% transparent
b.Must not block visibility between street and storefronts
3.Height
a.Recommended height 6 feet
b.Maximum height 8 feet
Weather Protection Design Guidelines
1.Wind and Weather Screens:
a.Free-standing panels or movable screens for seasonal wind, rain, or UV
protection
2.Adjustable Height Glass Screens:
a.Systems where the upper panel can be raised or lowered based on
weather
3.Planter-Integrated Screens:
a.Combined planter/screen units to green the space and buffer weather
4.Materials:
a.Tempered glass
b.Polycarbonate
c.Recycled composite
5.Avoid:
a.Opaque walls
b.Corrugated plastic
c.Patchwork or fabric-based solutions
Weather Protection Design Guidelines (continued)
6. Emphasize visual permeability and natural light
7. Not Allowed
a.Fully opaque walls over 30 inches
b.Temporary fencing, crowd-control barricades
c.Plastic sheeting or tarps as weather protection
d.Do it yourself structures using mixed salvage materials
Outdoor Alcohol Service
●If alcoholic beverages are served in the activation space:
○A physical boundary and signage must be provided to clearly
delineate the licensed premises as required by the California
Department of Alcoholic Beverage Control (ABC).
○The boundary may consist of planters, railings, or modular screens and
■Visibly defines the edge of the dining area
■Complies with ADA and emergency access standards
■Maintains openness and transparency above 30 inches
○Businesses are responsible for maintaining their beverage barriers in
good condition and ensuring compliance with all ABC conditions of
licensure.
○Reference: California ABC Premises Expansion Guidelines
03 Design Elements
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Outdoor Activation Program Guidelines 38
03 Design Elements
Example A: minimum allowed
enclosure facing promenade
The boundary condition of an outdoor activation
space can be designed in a variety of ways. These
are a few examples, viewed from the accessway.
Example C: Combination of low
planters and seating / benches with
min. 4’ entry
03.2.d Boundary Examples
Raili
Example B: Free standing partitions
with branding and 4’ min entry
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03.3 Overhead Shelter
To create a comfortable outdoor dining
experience and provide effective weather
protection that shields patrons from sun,
rain, and moderate wind, Cal Ave outdoor
outdoor activation areas may use robust,
high-quality umbrellas and awnings
designed for durability, stability, and
adaptability.
Large-format umbrellas complement dining areas
aesthetically while adhering to safety standards. Building-
mounted awnings enhance coverage and visual cohesion,
ensuring a unified, inviting environment.
03 Design Elements
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Placa Reial
Barcelona, Spain
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Overhead Shelter Requirements (continued)
1.Material Specifications
a.Canopy Fabric:
i.High-grade, solution-dyed acrylic (e.g., Sunbrella, Outdura).
ii.UV-resistant, waterproof, mildew-resistant, minimum 9 oz/sq. yd
fabric weight.
b.Frame Material:
i.Corrosion-resistant frames (marine-grade aluminum, stainless
steel, or fiberglass).
2.Wind and Stability
a.All umbrellas placed in the public right-of-way must be commercial
grade, intended for outdoor public and commercial use.
b.Umbrellas are to be free standing and not anchored to the roadway or
sidewalk)
c.Wind Performance
i.Umbrellas must be secured in a free standing, weighted base per
manufacturer recommendations.
ii.Umbrellas must be rated by the manufacturer to remain stable in
wind conditions while open when installed per manufacturer’s
instructions.
iii.Umbrellas must be closed and secured during wind conditions
per manufacturer’s recommendations.
d.Applicant must submit product specifications and describe base and
fastening methods with application.
e.Awnings:
i.Must be securely anchored to building façades.
Overhead Shelter Guidelines
1.Size and Coverage
a.Umbrella Diameter:
i.Typically between 13 to 20 feet.
ii.Fewer, larger umbrellas preferred over many smaller ones.
b.Clearance Height:
i.Minimum 7–8 feet from ground to canopy edge when fully
opened.
2.Wind and Stability
a.Wind Vents and Reinforced Seams:
i.Double-vented designs encouraged.
3.Weather and UV Protection
a.Waterproof coatings and reinforced seams.
b.UPF 50+ rating for UV protection.
c.Light or reflective canopy colors recommended for heat reduction.
4.Functionality and Flexibility
a.Tilt and Rotation Adjustments:
i.For cantilever umbrellas: 360-degree rotation and adjustable tilt
preferred.
b.Ease of Operation:
i.Use crank or pulley systems for opening/closing.
c.Retractability:
i.Retractable awnings encouraged for year-round flexibility.
d.Lighting Integration:
i.Ambient or task lighting within umbrellas/awnings (compliant
with lighting requirements).
03 Design Elements
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Cantilever umbrellas
Flexible, unobstructed space
beneath the umbrella, enabling
open seating and multi-table
coverage.
Center-pole (market-style)
umbrellas
Anchored installations with a
central pole that does not obstruct
movement or seating.
Multi-canopy umbrella systems
Multiple canopies on a single frame,
allowing greater coverage and
flexibility for large spaces.
03.3 Overhead Shelter (continued)
Building facade-mounted
retractable awnings
Attached to adjacent buildings
to provide broad coverage and
integration with architecture.
Preferred
Overhead Shelter
Types
The following are allowed
●Cantilever umbrellas
●Center-pole (market-style) umbrellas
●Multi-canopy umbrella systems
●Building facade-mounted retractable awnings
Other overhead shelter types may be permitted provided
that location, setback, clearance and area requirements
are met, they are not attached to the roadway, they are
easily and quickly removable for utility access, and meet
wind and stability requirements.
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03.3 Overhead Shelter (continued)
The following are NOT allowed
●Pop-up tents
●Permanent wood-framed roof structures
●Corrugated plastic or metal roofing materials
●Extending beyond the Outdoor Activation space
Pop-up tent
Customized overhead
shelters of any material or
form
Multi-colored, branded
umbrellas
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Outdoor Activation Program Guidelines
03.4 Branding & Signage
Branding and signage on Cal Ave
activation areas help define the district’s
identity, support business visibility, and
contribute to a cohesive and welcoming
public realm.
03 Design Elements
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Fort Point Ferry Building
San Francisco, California
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Free-standing signs
Sandwich Boards made of metal
(durable material)
Surface-mounted signs
Branding on 30” boundary elements
(planters or screens)
03.5 Branding & Signage (continued)
Preferred
Branding & Signage
Types
Branding and signage are allowed on the
following locations:
●On Sandwich Boards
●On boundary elements
●Must be located within the Outdoor Activation space
03 Design Elements
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Partition -mounted signs
Branding on 30” boundary elements
(planters or screens)
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03.5 Branding & Signage (continued)
Do not place signage in
pedestrian through zones
Signage cannot be placed
in streetscape garden
Outside the Outdoor
Activation space
Branding and signage are NOT allowed on
the following locations:
●On umbrellas, awnings, or vertical screens above 36 inches
●painted murals, decals, or wraps on activation area
surfaces
●Pedestrian through zones
●In planters
●Any location outside the designated outdoor activation
space
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03.5 Lighting
Thoughtful, human scale lighting can
improve the comfort, safety, and
appearance of outdoor activation spaces,
and will significantly contribute to the
attractiveness of the street. Applicants
interested in lighting should consider
solar-powered lighting that uses a
rechargeable battery.
03 Design Elements
46
Mill Street
Grass Valley, California
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Umbrellas mounted,
integrated lighting
Umbrellas mounted,
integrated lighting
1
2
03.6 Lighting (continued)
Preferred
Lighting Types
The following are allowed
●Lighting integrated into overhead canopies, umbrellas
●Lighting integrated into furniture, boundary elements
●String lights, wall-mounted downlights, solar or
rechargeable table lamps
03 Design Elements
47
Overhead String Lights
Item 17
Attachment A - Car-Free California
Avenue Outdoor Activation Program
Guidelines
Item 17: Staff Report Pg. 58 Packet Pg. 246 of 413
Outdoor Activation Program Guidelines
Lighting Requirements (continued)
1.Businesses must comply with the following standards, consistent with the
City of Palo Alto and California Electrical Code:
2.Lighting is required for outdoor dining areas for food and beverage service
in the evening hours.
3.Allowed Fixture Types:
a.LED-only lighting
b.String lights, wall-mounted downlights, solar or rechargeable table
lamps
4.All lighting must be rated for exterior use, listed, and carry a product
certificate for its intended use by a recognized electrical testing
laboratory.
5.Power & Installation:
a.Power must come from a weatherproof GFCI outlet mounted on the
building (min. 10 feet above ground)
b.Wiring must follow permanent wiring methods per code and run via a
single overhead guide wire
c.No extension cords, power strips, or generator use
d.Electrical equipment must be UL or ETL certified for outdoor
commercial use
6.Placement & Output:
a.Lighting must stay within the activation area and not encroach into
pedestrian walkways
b.Fixtures must aim downward, with shielding to prevent upward light
spill
c.Max output: 100 watts or 1,600 lumens per fixture
d.Lighting shall be of the lowest intensity and energy use adequate for
its purpose and be designed to focus illumination downward to avoid
excessive illumination above the light fixture with a maximum of 100
watts or 1600 lumens, whichever is greater, per fixture.
7.Permits:
a.An electrical permit is required for all permanent wiring and exterior
receptacle installations
b.If installing permanent lighting on the Outdoor Activation space or
adding the exterior GFCI receptacle at the building per IV(D)2a, an
electrical permit shall be obtained and shall comply with permanent
wiring methods as outlined in the adopted California Electrical code.
Lighting Guidelines
To support a comfortable, visually cohesive street experience, businesses are
encouraged to:
1.Use ambient lighting for general glow, task lighting for tables, and accent
lighting for architectural features or planters
2.Select fixtures that complement storefront architecture and minimize visual
clutter
3.Use low-wattage (5–20W) warm LEDs to enhance atmosphere without over-
lighting
4.Choose solar-powered or battery-operated lighting where feasible to
reduce energy use
5.Incorporate timers, motion sensors, or photocells to automatically turn off
lights when not needed
6.Avoid harsh glare near pedestrian or bike paths, and maintain consistent
spacing to reduce dark spots
03 Design Elements
48
Item 17
Attachment A - Car-Free California
Avenue Outdoor Activation Program
Guidelines
Item 17: Staff Report Pg. 59 Packet Pg. 247 of 413
Outdoor Activation Program Guidelines
Outdoor heating elements may be used to
enhance patron comfort in outdoor
activation areas during cold weather.
Electric and propane (LPG) heaters that meet City of Palo
Alto safety, and permitting requirements are permitted. All
heaters are to be weather rated, certified for commercial
outdoor use and installed according to manufacturer
instructions and applicable fire and electrical codes.
03.6 Heating
03 Design Elements
49
Item 17
Attachment A - Car-Free California
Avenue Outdoor Activation Program
Guidelines
Item 17: Staff Report Pg. 60 Packet Pg. 248 of 413
Outdoor Activation Program Guidelines
3.Proposed outdoor storage of 20-pound containers requires plan review and
inspection.
4.On-site storage of 20-pound propane containers (5 gal) is prohibited
indoors.
5.Propane storage is not allowed in the public right-of-way.
6.If businesses do not have an approved private outdoor storage area, all
propane containers must be removed from the premises at the close of
business every day.
7.LPG Heaters are not permitted on the sidewalk in the pedestrian path of
travel
8.LPG heaters cannot be placed underneath overhead canopies, awnings,
inside buildings or tents and they must have 5-feet clearance from any
flammable materials
9.Any use of a portable heater, portable generator, candles, open flame, or
any activity regulated by the Fire code must be approved and permitted by
the Palo Alto Fire Department separately from the outdoor activation
encroachment permit.
10.A fire extinguisher is required to be mounted within sight and have
appropriate signage per the Fire Code.
Heating Requirements (continued)
Electric radiant or infrared heaters:
1.UL-listed, ETL certified, and labeled for outdoor commercial use
2.Located and installed per manufacturer’s instructions and specifications.
3.Meet City installation requirements
a.Comply with the power supply requirements in section IV.D.2.
b.Electric heaters must be placed at least 3 feet away from any
combustible materials or as required by Manufacturer’s installation
instruction, whichever is more restrictive.
c.Mounted securely (8–12 feet above ground if overhead)
■Ensure adequate airflow, and avoid installation in exposed, high-
wind areas
■Electrical cords must be rated for outdoor use, protected, and
must not pose a trip hazard
■Do not place heaters in pedestrian paths of travel, including on
sidewalks or in any required accessible clearance zones
d.A fire extinguisher is required to be mounted within sight and have
appropriate signage per the Fire Code.
Propane heaters:
1.Permitted with an approved HAZMAT permit and CERS submittal.
2.HAZMAT permit is required for storage and use of liquid propane gas. A site
plan with the desired location of each heater is required at time of the
hazmat permit application. All storage locations and use areas must be
noted in the HAZMAT permit application and approved during fire
inspection. A final onsite hazmat inspection will be conducted to ensure the
proper spacing of heaters form combustibles and emergency access/egress
and storage of LPG.
03 Design Elements
50
Item 17
Attachment A - Car-Free California
Avenue Outdoor Activation Program
Guidelines
Item 17: Staff Report Pg. 61 Packet Pg. 249 of 413
Outdoor Activation Program Guidelines
All outdoor heating and lighting systems
must be powered safely and in
compliance with the California Electrical
Code and City of Palo Alto requirements.
Electrical infrastructure must be reviewed as part of the
permit process when installing fixed lighting, overhead
heating, or building-mounted outlets.
03.7 Electrical
03 Design Elements
51
Item 17
Attachment A - Car-Free California
Avenue Outdoor Activation Program
Guidelines
Item 17: Staff Report Pg. 62 Packet Pg. 250 of 413
Outdoor Activation Program Guidelines
Electrical Requirements (continued)
1.Power Source
a.Power must originate from a weatherproof GFCI outlet mounted to the
exterior of the building
b.Outlet must be installed no lower than 10 feet above the walking
surface
c.Power may not be sourced from:
■City streetlights
■Tree-mounted wiring
■Temporary outlets or plugs
2.Wiring and Installation
a.Electrical connections must use permanent wiring methods per
California Electrical Code
b.Power must be routed via one overhead guide wire from the building
to the outdoor activation area in sidewalk areas with mosaic glass
c.No cords may run along or under the sidewalk
d.No extension cords or power strips are permitted
e.Power cords between the building and the Outdoor Activation space
shall be secured to one (1) single overhead guide wire between the
building and the Outdoor Activation space structure.
f.Portable generators are prohibited for any outdoor activation use
3.Permitting
a.An electrical permit is required for:
■Installation of any new building-mounted exterior outlet
■Permanent lighting or fixed heating systems
4.All equipment must be:
a.UL or ETL certified
b.Rated for outdoor commercial use
5.Not allowed
a.Televisions are not permitted.
b.Amplified is not permitted on Outdoor Activation spaces. Any ambient
sound may only originate from the interior of the business’s occupied
building.
03 Design Elements
52
Item 17
Attachment A - Car-Free California
Avenue Outdoor Activation Program
Guidelines
Item 17: Staff Report Pg. 63 Packet Pg. 251 of 413
Outdoor Activation Program Guidelines
Clean and well-managed outdoor spaces
are essential to maintaining public health,
supporting sustainability, and enhancing
the visual character of California Avenue.
All businesses participating in the Outdoor Activation
Program are responsible for proper waste management in
compliance with the City’s Zero Waste Palo Alto Ordinance
and local solid waste sorting requirements.
03.8 Waste Management
03 Design Elements
53
Retrograde and Sunshine Cafe
Sebastopol, California
Item 17
Attachment A - Car-Free California
Avenue Outdoor Activation Program
Guidelines
Item 17: Staff Report Pg. 64 Packet Pg. 252 of 413
Outdoor Activation Program Guidelines
Waste Management Requirements (continued)
1.Keep outdoor activation area and adjacent sidewalks free of
litter, food waste, and stains
2.Clean surfaces daily, and power wash at least once per month
3.Prevent debris and liquids from entering storm drains or
accumulating near planters or barriers
4.Maintain clear access to drainage grates and public
infrastructure
5.Comply with Palo Alto’s solid waste ordinance and support
citywide zero waste goals:
6.Provide clearly labeled and color-coded containers for:
○Recycling (blue-tinted liners)
○Compost (green compostable liners)
○Landfill (clear liners)
7.Containers must be:
○Easily accessible to customers and staff
○Routinely emptied and cleaned
○Kept in a location that does not obstruct pedestrian
paths
03 Design Elements
54
Item 17
Attachment A - Car-Free California
Avenue Outdoor Activation Program
Guidelines
Item 17: Staff Report Pg. 65 Packet Pg. 253 of 413
Outdoor Activation Program Guidelines
Individual containers
Clearly defined trash, recycling
and compost bins.
Combined unit
Trash, compost and recycling bins
in a single unit.
03.8 Waste Management (continued)
Preferred
Trash & Recycling
Types
The following are allowed
●Individual Containers
●Combined Unit
03 Design Elements
55
Item 17
Attachment A - Car-Free California
Avenue Outdoor Activation Program
Guidelines
Item 17: Staff Report Pg. 66 Packet Pg. 254 of 413
Outdoor Activation Program Guidelines
03.9 Accessibility
All outdoor activation areas are required
to be accessible and usable by people
with disabilities.
All accessibility features are to be designed and
constructed to conform to the requirements of the
Americans with Disability Act accessibility guidelines and
standards. Compliance with the ADA can include a surface
flushed with the sidewalk or an outdoor activation space
that provides an ADA compliant ramp, railing, landing, and
associated eating and drinking facilities.
03 Design Elements
56
Sunday to Sunday
Manhattan, New York
Item 17
Attachment A - Car-Free California
Avenue Outdoor Activation Program
Guidelines
Item 17: Staff Report Pg. 67 Packet Pg. 255 of 413
Outdoor Activation Program Guidelines
Accessibility Requirements (continued)
1.Flush with Sidewalk Outdoor Activation:
a.The surface of the Outdoor Activation space platform must be flush
with the adjacent sidewalk with a maximum gap of one quarter inch
and one quarter inch vertical tolerance.
b.A minimum 4-foot wide accessible path of travel and 5-foot diameter
turnaround space must be maintained within the Outdoor Activation
space.
c.Any abrupt changes in elevation exceeding 4 inches along an
accessible path of travel shall be identified by 6-inch tall warning
curbs.
2.Depressed or Elevated Outdoor Activation:
a.If a ramp is required for access to the outdoor activation area or a
portion thereof, it shall comply with all accessibility ramp provisions.
3.Seating
a.Any seating and dining must comply with the applicable accessibility
requirements outlined in the adopted California Building Code. The
establishment shall provide 5 percent accessible seating for each
type of seating provided (table, booth, etc.) or a minimum of one seat
per type, whichever is greater, in an outdoor seating area where the
slope is no greater than 2 percent in any direction.
b.Such ADA accessible seating shall be of the same size and appearance
as the establishment’s other outdoor seating.
c.Refer to Section [ ] for additional accessibility requirements (WIP)
d.See Appendix [ ] for standards.(WIP)
03 Design Elements
57
Item 17
Attachment A - Car-Free California
Avenue Outdoor Activation Program
Guidelines
Item 17: Staff Report Pg. 68 Packet Pg. 256 of 413
Outdoor Activation Program Guidelines
Encroachment
Permit Application
Topics
➔Permit Process
➔Submittal Requirements
➔Extension Beyond Establishment
➔Removing an Outdoor Activation Area
➔Outdoor Activation Area Fee
04
58
Car-Free California Ave Item 17
Attachment A - Car-Free California
Avenue Outdoor Activation Program
Guidelines
Item 17: Staff Report Pg. 69 Packet Pg. 257 of 413
Outdoor Activation Program Guidelines
04.1 Permit Process
04 Encroachment Permit Application
The Outdoor Activation Program is effective
(date) through (date)
Please see [ ] for permitting process.
➔Any applicant seeking to install a Outdoor Activation space in
the public right-of-way in the City of Palo Alto must apply for
and receive a valid Encroachment Permit before beginning
construction of the Outdoor Activation space. The permit
application will be reviewed by the Department of Public
Works and other relevant City departments, prior to approval.
➔The Department of Public Works shall be an applicant’s
primary point of contact.
➔Construction of a Outdoor Activation space cannot begin
until a permit application has been approved and the permit
issued to the applicant. If work begins prior to approved
application, the Outdoor Activation space materials will be
removed and the applicant will be fined.
➔Prior to serving patrons and otherwise operating the Outdoor
Activation space, the Outdoor Activation space must be
inspected by the Department of Publics Works and approved
for use.
➔An eligible establishment with a valid Encroachment Permit
may construct and operate a Outdoor Activation space
subject to the standards and requirements contained in this
document, applicable sections of the Palo Alto Municipal
Code (PAMC), other documents associated by reference, and
other documents declared relevant by the Director of Public
Works and his or her designee.
59
Item 17
Attachment A - Car-Free California
Avenue Outdoor Activation Program
Guidelines
Item 17: Staff Report Pg. 70 Packet Pg. 258 of 413
Outdoor Activation Program Guidelines
04.2 Submittal Requirements
04 Encroachment Permit Application
Site Plan
➔Site plan shall be drawn to scale on 11 x17 tabloid paper,
include all pertinent dimensions and the following
information:
◆Location of the business frontage
◆Dimensions of the outdoor activation area
◆ADA accessibility measurements
◆Setbacks from adjacent property lines and the
accessway
◆Location of public utilities including any manhole
covers, gutter drains, fire hydrants, and FDCs, light
poles, etc. and their distances to the outdoor activation
area and proposed improvements
◆Any adjacent installations on the sidewalk including
utility boxes, street signs, bike racks, street furniture,
street trees, tree wells, etc. and their distances to the
outdoor activation area and proposed improvements
◆Crosswalks, bus stops, driveways and their distances to
the outdoor activation area and proposed
improvements
◆Width of sidewalk
60
◆Planters
◆Locations and extent of affected neighbors and their
adjacent businesses
Floor Plan
➔Floor Plan of the proposed outdoor activation area showing
the following information:
➔Total number and location of tables and seats and/or
benches
➔Dimensions of tables, seats, and benches and other furniture
Elevations
➔Elevation drawing showing the following information:
➔Height and design of any platform, railings and/or boundary
elements
➔Heating, lighting, other electrical equipment
➔Power connection (show distance from ground to overhead
wire)
➔Storm water drainage
➔Cross-section drawing of outdoor activation area
Item 17
Attachment A - Car-Free California
Avenue Outdoor Activation Program
Guidelines
Item 17: Staff Report Pg. 71 Packet Pg. 259 of 413
Outdoor Activation Program Guidelines
04 Encroachment Permit Application
Construction Drawings showing the following
information:
➔Structural drawings (platform, railings, electrical poles)
➔Structural calculations
➔Heating, lighting, other electrical equipment
➔Electrical power connection/source
Pictures of Existing Conditions
➔The application should include at least three photos
showing existing public right-of-way for the proposed
outdoor activation area, including the proposed sidewalk
and roadway area to converted into an outdoor activation
area, adjacent sidewalk and store frontage of the proposed
business and adjacent store frontages
List of Materials and Equipment
➔Materials palette showing the following information:
◆Proposed materials for platform
◆Proposed materials for railings/enclosures
◆Equipment sheet including image of equipment 61
Outdoor Activation Information
➔Proposed use
➔Business hours of
operation
➔Architect/Engineer/Construction firm contact (if
applicable)
Business Information
➔Address
Business Owner Information
➔xx
04.2 Submittal Requirements (continued)
Item 17
Attachment A - Car-Free California
Avenue Outdoor Activation Program
Guidelines
Item 17: Staff Report Pg. 72 Packet Pg. 260 of 413
Outdoor Activation Program Guidelines
04 Encroachment Permit Application
Property Owner Information (if different from
applicant)
➔xx
Insurance Documents
➔Letter(s) of Consent –An outdoor activation applicant
must get a letter of consent from neighboring ground-
floor tenant(s) if their activation space is to extend
beyond their storefront (see 04.2 extension beyond
establishment)
Indemnity Acknowledgement
➔xx
62
04.2 Submittal Requirements (continued)
Item 17
Attachment A - Car-Free California
Avenue Outdoor Activation Program
Guidelines
Item 17: Staff Report Pg. 73 Packet Pg. 261 of 413
Outdoor Activation Program Guidelines
04.3 Extension Beyond Establishment
Outdoor Activation areas may extend beyond
the applicant’s store front with a letter of
consent from neighboring ground-floor
tenants. If an outdoor activation area extends
in front of neighboring storefront(s) or
proposes to extend in front of neighboring
storefront(s), written notice will be sent to
the affected neighbor(s) at the time of permit
application and annual renewal. The business
adjacent to the affected neighbor(s) will also
receive notices.
➔If the neighboring ground-floor property is vacant, then the letter of consent is
not required for the duration of the permit. Outdoor activation sponsor must
obtain an up-to-date letter of consent for any future license renewals as
requested by Public Works during future permit renewal processes.
➔If Outdoor activation sponsor cannot obtain an up-to-date letter of consent, or if
the outdoor activation space occupancy in not in accordance with the terms of
any applicable law, these regulations, and/or any permit requirement, the outdoor
activation sponsor is responsible for the removal of any structure on the outdoor
activation permit extending into a neighboring frontage within 90-days.
➔If the affected neighbor(s) or adjacent business wish to claim the same space for
their own outdoor activation area, they must notify the city in writing within 30
days of the notice.
➔If a competing claim for the space from the adjacent business is confirmed, the
affected neighbor has priority over the space. However, an outdoor activation
area permit application must be submitted by the affected neighbor within 60
days of the first notice to claim the space.
➔If a competing claim for the space from the adjacent business is confirmed, and
the affected business does not claim the space, the adjacent business and
original outdoor activation area permittee shall split the space.
➔The Space shall be split from the centerline.
➔If applicable, an outdoor activation area sponsor must remove and/or alter their
outdoor activation area (applying for applicable permits) within 90 days of
receiving notice of a competing claim for the space(s).
04 Encroachment Permit Application
63
Item 17
Attachment A - Car-Free California
Avenue Outdoor Activation Program
Guidelines
Item 17: Staff Report Pg. 74 Packet Pg. 262 of 413
Outdoor Activation Program Guidelines
04.4 Removing an Outdoor Activation Area
If for some reason the Outdoor Activation
sponsor decides they no longer want to
maintain an Outdoor Activation space, the
sponsor is responsible for notifying the City
and removing it at the sponsors’ own
expense. Immediately upon removal the
Outdoor Activation area shall be cleaned and
restored to its previous condition to the
satisfaction of the City.
➔Failure to Maintain an Outdoor Activation: Sponsor who fails to properly and
sufficiently maintain the cleanliness, safety, and accessibility of their space
may be subject to violations and fines. If maintenance issues are not
resolved, the City may revoke the encroachment permit and the sponsor
may be required by the City to remove the Outdoor Activation space at
their own expense.
➔Utility Maintenance & Public Safety:Because an Outdoor Activation space
may sit atop buried utilities, there may be instances where it will need to be
removed to access, clean, maintain, repair or other action to the utilities
beneath it. In the event of necessary utility maintenance or the unlikely
event of a utility failure such as a gas leak or water main break that
threatens public safety, the City may request the sponsor to move a
platform or other improvement, or the City or utility owner may remove
improvements with little or no notice. The sponsors are responsible for the
cost of reinstalling and restoring any damage to the Outdoor Activation
space. In instances of advanced notice (such as street repaving, planned
maintenance, etc.), the sponsor may need to remove and reinstall the
Outdoor Activation space at their sole expense. If the sponsor cannot
remove the space, the City will remove it for them. Sponsor accepts street
repairs may occur at anytime and may involve heavy construction work,
noise and related disruptions, for which the City or utility owner is not
responsible for any impact of inconvenience.
04 Encroachment Permit Application
64
Item 17
Attachment A - Car-Free California
Avenue Outdoor Activation Program
Guidelines
Item 17: Staff Report Pg. 75 Packet Pg. 263 of 413
Outdoor Activation Program Guidelines
04.5 Outdoor Activation Area Fees
Outdoor Activation spaces are subject to the
following fees outlined in the City’s Fee
Schedule.
➔Permit Application Fee
➔Deposit Fee (refundable). This deposit will be used to cover
the cost of restoring the right-of-way to its original
condition if not done so by the permittee. This includes, but
is not limited to, the following:
●Removing the Outdoor Activation space structure
●Removing bolts in the curb and the right-of-way
and filling in holes
●Removing exposed wiring
●Repairing damage to the sidewalk
●Removing construction debris and/or garbage
●Parking or traffic control striping
●Wheel stop removal or reinstallation
➔Permit Renewal Fee
➔Annual License Fee
◆This fee will be charged per square foot based on the
total Outdoor Activation space platform area
04 Encroachment Permit Application
65
Item 17
Attachment A - Car-Free California
Avenue Outdoor Activation Program
Guidelines
Item 17: Staff Report Pg. 76 Packet Pg. 264 of 413
NOT YET APPROVED Attachment B
134_20250529_ts24
Resolution No. _____
Resolution of the Council of the City of Palo Alto Allowing Eating/Drinking
and Retail Parklets (as Defined in Palo Alto Municipal Code Ch. 12.11) on
the Car Free Portion of California Avenue
R E C I T A L S
A. Palo Alto Municipal Code Chapter 12.11 allows the City Council to
designate which areas of the City to allow “parklets,” which is defined by PAMC section
12.11.010(a).
B. Through this Resolution, the City Council now intends to allow parklets on
the car-free portion of California Avenue.
NOW, THEREFORE, the Council of the City of Palo Alto does RESOLVE as follows:
SECTION 1. Findings and Declarations. The Council hereby adopts the above
Recitals as findings of the Council.
SECTION 2. Designated Area. The Council hereby designates the section of
California Avenue between El Camino Real and Birch Street (“Designated Area”) as eligible
for parklets pursuant to PAMC section 12.11.040. The permissible uses in this Designated
Area are: (1) eating and drinking service; and (2) retail service. The Director of Public
Works may promulgate regulations specific to this Designated Area under the authority
granted in PAMC section 12.11.050.
SECTION 3. No Rights Granted. This Resolution does not create any right in
any specific person or corporate entity to a parklet, parklet permit, or to create a parklet
in a specific location within the area detailed in Section 2.
SECTION 4. CEQA. The Council finds that this Resolution is categorically
exempt from CEQA under CEQA Guidelines Sections 15301 (existing facilities), 15303 (new
construction or conversion of small structures), 15304(e) (minor temporary use of land
having negligible or no permanent effects on the environment), 15305 (minor alterations
in land use limitations), 15311 (accessory structures), and 15323 (normal operations of
facilities for public gatherings).
//
//
Item 17
Attachment B -
Resolution Authorizing
FoodDrink and Retail
Encroachments on Car
Item 17: Staff Report Pg. 77 Packet Pg. 265 of 413
NOT YET APPROVED Attachment B
134_20250529_ts24
SECTION 5. This Resolution shall be effective upon adoption. The City Manager
may temporarily suspend (or partially suspend) the enforcement of PAMC Ch. 12.11 and
its regulations as to the Designated Area in order to allow existing and new permittees to
come into compliance.
INTRODUCED AND PASSED:
AYES:
NOES:
ABSENT:
ABSTENTIONS:
ATTEST:
__________________________ _____________________________
City Clerk Mayor
APPROVED AS TO FORM: APPROVED:
__________________________ _____________________________
Assistant City Attorney City Manager
_____________________________
Director of Public Works
Item 17
Attachment B -
Resolution Authorizing
FoodDrink and Retail
Encroachments on Car
Item 17: Staff Report Pg. 78 Packet Pg. 266 of 413
NOT YET APPROVED Attachment C
135_20250529_ts24 1
Resolution No. _____
Resolution of the Council of the City of Palo Alto to Authorize
Consumption of Alcoholic Beverages under PAMC 9.04.010 for Third
Thursdays on California Avenue in 2025
R E C I T A L S
A. Palo Alto Municipal Code (PAMC) section 9.04.010 makes it unlawful to consume any
alcoholic beverage upon any street, sidewalk, highway or alley except as may be
authorized by the City Council.
B. Through this Resolution, the City Council desires to authorize such consumption for a
temporary period in conjunction with the Third Thursday street music festival events on
the section of California Avenue closed to vehicular traffic.
NOW, THEREFORE, the Council of the City of Palo Alto does RESOLVE as follows:
SECTION 1. The City Council hereby authorizes the consumption of alcoholic beverages
under PAMC section 9.04.010 upon the section of California Avenue between El Camino Real and
Birch Street that is closed to traffic (the ‘designated area’) between the hours of 4:30 pm to 10:00
pm on the third Thursday of each month throughout 2025 only when the Third Thursday street
festival event occurs. The City Manager may change these dates and times of this authorization
in case any Third Thursday street festival date is rescheduled.
SECTION 2. This authorization is subject to any conditions, regulations, or limits imposed
by the City through its City Manager, any City Department, or any relevant law, permit, or
condition. The City Manager may promulgate regulations of such consumption in order to ensure
public safety, health, and welfare, including but not limited to regulations regarding staffing,
security and law enforcement requirements, refuse/trash/recycling, and bathrooms. The City
Manager is authorized to further limit the designated area and time duration than that allowed
in Section 1 if necessary to ensure public safety, health, and welfare.
SECTION 3. This Resolution’s authority is limited to that which is granted under PAMC
section 9.04.010. It does not authorize any event generally, nor does it grant or waive any other
generally applicable requirements under law, regulation, or permit condition. It does not curtail
or supersede any other applicable law, regulation, permit, or condition. It does not limit the
ability of the City to issue or enforce any permit conditions that limit or forbid alcohol sales or
consumption in the designated area under other laws or regulations. It does not create any right
or vested interest in any person or business to sell alcoholic beverages. It does not prevent law
enforcement from enforcing any provision of state law or the Palo Alto Municipal Code besides
PAMC section 9.04.010 during the dates and times specified above. This Resolution shall not be
interpreted to conflict with any state law, regulation, or permit condition imposed by the State
of California’s Department of Alcoholic Beverage Control.
Item 17
Attachment C - Resolution
Authorizing Consumption
of Alcoholic Beverages
under P
Item 17: Staff Report Pg. 79 Packet Pg. 267 of 413
NOT YET APPROVED Attachment C
135_20250529_ts24 2
SECTION 4. Environmental Review. The Council finds that this Resolution is categorically
exempt under CEQA Guidelines Sections 15301 (existing facilities); 15304(e) (minor temporary
use of land having negligible or no permanent effects on the environment); 15305 (minor
alterations in land use limitations); and 15323 (normal operations of facilities for public
gatherings).
SECTION 5. Effective Date and Sunset. This Resolution shall be effective immediately
upon adoption and shall automatically sunset on December 31, 2025.
INTRODUCED AND PASSED:
AYES:
NOES:
ABSENT:
ABSTENTIONS:
ATTEST:
__________________________ _____________________________
City Clerk Mayor
APPROVED AS TO FORM: APPROVED:
__________________________ _____________________________
Assistant City Attorney City Manager
Item 17
Attachment C - Resolution
Authorizing Consumption
of Alcoholic Beverages
under P
Item 17: Staff Report Pg. 80 Packet Pg. 268 of 413
City Council
Staff Report
From: City Manager
Report Type: INFORMATION REPORTS
Lead Department: Public Works
Meeting Date: June 17, 2025
Report #:2411-3804
TITLE
Semiannual Update on the Status of Capital Improvement Program Projects; CEQA Status – Not
a Project
RECOMMENDATION
This report is provided for information only and requires no Council action.
EXECUTIVE SUMMARY
The City Council and Palo Alto community can be proud of the City’s capital improvement
program (CIP). The CIP represents major investments in infrastructure functionality and
sustainability, funded largely through the transfer of funding from the General Fund, including
dedicated Transient Occupancy Tax (TOT) funding, as well as utility rates and various other
sources. The 2025-2029 five-year CIP totaled $1.7 billion for 206 projects as reviewed by the
Council in its adoption of the FY 2025 Capital Budget. Since July 2016, the City of Palo Alto has
completed 110 individual community-serving projects totaling over $434 million in
improvements. A summary of all completed CIP projects is provided at the end of Attachment
A. The CIP also represents a major effort for much of the City workforce. The following table
summarizes the status of all projects for the six-month period of July to December 2024.
One Time ProjectsCIP Workgroup Recurring
Projects Pre-Design Design Procurement Construction Completed
Airport 0 0 4 1 0 1
Buildings and Facilities 12 5 13 0 9 2
Electric 9 2 3 0 6 1
Fiber Optic 2 0 2 0 0 0
Gas 4 0 2 0 1 0
Parks and Open Space 9 2 7 0 7 1
Stormwater Management 2 0 4 0 0 3
Streets and Sidewalks 8 0 3 0 0 0
Traffic and Transportation 5 1 8 1 2 0
Wastewater Collection 4 0 0 0 1 0
Wastewater Treatment 2 2 3 0 2 0
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Water 7 1 1 0 1 1
Subtotals 64 13 50 2 29 9
Totals 167
BACKGROUND
This report provides Council with an update on the status of capital improvement program (CIP)
projects, with detailed and useful information for the Council and public regarding general fund
and enterprise fund projects that appear on Council agendas and will be visible throughout the
community. The report does not include Internal Service Funds projects (Information
Technology and Vehicle).
ANALYSIS
Project Update Organization
The City of Palo Alto has a robust capital improvement program, and many individual projects
are in progress at any given time. The 2025-2029 five-year CIP totaled $1.7 billion for 206
projects as reviewed by the Council in the adoption of the FY 2025 Capital Budget. The attached
CIP project tables are intended to provide a quick overview of each project, including budgetary
information, the anticipated completion date, a brief description of the project scope, the
status of the project, and upcoming activities including Council actions. Also included in the
report is a list of all completed projects since the introduction of the Infrastructure
Management System.
Major/Significant Projects Summary
The 2014 Council Infrastructure Plan is a major focus of staff’s capital improvement program
efforts and ties to several 2024 City Council Priorities and related objectives. The following table
details the Total Project Budget and Total Actual Expenses through January 25, 2025, for the
Infrastructure Plan projects.
Council
Infrastructure
Plan Projects
CIP
Number Project Update Total Project
Budget
Total Actual
Expenses*Completion
Date
Fire Station 3
Replacement
PE-15003 Completed $10,600,734 $10,600,734 Summer
2019
New California
Avenue Area
Parking Garage
PE-18000 Completed (final punch list items
in progress)
$50,207,727 $49,454,479 Summer
2020
Highway 101
Pedestrian/Bicycle
Overpass Project
PE-11011 Completed $23,734,218 $23,734,218 Fall 2020
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Charleston
Arastradero
Corridor Project
PE-13011 Completed $20,684,799 $20,684,799 Summer
2024
Downtown
Automated
Parking Guidance
Systems
PL-15002 Council approved a design-build
contract in May 2023.
Construction is underway and
expected to be completed in
spring 2025.
$5,197,827 $2,790,599 Spring 2025
New Public Safety
Building
PE-15001 Phased staff move-in is expected
in summer 2025, following May
2025 issuance of a Temporary
Certificate of Occupancy.
$123,500,000 $119,375,833 Spring 2025
Fire Station 4
Replacement
PE-18004 Project is going through building
permit review. Staff completed a
pre-qualification process, with
construction bidding anticipated
in early 2025.
$18,225,946 2,117,901 Spring 2027
Byxbee Park
Completion
PE-18006 On hold pending completion of
the Baylands Comprehensive
Conservation Plan.
$3,699,189 $368,192 Spring 2028
Bicycle and
Pedestrian
Transportation
Implementation
Plan
PL-04010 This project funds the Bicycle and
Pedestrian Transportation Plan
Update, which has kicked off
recently and is slated to take
approximately 18 months to
complete. This project also funds
the implementation of various
bicycle and pedestrian projects.
$14,400,000 $9,912,240 On-Going
New Downtown
Parking Garage
PE-15007 Council directed staff to look at
the feasibility of partnering with a
private entity to develop new
parking using downtown in-lieu
parking fees in conjunction with
housing or other uses, including
the use of City surface lots or
privately held parcels. Council
gave direction to staff in
December 2023 to advance the
project in conjunction with
advancement of affordable
housing in the Downtown area. A
design contract for the garage was
approved on Council’s December
2, 2024 consent agenda.
$17,300,000 $1,469,301 TBD
*Total actual expenses through January 25, 2025
The last phase of the Public Safety Building project is expected to be completed in spring 2025.
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Current Infrastructure Plan project schedules can be found at
https://www.infrastructure.cityofpaloalto.org/
•Baylands Boardwalk Piling Repair (PE-24000)
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Baylands Boardwalk Piling Repair (PE-24000)
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One-Time Projects Under Construction
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Water Fund:
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Homekey Facilities (PE-24005)
FISCAL/RESOURCE IMPACT
STAKEHOLDER ENGAGEMENT
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ENVIRONMENTAL REVIEW
ATTACHMENTS
APPROVED BY:
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ATTACHMENT A
Semiannual Update on the Status of Capital Improvement Program Projects
Capital Improvement Fund CIP Projects
• Buildings and Facili�es Projects
• Parks and Open Space Projects
• Streets and Sidewalks Projects
• Traffic and Transporta�on Projects
Enterprise Fund CIP Projects
• Airport Projects
• Electric Projects
• Fiber Op�cs Projects
• Gas Projects
• Stormwater Management Projects
• Wastewater Collec�on Projects
• Wastewater Treatment Projects
• Water Projects
List of Completed Project
Item A
Attachment A - Semiannual Update
on the Status of Capital
Improvement Program Projects
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Buildings and Facilities Projects Status as of December 2024
One‐Time Projects
Animal Shelter
(PE‐19002)
Prior Years Actuals Total Project Budget
$2,921,108 $6,181,882
Implementing Department Project Phase
Public Works Design
Project Completion
Fall 2027
Project Status: A new five‐year agreement with Pets in Need (PIN) was approved by Council in March 2024.
with PIN and City staff regarding capital projects started in late 2024, with a scope of work to be finalized
PIN in early 2025. Tentative schedule shows design complete by summer 2026 and for construction to start
Baylands Prior Years Actuals Total Project Budget
$182,854 $1,140,076
Implementing Department Project Phase
Public Works Completed
Project Completion
Fall 2024Boardwalk
Repair
(PE‐24000)
Project Status: This project repaired damage caused by aquatic borers to The Lucy Evans Baylands Interpretive
boardwalk pilings. The project received permits from the San Francisco Bay Regional Water Quality Control
Bay Conservation and Development Commission, United States Fish and Wildlife Services, and United States
Corps of Engineers. The project was issued to bid in April 2024 and Council approved a construction contract in
2024. Project construction began in early September and was completed by October 2024. The project will remain
until later fall 2025 after a one‐year monitoring report is submitted to the permitting agencies.
California
Parking $0
Prior Years Actuals Total Project Budget
$110,102
Implementing Department Project Phase
Public Works Design
Project Completion
Fall 2025
District Parking
(PF‐25000)
Project Status: This project provides funding for parking improvements in the California Avenue parking district such
parking lot resurfacing, striping and signing; parking structure painting or staining; electrical system upgrades
to support improved lighting security, parking, fountains and/or other systems; and replacement or
of parking lot signs.
Prior Years Actuals Total Project Budget
$ 0 $ 137,628
Implementing Department Project Phase
Community Services Pre‐Design
Project Completion
Summer 2025
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on the Status of Capital
Improvement Program Projects
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Buildings and Facilities Projects Status as of December 2024
Children’s Project Status: This project will upgrade and repair the Children’s Theatre Facility, including backstage work and
Theater Facility storage areas, classrooms, performance stages, restrooms and public spaces. Phase 1 will focus on procuring a
consultant to conduct a facility needs assessment and provide cost estimates.
(AC‐28002)
City Facilities
and $288,961
Prior Years Actuals Total Project Budget
$333,134
Implementing Department Project Phase
Public Works Completed
Project Completion
Fall 2024
Record Plan Project Status: The Kitchell Report in 2008 summarized the last City‐wide facility condition assessment. A new facility
assessment is warranted per the City’s APWA reaccreditation requirements. All City facilities will be
to bring current the “catch‐up” and “keep up” costs. In addition, an electrification assessment will be
to help the City reach its sustainability goals for 2030. Council awarded the contract in April 2022. All City
have been assessed for the Condition and Electrification assessments. A detailed list of buildings for
is being analyzed to determine prioritization for replacements. The data has been updated into the City’s
Management System to provide long range capital planning based on the results of the FCA. The
Records Management System, originally included in this project, is being implemented through TE‐13004
Laserfiche as the sole repository for Public Works Engineering. The project reached completion in fall 2024.
(PE‐20002)
City Hall Space Prior Years Actuals Total Project Budget
$52,615 $700,343
Implementing Department Project Phase
Public Works Design
Project Completion
Fall 2026
(PE‐19000)Project Status: This project involves space planning to determine future workgroup space needs and programming
the City Hall office building focused on the Police Department areas that will be vacated once the new Public Safety
is complete and the City Hall Office Tower. The city completed solicitations for a qualified architectural firm
perform the space needs assessment for the two city facilities. A contract is anticipated to be awarded in February
with work to begin by spring 2025.
Prior Years Actuals Total Project Budget
$0 $2,710,140
Implementing Department Project Phase
Police Department Design
Project Completion
Summer 2029
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Improvement Program Projects
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Buildings and Facilities Projects Status as of December 2024
City Radio Project Status: Two‐way commercial radios are used by many Departments in the City of Palo Alto. The City operates
772 radios across 9 workgroups, including Police, Fire, Office of Emergency Services (OES), Community
Park Rangers, Public Works, Utilities, Development Center, and Information Technology. This project will be
to replace the original digital radios.(PD‐25000)
Civic Center Prior Years Actuals Total Project Budget
$656,289 $2,176,935
Implementing Department Project Phase
Public Works Design
Project Completion
Winter 2027
Upgrade & EV
(PE‐17010)
Project Status: This project has installed EV chargers in existing downtown garages and will replace the aging Civic
electrical switchgear and motor control centers. EV charger construction at the Civic Center, Bryant Street
and Webster Street garage was completed in December 2021. A contract was awarded in June 2021 for the
of the Civic Center switchgear replacement and is currently at the 90 percent design stage. Lead times on switch
are now taking 18 months, so the project completion date has been extended. The structural analysis design of
switchgear area and its permit set will be completed in April 2025. Recent plan check comments required a
to accommodate fire code updates and provided some cost savings benefit.
Civic Center Fire Prior Years Actuals Total Project Budget Implementing Department Project Phase
Public Works Construction
Project Completion
Winter 2026Life Safety
(PE‐18016)
$904,269 $1,117,335
Project Status: This project will assess, update, and replace the Civic Center fire alarm system and the emergency
radio communication system (ERRCS). The fire life safety system is approaching the end of its useful life.
fire alarm panel and associated equipment need an upgrade to meet current code requirements. The award of a
design‐build contract was approved by Council in June 2021. Construction in the main tower areas is nearly complete.
ground floor and the garage levels have been completed. The project completion date for the fire alarm
has been extended to winter 2025 due to ongoing testing issues. The ERRCS study will be conducted upon
completion of the planning and design for 275 Forest Avenue.
Civic Center Prior Years Actuals Total Project Budget Implementing Department Project Phase Project Completion
Buildings and Facilities Projects – Page 3 of 13
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on the Status of Capital
Improvement Program Projects
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Buildings and Facilities Projects Status as of December 2024
Waterproofing $798,460 $1,830,089 Public Works Design Fall 2026
Study and
(PE‐15020)
Project Status: This project includes a condition assessment of the Civic Center Plaza deck structural system. In 2016,
Building Science, Inc. determined that the expansion joint on the plaza could be repaired and that replacing the
coatings on the inside of the plaza perimeter planter boxes was needed. Repair of the waterproofing joint
front of City Hall was completed in winter 2023. Further study of the water intrusion into the garage was performed
a consultant in summer 2024; a design contract for repair of the planter boxes and garage water damage is expected
summer 2025.
Cubberley Gym Prior Years Actuals Total Project Budget Implementing Department Project Phase
Public Works Pre‐Design
Project Completion
Spring 2026HVAC$0 $826,113
Replacement
(CB‐24000)
Project Status: The existing heating system in Cubberley Gyms A & B is original to the building, which was constructed
the mid‐1950s. The system is currently not functioning because multiple leaks have developed in the steel hot water
which is in the walls and under the floor. These leaks contributed (in addition to a domestic water main supply
to significant water damage in the walls, floors, and crawl spaces of the gyms. Asbestos and mold were
from the under‐floor crawl space. All the old heating units and piping were removed from the ceilings in
gyms. The next step is to hire a consultant to create design drawings for a new heating system. This project has
put on hold due to the City’s pending purchase of the remaining Cubberley buildings and then ultimately
a new Cubberley Community Center.
Fire Station 4
(PE‐18004)
Prior Years Actuals Total Project Budget
$1,860,907 $ 15,434,655
Status: This project will replace Fire Station #4 at the corner of Middlefield Road and East Meadow Drive. The
design consultant completed design development and received Planning approval for the project in November 2023.
A construction management contract was awarded in December 2023. The project has been submitted for building
permit review, and the architect is preparing resubmittal. Pre‐qualification of bidders was completed in November
Implementing Department Project Phase
Public Works Design
Project Completion
Winter 2026
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Improvement Program Projects
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Buildings and Facilities Projects Status as of December 2024
2024, and solicitation for construction is anticipated for spring 2025 with construction to follow in summer 2025.
of the temporary station will start in winter 2025.
Fire Training Prior Years Actuals Total Project Budget
$459 $55,293
Implementing Department Project Phase
Public Works Pre‐Design
Project Completion
Summer 2026
Replacement
(FD‐24000)
Project Status: This project will identify an appropriate site and construct a new fire training facility in Palo Alto. This
be the first City‐owned and City‐maintained permanent fire training facility, and it will allow training to be
within City limits and therefore reduce the downtime associated with the need for staff to travel for training
when responding to calls.
Homekey Prior Years Actuals Total Project Budget
$2,218,979 $4,944,710
Implementing Department Project Phase
Public Works Construction
Project Completion
Spring 2025
(PE‐24005)Project Status: This project involves relocating the City of Palo Alto (City) GreenWaste facility from its current site on
portion of 1237 San Antonio Road to the rear portion of the same site as a result of adding the Homekey Palo Alto
housing shelter. Homekey Palo Alto will be operated by LifeMoves who will provide intensive, customized case
for clients including counseling, employment and housing search services with the goal of paving a
path to self‐sufficiency. The project is currently in construction. The site work, utility infrastructure, building
and energization for the incoming modular units has been completed. Setting and finishing of the
units will soon be underway, along with the interior completion of the conventional framed community
and site landscaping. Construction is anticipated to be completed in spring 2025.
JMZ Renovation Prior Years Actuals Total Project Budget
(AC‐18001) $4,172,284 $5,020,310
Implementing Department Project Phase
Community Services Construction
Project Completion
Summer 2025
Project Status: This project provides for the temporary relocation of the Junior Museum and Zoo and the construction
a new facility and exhibits. The California Dinosaur Garden exhibit, which is partially funded by a reimbursable
grant, was opened with a special ribbon cutting ceremony in October 2023. Funds associated with the grant
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Buildings and Facilities Projects Status as of December 2024
are expended against the project until reimbursements are made. Reimbursement has been submitted and expected
the first quarter of FY 2025. A portion of the project was extended through FY 2025 to complete the list of
and equipment not purchased in FY 2024 due to staffing shortages. Completion is expected in July 2025.
Library Prior Years Actuals Total Project Budget
$205,811 $1,898,292
Implementing Department Project Phase
Public Works Construction
Project Completion
Fall 2028Automated
(LB‐21000)
Project Status: This project will provide the design and construction of three new Automated Material Handling (AMH)
for the Children’s, Mitchell Park and Rinconada Libraries. AMH systems efficiently sort returned library
based on the Radio Frequency Identification Devices (RFID) on the materials. For the Children’s Library, the
permit has been issued. The construction contract was awarded in November 2024, and construction at
Library will begin in February 2025. Construction is anticipated to be complete by summer 2025.
Lucie Stern Prior Years Actuals Total Project Budget
$28,548 $2,443,408
Status: This project will upgrade and replace the Heating Ventilation and Air Conditioning (HVAC) system at
the Lucie Stern Community Theatre. As a first step, the project will include a detailed feasibility study to determine if
natural gas‐powered equipment in the facility can be electrified per the recommended results of the City‐wide
electrification assessment. An RFP for design services is currently being compiled.
Implementing Department Project Phase
Public Works Pre‐Design
Project Completion
Winter 2027
Mechanical
(PE‐24002)
Stern
Fire
Prior Years Actuals Total Project Budget
$0 $241,374
Status: This project will replace the fire curtain and its associated rigging at the Lucie Stern Community Theatre.
The fire curtain work will be coordinated with the Theatrical and House Lighting System Replacement Project (PE‐
24003).
Implementing Department Project Phase
Community Services Pre‐Design
Project Completion
Fall 2026
(AC‐24001)
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Improvement Program Projects
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Buildings and Facilities Projects Status as of December 2024
Lucie Stern
Stage
Prior Years Actuals Total Project Budget
$0 $116,113
Status: This project will refurbish the most heavily used components of the stage rigging system at the Lucie
Implementing Department Project Phase
Community Services Construction
Project Completion
Winter 2025
Rigging System Stern Community Theatre. The construction contract was approved by City Council on June 3, 2024. Work was
scheduled to start in July 2024, but parts needed for the installation were delayed. Anticipated construction is now
(AC‐24000)early 2025.
Lucie Stern
House
Prior Years Actuals Total Project Budget Implementing Department Project Phase
Public Works Design
Project Completion
Winter 2027$21,177 $333,210
Project Status: This project will upgrade and replace lighting systems at the Lucie Stern Community Theatre for stage
areas, the performance stage, and audience areas. The bridging documents for the new system are complete
an RFP for a Design Build Entity will be submitted for bidding. The timing of this project will coincide with the
Lighting System Community Theatre Mechanical Equipment Replacement (PE‐24002).
Replacement
Mitchell Park
Repair
(PE‐24006)
Prior Years Actuals Total Project Budget
$15,083 $266,540
Implementing Department Project Phase
Public Works Design
Project Completion
Fall 2025
Project Status: This project will repair the damage caused by a vehicular accident in January 2023. A vehicle ran into
north wall of the Mitchell Park Library near the center of the building. The car impacted an area of the stone
on cold‐formed steel studs, causing the cladding to fall from the wall and the wall to bulge into the building’s
Architectural and structural surveys and reports were completed. The stone cladding wall will require
but the structural steel frame was not damaged. The design contract was completed in October 2024.
documents are on track to be completed in spring 2025.
Prior Years Actuals Total Project Budget Implementing Department Project Phase Project Completion
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Improvement Program Projects
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Buildings and Facilities Projects Status as of December 2024
Municipal $1,195,776 $8,850,720 Public Works Design Winter 2027
Service Center
Electrical
(PF‐16006)
Project Status: This project replaces original mechanical, electrical, and lighting systems installed in 1966. It also
design and construction for office renovations for the Zero Waste group. The electrical design is complete
the planning permit was approved in spring 2024. However, additional stakeholder review is needed to ensure
scope aligns with anticipated future capacity requirements.
New Downtown Prior Years Actuals Total Project Budget
Parking Garage $1,440,311 $17,300,000
Implementing Department Project Phase
Public Works Design
Project Completion
Summer 2027
(PE‐15007)Project Status: In December 2021, Council directed staff to look at the feasibility of partnering with a private entity to
new parking using downtown in‐lieu parking fees in conjunction with housing or other uses, including the use
City surface lots or privately held parcels. A Request for Information was issued in December 2022 and staff
proposals and held interviews in May 2023. Council gave directions to staff in December 2023 to advance
project in conjunction with advancement of affordable housing in the Downtown area. In December 2024, the City
a contract with Watry Design, Inc. to provide for design, environmental review, and construction
services for the New Downtown Parking Garage. Concept designs will be presented to City Council in
2025.
New Public
Building $113,275,793
(PE‐15001)
Prior Years Actuals Total Project Budget
$ 123,500,000
Implementing Department Project Phase
Public Works Construction
Project Completion
Spring 2025
Project Status: This project will provide a new, modern Public Safety Building (PSB) that will meet essential services
and the current and future needs of the public safety departments. The PSB and new garage in the California
business district are now an integrated project and both are part of the 2014 Council Infrastructure Plan.
on the PSB started in March 2021 and will continue into spring 2025. The Tier 4 emergency generator
completed source testing. Punch list and department inspections are in progress. The project is expected to obtain
certificate of occupancy in early 2025.
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Improvement Program Projects
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Buildings and Facilities Projects Status as of December 2024
Palo Alto Art Prior Years Actuals Total Project Budget
$0 $181,367
Implementing Department Project Phase
Community Services Design
Project Completion
Summer 2026
Ceramics
(AC‐28003)
Project Status: This project renews and replaces ceramics program equipment, upgrades facility Wi‐Fi and electrical
and waterproofs outdoor kiln sheds. The majority of the Art Center’s existing ceramics equipment was
during the renovation of the Art Center in 2011 and 2012. These pieces of equipment are showing signs of
necessitating facility updates.
Performing Arts Prior Years Actuals Total Project Budget Implementing Department Project Phase
Public Works Construction
Project Completion
Summer 2025Venues Seat
(AC‐18000)
$663,022 $1,281,909
Project Status: This project will replace all the seats in the Community and Children’s Theatres. Staff hired a consultant
design the seat replacements and ADA upgrades for the Children’s Theatre portion of the project. The Children’s
seats replacement was completed in November 2022. A contract for the design of the Community Theatre
issued in June 2023. Council approved a construction contract on April 22, 2024, with project completion expected
fall 2024. The installation of the ADA upgrades and auditorium seats are complete with additional companion seats
in February. Painting of the auditorium will be completed in the summer 2025.
Rinconada Pool Prior Years Actuals Total Project Budget
Family $34,922 $1,397,698
Implementing Department Project Phase
Public Works Design
Project Completion
Winter 2026
Changing Room Project Status: The project will construct a gender‐neutral restroom and family changing facility that is compliant with
(PE‐24004)the Americans with Disabilities Act (ADA) at the Rinconada Pool. The facility will include two separate rooms, each
of a toilet, sink, shower, and child/adult changing station. The facility will provide community members who
special needs, and individuals who require privacy, an accessible space for changing and personal hygiene. Design
the family changing rooms started in December 2024.
Prior Years Actuals Total Project Budget
$6,927,119 $11,367,366
Implementing Department Project Phase
Public Works Construction
Project Completion
Winter 2024
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Improvement Program Projects
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Buildings and Facilities Projects Status as of December 2024
Roth Building
1
Project Status: This project provides funding for Phase 1 of the rehabilitation and build‐out of the Roth Building facility.
I will make the building suitable for occupancy, also known as a “warm shell. Phase II of the rehabilitation
the interior build‐out of the museum and exhibits, readying the facility to welcome visitors, and will be funded
the Palo Alto History Museum (PAHM). A Tenant Work Letter was approved by Council in April 2023 and
is underway including underground utilities, roof, demolition, and abatement. Phase I of this project will
substantially completed in February 2025.
(PF‐23001)
Recurring Projects
Americans
With
Prior Year Actuals
$0
Current Year Budget Implementing Department Project Phase Project Completion
$880,820 Public Works N/A Recurring
Disabilities Act Project Status: This project provides accessibility upgrades to City facilities and equipment. It includes continued
Compliance
(PF‐93009)
funding for improvements such as path of travel, restrooms, drinking fountains, and counters. An updated ADA
Plan was adopted by Council in June 2021. Staff is waiting to solicit new software that will allow staff to
and log new barriers, track grievances from the public, and update the ADA Transition Plan Report.
Building Prior Year Actuals
$77,759
Current Year Budget Implementing Department Project Phase Project Completion
$1,366,177 Public Works N/A Recurring
Improvements Project Status: This project provides electrical, mechanical, plumbing, structural, and security upgrades for City
(PF‐01003)facilities. The UCC Emergency Generator Replacement project is currently in permitting. Once permitting is approved,
project will be go out to bid in spring 2025. The City Hall Cooling Tower Overhaul project contract was signed in
2024. The material lead time is 12 to 14 weeks, pushing back construction until spring 2025.
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Improvement Program Projects
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Buildings and Facilities Projects Status as of December 2024
City Facility
Lot
(PE‐09003)
Prior Year Actuals
$0
Current Year Budget Implementing Department Project Phase Project Completion
$567,564 Public Works N/A Recurring
Project Status: This project repairs, resurfaces, or reconstructs parking lots and walkways at various City facilities,
restriping and signage. The Cubberley Community Center restriping and base‐failure repair work was
in fall 2024.
Cubberley Prior Year Actuals
$309,506
Current Year Budget Implementing Department Project Phase Project Completion
$746,556 Public Works N/A Recurring
(CB‐17001)Project Status: This project is for general maintenance needs of the Cubberley campus. Gym B completed floor sanding,
line repainting, and refinishing in July 2024. One third of the hardwood flooring and subflooring has been restored
Gym A due to water damage. All repair work on Gyms A & B have been completed and the facilities are ready to rent
Cubberley Prior Year Actuals
$27,039
Current Year Budget Implementing Department Project Phase Project Completion
$1,224,164 Public Works N/A Recurring
Replacements Project Status: This project replaces existing roofs at Cubberley Community Center. The Pavilion Roofing project was
(CB‐16002)canceled due to the City’s pending purchase of the remaining Cubberley buildings and then ultimately rebuilding a new
Community Center.
Electric Prior Year Actuals
$63,243
Current Year Budget Implementing Department Project Phase Project Completion
$ 122,453 Public Works N/A Recurring
Infrastructure Project Status: This project designs and installs electric vehicle chargers at various City facilities. The primary use of the
Installation
(PF‐23000)
electric vehicle chargers will be for City fleet vehicles. The City Hall Level C EV Charger project to install six new chargers
Level C of the parking garage is complete.
Buildings and Facilities Projects – Page 11 of 13
Item A
Attachment A - Semiannual Update
on the Status of Capital
Improvement Program Projects
Item A: Staff Report Pg. 21 Packet Pg. 289 of 413
Buildings and Facilities Projects Status as of December 2024
Electrification Prior Year Actuals Current Year Budget Implementing Department Project Phase Project Completion
of City $ 204,162 $1,358,531 Public Works Pre‐Design Fall 2030
Facilities
(PE‐24001)
Project Status: This project will evaluate feasibility, prepare designs, and implement construction for the electrification
fossil fuel consuming building systems in coordination with the Building Systems Improvements project (PF‐01003).
City Facility Electrification assessment report will act as a workplan to implement the electrification of City facilities.
RFP for an on‐call task order consultant for all City facilities requiring electrification will be issued in summer 2025.
will be electrified in order by priorities set by the Electrification Assessment to facilitate reaching the S/CAP
Funding is also included for the HVAC electrification upgrade at the 445 Bryant Street property. Mechanical
for the replacement of seven package units and one exhaust fan is 90% complete. Expect 100% design by early
2025.
Facility Prior Year Actuals
$83,323
Current Year Budget Implementing Department Project Phase Project Completion
$615,564 Public Works N/A Recurring
Finishes
(PF‐02022)
Project Status: This project improves the interior finishes of City facilities, including flooring, walls, cabinets, paint,
ceiling tiles, soundproofing, and fixed office furniture, doors, windows, and associated fire/life safety,
electrical and plumbing code compliance requirements. New carpet has been selected for the Children’s
with work scheduled for spring 2025.
Fire Prior Year Actuals
$0
Current Year Budget Implementing Department Project Phase Project Completion
$113,405 Fire Department N/A RecurringEquipment
(FD‐25000)
Project Status: This project funds ongoing replacement of Fire and Emergency Medical Services (EMS) equipment used
training, medical response, and technical rescue in all emergency situations.
Police Video Prior Year Actuals
$ 10,751
Current Year Budget Implementing Department Project Phase Project Completion
$ 203,503 Police Department N/A Recurring
Buildings and Facilities Projects – Page 12 of 13
Item A
Attachment A - Semiannual Update
on the Status of Capital
Improvement Program Projects
Item A: Staff Report Pg. 22 Packet Pg. 290 of 413
Buildings and Facilities Projects Status as of December 2024
Systems
(PD‐20000)
Project Status: This project maintains the Palo Alto Police Department video recording systems used to record events
the field with up to five in‐car cameras as well as body‐worn cameras (BWC). In FY 2024, the City solicited for a new
to include the in‐car and BWC systems and newly added fixed interrogation systems in the PSB. A vendor was
and City Council approved a Purchase Order. Materials have been shipped, and the transition is in process.
implementation is expected to be completed on or around the end of FY 2025. The CIP will remain open to
with the vehicle replacement cycle.
Roofing
(PF‐00006)
Prior Year Actuals
$447,681
Current Year Budget Implementing Department Project Phase Project Completion
$1,316,825 Public Works N/A Recurring
Project Status: This project replaces existing roofs at City facilities that have outlived their useful lifespans. The Animal
roof recoat has been delayed due to roof modifications required for the proposed kennel remodel. Permits for
Phase 2 of the Lucie Stern Community Center roof replacement project have been completed. This project will go
to bid in early 2025 with construction to start in summer 2025.
University Prior Year Actuals
$0
Current Year Budget Implementing Department Project Phase Project Completion
$171,116 Public Works N/A Recurring
Parking Project Status: This project maintains parking lots and parking structures within the University Avenue Downtown
Improvements Business Parking District. There is no work planned for parking improvements in the first half of FY 2025.
(PF‐14003)
Buildings and Facilities Projects – Page 13 of 13
Item A
Attachment A - Semiannual Update
on the Status of Capital
Improvement Program Projects
Item A: Staff Report Pg. 23 Packet Pg. 291 of 413
Parks and Open Space Projects Status as of December 2024
One‐Time Projects
Baylands Prior Years Actuals Total Project Budget Implementing Department Project Phase Project Completion
Comprehensive $386,401 $438,413 Community Services Design Summer 2026
Conservation
(PG‐17000)
Project Status: This project provides funding for a conservation plan that will examine native vegetation, wildlife
resources, and wildlife‐appropriate public access for the entire Baylands, including Byxbee Park. This plan will
information to successfully manage wildlife habitat and provide trails or other recreation amenities; provide
design overlay for appropriate types and locations of public art in the Baylands; and design interpretive messaging
the Baylands. The plan seeks to optimize opportunities for low‐impact recreation ensuring that these are
with the Baylands Master Plan direction for passive use of the nature preserve. The Conservation Plan will
provide input for the Byxbee Park Completion project. The Parks and Recreation Commission has created an Ad
Committee to work with staff on this project. Staff and the Ad Hoc Committee have been reviewing the draft plan
identifying gaps and highlighting where updates are required.
Baylands
(OS‐24001)
Prior Years Actuals Total Project Budget Implementing Department
$178,366 Community Services
Status: This project was originally planned for 2018‐2021 but was delayed due to project priorities involved
with the moving of the Junior Museum & Zoo to Cubberley Community Center and construction of the newly rebuilt
Junior Museum & Zoo. The project will install interpretive signage and exhibits on two miles of trails and on the
boardwalk at the Palo Alto Baylands. Construction is anticipated to be complete by spring 2025.
Project Phase Project Completion
Construction Spring 2025$
Boulware Park
(PE‐17005)
Prior Years Actuals Total Project Budget Implementing Department
$2,937,729 $5,782,383 Public Works
Status: This park renovation project was initially planned in FY 2018 but was postponed due to project priorities
and potential purchase of the adjacent AT&T lot located at 3350 Birch Street. In fall 2019, the lot was purchased by the
City. A Park Improvement Ordinance for the improvements was adopted by the City Council in October 2021. A
Project Phase Project Completion
Construction Spring 2025
Parks and Open Space Projects – Page 1 of 9
Item A
Attachment A - Semiannual Update
on the Status of Capital
Improvement Program Projects
Item A: Staff Report Pg. 24 Packet Pg. 292 of 413
Parks and Open Space Projects Status as of December 2024
construction contract was awarded in June 2023, and the project construction began in August 2023. Current site work
85% complete. The project is anticipated to be completed by spring 2025
Byxbee Park
(PE‐18006)
Prior Years Actuals Total Project Budget Implementing Department
$368,192 $3,699,189 Public Works
Project Phase Project Completion
Pre‐Design Summer 2028
Project Status: This project allows for the remaining improvements to Byxbee Park that follow the completion of the
capping work. The Baylands Comprehensive Conservation Plan (BCCP), which is currently undergoing CEQA
will include recommendations on the scope of the Byxbee Park project. The BCCP and the conceptual plan for
Park need additional outreach and review which is anticipated to continue through fiscal year 2026. The project
been moved to FY 2027 pending completion of the BCCP.
Cameron Park
(PG‐14002)
Prior Years Actuals Total Project Budget Implementing Department
$205,627 $538,898 Community Services
Project Phase Project Completion
Completed Fall 2024
Project Status: This project upgraded and renovated safety and accessibility features at Cameron Park with a primary
focus on the park playground improvements. The Cameron Park Improvements Project was completed in November
Cubberley Field Prior Years Actuals Total Project Budget Implementing Department Project Phase Project Completion
Construction Spring 2025Restroom$776,349 $1,452,876 Public Works
(CB‐17002)Project Status: This project will install a new restroom in the sports field area of the Cubberley Community Center. In
June 2023, Council approved a purchase order with the Public Restroom Company for a four‐stall prefabricated
restroom building. Council awarded a construction contract for site work in September 2024. The prefabricated
restroom building was installed in December 2024. The sewer pump station and remaining site utilities work are
anticipated to be completed by spring 2025.
Parks and Open Space Projects – Page 2 of 9
Item A
Attachment A - Semiannual Update
on the Status of Capital
Improvement Program Projects
Item A: Staff Report Pg. 25 Packet Pg. 293 of 413
Parks and Open Space Projects Status as of December 2024
El Camino Park Prior Years Actuals Total Project Budget Implementing Department
$ 40,000 $931,121 Community Services
Project Phase Project Completion
Design Summer 2026
Replacement
(PG‐24000)
Project Status: This project has been paused and City Council has provided direction to use a portion of this CIP funding
complete a comprehensive study comparing synthetic turf fields to natural grass fields. The study will assess
and health impacts, field utilization capacity, and capital and operating costs required for both types of
Once complete, the study will enable staff to provide recommendations to City Council for replacement.
Eucalyptus Tree Prior Years Actuals Total Project Budget Implementing Department Project Phase Project Completion
Removal $$110,102 Community Services Construction Fall 2025
(PG‐25002)Project Status: This Hazardous Fuel Abatement project identified eucalyptus trees from the City of Palo Alto’s open
preserves for removal. During Phase 1 of this CIP, 36 Eucalyptus trees were removed within Esther Clark Park to
hazardous fuels adjacent to homes in the Palo Alto Wildland Urban Interface. Foothills Nature Preserve and
Preserve are to be evaluated for further Eucalyptus tree removals pending available resources.
Foothills Nature Prior Years Actuals Total Project Budget Implementing Department Project Phase Project Completion
Design Summer 2026Preserve$0 $278,470 Public Works
Boronda Lake
(OS‐18000)
Project Status: This project is a refurbishment of the existing dock. The dock was originally built in 1965 and was last
in 2010 with repairs to the wood decking. The current condition of the dock has declined and now requires
complete replacement with new decking, ramp, floats, and pilings. Design for the Foothills Nature Preserve Boronda
Dock renovation is currently in progress.
Foothills Nature Prior Years Actuals Total Project Budget Implementing Department Project Phase Project Completion
Design Spring 2025Preserve Dam $42,170 $112,716 Public Works
Project Status: This project will study the location of historic seepage from the Foothills Nature Preserve Dam at the
bend in the road on the face of the dam and will locate and investigate the pipe and trench backfill material. The
of the seepage is suspected to be the trench backfill around the pipe that returns shallow groundwater to
Investigation
Repairs
Parks and Open Space Projects – Page 3 of 9
Item A
Attachment A - Semiannual Update
on the Status of Capital
Improvement Program Projects
Item A: Staff Report Pg. 26 Packet Pg. 294 of 413
Parks and Open Space Projects Status as of December 2024
(PE‐20000)Boronda Lake. Staff continue to monitor and investigate the seepage per the Department of Water Resources Division
Safety of Dams (DSOD) inspections and recommendations. Staff completed camera inspections of the underdrain
to identify potential obstructions and leakage issues. Per the DSOD recommendations, the City’s consultant
a field assessment in fall 2024 identifying location of a seepage weir on the downstream side of the Foothill
Preserve Dam. The weir is anticipated to be installed by early 2025 which will allow the City to collect
measurements of the seepage flow and inform the seepage trends and needs for a long‐term solution as
Foothills Nature Prior Years Actuals Total Project Budget Implementing Department Project Phase Project Completion
Design Summer 2028Preserve$246,859 $3,710,577 Public Works
Improvements
(PE‐21000)
Project Status: This project has repaired the bridge to Sunfish Island, and will complete the design and permitting to
the footbridge in Los Trancos Valley, replace the grade control structures along Buckeye Creek, provide new
rail fencing to protect sensitive areas, new pedestrian pathways to keep park visitors safe while walking along the
road, and improvements to some of the existing parking areas to make them safer and more efficient. Council
a professional services contract for additional outreach, detailed design and bid package preparation for
fencing and parking improvements in spring 2024. Preliminary renderings have been prepared, and staff
outreach and preliminary design in early 2025. The replacement of the footbridge in Los Trancos Valley and
grade control structures along Buckeye Creek have been moved to FY 2027 and FY 2028 due to staffing constraints.
Golf Course Net Prior Years Actuals Total Project Budget Implementing Department Project Phase Project Completion
Pre‐Design Summer 2027and Artificial $0 $925,056 Community Services
Project Status: This project will remove and replace the golf course driving range netting and synthetic turf. This project
been delayed due to the assessment of additional ball retention needs throughout the golf course and the ongoing
of a potential long‐term partnership with the First Tee of Silicon Valley for driving range and practice
improvements.
Replacement
(PG‐18000)
Parks and Open Space Projects – Page 4 of 9
Item A
Attachment A - Semiannual Update
on the Status of Capital
Improvement Program Projects
Item A: Staff Report Pg. 27 Packet Pg. 295 of 413
Parks and Open Space Projects Status as of December 2024
Heritage Park
Amenities
(PG‐21000)
Prior Years Actuals Total Project Budget Implementing Department
$0 $143,134 Community Services
Status: The project will replace select walkways and all of the site amenities in Heritage Park including benches,
picnic tables, trash receptacles, playground arbor, bicycle racks and drinking fountain. In the first half of FY 2025, staff
conducted a site assessment to ascertain the full extent of site furnishings to be replaced, with replacement targeted
in summer 2025.
Project Phase Project Completion
Construction Summer 2025
Ramos Park
(PG‐14000)
Prior Years Actuals Total Project Budget Implementing Department
$279,354 $682,057 Community Services
Status: This project replaces the playground equipment at Ramos Park. Council awarded a cooperative
agreement with Ross Recreation in June 2024 to replace and install the playground equipment for Ramos Park. Work
is anticipated to be completed by spring 2025.
Project Phase Project Completion
Construction Spring 2025
Rinconada Park Prior Years Actuals Total Project Budget Implementing Department Project Phase Project Completion
Construction Fall 2027Improvements$5,447,216 $10,176,310 Public Works
(PE‐08001)Project Status: This project provides upgrades to safety, site amenities, playground facilities, a new restroom, irrigation,
and ADA accessibility improvements at Rinconada Park. These improvements were identified in the
Long Range Plan (LRP). Phase 1 park improvements to the western half of the park were completed in spring
A new park restroom was installed and opened to the public in summer 2024. Funding was approved by Council
FY 2025 for City to complete structural and electric design for replacement of a storage unit (purchased by Palo Alto
Club (PATC) at Rinconada Park. The design and a Memorandum of Understanding between City and PATC are in
Staff anticipate submitting a building permit application for the storage unit upon completion of design work
early 2025. According to the LRP, future improvement phases will include improvements to the eastern half of the
by FY 2028 including pathway improvements, ADA upgrades, planting, irrigation, lighting, and site furnishings.
Prior Years Actuals Total Project Budget Implementing Department Project Phase Project Completion
Parks and Open Space Projects – Page 5 of 9
Item A
Attachment A - Semiannual Update
on the Status of Capital
Improvement Program Projects
Item A: Staff Report Pg. 28 Packet Pg. 296 of 413
Parks and Open Space Projects Status as of December 2024
Robles Park
(PE‐18015)
$161,765 $742,055 Public Works Design Fall 2025
Project Status: This project will replace playground equipment. Community meetings were held in September 2023
March 2024 to obtain community input. An online community survey regarding the play equipment is currently
and will end in January of 2025. If the proposed playground equipment is supported by the community, a
agreement with Ross Recreation will be processed. Due to fabrication lead times, it is anticipated the new
equipment will be installed in fall 2025.
Stanford Palo
Community $
Prior Years Actuals Total Project Budget Implementing Department
$2,707,547 Community Services
Project Phase Project Completion
Design Summer 2025
Playing Project Status: The project provides funding for the replacement of synthetic turf at the Stanford Palo Alto Community
Fields. The Stanford Palo Alto Community Playing Fields accommodate year‐round play, including additional
play with some temporary lighting. Since the turf was installed in 2016, it has been in high demand and is used
youth and adult leagues as well as walk‐on play. Synthetic turf has a typical lifespan of approximately eight to ten
with each year of use contributing to gradual wear and tear resulting in loss of pile height, turf fiber, and infill.
design was completed in fall 2024, and construction is scheduled to begin in spring 2025 through an approved sole
contract.
Fields Turf
(PG‐26000)
Recurring Projects
Art in Public
Spaces
Prior Year Actuals Current Year Budget Implementing Department Project Phase
$189,175 $1,823,508 Community Services N/A
Project Completion
Recurring
(AC‐86017)Project Status: This project provides the ongoing temporary and permanent artworks throughout the City of Palo
Two new artworks were installed at the Public Safety Building, and one more will be installed in early 2025, a
mural was painted at Cubberley, artwork was installed at Boulware Park, and artwork is under development for
Stations 4 and 5, and for three murals downtown. Twenty utility box projects were painted throughout the City
Parks and Open Space Projects – Page 6 of 9
Item A
Attachment A - Semiannual Update
on the Status of Capital
Improvement Program Projects
Item A: Staff Report Pg. 29 Packet Pg. 297 of 413
Parks and Open Space Projects Status as of December 2024
during fall 2024. Other projects in process include the ongoing King Artist‐in‐Residence with artist Alma Landeta,
the development of temporary artwork for King Plaza, and preparations for the 2025 Code: ART festival.
Athletic Courts
(PG‐06001)
Prior Year Actuals Current Year Budget Implementing Department Project Phase
$22,294 $194,499 Community Services N/A
Status: This project repairs and resurfaces athletic courts in various Palo Alto parks. The reconfiguration and
Project Completion
Recurring
resurfacing of the Greer Park basketball courts is scheduled to begin construction in spring 2025.
Benches, Signage, Prior Year Actuals Current Year Budget Implementing Department Project Phase Project Completion
Walkways,
(PG‐06003)
$513,204 $325,544 Community Services N/A Recurring
Project Status: This project restores and replaces existing benches, signage, fencing, walkways, and landscaping at
City facilities. The refurbishing of the wooden picnic tables at Rinconada Park was completed in summer
In November 2024 a design consultant was hired for the design of the Lytton Plaza fountain grate. Lytton Plaza
is scheduled for completion in winter 2024 and construction of the fountain grate is estimated for spring
Dog Park Prior Year Actuals Current Year Budget Implementing Department Project Phase
$30,278 $0 Community Services N/A
Project Completion
RecurringInstallation and
(PG‐18001)
Project Status: This project enables the construction of dog parks at various City parks and facilities for constructing
or renovating existing dog parks. A new dog park will be added with the Boulware Park expansion project for
construction started in summer 2023. Council approved a Park Improvement Ordinance in September 2022
the expansion of the Mitchell Park Dog Park. Mitchell Dog Park installation and expansion began in fall 2024 and
completed in April2025.
Prior Year Actuals Current Year Budget Implementing Department Project Phase
$22,075 $269,457 Public Works N/A
Project Completion
Recurring
Parks and Open Space Projects – Page 7 of 9
Item A
Attachment A - Semiannual Update
on the Status of Capital
Improvement Program Projects
Item A: Staff Report Pg. 30 Packet Pg. 298 of 413
Parks and Open Space Projects Status as of December 2024
Off‐Road Pathway Project Status: This project repairs, resurfaces, or replaces pathways as needed within the City of Palo Alto.
Resurfacing and Pathways are chosen based on safety inspections, condition, and usage. Open Space pathways are currently under
for repair.
(OS‐09001)
Open Space Lakes Prior Year Actuals Current Year Budget Implementing Department Project Phase Project Completion
and Pond $27,900 $78,037 Community Services N/A Recurring
Maintenance
(OS‐00002)
Project Status: This project rehabilitates lakes and ponds in open space nature preserves to protect wildlife habitat
recreational safety and to meet State Division of Safety of Dams requirements. A new three‐year contract was
in July 2024 for the removal of aquatic vegetation in Boronda Lake.
Open Space Trails Prior Year Actuals Current Year Budget Implementing Department Project Phase Project Completion
and Amenities $360,820 $296,701 Community Services N/A Recurring
(OS‐00001)Project Status: This project restores unpaved trails, fences, picnic areas, and campgrounds at Foothills, Baylands,
Pearson‐Arastradero Nature Preserves. Work performed in summer 2024 included approximately 60 acres of
maintenance and fire road mowing. A new five‐year maintenance contract was awarded in November
Work performed in December 2024 included the reconstruction of a degraded levee in the Baylands Nature
and maintenance of 25 miles of trailside vegetation in the Foothills Nature Preserve.
Parks and Open
Emergency
Prior Year Actuals Current Year Budget Implementing Department Project Phase
$192,025 $335,109 Community Services N/A
Project Completion
Recurring
Project Status: This project replaces or repairs playgrounds, play yard surfaces, wooden structures, park amenities,
play equipment in the event of storms, fire, vandalism, or structural failure. In fall 2024, GMAX impact safety
was conducted on four artificial turf sports fields located at Cubberley Community Center, El Camino Park,
Stanford Palo Alto Community Playing Fields to ensure safety compliance and evaluate surface performance. In
2024, replacement of two water meters on California Avenue were completed. In December 2024, fencing
(PG‐09002)
Parks and Open Space Projects – Page 8 of 9
Item A
Attachment A - Semiannual Update
on the Status of Capital
Improvement Program Projects
Item A: Staff Report Pg. 31 Packet Pg. 299 of 413
Parks and Open Space Projects Status as of December 2024
repairs were completed at El Camino Park and repairs to the permeable parking lot pavers are scheduled for
in January 2025.
Park Restroom Prior Years Actuals Current Year Budget Implementing Department Project Phase
$485,995 $693,359 Community Services N/A
Project Completion
Recurring
(PG‐19000)Project Status: This project installs new restrooms at City parks that currently do not have restroom facilities. City
approved a Park Improvement Ordinance for Ramos Park. In April 2023, Council approved a purchase order
the Public Restroom Company for a two‐stall prefabricated restroom building at Ramos Park. Staff completed
and obtained a building permit for site work and restroom. On December 18, 2023, Council awarded a
contract for the restroom site work. In summer 2024 the Ramos Park restroom construction was
and opened to the public.
Parks and Open Space Projects – Page 9 of 9
Item A
Attachment A - Semiannual Update
on the Status of Capital
Improvement Program Projects
Item A: Staff Report Pg. 32 Packet Pg. 300 of 413
Streets and Sidewalks Projects Status as of December 2024
One‐Time Projects
California Avenue Prior Years Actuals
District Gateway $26,943
Total Project Budget
$162,783
Implementing Department Project Phase Project Completion
Public Works Design Fall 2025
Signs
(PE‐17004)
Project Status: This project includes the design and replacement of two existing gateway signs for the California
business district. Initial public outreach was completed in winter 2021. The California Avenue District Gateway
project is in the next phase of improvements following the California Avenue Streetscape update and near‐term
The signage plan, including district gateway signs, will be discussed with the Architectural Review
in Spring 2025 and presented to City Council for approval later in 2025.
Newell Road Prior Years Actuals
$3,957,812
Total Project Budget
$23,456,670
Implementing Department Project Phase Project Completion
Public Works Design Fall 2026
Francisquito
Bridge
(PE‐12011)
Project Status: This project removes and replaces the Newell Road bridge over San Francisquito Creek with a clear
to allow the channel to convey up to the natural capacity of the San Francisquito Creek, approximately 7,500
feet per second, and to improve safety for vehicular, bicycle, and pedestrian traffic. The project is being closely
with the City of East Palo Alto, Valley Water, and San Francisquito Creek Joint Powers Authority (SFCJPA).
the second half of FY 2024, staff acquired the eight easements needed to complete the project, obtain a permit
Regional Water Quality Control Board and a draft permit from California Department of Fish and Wildlife along
encroachment permits from East Palo Alto and Santa Clara Valley Water District. Staff and consultants worked
PG&E, Comcast, AT&T, City of East Palo Alto Water and City of Palo Alto Utilities on the Utility Relocation letters
for Caltrans’ review and approval. The right‐of‐way acquisition and permitting was completed in September
The request for Caltrans to authorize the start of the construction phase with the construction funding that was
approved is still under review. Once approval is received from Caltrans staff will solicit bids for construction
spring 2025.
Prior Years Actuals
$8,799
Total Project Budget
$274,309
Implementing Department Project Phase Project Completion
Public Works Design Fall 2025
Streets and Sidewalks Projects – Page 1 of 5
Item A
Attachment A - Semiannual Update
on the Status of Capital
Improvement Program Projects
Item A: Staff Report Pg. 33 Packet Pg. 301 of 413
Streets and Sidewalks Projects Status as of December 2024
Streetlights
(PE‐13014)
Project Status: This project will assess the condition of the City’s streetlight system. The assessment will include an
of the entire lighting system, including age and condition of conduit, wiring, streetlight poles, foundations,
and lighting coverage. The project will also determine the inspection, maintenance, repair, and
necessary to prolong the life of the City’s streetlight system. This project has not started due to staffing
Recurring Projects
City Bridge
Improvements
(PE‐20001)
Prior Year Actuals Current Year Budget
$200,258 $1,704,161
Implementing Department Project Phase Project Completion
Public Works N/A Recurring
Project Status: This project includes bridge inspections, maintenance, repair, and an improvement program over the
five years. This program will include on‐going inspections to report physical changes to the structures,
for work to be done, and additional information to meet functional and structural standards in
with industry standards. Staff hired an on‐call structural engineering firm to assist with the bridge
and repair program. Staff completed design and bidding for repairs of seven bridges identified for repairs
winter 2023. A construction contract was awarded by the Council in March 2024. Bridge construction repair work
in September 2024 and was completed in December 2024. Staff will continue recurring inspections and repairs
City bridge structures as needed.
Curb and Gutter Prior Year Actuals Current Year Budget
$1,519 $114,506
Implementing Department
Public Works
Project Phase Project Completion
N/A Recurring
(PO‐12001)Project Status: This project repairs curbs and gutters uplifted by tree roots. Funding for FY 2023 was carried over into
FY 2024 for a larger curb and gutter repairs project focusing on the City’s Sidewalk Districts 1 & 2 that includes
Streets and Sidewalks Projects – Page 2 of 5
Item A
Attachment A - Semiannual Update
on the Status of Capital
Improvement Program Projects
Item A: Staff Report Pg. 34 Packet Pg. 302 of 413
Streets and Sidewalks Projects Status as of December 2024
Downtown North and University South neighborhoods (Palo Alto Avenue to Embarcadero Road and Alma Street to
Road) in addition to addressing hot spot locations from 311 requests. Approximately 2,136 linear feet of
and gutters are included in the FY 2024 Sidewalk Repair ADA Improvement Project. Council approved the
contract on June 10, 2024. Construction of curb and gutter repairs began in September 2024, prioritizing
with CDBG funding, with the construction work estimated to be completed by February 2025.
San Francisquito
Joint
Creek
Prior Year Actuals Current Year Budget
$108,514 $220,205
Implementing Department
Public Works
Project Phase Project Completion
N/A Recurring
Project Status: This project provides funding for studies and completion of the design for the San Francisquito Creek
Powers Authority (JPA) upstream project including channel widening and Continuing Authority Program Section
(CAP 205) study. In FY 2024, the JPA awarded a contract with WRA Environmental Consultants to analyze the
hydraulics and the improvement alternatives that could reduce flooding. The Master Service Agreement
the design and implementation of Reach 2 project elements. WRA completed their initial field survey,
a preliminary list of improvement alternatives and provided the initial presentation to the public in
Their efforts will be driven based on public feedback and direction from the SFCJPA Board. A preferred
will be determined in 2025.
(PE‐22000)
Sidewalk Repairs Prior Year Actuals Current Year Budget
(PO‐89003) $1,265,080 $ 1,445,415
Implementing Department
Public Works
Project Phase Project Completion
N/A Recurring
Project Status: This project repairs and replaces broken and uplifted sidewalks. The program completed all twenty‐
three sidewalk districts in 2017, a 30‐year (1986–2017) sidewalk repair district cycle. Council approved a sidewalk
assessment contract in November 2017 to evaluate the sidewalk program and assess potential improvements to the
current district‐based program. Funding for FY 2023 has been carried over into FY 2024 for a larger sidewalk project.
The FY 2024 Sidewalk Repair ADA Improvement Project will focus on sidewalk repairs (PO‐89003) and curb and gutter
repairs (PO‐12001) in the Downtown Professorville neighborhoods (Palo Alto Avenue to Embarcadero Road and Alma
Street to Middlefield Road). Council approved the construction contract on June 10, 2024. The project aims to replace
Streets and Sidewalks Projects – Page 3 of 5
Item A
Attachment A - Semiannual Update
on the Status of Capital
Improvement Program Projects
Item A: Staff Report Pg. 35 Packet Pg. 303 of 413
Streets and Sidewalks Projects Status as of December 2024
approximately 23,199 square feet of concrete sidewalk, 4,309 square feet of driveways, install 86 new curb ramps,
retrofit 33 existing curb ramps with truncated domes to conform to the Americans with Disabilities Act (ADA).
repairs included in this project are estimated for completion in February 2025.
Sign Reflectivity Prior Year Actuals Current Year Budget
$6,692 $ 55,052
Implementing Department
Public Works
Project Phase Project Completion
N/A Recurring
(PO‐11000)Project Status: This project includes the annual inventorying, upgrading and maintaining of all traffic signs. A list of
not meeting the minimum requirement is derived from MUTCD approved Nighttime Visual Inspection surveys.
will continue to work on replacing the 405 signs identified for replacement from the FY 2024 survey. Due to
staffing constraints, nighttime reflectivity surveys are not planned for FY 2025.
Streetlight
(PO‐05054)
Prior Year Actuals Current Year Budget
$210,264 $399,481
Status: This project replaces streetlights, including poles, pole foundations, luminaires and wiring as needed
to restore or improve street lighting. In the second half of FY 2024, there were four knockdown locations with six
completed repairs and eleven are still in progress to be completed in FY 2025.
Implementing Department
Public Works
Project Phase Project Completion
N/A Recurring
Street
(PE‐86070)
Prior Year Actuals Current Year Budget
$3,892,921 $5,531,353
Implementing Department
Public Works
Project Phase Project Completion
N/A Recurring
Project Status: Street Maintenance Projects include the annual resurfacing, micro‐seal, crack seal, and reconstruction
various city streets in support of the Council’s goal of achieving a citywide average pavement condition index (PCI)
of 85, representing very good or excellent conditions. The FY 2024 Street Resurfacing Project will replace 10,149
feet of sidewalk, 3,371 square feet of driveway, 2,280 linear feet of curb and gutter, construct 37 new ADA
ramps, and will place 9,844 tons of asphalt concrete overlay, 36 blue markers, 384 thermoplastic legends, and
LF of thermoplastic striping on the streets of Palo Alto. The FY 2024 Street Resurfacing Project is completed
for the resurfacing of University Avenue due to an existing Gas Main Replacement Project still under
Streets and Sidewalks Projects – Page 4 of 5
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Attachment A - Semiannual Update
on the Status of Capital
Improvement Program Projects
Item A: Staff Report Pg. 36 Packet Pg. 304 of 413
Streets and Sidewalks Projects Status as of December 2024
construction. University Avenue will be resurfaced in spring 2025 once the Gas Main Replacement Project is
The FY 2024 Street Preventive Maintenance Project was completed in October 2024. The FY 2024
Maintenance Project micro‐surfaced 14.23 lane‐miles of streets, replaced 19,200 LF of thermoplastic
installed 85 thermoplastic legends, and updated 77 blue markers. Together, both the Street Resurfacing and
Maintenance Projects will maintain and improve the City’s Pavement Condition Index (PCI) beyond its
of 84 and will address many streets whose PCI scores fall below the City’s minimum goal of 60.
Thermoplastic
Marking
Striping
(PO‐11001)
Prior Year Actuals Current Year Budget
$0 137,628
Status: This project maintains thermoplastic markings on roadways. Thermoplastic lane marking and striping
are incorporated into annual Pavement Preventive Maintenance Projects. The FY 2024 Streets Preventive
Maintenance Project (PE‐86070) was completed in October 2024 and installed 12,400 LF of thermoplastic striping
and 33 thermoplastic legends.
Implementing Department
Public Works
Project Phase Project Completion
N/A Recurring
Streets and Sidewalks Projects – Page 5 of 5
Item A
Attachment A - Semiannual Update
on the Status of Capital
Improvement Program Projects
Item A: Staff Report Pg. 37 Packet Pg. 305 of 413
Traffic and Transportation Projects Status as of December 2024
One‐Time Projects
California Avenue Prior Years Actuals Total Project Budget Implementing Department Project Phase Project Completion
Streetscape
(PL‐23000)
$84,054 $560,583 City Manager’s Office Design Spring 2025
Project Status: The project provides funding for interim changes to the street and for necessary CEQA analysis
the future configuration of the street. Interim changes to the street will take place in early 2025. CEQA
will be brought forward to the Planning and Transportation Commission and City Council in spring 2025.
Charleston Prior Years Actuals Total Project Budget Implementing Department Project Phase Project Completion
Road/Alma Street $0 $1,298,512 Office of Transportation Design Fall 2027
Railroad Crossing Project Status: The California Department of Transportation, in cooperation with the Peninsula Corridor Joint
Safety
(PL‐25002)
Power Board (JPB) and the City of Palo Alto, proposed a railroad crossing improvement project at Charleston Road
Alma Street to enhance traffic safety. This crossing was identified for possible funding of hazard elimination
safety improvements through Section 130 funds. The Section 130 program is a federal‐funded program,
at the state level, for the elimination of hazards at at‐grade highway‐rail crossings. Section 130
will reimburse the actual and direct costs of the design and construction of the improvements. This project
separate and independent from the on‐going rail grade separation projects and addresses more immediate
concerns at this crossing. The railroad crossing at Alma Street and Charleston Road experiences a large
of pedestrian and bicycle traffic during the morning and afternoon school commute hours. JPB and the
will be responsible for the construction of the improvements within each respective agency’s right of way.
Churchill Avenue Prior Years Actuals Total Project Budget Implementing Department Project Phase Project Completion
Enhanced
(PL‐14000)
$418,211 $4,914,801 Public Works Design Winter 2026
Project Status: This project includes planning, design and construction of a shared‐use path along the north side
Churchill Avenue between the existing shared‐use path at Castilleja Avenue and the Stanford Perimeter Trail. It
includes intersection improvements at Churchill Avenue and El Camino Real, which will include a new
westbound right‐turn lane. PAUSD approved the easements required for the project in August 2023.
Traffic and Transportation Projects – Page 1 of 8
Item A
Attachment A - Semiannual Update
on the Status of Capital
Improvement Program Projects
Item A: Staff Report Pg. 38 Packet Pg. 306 of 413
Traffic and Transportation Projects Status as of December 2024
Staff has worked with Caltrans for re‐issuance of the encroachment permit and received approval in June 2024.
construction contract was approved by Council on December 9, 2024. The project is anticipated to be
by winter 2026.
Churchill Avenue Prior Years Actuals Total Project Budget Implementing Department Project Phase Project Completion
Rail Grade
and
$21,018 $198,542,138 Office of Transportation Design Spring 2029
Project Status: This project provides for the planning, design, and construction of the grade separation at the
at‐grade crossing on Churchill Avenue in the Caltrain Rail Corridor. The project will provide improvements
accommodate bicycles, pedestrians, and vehicular movement at the crossing. After reviewing various studies
refinements to the alternatives, the Rail Committee recommended proceeding with a Partial Underpass
with Bicycle and Pedestrian crossing at Seale Avenue. On June 10, 2024, the City Council selected the
Underpass with Ped/bike crossing at Seale Avenue. The funding agreement with the Federal Railroad
was approved by City Council on June 17, 2024. Staff collaborated with Caltrain and the Valley
Agency to develop a cooperative agreement for the Preliminary Engineering and Environmental
phase and funding from Measure B Grade Separation funds. This cooperative agreement between
City, Caltrain, and VTA was approved by the City Council on December 9, 2024. The City is also working with
representatives to preserve the CalSTA, Transit, and Intercity Capital Program funding awarded for the
which is currently being reconsidered for reduction in the Governor’s budget.
(PL‐24001)
Churchill Avenue Prior Years Actuals Total Project Budget Implementing Department Project Phase Project Completion
Alma Street
Crossing
(PL‐20000)
$1,804,194 $9,243,271 Public Works Construction Spring 2025
Project Status: This project is a railroad crossing improvement project to enhance safety at the intersection of
Avenue and Alma Street. The design includes traffic signal modifications, street lighting improvements,
resurfacing, sidewalk realignment, drainage improvements, utility relocations, signage, and striping. Staff
coordinating with Caltrain, Caltrans, and California Public Utilities Commission (CPUC). CPUC approved General
88‐B for the project in November 2022 and authorized the City to move forward with construction. Council
Traffic and Transportation Projects – Page 2 of 8
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Attachment A - Semiannual Update
on the Status of Capital
Improvement Program Projects
Item A: Staff Report Pg. 39 Packet Pg. 307 of 413
Traffic and Transportation Projects Status as of December 2024
approved the construction contract in June 2023 and construction started in summer 2023. Procurement issues
construction constraints from Caltrain will push out project completion through spring 2025.
Downtown Prior Years Actuals Total Project Budget Implementing Department Project Phase Project Completion
$1,658,417 $5,197,827 Public Works Construction Spring 2025
Project Status: This project includes design and installation of new downtown parking guidance systems, access
and revenue collection equipment that will be coordinated with both the Downtown Parking Wayfinding,
PL‐15004 project and the 2016 Downtown Parking Management. Staff contracted with Dixon Resources for
management support in design and procurement for the system installation in the Downtown garages
University Avenue. Building permits for the garage interior work were approved in June 2024 for all four
The High Street Parking Garage (Lot R) and Bryant Street Parking Garage (Lot S/L) passed final inspections
early December 2024. The Webster/Cowper Parking Garage (Lot J) interior work is in progress and expected to
complete in February 2025. Construction will then move the Civic Center Garage. Plans for the exterior digital
signs are under review with Planning.
Guidance
Systems, Access
&
(PL‐15002)
Meadow Prior Years Actuals Total Project Budget Implementing Department Project Phase Project Completion
Drive/Charleston $42,055 $401,639,254 Office of Transportation Design Spring 2028
Road Rail Grade
and
(PL‐24000)
Project Status: This project provides for the planning, design, and construction of the grade separations at the
at grade crossings on Meadow Drive and Charleston Road in the Caltrain Rail Corridor. The project will
improvements to accommodate bicycles, pedestrians, and vehicular movement at the crossings. After
various studies and refinements to the alternatives, the Rail Committee recommended proceeding to
two alternatives, the Hybrid and Underpass Alternatives, into the early phase of Preliminary Engineering
Environmental Documentation. The committee also recommended refining these alternatives to reduce right‐
of‐way impacts and improve bicycle and pedestrian facilities. The City Council after reviewing directed staff to
these alternatives into Preliminary Engineering and Environmental phase at Council Meetings in June
The funding agreement with the Federal Railroad Administration was approved by City Council on June 17,
Traffic and Transportation Projects – Page 3 of 8
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Attachment A - Semiannual Update
on the Status of Capital
Improvement Program Projects
Item A: Staff Report Pg. 40 Packet Pg. 308 of 413
Traffic and Transportation Projects Status as of December 2024
2024. Staff collaborated with Caltrain and the Valley Transportation Agency to develop a cooperative agreement
the Preliminary Engineering and Environmental Documentation phase and funding from Measure B Grade
funds. This cooperative agreement between the City, Caltrain, and VTA was approved by the City
on December 9, 2024. The City is also working with State representatives to preserve the CalSTA, Transit,
Intercity Capital Program funding awarded for the project, which is currently being reconsidered for reduction
the Governor’s budget.
Parking Prior Years Actuals Total Project Budget Implementing Department Project Phase Project Completion
Management and
(PL‐16002)
$292,811 $627,247 Office of Transportation Procurement Spring 2025
Project Status: This project provides funding for the design and installation of the Comprehensive Parking Permit
Citation Management System. The all‐inclusive system is a tool staff will utilize in the management of parking
for eight parking permit programs and associated on and off‐street parking citations. An RFP to solicit
vendor was issued the last week of June 2024. Interviews for the final three candidates were completed
December 2024.
Quarry Road
Transit
Access
(PL‐16000)
Prior Years Actuals Total Project Budget Implementing Department Project Phase Project Completion
$1,282,050 $1,682,068 Office of Transportation Design Fall 2026
Project Status: This project provides funding for the planning, design, and construction of bicycle and pedestrian
along Quarry Road between El Camino Real and Welch Road, including, but not limited to, upgraded
lanes and crosswalks, innovative intersection treatments for bicyclists, and improved access to transit
Railroad Grade
and
Prior Years Actuals Total Project Budget Implementing Department Project Phase Project Completion
$4,501,430 $11,735,179 Office of Transportation Pre‐Design Fall 2025
Project Status: This project is a community‐based process to advance the railroad grade crossing circulation study
Improvements and context sensitive solutions study envisioned by the City Council for the Palo Alto Avenue crossing. It will also
Traffic and Transportation Projects – Page 4 of 8
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Attachment A - Semiannual Update
on the Status of Capital
Improvement Program Projects
Item A: Staff Report Pg. 41 Packet Pg. 309 of 413
Traffic and Transportation Projects Status as of December 2024
(PL‐17001)fund the preparation of a Project Study Report and environmental analysis that will be required for the City to
its goals of advancing grade separations. The project will perform preliminary engineering design, conduct
related studies, and prepare environmental documents for the improvements. This project is currently on
while the City is considering quiet zone implementation for interim conditions, and staff will initiate the
plan development for grade separation at this crossing in 2025.
Traffic Prior Years Actuals Total Project Budget Implementing Department Project Phase Project Completion
Intersection $$550,512 Office of Transportation Design Summer 2025
Project Status: This project will provide traffic intersection accessibility improvements at four identified locations
the City to enhance traffic congestion relief efforts. These modifications may include the addition of new
and curb ramps; accessible pedestrian system (APS) push buttons; updating existing 8” traffic signal
heads to 12”; video detection for improved operations; and implementation of Automated Traffic
Performance Measures (ATSPM) for ongoing data collection and operational/safety analysis. Funding for
project will be provided by 2016 Measure B Local Streets and Roads (LSR) grant funds. Since the City’s
condition index (PCI) is above 70, the City is eligible to use this funding for traffic congestion relief
(PL‐25001)
University Ave Prior Years Actuals Total Project Budget Implementing Department Project Phase Project Completion
$461,353 $1,625,909 Public Works Design Summer 2027
Project Status: This project includes a study to reconfigure University Avenue between Alma Street and Middlefield
to adapt the public realm to maximize pedestrian and bicycle use, reduce congestion, and enhance the retail
activity, while maintaining two‐way vehicular access, parking opportunities, delivery and
zones, ride share spaces, and other amenities including performance space. Council awarded a professional
contract for CSW/Stuber‐Stroeh Engineering in February 2022. The project uses a phased approach with
1 consisting of public outreach, conceptual design, preliminary environmental studies, and financial
Staff presented an alternatives analysis and a preferred streetscape concept plan to Council on
(PE‐21004)
Traffic and Transportation Projects – Page 5 of 8
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Attachment A - Semiannual Update
on the Status of Capital
Improvement Program Projects
Item A: Staff Report Pg. 42 Packet Pg. 310 of 413
Traffic and Transportation Projects Status as of December 2024
December 18, 2023. Council did not approve the plan and directed staff to identify additional concept alternatives
Council discussion. Staff conducted additional outreach to the Retail Committee, Stakeholder Working Group,
received input from Council on June 3, 2024. On December 9, 2024, Council approved staff’s recommended
concept plan. Staff will seek Council approval for a consultant contract amendment in early 2025 for
2 services, including preliminary design, environmental review, and Engineer’s Report for an Assessment
Recurring Projects
and Prior Year Actuals Current Year Budget
$14,400,000
Implementing Department Project Phase Project Completion
of Transportation N/A Recurring
Transportation
(PL‐04010)
Project Status: This project funds the Bicycle and Pedestrian Transportation Plan Update effort, which kicked off
fall 2023 and is scheduled to be completed by fall 2025. This project also includes the implementation of various
bicycle and pedestrian projects, such as the design and construction of bicycle boulevards, enhanced
shared‐paths, bicycle parking, pedestrian improvements, and quick‐build implementation of the City’s
2012 Bicycle and Pedestrian Transportation Plan.
Parking District
(PL‐15003)
Prior Year Actuals Current Year Budget
$180,457
Status: This project introduces additional parking permit programs throughout the City. One aspect of this
is to update City Council‐approved Residential Preferential Parking (RPP) ordinance language to establish
and streamlined procedures and processes to implement RPP districts through the process outlined in
Code 10.50.
Implementing Department Project Phase Project Completion
of Transportation N/A Recurring
Traffic and Transportation Projects – Page 6 of 8
Item A
Attachment A - Semiannual Update
on the Status of Capital
Improvement Program Projects
Item A: Staff Report Pg. 43 Packet Pg. 311 of 413
Traffic and Transportation Projects Status as of December 2024
Safe Routes
School
Prior Year Actuals Current Year Budget
$610,103
Implementing Department Project Phase Project Completion
Office of Transportation N/A Recurring
(PL‐00026)Project Status: This project enables the City’s Safe Routes to School program, including school commute planning,
activities, and capital improvements along local and collector streets that may be impacted by
commute activities. The capital improvements include traffic calming devices, enhanced crosswalks, and
signage along suggested safe routes to school. The community engagement and planning process for
construction of the South Palo Alto Bikeways project began in FY 2021. The project will implement buffered
protected bike lanes on East Meadow Drive from Alma Way to Fabian Way, Fabian Way from East Meadow
to East Charleston Road, and widen and repave the Waverley Avenue Bike Path between East Meadow Drive
Charleston Road. Staff was notified of the award of a “Safe Streets for All” grant in spring 2024 to pilot the
Palo Alto Bikeways concept plans on East Meadow Drive and Fabian Way. In FY 2024, this project funded
to improve school access and safety. In addition, this project supported a secondary school needs
to identify middle and high school education and encouragement programs and to query the Safe
Partnership for the resources to support these programs. This project will support the demonstration
local match and pre‐grant activities in FY 2025.
Traffic Signal
Intelligent
Prior Year Actuals Current Year Budget
$994,336
Implementing Department Project Phase Project Completion
of Transportation N/A Recurring
Project Status: This project includes design and construction of traffic signals, traffic signal communications
detection, and data projects for transportation use, and maintenance of the City’s traffic signal central
system. The project includes the replacement of traffic signal controllers and cabinets, video
systems, accessible pedestrian buttons, and related field equipment. Design for traffic signal safety and
improvements at the intersection of San Antonio Road and Charleston Road is nearing 100%
Staff is finalizing the plans and will be preparing bid documents for construction to be released in fall
with construction anticipated to begin in spring 2025. Staff is in the process of updating the Centralized
Management system servers to improve operational functions and system security. An IFB for the Quarry
(PL‐05030)
Traffic and Transportation Projects – Page 7 of 8
Item A
Attachment A - Semiannual Update
on the Status of Capital
Improvement Program Projects
Item A: Staff Report Pg. 44 Packet Pg. 312 of 413
Traffic and Transportation Projects Status as of December 2024
Road Traffic Signal and Intelligent Transportation System upgrade project is anticipated for spring/summer
Staff continually provide traffic signal modifications, installations, and upgrades throughout the City.
Transportation
Parking
Prior Year Actuals Current Year Budget
$442,611
Implementing Department Project Phase Project Completion
of Transportation N/A Recurring
Improvements
(PL‐12000)
Project Status: This project implements miscellaneous parking and transportation related improvements
neighborhood traffic calming, neighborhood traffic studies, minor striping and signs installation, and
improvements. This project also funds the development of grant proposals used to procure funding for
projects. For the traffic calming project in the Crescent Park neighborhood, City Council approved
with the design of permanent improvements in November 2023. Staff has procured the services of
consultant to design improvements and conduct community outreach. In addition, staff initiated an
and Traffic Survey to select roadway segments to study prevailing speeds and review traffic conditions
order to establish and/or certify posted speed limits. Staff is also working on the quiet zone project for all
crossings along the Caltrain corridor. A quiet zone study was performed for the Palo Alto Avenue and
Street crossing in collaboration with City of Menlo Park in 2022. Staff has retained the services of the
to design final improvements at this crossing. The design plans are currently at 70% and are being
by CPUC, Caltrain and FRA for feedback and comments that will be incorporated to develop final PS&E
procure necessary permits. In addition, staff procured the services of the consultant to conduct a study for
of quiet zones at the other three crossings of Churchill Avenue, Meadow Drive, and Charleston Road.
$200K Safe Streets for All (SS4A) Safety Action Plan is funded via this project but will be reimbursed up to
by a federal grant. The plan will target eliminating traffic deaths and life‐changing injuries on local streets.
Traffic and Transportation Projects – Page 8 of 8
Item A
Attachment A - Semiannual Update
on the Status of Capital
Improvement Program Projects
Item A: Staff Report Pg. 45 Packet Pg. 313 of 413
Airport Projects Status as of December 2024
One‐Time Projects
Airfield Prior Years Actuals Total Project Budget Implementing Department Project Phase Project Completion
Electrical $0 $5,789,450 Public Works Design Summer 2030
Improvements
(AP‐19001)
Project Status: This project is for the design and construction of electrical improvements and installation of LED
at the airport runway and taxiway. This project has not received FAA funding and is currently on hold.
Airport Access Prior Years Actuals Total Project Budget Implementing Department Project Phase Project Completion
Road $0 $3,700,002 Public Works Design Summer 2027
Reconstruction
(AP‐24000)
Project Status: This project is for the design and reconstruction of the pavement on Embarcadero Way, which is
main access road for airport businesses and the Air Traffic Control Tower at the Airport. The Airport did not
FAA funding for this project and the project is currently on hold.
Airport Layout Prior Years Actuals Total Project Budget Implementing Department Project Phase Project Completion
Plan $1,179,551 $ 967,100 Public Works Construction Summer 2025
(AP‐21000)Project Status: This project provides updates to the Airport Layout Plan, also known as the Long‐Range Facilities
Sustainability Plan, including a narrative report and environmental study. The Airport received funding for a
I portion of this project in fall 2020. The airport conducted five public meetings for the project, and additional
are currently being planned for this project. Phase I is approximately 95% complete, and Phase II is
75% complete. This project is currently on hold, and the completion date is unknown.
Airport Parking Prior Years Actuals Total Project Budget Implementing Department Project Phase Project Completion
Lot Electric
(AP‐24001)
$0 $28,993 Public Works Design Summer 2026
Project Status: This project will install electric vehicle charging stations in the Airport customer parking lot. The
is currently unable to offer electric vehicle charging to its customers, but there is increasing demand for
charging capability from Airport tenants. This project has been delayed as the Airport explores further
options.
Airport Projects – Page 1 of 2
Item A
Attachment A - Semiannual Update
on the Status of Capital
Improvement Program Projects
Item A: Staff Report Pg. 46 Packet Pg. 314 of 413
Airport Projects Status as of December 2024
Airport Prior Years Actuals Total Project Budget Implementing Department Project Phase Project Completion
Temporary
Buildings
(AP‐22001)
$947 $431,005 Public Works Procurement Winter 2025
Project Status: This project provides funding for the installation and Furniture, Fixtures, & Equipment (FF&E) of
temporary modular buildings at the airport to provide adequate office space for airport staff as well as
space for the public. This project has been delayed while the Airport explores further funding options.
Airport Zero Prior Years Actuals Total Project Budget Implementing Department Project Phase Project Completion
$192,546 $377,696 Public Works Completed Summer 2024
Vehicle Fleet Project Status: The Airport vehicle fleet will be replaced by three zero emissions vehicles (ZEV), to be supported
three electric charging stations. The van is used for the transportation of airport guests and passengers and
safety by minimizing foot traffic on the airport apron. The truck is used as a maintenance, first response,
operations vehicle. The ZEV fleet will include one passenger vehicle and two trucks. FAA funding was received
fall 2023, for the fleet replacement. The Airport received delivery of a new electric truck in fall 2024 which
both airport vehicles with electric vehicles.
(AP‐23000)
Automated
AP‐19000
Prior Years Actuals Total Project Budget Implementing Department Project Phase Project Completion
$43,677 $1,588,533 Public Works Design Summer 2025
Project Status: This project provides a new weather information system to be installed at the Palo Alto Airport.
Airport has applied for FAA funding and is waiting for the grant agreement to start design. The Airport received
bid for the project and is submitting a grant application to the FAA. It is anticipated that funding for the project
be received in spring 2025.
Recurring Projects
2024‐2028 – Airport Capital Improvements Program Projects: There are no recurring projects scheduled at this time.
Airport Projects – Page 2 of 2
Item A
Attachment A - Semiannual Update
on the Status of Capital
Improvement Program Projects
Item A: Staff Report Pg. 47 Packet Pg. 315 of 413
Electric Fund Projects Status as of December 2024
One‐Time Projects
115 kV Electric Prior Years Actuals Total Project Budget Implementing Department Project Phase Project Completion
$742,639 $ 1,364,625 Utilities Pre‐Design Summer 2027
(EL‐06001)Project Status: This project will perform a technical feasibility study to determine the general project requirements
establish a 115 kV electric intertie line and construct a 115/60 kV substation to connect the City's electric system
to the 115 kV transmission line at an additional location. Staff did not receive California Independent
Operator’s (CAISO) commitment to support this interconnection. Staff has retained the services of a
to evaluate the options available to the City. Staff submitted CPAU electric load forecast and proposal
an additional 115 kV transmission line in October 2024 to CAISO for review and acceptance. Staff expects a
from CAISO by June 2025.
Colorado Prior Years Actuals Total Project Budget Implementing Department Project Phase Project Completion
Distribution
Outlet
(EL‐22002)
$10,576 $400,000 Utilities Construction Fall 2025
Project Status: This project is for the installation of a new underground duct bank and cable at Colorado Substation.
installation will improve reliability for all Colorado circuits. The design was completed in spring 2024 and
will begin by summer 2025. Council approved the contract in April 2024 and an order for the material
been issued. The construction is delayed due to the procurement of the 12 kV pad‐mount switches. In
construction is being coordinated with the fiber hut installation which is expected to be installed by June
Colorado Power Prior Years Actuals Total Project Budget Implementing Department Project Phase Project Completion
$4,468,548 $11,293,873 Utilities Design Fall 2027
Equipment
(EL‐19001)
Project Status: This project is for the upgrades to equipment at the Colorado Power substation. In FY 2022 staff
the evaluation of existing equipment and will proceed with replacing the COP‐3 115 kV/60 kV
bank and the 115 kV breaker. Engineering is continuing to work on the design RFPs and construction
for contract services to complete substation projects. The station’s service voltage transformers (SSVT1) was
Electric Fund Projects – Page 1 of 8
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Improvement Program Projects
Item A: Staff Report Pg. 48 Packet Pg. 316 of 413
Electric Fund Projects Status as of December 2024
purchased and installed. The 60 kV Bus 1 & 2 Potential Transformers (PT) have been purchased for their eventual
Colorado Prior Years Actuals Total Project Budget Implementing Department Project Phase Project Completion
Substation Site
(EL‐19002)
$275,777 $1,416,912 Utilities Design Fall 2025
Project Status: This project will make modifications to the substation driveways and fence to provide adequate
and egress for utility vehicles used for maintenance and repair. Staff has prepared an overall master plan
Colorado Substation to include all proposed improvements. Detailed designs for lighting, driveway, fences,
and an improvement of oil containment have been prepared. The Planning Department approved the Utility
design in May 2024. Engineering staff are currently preparing the IFB for construction. Bid opening
been delayed until spring 2025 due to recent staff changes.
Foothills Rebuild Prior Years Actuals Total Project Budget Implementing Department Project Phase Project Completion
(Fire Mitigation)$8,503,110 $14,999,581 Utilities Construction Fall 2025
(EL‐21001)Project Status: This project will rebuild the approximately 11 miles of overhead line in Foothills Park, as necessary
mitigate the possibility of wildfire due to overhead electric lines. This could include the utilization of more robust
or construction practices, rerouting to avoid vegetation and improve access for inspection and
or converting the overhead lines to underground where feasible. Two proposals were received for
project and both proposals were rejected because they did not provide an option to underground existing
electric lines. Substructure for Phases 1 and 2 are completed while Phase 3 substructure installation is
in progress. Phase 4 construction is currently paused for an easement relocation from Mid‐Peninsula
Space. Construction will resume in early 2025 when the easement paperwork is completed. Phase 5
installation along Arastradero Road is currently in progress.
Prior Years Actuals Total Project Budget Implementing Department Project Phase Project Completion
$350,153 $300,000,000 Utilities Construction Winter 2030
Electric Fund Projects – Page 2 of 8
Item A
Attachment A - Semiannual Update
on the Status of Capital
Improvement Program Projects
Item A: Staff Report Pg. 49 Packet Pg. 317 of 413
Electric Fund Projects Status as of December 2024
Grid Project Status: This project will provide the City with an electric infrastructure adequate to support the City’s goal
Modernization of 100% electrification and 80% carbon emissions reduction by the year 2030. To attain the 100% electrification
for Electrification scenario, the City must maximize use of electric energy and phase out carbon‐based end uses such as natural gas
(EL‐24000)appliances and internal combustion vehicles. The electric system must be updated to meet the needs of
and older components in the distribution infrastructure must be replaced to mitigate chances of
the system. Examples of assets to be replaced are distribution and substation transformers,
distribution circuits. A Pilot area was designated and engineering staff in conjunction with a
have completed the distribution system design for the Pilot area, with a handful of power poles replaced
installed as initial construction efforts start to take shape. Starting in FY 2025, this project will incorporate and
the scope of work from the following projects into one CIP: Coleridge Cowper Tennyson 4/12kV
(EL‐14000), Hopkins Substation 4/12 kV Conversion (EL‐20000), Rebuild Underground District 15 (EL‐
and Rebuild Underground District 16 (EL‐13003). Engineering design in the Pilot area is complete and
is in progress. Fifty‐five (73%) poles out of the seventy‐five targeted for replacement have been
in the Grid Modernization Pilot area, with the remaining twenty poles slated for replacement by
2025. Additionally, 428 (47%) of the 908 homes in the Pilot area are ready for electrification, with another
homes in line to be connected to the upgraded infrastructure by the end of April 2025.
Hanover Prior Years Actuals Total Project Budget Implementing Department Project Phase Project Completion
Substation
(EL‐24001)
$220,986 $15,000,000 Utilities Completed Fall 2024
Project Status: This project installed two 12 kV 50 MVA transformers to replace two 4kV transformers that served
Page Mill Road and make all substation improvements necessary to accommodate the installations.
three to four years are spent on a substation upgrade. Project construction is 100% complete and new
substation transformers and switchgear have been successfully tested and commissioned and released
the Utility Operations group. Final project close out and settlement of the Public‐Private Partnership Contract
the City and Tesla remain.
Electric Fund Projects – Page 3 of 8
Item A
Attachment A - Semiannual Update
on the Status of Capital
Improvement Program Projects
Item A: Staff Report Pg. 50 Packet Pg. 318 of 413
Electric Fund Projects Status as of December 2024
Inter‐Substation
Line Protection
Relay
Prior Years Actuals Total Project Budget Implementing Department Project Phase Project Completion
$371,146 $1,805,866 Utilities Construction Summer 2027
Project Status: This project replaces the existing HCB pilot wire relays with a new microprocessor line differential
relay to protect the city’s 60 kV sub‐transmission line sections and equipment from damage due to
(i.e. short circuits) on the 60 kV line sections. This project is being done in phases, with design and
happening concurrently on the different phases. Construction of these improvements relies on work
by other projects to install fiber optic connections. Engineering design for segments Colorado
to Adobe Creek substation, Park Boulevard substation to Quarry substation, and Maybell substation to
Boulevard substation is in progress. A test plan is being written to prove the equipment will work as designed.
Quarry to Park substation segment is delayed due to resources and is expected to be completed fall 2025. Park
Maybell segment is still in progress, fiber installation is complete, and completion is expected winter 2026. Staff
completed the testing and verification of a fiber optic transfer switch proof of concept project required to
with replacement of HCB relays at COP.
(EL‐17005)
Rebuild Prior Years Actuals Total Project Budget Implementing Department Project Phase Project Completion
Underground
24
(EL‐10006)
$1,949,767 $2,240,451 Utilities Design Fall 2025
Project Status: This project rebuilds and replaces the underground electric system in Underground District 24, the
bounded by Lytton Avenue; Bryant Street; Forest Avenue; and Alma Street. The engineering design will be
in spring 2025. Construction will follow in fall 2025.
Smart Grid
(EL‐11014)
Prior Years Actuals Total Project Budget Implementing Department Project Phase Project Completion
$12,387,759 $19,430,985 Utilities Construction Spring 2025
Project Status: Council approved the Advanced Metering Infrastructure (AMI) with Sensus on October 18, 2021.
project includes replacement of 30,000 electric meters and retrofit of 20,800 water and 24,200 gas meters
radio endpoints to transmit meter data to the AMI network. The proof‐of‐concept phase including AMI
Electric Fund Projects – Page 4 of 8
Item A
Attachment A - Semiannual Update
on the Status of Capital
Improvement Program Projects
Item A: Staff Report Pg. 51 Packet Pg. 319 of 413
Electric Fund Projects Status as of December 2024
network installation, meter testing, and system integration will occur between January 2022 and August 2023. Full
is anticipated to run from September 2023 through April 2025.
Substation Prior Years Actuals Total Project Budget Implementing Department Project Phase Project Completion
$1,568,954 $7,312,009 Utilities Pre‐Design Summer 2028
Replacement
(EL‐17002)
Project Status: This project replaces high voltage circuit breakers that interconnect the nine electric substations
two power switching stations that are reaching the end of their useful life and are now underrated for their
This project is being done in phases, with design and construction happening concurrently on the different
Staff completed the construction on the first phase and is working to procure a multi‐year contract with
contractor to complete the design and replacement of the remaining breakers. Staff is working on the design RFP
the construction IFB for contract services to complete substation projects. Lead times for circuit breakers are
at around 18 months.
Substation Prior Years Actuals Total Project Budget Implementing Department Project Phase Project Completion
Physical Security $3,093,299
(EL‐16003)
$7,397,072 Utilities Construction Winter 2025
Project Status: This project installs facilities providing physical protection for nine electric substations from
and intrusion. The installation for the first phase was completed for seven of the nine substations in
2024. The bid package for the 2 nd phase and final two substations is being prepared for
Construction is to be completed by summer 2026.
Electric Fund Projects – Page 5 of 8
Item A
Attachment A - Semiannual Update
on the Status of Capital
Improvement Program Projects
Item A: Staff Report Pg. 52 Packet Pg. 320 of 413
Electric Fund Projects Status as of December 2024
Recurring Projects
Communications Prior Year Actuals Current Year Budget Implementing Department Project Phase Project Completion
System $45,733 $100,000 Utilities N/A Recurring
Improvements
(EL‐89031)
Project Status: This project installs high frequency coaxial cable, fiber optic cable, and related equipment to
communications services for traffic signal coordination, telephone links, computer data transmission, and
Electric Supervisory Control and Data Acquisition (SCADA) system. This project is funding a portion of the
phase of an expanded Utilities fiber optic network. The contract for design of this network was approved
Council in June 2020. Staff installed 48F FO Cable between Maybell MB and PBS Park Boulevard substations in
Aerial Innerduct for pilot wire relay protection.
Electric Customer Prior Year Actuals Current Year Budget Implementing Department Project Phase Project Completion
Utilities N/A RecurringConnections$2,202,541 $2,700,000
(EL‐89028)Project Status: This project installs services, transformers, and meters for new customers; upgrading of existing
temporary service connections; and overhead and underground extensions for new or existing
Projects are in many stages of design and construction to provide temporary and permanent power
residential and commercial customers in Palo Alto.
Electric System
(EL‐98003)
Prior Year Actuals Current Year Budget
$1,567,547 $2,980,070
Status: This project consists of various projects that replace deteriorated facilities or install protective
devices that improve the Electric Distribution System. Projects are in many stages of development to replace
transformers, replace poles, replace overhead wires, and install protective devices to improve service reliability.
Implementing Department Project Phase Project Completion
Utilities N/A Recurring
Electric Utility Prior Year Actuals Current Year Budget
$68,397 $165,000
Implementing Department Project Phase Project Completion
Utilities N/A Recurring
Electric Fund Projects – Page 6 of 8
Item A
Attachment A - Semiannual Update
on the Status of Capital
Improvement Program Projects
Item A: Staff Report Pg. 53 Packet Pg. 321 of 413
Electric Fund Projects Status as of December 2024
Information
(EL‐02011)
Project Status: This project enhances the citywide Geographical Information System (GIS). The project scope
on‐going maintenance/technical support of the existing GIS system and implementation of the new GIS
ESRI.
SCADA System Prior Year Actuals Current Year Budget
$136,591 $225,000
Implementing Department Project Phase Project Completion
Utilities N/A Recurring
(EL‐02010)Project Status: This project upgrades the Supervisory Control and Data Acquisition (SCADA) system hardware.
completed the upgrade of the servers used for monitoring the utility substations and equipment for 2024.
next hardware and software upgrade is currently in progress at the factory and work will occur in winter 2025.
Substation Prior Year Actuals Current Year Budget
$29,240 $400,000
Implementing Department Project Phase Project Completion
Utilities N/A Recurring
Improvements
(EL‐89044)
Project Status: This project makes improvements to facilities at the electric substations in Palo Alto. Staff is
on the replacement of Remote Terminal Units (RTU) at various substations, upgrading gravel and
60 kV air switches, and reconfiguring steel trusses and associated devices. Engineering is working on
and construction for contract services to complete substation projects. Staff has completed the
of capacitor cans and fuses at Adobe Creek, the procurement and replacement of 12kV Alllis
circuit breakers at Hansen Way (7ea) and Hanover (9ea) as well as completed the installation of new
meters at Hansen Way (22/23) and Colorado (20/21). The design of new Nexus meters at Hansen Way
is in progress.
Substation Prior Year Actuals Current Year Budget
$262,000 $300,000
Implementing Department Project Phase Project Completion
Utilities N/A Recurring
Improvements
(EL‐89038)
Project Status: This project makes improvements to equipment used at electric substations to protect the
equipment and circuits emanating from the substation from damage due to faults (i.e. short circuits)
Electric Fund Projects – Page 7 of 8
Item A
Attachment A - Semiannual Update
on the Status of Capital
Improvement Program Projects
Item A: Staff Report Pg. 54 Packet Pg. 322 of 413
Electric Fund Projects Status as of December 2024
on the electric system. Staff issued a task order with Soudi Consultants to review and revise protection settings
training on the commissioning of Park Boulevard relay.
Underground
Rebuild
(EL‐16001)
Prior Year Actuals Current Year Budget
$0 $350,000
Implementing Department Project Phase Project Completion
Utilities N/A Recurring
Project Status: This project replaces underground electric equipment in areas that were originally installed
that are not part of an Underground District. Staff is working to identify areas where the age of the
cables is a high priority for cable replacement. To date, this includes areas in the Stanford Research Park,
Road, and along East Bayshore Road. New areas have been identified, and progress has been made
the development of the project. Projects are in many stages of development to replace underground
cables, vaults, and to install protective devices to improve service reliability.
Wood Pole
(EL‐19004)
Prior Year Actuals Current Year Budget
$533,613 $750,000
Status: This project will fund the annual replacement of deteriorated wood power poles. CPAU staff and
contract consultants are continuously working on pole replacement designs for construction. Replacement of
poles in the Grid Modernization Pilot area is the top priority.
Implementing Department Project Phase Project Completion
Utilities N/A Recurring
Electric Fund Projects – Page 8 of 8
Item A
Attachment A - Semiannual Update
on the Status of Capital
Improvement Program Projects
Item A: Staff Report Pg. 55 Packet Pg. 323 of 413
Fiber Optics Fund Projects Status as of December 2024
One‐Time Projects
Fiber Optic
(FO‐16000)
Prior Years Actuals Total Project Budget
$29,789,313
Implementing Department Project Phase Project Completion
Utilities Design December 2026
Project Status: This project is for the System Capacity Improvement that rebuilds portions of the "dark" fiber optic
around Palo Alto. In September 2022, Council approved the City’s fiber expansion plan including
of a new fiber backbone and a phased buildout of a fiber‐to‐the‐premises network. The Fiber Optic
System Rebuild CIP will be replaced with new Fiber Backbone and Fiber‐to‐the‐Premises (FTTP) CIPs in FY
Staff has hired a consultant to complete the Fiber Backbone and FTTP conceptual design. The conceptual
has been completed the contract has been amended to complete the design and all provide documentation
for procurement of a construction contract. Staff is updating fiber databases and reviewing the current
of fiber strands in order to determine what sections of the Fiber Backbone should be upgraded first. Due
the Fiber to the Premises pilot and Wildfire Mitigation project in the Foothills, materials and resources have been
from this project. Staff anticipates restarting this review phase of the new fiber backbone in July 2025
the Foothills undergrounding, grid modernization pilot, and FTTP pilot are completed. As the FTTP pilot expands
Phase I, staff will be designing and constructing the new Fiber Backbone in phases and in alignment with Grid
with a tentative completion of the phase 1 Fiber Backbone by end of December 2026.
Fiber to the Prior Years Actuals Total Project Budget Implementing Department Project Phase Project Completion
Design Winter 2030Premises$53,550 $ 20,000,000
Project Status: This project will build Fiber‐to‐the‐Premises (FTTP) to deliver broadband (high‐speed internet) for
and businesses in the City of Palo Alto. As the City builds the FO‐16000 ‐ Fiber Optics Network ‐ System Rebuild
has divided up the City into smaller sections for a phased approach of the Fiber‐to‐the‐Premises project.
Staff has proceeded to combine the Phase 1 Fiber‐to‐the‐Premise design with a Grid Modernization
covering the same area. Staff is capitalizing on inherent synergies between the two projects, as well as taking
of economies of scale deployment that can be realized as a result of combining the two projects. Staff has
with an Engineering firm to produce design drawings and specifications. The City is implementing a pilot
(FO‐24000)
Fiber Optics Fund Projects – Page 1 of 2
Item A
Attachment A - Semiannual Update
on the Status of Capital
Improvement Program Projects
Item A: Staff Report Pg. 56 Packet Pg. 324 of 413
Fiber Optics Fund Projects Status as of December 2024
during Phase 1 of the FTTP project to evaluate various new technologies and to assess various construction
to closely align with Grid Modernization and inform on future phases of deployment. In conjunction
the grid modernization pilot, FTTP make‐ready work such as pole replacements and installation of messenger
is being performed. The remaining FTTP pilot construction including fiber lashing and fiber distribution
is scheduled to begin in February 2025 and customers in the pilot area are tentatively scheduled to be
in July 2025.
Recurring Projects
Fiber Optics Prior Year Actuals Current Year Budget Implementing Department Project Phase Project Completion
Utilities N/A Recurring
Connections
(FO‐10000)
Project Status: This project enables the installation of fiber optic infrastructure for new service connections.
are developed as needed to meet customer requests for leasing of fibers on the Dark Fiber system. There
been seven new customer inquiries in the first half of FY 2025. The City is partnering with a non‐profit agency
a dark fiber licensing agreement to provide fiber broadband service to customers in the foothills area.
Fiber Optics Prior Year Actuals Current Year Budget Implementing Department Project Phase Project Completion
Utilities N/A Recurring
Project Status: This project improves the reliability within the fiber optic network system. As part of the City’s
Improvements wildfire mitigation plan, this project will add new fiber conduit and substructure in the foothills to support city
(FO‐10001)infrastructure and improve telecommunication and connectivity in the open space. This project will rebuild
11 miles of overhead electric and fiber lines in Foothills Nature Preserve. Staff have completed the
of 7,000 feet of fiber. Staff will also be extending the fiber backbone from Dahl reservoir to
reservoir. The foothills project is scheduled to be completed by summer 2025.
Fiber Optics Fund Projects – Page 2 of 2
Item A
Attachment A - Semiannual Update
on the Status of Capital
Improvement Program Projects
Item A: Staff Report Pg. 57 Packet Pg. 325 of 413
Gas Fund Projects Status as of December 2024
One‐Time Projects
Gas Line Prior Years Actuals Total Project Budget Implementing Department Project Phase
$ 0 $1,000,000 Utilities Design
Status: This project is for the design of the Arastradero Creek to address a creek bed erosion project that exposed
an 8” natural gas pipeline and threatened the integrity of a 16” potable water pipeline and 16” sanitary sewer pipeline.
The project will address requirements outlined by the Water Board in the City emergency work permit to re‐bury the
exposed 8” gas pipeline. The design is expected to finish by winter 2026, with construction beginning in summer 2026.
Project Completion
Fall 2026Repair at
(GS‐25001)
Gas Main
$3,929,943
Prior Years Actuals Total Project Budget Implementing Department Project Phase
$11,409,309 Utilities Construction
Project Completion
Spring 2025
Project 24
(GS‐14003)
Project Status: This project enables the design and construction to replace approximately 20,100 linear feet (which
1.9% of the City's Gas distribution main system) of distribution main and 260 gas services constructed mainly
PVC on various streets within the University Park and Crescent Park neighborhoods. Release of the project for bidding
been delayed, to include the Town & Country Village scope. This project was split into GMR24A and GMR24B.
(Stanford Shopping Center) was completed in spring 2023. GMR24B construction started in winter 2024, is
80% complete, and is anticipated to be complete in spring 2025.
Gas Main
$15,525
Prior Years Actuals Total Project Budget Implementing Department Project Phase
$8,743,849 Utilities Design
Project Completion
Fall 2026
Project 25
(GS‐15000)
Project Status: This Gas Main Replacement (GMR) project replaces approximately 26,000 linear feet (which represents
of the City’s Gas Distribution System) of leaking, inadequate sized, and structurally deficient gas mains and services
on various streets in the neighborhoods of Community Center, Leland Manor, Midtown, and Palo Verde
Staff identified problematic mains and services by researching maintenance and leak histories, analyzing
of the entire Gas Distribution System, and considering risk ratings of the Distribution Integrity Management
A federal grant application was submitted in August 2023, and the City was awarded $16.5 million in grant funding
this project. Staff is currently completing the Tier 2 Environmental documentation to meet federal grant requirements
Gas Fund Projects – Page 1 of 3
Item A
Attachment A - Semiannual Update
on the Status of Capital
Improvement Program Projects
Item A: Staff Report Pg. 58 Packet Pg. 326 of 413
Gas Fund Projects Status as of December 2024
before it can be released through purchasing for construction bids. The Grant Agreement is anticipated to go before
in January 2025. The project is on track for construction to begin in summer 2025.
Recurring Projects
Gas Prior Year Actuals Current Year Budget Implementing Department
$484,530 $1,166,723 Utilities
Status: This project enables Gas Distribution System improvements that include increasing distribution system
Project Phase
N/A
Project Completion
Recurring
Improvements capacity for load growth, replacing deteriorated capital facilities, reconfiguring and adding and improving service
(GS‐11002)reliability, and conducting research related to performance of the gas distribution system or its various components
general improvements to the system. The City must continuously evaluate service reliability needs and make
to the system to maintain top level service to City customers and to minimize potential economic losses
to service interruptions. In the first half of FY 2025, City crews completed the replacement of various gas services
valves throughout the system and replaced leaking ten inch steel gas valves on the Waverley Street bridge crossing
Matadero Creek.
Gas Prior Year Actuals Current Year Budget Implementing Department
$80,226 $100,000 Utilities
Status: This project purchases polyethylene (PE) fusion equipment and tools, directional boring/locating
equipment and tools, and general shop equipment and tools. The equipment needs to be upgraded on an annual basis
to safely operate and maintain a natural gas distribution system and to ensure operators’ safety and productivity. In the
first half of FY 2025, no new equipment purchases were completed.
Project Phase
N/A
Project Completion
RecurringEquipment
Tools
(GS‐13002)
Gas Fund Projects – Page 2 of 3
Item A
Attachment A - Semiannual Update
on the Status of Capital
Improvement Program Projects
Item A: Staff Report Pg. 59 Packet Pg. 327 of 413
Gas Fund Projects Status as of December 2024
Gas Meters Prior Year Actuals Current Year Budget Implementing Department
$365,663 $688,545 Utilities
Project Phase
N/A
Project Completion
Recurring
Regulators
(GS‐80019)
Project Status: This project provides replacement of the existing gas meters and regulators annually. The coordination
gas meters and regulator replacements with gas meters identified to be replaced under the AMI contract, which is
gas meters that are twenty‐five years or older. The gas meter replacement program ensures the accuracy of
consumption measurement, reduces possible revenue loss due to under‐registered gas, and provides customers with
monthly bills. Replacement of aged gas meters and regulators is on‐going. The next major replacement of
and regulators will be coordinated with Gas Main Replacement Project 25 (GS‐15000) and the Advanced Metering
project.
Gas System,Prior Year Actuals Current Year Budget Implementing Department
$584,034 $700,000 Utilities
Project Phase
N/A
Project Completion
Recurring
Connections
(GS‐80017)
Project Status: This project enables the Gas Distribution System to be extended to provide gas service to new customers
augment service to customers with increased natural gas demands. Improvements include new mains, services,
regulators, meters, and accessories in order to meet changes in existing customer service demands and respond
changes in gas service requirements due to new development or redevelopment. This project is funded partially from
by customers. City crews completed 22 gas service installations, 4 gas service relocations and 65 gas
demolitions in the first half of FY 2025.
Gas Fund Projects – Page 3 of 3
Item A
Attachment A - Semiannual Update
on the Status of Capital
Improvement Program Projects
Item A: Staff Report Pg. 60 Packet Pg. 328 of 413
Stormwater Management Projects Status as of December 2024
One‐Time Projects
Corporation
System
and
Station
(SD‐21000)
Prior Years Actuals
$340,827
Total Project Budget Implementing Department Project Phase Project Completion
$4,146,554 Public Works Design Spring 2026
Project Status: This project incorporates a design of a new small pump station with a 25 cubic feet per second
and upgrades 700 linear feet of pipe to 30‐inch diameter High Density Polyethylene pipe. The existing
does not have the force needed to discharge storm flows into the Adobe Creek. Adding a pump station in
of the outfall and upsizing the storm pipe will eliminate the routine flooding along East Bayshore Road and
runoff from a 10‐year storm event. Staff secured an easement for the pump station from adjacent property
The consultant completed the design of the project in June 2024. Due to poor bid results combined with
construction costs, a third IFB is scheduled to be advertised in December 2024.
East Meadow
System
Prior Years Actuals
$440,133
Total Project Budget Implementing Department Project Phase Project Completion
$663,551 Public Works Completed Summer 2024
Project Status: This project added approximately 404 linear feet of new 24‐inch high density polyethylene (HDPE)
be parallel to the existing 36‐inch pipe within East Meadow Drive to increase the capacity of the storm drain
This project includes upsizing manholes based on new pipes and reconnecting laterals from private
and catch basins. A construction contract was awarded in October 2023, and construction began in
2023. The project was completed in September 2024, after additional storm drain‐pipe replacement
as part of the Storm Drain Rehab project (SD‐06101) were completed.
(SD‐22000)
East Meadow Prior Years Actuals
$333,087
Total Project Budget Implementing Department Project Phase Project Completion
$634,016 Public Works Completed Summer 2024
Connection to
Creek
Station
(SD‐26000)
Project Status: This project installed approximately 506 linear feet of 15‐inch pipe and manholes along East
Circle. The upgraded line will eliminate flooding that occurs within East Meadow Circle when the water
within Barron Creek is higher than the flap‐gate, and flows are not able to drain into the creek. The new 15‐
HDPE line extension allows flows to drain away from Barron Creek and into Adobe Creek, where they can be
The project also includes a small bioretention area to treat low flow runoff within East Meadow Circle
Stormwater Management Projects ‐ Page 1 of 4
Item A
Attachment A - Semiannual Update
on the Status of Capital
Improvement Program Projects
Item A: Staff Report Pg. 61 Packet Pg. 329 of 413
Stormwater Management Projects Status as of December 2024
before discharging into either creek. A construction contract was awarded in October 2023, and construction began
November 2023. The project was completed in September 2024 following additional storm drain‐pipe
locations as part of the Storm Drain Rehab project (SD‐06101).
Hamilton
System
Prior Years Actuals
$
Total Project Budget Implementing Department Project Phase Project Completion
$6,152,539 Public Works Design Summer 2026
Project Status: This project adds approximately 3,700 linear feet of new 48‐inch high‐density polyethylene (HDPE)
and manholes on Hamilton Avenue to increase the capacity of the storm drain system. This project proposes
upsize the pipes to divert some flows away from Newell Road System and toward the 96‐inch line near Greer
that would have otherwise drained towards Channing Avenue by adding storm pipe on a section of the 1500
of Hamilton. As a result of the December 31, 2022, flood event, the project includes upsizing the existing 12‐
line on Alester Drive for additional storage capacity. The design and project documents are underway. The
design is approximately 70% complete.
(SD‐25000)
Trash Capture Prior Years Actuals
$762,720
Total Project Budget Implementing Department Project Phase Project Completion
$818,837 Public Works Completed Summer 2024
Installation
(SD‐22002)
Project Status: This project involved the design and construction of a large trash capture device (TCD) to be
in the planting strip along Embarcadero Road located in front of the Palo Alto Baylands Golf Links parking
The TCD will be integrated into a 36‐inch storm pipe to capture trash as small as five millimeters from a section
the storm drain system prior to discharging to the San Francisco Bay. The 189‐acre drainage area treated by the
consists of 169 acres of commercial and office land use in the City’s jurisdiction and 20 acres in the California
of Transportation (Caltrans) right‐of‐way. Caltrans provided funding for the project construction, while
City will take on the maintenance per an interagency agreement. Construction began in summer 2023 and was
October 1, 2024.
Prior Years Actuals
$424,398
Total Project Budget Implementing Department Project Phase Project Completion
$2,881,017 Public Works Design Spring 2026
Stormwater Management Projects ‐ Page 2 of 4
Item A
Attachment A - Semiannual Update
on the Status of Capital
Improvement Program Projects
Item A: Staff Report Pg. 62 Packet Pg. 330 of 413
Stormwater Management Projects Status as of December 2024
West Bayshore Project Status: This project incorporates the design and construction of a new small pump station with 15 cubic
Road Pump
(SD‐20000)
feet per second capacity. Installing a new pump station will allow storm flows to be pumped into the Adobe Barron
confluence while adding a pump station in advance of the outfall would eliminate the routine flooding along
Bayshore Road and allow the system to convey runoff from a 10‐year storm event. Staff secured an easement
the pump station from adjacent property owners. The consultant completed the design of the project in June
Due to poor bid results combined with high construction costs, a third IFB is scheduled to be advertised in
2024.
West Bayshore Prior Years Actuals
Road Trunk Line $44,554
Total Project Budget Implementing Department Project Phase Project Completion
$2,424,006 Public Works Design Spring 2026
Improvements
(SD‐23000)
Project Status: This project replaces approximately 1,400 linear feet of existing 15‐inch diameter pipe with 36‐inch
High Density Polyethylene pipe. These improvements along with the new West Bayshore Road Pump Station (SD‐
20000) will eliminate the routine flooding along West Bayshore Road and allow the system to convey runoff from
a 10‐year storm event. Staff secured an easement for the pump station from adjacent property owners. The
consultant completed the design of the project in June 2024. Due to poor bid results combined with high
construction costs, a third IFB for the project is scheduled to be advertised in December 2024.
Recurring Projects
Green
Stormwater
Infrastructure
(SD‐22001)
Prior Year Actuals
$77,092
Current Year Budget Implementing Department Project Phase Project Completion
$1,819,870 Public Works N/A Recurring
Project Status: This project provides funding for Green Stormwater Infrastructure (GSI) projects and the integration
GSI features in the design and implementation of planned CIP projects supported by other funds. GSI mimics the
environment to slow, spread, infiltrate, and filter pollutants from stormwater runoff through native or
Stormwater Management Projects ‐ Page 3 of 4
Item A
Attachment A - Semiannual Update
on the Status of Capital
Improvement Program Projects
Item A: Staff Report Pg. 63 Packet Pg. 331 of 413
Stormwater Management Projects Status as of December 2024
engineered soils or other pervious material rather than discharging it directly into the storm drain system, creeks,
the Bay. Types of GSI include bioretention areas, flow‐through planters, tree wells, and pervious pavement to
stormwater runoff. The FY 2024 budget is allocated as a match to fund the balance of a GSI project partially
by the U.S. Environmental Protection Agency (EPA) and for constructing a bioretention area as part of the
Meadow Circle Connection to Adobe Creek pump station project (SD‐26000) in spring 2024. SD‐26000 has
completed, while a request for proposals for the EPA‐funded project will be released in spring 2025.
Storm Drainage Prior Year Actuals Current Year Budget Implementing Department Project Phase Project Completion
$1,650,239 Public Works N/A RecurringSystem$598,188
Replacement
(SD‐06101)
Project Status: This project provides for annual replacement and rehabilitation to maintain the integrity of the
drain system, including deteriorated storm drain piping, manholes, and storm drain inlets. The rehabilitation
replacement of broken corrugated metal pipe with High Density Polyethylene pipe. Based on recent pipe
that occurred in early 2023, storm drain pipes at seven locations (Forest Avenue, Embarcadero Road,
Drive, Middlefield Road, Newell Road, and Alexis Drive) were replaced as part of CIP projects SD‐22000 and
SD‐26000. A construction contract was awarded in October 2023 and construction was completed in September
Stormwater Management Projects ‐ Page 4 of 4
Item A
Attachment A - Semiannual Update
on the Status of Capital
Improvement Program Projects
Item A: Staff Report Pg. 64 Packet Pg. 332 of 413
Wastewater Collection Fund Projects Status as of December 2024
One‐Time Projects
Wastewater Prior Years Actuals Total Project Budget Implementing Department Project Phase Project Completion
$0 $3,000,000 Utilities Construction Summer 2026
Rehabilitation
32
Project Status: This project designs and constructs high priority main and lateral replacements, which reduces inflow
rainfall and infiltration of groundwater into the collection system. The project will replace approximately 5,200
feet (which represents 0.5 percent of the City’s Wastewater Collection System) for streets in the Middlefield
Webster Street, Santa Rita Avenue, and N. California Avenue neighborhoods. The project will be comprised of
identified in video inspection work or through maintenance records as deficient and in need of replacement.
will be given to areas identified by Public Works as targeted work zones ensuring coordination between
(WC‐20000)
Recurring Projects
Sewer
Lateral/Manhole
Rehabilitation
and
Prior Year Actuals Current Year Budget Implementing Department
$875,500 Utilities
Project Phase Project Completion
$688,486 N/A Recurring
Project Status: This project replaces defective sewer laterals, cleanouts, manholes, backwater devices, and equipment
support these activities to maintain the Wastewater Collection System, as well as to comply with the Sanitary Sewer
Plan (SMP). Information collected during routine annual maintenance activities is used to prioritize work. The
work performed will also help to reduce both sewage blockage and the City's treatment expenses to treat
or groundwater infiltration. A new three‐year construction contract was approved in FY 2023 to replace
sewer laterals. In the first half of FY 2025, two sewer lateral replacements were completed under this
Replacement
(WC‐99013)
Wastewater Collection Fund Projects – Page 1 of 2
Item A
Attachment A - Semiannual Update
on the Status of Capital
Improvement Program Projects
Item A: Staff Report Pg. 65 Packet Pg. 333 of 413
Wastewater Collection Fund Projects Status as of December 2024
Sewer System,Prior Year Actuals
$386,388
Current Year Budget Implementing Department
$450,000 Utilities
Project Phase
N/A
Project Completion
Recurring
Connections
(WC‐80020)
Project Status: This project installs sewer lateral connections and additions or extensions of existing mains to serve
customers and to respond to changes in sewer requirements due to redevelopment. Old existing non‐plastic
laterals with condition deficiencies per Utilities Operations’ criteria are required to be replaced in accordance
the latest 2022 WGW Standards. In the first half of FY 2025, eleven new lateral connections were performed.
Wastewater Prior Year Actuals
$44,679
Current Year Budget Implementing Department
$90,000 Utilities
Project Phase
N/A
Project Completion
Recurring
Equipment and Project Status: This project provides funds to procure new general equipment and new tools. In the first half of FY
no new general equipment or tools was procured.
(WC‐13002)
Wastewater
System
Prior Year Actuals
$133,144
Current Year Budget Implementing Department
$200,000 Utilities
Project Phase
N/A
Project Completion
Recurring
Improvements
(WC‐15002)
Project Status: This project implements improvements to the Wastewater Collection System by increasing system
for growth, flow monitoring, hydraulic modeling and system analysis, load simulations, asset management
and assessment, system infiltration analysis, and sanitary sewer overflow monitoring and reduction. Part of
project funds the Sewer Master Plan Study, which is evaluating the City’s existing wastewater collection system,
and flow patterns to determine system capacity to meet current and future flows and recommend and prioritize
improvement projects where needed. The consultant contract was approved in November 2023 and work
in December 2023. The project completed calibrating the collection system model in fall 2024 and is beginning
run the model to quantify existing system flows and buildout system flows. Project completion is anticipated in
2025.
Wastewater Collection Fund Projects – Page 2 of 2
Item A
Attachment A - Semiannual Update
on the Status of Capital
Improvement Program Projects
Item A: Staff Report Pg. 66 Packet Pg. 334 of 413
Wastewater Treatment Fund Projects Status as of December 2024
One‐Time Projects
Local
(WQ‐19003)
Prior Years Actuals Total Project Budget
$ $67,138,041
Implementing Department
Works
Project Phase Project Completion
Design Winter 2027
Project Status: This project enables the design and construction of an Advanced Water Purification Facility to further
the quality of the tertiary‐treated recycled water by ultrafiltration followed by reverse osmosis to reduce the
of total dissolved solids. The water reuse partnership agreement with Valley Water and Mountain View provides
million in funding from Valley Water grant funding for a portion of the project costs and a State low‐interest loan
the design and construction phases. Mountain View agreed to pay the remainder of the capital costs associated
this project. The design is completed and staff issued an IFB in fall 2024. The project is in the process of receiving
building permit while financial agreements with funding agencies are being finalized. Construction is expected to
in spring 2025.
Headworks Prior Years Actuals Total Project Budget
$55,820,790
Implementing Department
Works
Project Phase Project Completion
Pre‐Design Fall 2032
Replacement
(WQ‐16002)
Project Status: This project replaces the existing two outdated influent pump stations and their associated equipment
ancillary systems, including the suction and discharge piping manifolds, valves, electrical and controls system,
equipment, grit handling equipment, pumps, flow meters and yard piping. The consultant is currently
the preliminary design to finalize the design criteria. At the preliminary design conclusion, either the same
a different consultant will be selected to perform detailed design.
Horizontal
Pilot
(WQ‐22001)
Prior Years Actuals Total Project Budget Implementing Department
$754,625 Public Works
Status: This project consists of the design, permitting, and construction of a horizontal levee pilot system. The
will utilize treated wastewater to create a transitional brackish habitat on the Bayside of a future flood control
located in the Palo Alto Baylands, adjacent to the Regional Water Quality Control Plant (RWQCP). Information
data collected by this pilot system could support broader implementation of horizontal levees as green
Project Phase Project Completion
Fall 2029
Wastewater Treatment Fund Projects – Page 1 of 4
Item A
Attachment A - Semiannual Update
on the Status of Capital
Improvement Program Projects
Item A: Staff Report Pg. 67 Packet Pg. 335 of 413
Wastewater Treatment Fund Projects Status as of December 2024
infrastructure components in larger flood control levee improvement projects within Palo Alto and beyond. The project
design, CEQA review, conducted several stakeholder outreach events, created a project webpage, obtained
construction permits from resource agencies, received a recommendation from the Parks and Recreation
and obtained Council approval of the Park Improvement Ordinance as well as a Cooperative Agreement
project partners. The project is currently onboarding a construction management firm, preparing for required
and coordinating future community engagement activities including BioBlitz and King Tide Walks. The San
Estuary Partnership/Association of Bay Area Governments will be posting the project for solicitation in early
Joint Prior Years Actuals Total Project Budget
$12,590,181
Status: This project will rehabilitate 2,364 linear feet of the 60‐inch and 72‐inch diameter Joint Intercepting
Implementing Department
Works
Project Phase Project Completion
Summer 2025
Rehabilitation Sewer (JIS) trunk line leading to the Regional Water Quality Control Plant (RWQCP). The entire trunk sewer line,
(Phase 1)
(WQ‐24000)
constructed in 1972, is approximately 9,000 feet long consisting of thirteen manholes and three junction structures.
JIS conveys raw wastewater mainly from the City of Mountain View, City of Los Altos, Los Altos Hills, and a portion
Palo Alto, which accounts for more than half of the RWQCP’s influent flows. A construction contract was awarded
winter 2024. Construction is 23% complete and is scheduled to be completed by summer 2025.
New Prior Years Actuals Total Project Budget
$17,051,434
Status: This project was originally envisioned to replace the existing plant laboratory and environmental
Implementing Department
Works
Project Phase Project Completion
Pre‐Design Fall 2030
Environmental services offices. Staff is currently revising space planning assumptions as the City and RWQCP are investigating the
Services
(WQ‐14002)
potential acquisition of a property adjoining the RWQCP and have put further design efforts on hold. The original design
was terminated in March 2021. Solicitation for engaging a new consultant for detailed design will begin after
planning and siting analysis are completed as part of the Long‐Range Facilities Plan Update.
Wastewater Treatment Fund Projects – Page 2 of 4
Item A
Attachment A - Semiannual Update
on the Status of Capital
Improvement Program Projects
Item A: Staff Report Pg. 68 Packet Pg. 336 of 413
Wastewater Treatment Fund Projects Status as of December 2024
Recommendations from the Long Range Facilities Plan Update, anticipated to be completed in winter 2027, will help
the direction the RWQCP will pursue to address this item.
Outfall Line
(WQ‐19000)
Prior Years Actuals Total Project Budget
$18,237,754
Implementing Department
Works
Project Phase Project Completion
Summer 2027
Project Status: This project consists of the construction of a new parallel outfall pipe to convey final plant effluent to
Francisco Bay. A re‐design of the pipeline is needed to accommodate a potential future runway shift at Palo Alto
Staff is currently working with the Airport staff and Federal Aviation Administration (FAA) to gain FAA
for the pipeline construction and permanent easements on Airport property. The re‐design is anticipated
begin in 2025, moving immediately to construction upon design completion.
Secondary Prior Years Actuals Total Project Budget
$193,322,311
Implementing Department
Works
Project Phase Project Completion
Summer 2028
Project Status: This project upgrades the Secondary Treatment process at the RWQCP. The existing Secondary
process has two main components, the Fixed Film Reactors (FFR) and the Activated Sludge (AS) Process.
project includes the reconstruction of the AS process, rehabilitation and reconfiguration of the AS Aeration Basins,
elimination of the FFRs, addition of denitrification capabilities, and replacement of equipment beyond its useful
Construction began in winter 2023 with the completion of new nitrification denitrification treatment and
of the FFR’s is expected in 2028. Construction is still in progress with much of the underground support
in place. Reconfiguration of the first AS Aeration Basin is completed with the basin and is anticipated to
online in winter 2025.
(WQ‐19001)
Wastewater Treatment Fund Projects – Page 3 of 4
Item A
Attachment A - Semiannual Update
on the Status of Capital
Improvement Program Projects
Item A: Staff Report Pg. 69 Packet Pg. 337 of 413
Wastewater Treatment Fund Projects Status as of December 2024
Recurring Projects
Plant Master Prior Year Actuals Current Year Budget Implementing Department
Works
Project Phase Project Completion
N/A Recurring
(WQ‐10001)Project Status: This project enables the ongoing program management support for major capital projects. Current tasks
developing scopes of work, evaluating consultant proposals, coordinating project management activities,
State low‐interest loans for multiple projects, and updating partner agreements. The consultant provides
for the projects associated with the Long‐Range Facilities Plan (LRFP) update.
Plant Repair,
and
Prior Year Actuals Current Year Budget Implementing Department
Works
Project Phase Project Completion
Recurring
Project Status: This project enables the assessment, repair, and retrofit of the RWQCP’s concrete and metal structures;
Replacement the replacement of necessary equipment and ancillary facilities, including electrical equipment/systems, to maintain
(WQ‐19002)treatment reliability and existing infrastructure; and the replacement of large diameter flow meters built into the
treatment system on sewers, pipes, and water lines. Design of the 12 kV Electrical Loop Upgrade Project
completed in spring 2022. A construction contract for phase 1 was executed in winter 2023 and completed in fall
A construction contract for Phase 2 was executed in fall 2024 and is scheduled to be completed by fall 2026.
Wastewater Treatment Fund Projects – Page 4 of 4
Item A
Attachment A - Semiannual Update
on the Status of Capital
Improvement Program Projects
Item A: Staff Report Pg. 70 Packet Pg. 338 of 413
Water Fund Projects Status as of December 2024
One‐Time Projects
Water Main
29
Prior Years Actuals Total Project Budget
$9,307,828
Implementing Department Project Phase Project Completion
Utilities Completed Summer 2024
Project Status: This project funded the design and replacement of structurally deficient water mains and
Mains are selected by researching the maintenance history of the system and identifying those
are undersized, corroded, and/or subject to breaks. The project scope includes approximately 7,500 linear feet
represents 0.6 percent of the City’s Water Distribution System) of mains and services on various streets
the City, including areas in the Evergreen Park and Ventura neighborhoods. Construction started in
2023 and was completed in September 2024.
(WS‐15002)
Water Main
30
Prior Years Actuals Total Project Budget
$9,809,000
Implementing Department Project Phase Project Completion
Design Spring 2026
Project Status: This project will fund the replacement of structurally deficient water mains and appurtenances in
Year 2026. Mains are selected by researching the maintenance history of the system and identifying those
are undersized, corroded, and subject to breaks. The project scope includes approximately 10,000 linear feet
represents 0.8 percent of the City’s Water Distribution System) of mains and services on various streets
the City, including areas in Midtown/Midtown West, Palo Verde, and Green Meadow neighborhoods. The
is approximately 50% complete at the midpoint of FY 2025.
(WS‐16001)
Water Recycling Prior Years Actuals Total Project Budget Implementing Department Project Phase Project Completion
Pre‐Design Fall 2027Facilities$710,106 $852,674
(WS‐07001)Project Status: This project allows the City to hire a consultant to prepare a business plan, prepare preliminary
and secure funding options for an expansion of the existing recycled water delivery system in the City. The
pipeline is one of several water reuse projects being considered in the Northwest County Recycled Water
Plan. One Water Plan development is underway to evaluate alternative water supplies, define existing
future uncertainties and supply risks, and identify community needs and priorities. Funding contribution from
Water Fund Projects – Page 1 of 5
Item A
Attachment A - Semiannual Update
on the Status of Capital
Improvement Program Projects
Item A: Staff Report Pg. 71 Packet Pg. 339 of 413
Water Fund Projects Status as of December 2024
the Water Fund to the Recycled Water project has ended and funding for Operations and Maintenance will be
for budget cycle FY 2027.
Water Tank
Upgrade $9,944,241
Prior Years Actuals Total Project Budget Implementing Department Project Phase Project Completion
Construction Fall 2028
and
(WS‐09000)
Project Status: This project for Seismic Water System Upgrades includes seismic upgrades at the Montebello,
Corte Madera, Park, Boronda, and Dahl Reservoirs in compliance with the American Society of Civil
(ASCE 7) seismic codes. Mayfield Reservoir was seismically retrofitted in 2011. Seismic upgrades of
and Montebello Reservoirs were completed in 2016 and 2018. The new concrete Corte Madera Reservoir
completed in April 2022. The Park Reservoir and Dahl Reservoir Tanks are scheduled next for retrofit or
An Engineering and structural assessment of Park Reservoir was completed in spring 2023, and Dahl
will be assessed in 2025.
Recurring Projects
Prior Year Actuals Current Year Budget Implementing Department Project Phase Project Completion
Distribution
(WS‐11003)
$161,813 $975,388 Utilities N/A Recurring
Project Status: This project enables improvements to water distribution system deliverability and reliability. Typical
include installing restraining joints at critical pipelines and bridge crossings, increasing the size of
facilities, system leakage surveys, network modeling, and fire flow studies or other system
as required. Continuous evaluation of system needs and making required improvements is
to maintain adequate quantities of quality water, meeting local, state, and federal safe drinking water
The Pump Station Painting project to paint the five foothill pump stations was completed in May 2024.
Water Fund Projects – Page 2 of 5
Item A
Attachment A - Semiannual Update
on the Status of Capital
Improvement Program Projects
Item A: Staff Report Pg. 72 Packet Pg. 340 of 413
Water Fund Projects Status as of December 2024
Services for a full system leakage survey of the water distribution system will be solicited in 2025 and the work is
to be completed by 2026.
Water, Gas,
GIS Data
(WS‐02014)
Prior Year Actuals Current Year Budget Implementing Department Project Phase Project Completion
$249,154 $578,800 Utilities N/A Recurring
Project Status: This project enables contracts related to Utilities GIS (Geographic Information System) needs. AME
is heavily utilized by Utilities Engineering staff to update the utility information in GIS. The updated
is used by various City staff, such as marking/locating underground utilities to comply with USA
Service Alert) requirements; developing design drawings for pipeline replacement projects; verifying
underground utilities during construction activities; creating customized utility map books for field crews
on‐call personnel to meet their specific needs. Annual surveying contracts collect GPS points of existing above‐
utility features within CIP project areas. The data being collected continues to be used to correct the GIS
Accurate utility data helps the design to select new pipe alignment to minimize construction conflicts
provides data for additional road feature linework to be corrected in the older GIS/AVEC database via ESRI.
Water General Prior Year Actuals Current Year Budget Implementing Department Project Phase Project Completion
Equipment/Tools $0.00 $100,000 Utilities N/A Recurring
(WS‐13002)Project Status: This project acquires new equipment and tools, the replacement of existing fusion equipment, and
associated tools. The fusion equipment is used to fuse together pipe joints in the City's water distribution
Equipment and tools are required to be upgraded on an annual basis to maintain high quality standards
the installation of the City's water distribution mains, along with the associated service standards and worker
and productivity measures. There were no purchases of equipment or tools in the first half of FY 2025.
Water Meters Prior Year Actuals Current Year Budget Implementing Department Project Phase Project Completion
(WS‐80015)$2,801,577 $367,440 Utilities N/A Recurring
Water Fund Projects – Page 3 of 5
Item A
Attachment A - Semiannual Update
on the Status of Capital
Improvement Program Projects
Item A: Staff Report Pg. 73 Packet Pg. 341 of 413
Water Fund Projects Status as of December 2024
Project Status: This project enables the purchasing of meters for new customers, upgrading meters for current
installing meter bypasses, and replacing obsolete meters that are no longer repairable. This funding
allows for annual testing and calibration of selected meters to maintain meter accuracy and reliability. During
AMI implementation process, approximately 50% of the meters will be replaced, with a focus on meters more
twenty years old. Staff is currently testing large diameter meter sets. Staff continues to test additional larger
meters.
Water Service
Hydrant
(WS‐80014)
Prior Year Actuals Current Year Budget Implementing Department Project Phase Project Completion
$152,163 $412,000 Utilities N/A Recurring
Project Status: This project replaces system control valves, deteriorated galvanized service lines, lead goosenecks,
fire hydrant valves and assemblies per the Fire Department’s flow testing, upgrades fire hydrants in main line
project areas, replaces damaged fire hydrants, and replaces existing undersized or deteriorated
water services on an as needed basis. Staff has been working on an extensive valve audit and to date have
and evaluated approximately 74% of the City’s 6,500 water valves. This project will be increasing work to
inoperative and leaking valves identified during this audit process. This project will be increasing work to
inoperative and leaking valves identified during this audit process. In addition, the City will be doing
work to look for possible lead whips in our distribution system as we continue to comply with the new
and copper rule revisions (LCRR).
Water System
(WS‐80013)
Prior Year Actuals Current Year Budget Implementing Department Project Phase Project Completion
$1,187,207 $960,500 Utilities N/A Recurring
Project Status: This project allows for improvements that include new main extensions, valves, domestic services,
on upgraded services, backflow devices, fire services, and fire hydrants. System extensions are required to
service to new large developments and to serve existing customers requesting expanded service on
Services projects. A total of 70 water services were installed in the first half of FY 2025.
Water Fund Projects – Page 4 of 5
Item A
Attachment A - Semiannual Update
on the Status of Capital
Improvement Program Projects
Item A: Staff Report Pg. 74 Packet Pg. 342 of 413
Water Fund Projects Status as of December 2024
Water System
(WS‐11004)
Prior Year Actuals Current Year Budget Implementing Department Project Phase Project Completion
$4,133,706 Utilities N/A Recurring
Project Status: This project evaluates and improves the City’s water distribution system on an as‐needed basis. This
includes piping modifications, equipment replacements associated with water delivery, supervisory control
upgrades, system modifications for water system quality compliance, conditional assessment of the
of transmission mains, and security system installations. The water system includes the connection
between the City’s and the San Francisco Public Utility Commission’s pipelines, emergency water wells
the City’s pumping stations, water reservoirs, and pipelines. Security cameras will also be added to various
pump stations, and turnouts as part of the Security Cameras project. Two new generators have been
and will be deployed in FY 2025.
Water Fund Projects – Page 5 of 5
Item A
Attachment A - Semiannual Update
on the Status of Capital
Improvement Program Projects
Item A: Staff Report Pg. 75 Packet Pg. 343 of 413
List of Completed Projects
Season
Completed Completed
Year Total Project BudgetCIP #Project Name Project Description Project Type Fund Source Department CMR Date
Airport Zero Emission
AP‐23000 Vehicle Fleet Replacement
This project provided the funding to replace existing support vehicles used by Airport staff with
emission vehicles. The Airport received delivery of the final new electric truck in fall 2024
replaced both airport vehicles with electric vehicles.
Procurement Airport Airport Summer 2024 $377,696.00
276,461.00
205,627.00
Program
This project provided funding for the identification and implementation of a long‐term repair
to damage caused by aquatic borers to the Lucy Evans Baylands Interpretive Center’s
pilings. The project received permits from the San Francisco Bay Regional Water
Control Board, Bay Conservation and Development Commission, United States Fish and
Services, and United States Army Corps of Engineers. Project construction was
in October 2024.
Baylands Boardwalk Piling Buildings andPE‐24000 Construction Public Works
This project upgraded and renovated safety and accessibility features at Cameron Park with a
PG‐14002 Cameron Park Improvements primary focus on the park playground improvements. The Cameron Park Improvements Project Parks and Open Community Fall
were completed in November 2024.
This project provided a complete Facility Condition Assessment (FCA) to renew cost estimates of
deferred maintenance, planned maintenance, capital renewal and electrification costs of city
City Facilities Assessment
PE‐20002 and Record Plan
facilities over the next 30 years.ꢀ A detailed list of buildings for electrification has been analyzed
determine prioritization to help meet SCAP goals. The data has been updated into the City of
Alto’s newly customized Infrastructure Management System to provide long range capital
based on the results of the FCA. The Record Plan Management System is being
through TE‐13004. The project reached completion in fall 2024.
Buildings andConstruction Public Works Fall 2024 $333,134.00
Management Systemꢀꢀꢀꢀ
This project added 407 linear feet of new twenty‐four inch high density polyethylene (HDPE) to
parallel to the existing thirty‐six inch pipe within East Meadow Drive to increase the capacity
the storm drain system. This project included upsizing manholes based on new pipes and
laterals from private property and catch basins. Project was completed in
2024.
East Meadow Drive System Stormwater
ManagementSD‐22000 Construction Public Works
Works
Summer 2024 $636,405.00
This project installed 506 linear feet of fifteen‐inch pipe and manholes along East Meadow Circle.
upgraded line will eliminate flooding that occurs within East Meadow Circle when the water
within Barron Creek is higher than the flap‐gate, and flows are not able to drain into theEast Meadow Circle Stormwater
ManagementSD‐26000 Connection to Adobe Creek creek. The new fifteen‐inch HDPE line extension allows flows to drain away from Barron Creek
Pump Station and into Adobe Creek, where they can be pumped. The project also included a small bioretention
to treat low flow runoff within East Meadow Circle before discharging into either creek. The
was completed in September 2024.
This project included both the design and construction of a large trash capture device (TCD)
in the planting strip along Embarcadero Road located in front of the Palo Alto Baylands
Links parking lot. The TCD was integrated into a thirty‐six inch storm pipe to capture trash as
as five millimeters from a section of the storm drain system prior to discharging to the San
Bay. The 189‐acre drainage area treated by the TCD consists of 169 acres of
and office land use in the City’s jurisdiction and twenty acres in the California
of Transportation (Caltrans) right‐of‐way. Construction was completed October 1,
Trash Capture Device Stormwater
ManagementSD‐22002 Construction Public Works Fall 2024 $818,837.00
1
Item A
Attachment A - Semiannual Update
on the Status of Capital
Improvement Program Projects
Item A: Staff Report Pg. 76 Packet Pg. 344 of 413
List of Completed Projects
Season
Completed Completed
Year Total Project BudgetCIP #Project Name Project Description Project Type Fund Source Department CMR Date
This project installed two 12 kV 50 MVA transformers to replace two 4kV transformers that
1501 Page Mill Road and make all substation improvements necessary to accommodate
installations. Project construction is 100% complete and new Hanover substation
and switchgear have been successfully tested and commissioned and released to
Utility Operations group. Final project close out and settlement of Public‐Private Partnership
between the City and Tesla still remain.
Hanover SubstationEL‐24001 Construction Electric Utilities Fall 2024 $15,000,000.00
This project funded the design and replacement of structurally deficient water mains and
Mains are selected by researching the maintenance history of the system and
those that are undersized, corroded, and/or subject to breaks. The project scope
approximately 7,500 linear feet (which represents 0.6 percent of the City’s Water
System) of mains and services on various streets within the City, including areas in
Evergreen Park and Ventura neighborhoods. The project was completed in September 2024.
Water Main Replacement
29WS‐15002
‐24000
Construction Water Utilities Fall 2024 $9,307,828.00
This project installed a new automated gate at the Baylands Nature Preserve main entrance. The
gate was manually opened and closed by staff each day for public access. The scope of
included an electrical transformer, trenching, wiring, and gate automation equipment. The
started June 24, 2024 and reached substantial completion on June 30, 2024.
Baylands Nature Preserve
Gate
Parks and Open Community Spring 2024
The Charleston Arastradero Corridor was reconfigured to provide new landscaped median
bulb outs, enhanced bike lanes, traffic signal improvements, and new street trees to
the new lane configurations that were approved for permanent retention. Phase 1
Road between Foothill Expressway to Clemo Avenue), Phase 2 (Charleston Road
Alma Street to Middlefield Road) and Phase 3 (Arastradero Road from Los Palos Avenue to
Camino Real, Charleston Road from El Camino Real to Alma Street and from Middlefield Road
San Antonio Road) have all been completed as of spring 2024.
Charleston Arastradero
Project
Traffic and
TransportationPE‐13011 Construction Public Works Spring 2024 $20,788,951.00
This project funded the design and construction of high priority main replacement work, which
inflow of rainfall and groundwater into the collection system. The project replaced
11,000 linear feet (which represents 1.0 percent of the City's Wastewater
System) for El Camino Real from Page Mill Road to Cesano Court, and Page Mill Road
Ramos Way to Ash Street. The project wais comprised of mains identified in video
work or through maintenance records as structurally deficient and in need of
The work was in Caltrans (El Camino Real) and the County of Santa Clara (Page Mill
right‐of‐way. Construction was completed May 5, 2024.
Wastewater Collection
WC‐19001 System Rehabilitation Wastewater Utilities $8,635,244.00
Augmentation Project 31
This project enabled the design and construction for new protective coatings on each of the four
primary sedimentation tanks, with replacement of worn rotating parts and mechanical
electrical equipment. These tanks were installed in 1972 and the recoating project will will
the concrete life for another thirty years. Substantial completion was achieved on June 1,
Primary Sedimentation Tank WastewaterWQ‐14003
‐07000
Construction Public Works Spring 2024 $20,449,644.00
This project for Water Regulation Station Improvements included seismic upgrades, piping
and other various upgrades to increase the structural reliability of two of the
turnouts with SFPUC. Work under this project includes Seismic Upgrades of California
and Page Mill Road Turnouts. Structural evaluation for restraining the Page Mill turnout
piping was included in the design. The construction was completed in May 2024.
Water Regulation Station Water Utilities
2
Item A
Attachment A - Semiannual Update
on the Status of Capital
Improvement Program Projects
Item A: Staff Report Pg. 77 Packet Pg. 345 of 413
List of Completed Projects
Season
Completed Completed
Year Total Project BudgetCIP #Project Name Project Description Project Type Fund Source Department CMR Date
This project incorporated renovations to the Utilities Water Gas Wastewater (WGW) office space
the Municipal Service Center (MSC). The new work area includes a small reception area, a
kitchen and printer area, additional offices and cubicles, upgrades to the HVAC
lighting improvements and fire life safety systems upgrade. Construction was completed
April 2023.
Water, Gas, Wastewater
Remodel
Buildings andPE‐19001 Construction Public Works Spring 2023 $1,234,354.00
This project provided funding for the replacement of all extrication tools for the Fire
Extrication tools, also known as "Jaws of Life", are used to rescue victims of car
and other emergencies where the victims are trapped in confined spaces. Equipment
purchased in winter 2023 and the project is complete.
Buildings and Fire
DepartmentFD‐22000 Extrication Tool Replacement Procurement
This project has replaced approximately 18,600 linear feet (which represents 1.6% of the City's
distribution system) of mains and 265 services on various streets in the City, including
in the Duveneck, St. Francis, Barron Park and Charleston Meadows neighborhoods.
started in April 2022 and the project was substantially completed in spring 2023.
Water Main Replacement
28WS‐14001 Water Utilities 10,305,619.00
This project included the design and construction of high priority mains with structural defects
could not be addressed with routine maintenance. The wastewater mains on various streets
the City were replaced with approximately 10,000 linear feet of HDPE sanitary sewer mains
associated laterals in the Ventura, Charleston Meadows, Fair Meadow, and Palo Verde
The project achieved substantial completion in April 2023.
Wastewater Collection
WC‐17001 System Rehabilitation Wastewater
Augmentation Project 30
This project included the design and reconstruction of the Palo Alto Airport apron. The need to
the aircraft parking apron is critical to airport safety. Construction Phase I was
in November 2017. Construction Phase II was completed in winter 2020.
on Phase III reached substantial completion in June 2023
Airport ApronAP‐16000 Construction Airport Airport Spring 2023 $41,563,570.00
This project replace rubberized and synthetic turf surfacing in the playground and replace play
Magical Bridge Playground equipment including swings, climbing net, and playhouse. An IFB was issued in November 2021 Parks and OpenPE‐21003 Rubber and Synthetic Turf and Council awarded a construction contract in spring 2022. Installation of rubberized and
surfacing, replacement of climbing nets and renovation of the playhouse took place in
2022. Project was completed in December 2022.
Public Works Fall
Resurfacing
3
Item A
Attachment A - Semiannual Update
on the Status of Capital
Improvement Program Projects
Item A: Staff Report Pg. 78 Packet Pg. 346 of 413
List of Completed Projects
Season
Completed Completed
Year Total Project BudgetCIP #Project Name Project Description Project Type Fund Source Department CMR Date
This project designed and constructed approximately 21,700 linear feet (which represents 1.9%
the City's Gas distribution main system) of distribution main and 320 gas services constructed
of PVC material on various streets within the Midtown, Evergreen Park, Ventura, College
Charleston Terrace, and Research Park neighborhoods. Construction began in winter
was completed in summer 2022
Gas Main Replacement
23GS‐13001 Construction Gas Utilities Summer 2022 $7,951,858.00
This project replaced the entire complement of Automated External Defibrillators (AEDs)
City facilities and emergency response vehicles, which currently totals 93 AEDs. The
process was completed in fall 2021. The new AEDs were purchased and deployed in summer
Automated External
Replacement
Buildings and Fire
DepartmentFD‐21000
‐17000
Procurement Summer 2022 $237,500.00
This project replaced the existing MSC roofs. The existing asphalt and gravel roofs have reached
end of their useful life and needed to be replaced. The new roofs will meet current cool
codes to optimize energy efficiency. Construction was completed in November 2022.
Municipal Service Center A,
& C Roof Replacement
Buildings and Public Works 2,013,475.00
This project installed capacitor banks at electric substations and on distribution lines to ensure
Northern California Power Association Power Factor requirements are met. Capacitor banks
EL‐16002 Capacitor Bank Installation were installed at Hanover Avenue, Hansen Way, Maybell Avenue, and Park Boulevard
Substations. The project was substantially completed in June 2022 and will be commissioned
and energized in summer 2022.
Construction Electric Spring 2022 $1,050,443
Facility Relocation for
EL‐17007 Caltrain Modernization
Project
The Utilities Department removed the overhead lines allowing for the installation of the
Catenary System above the rails for the Caltrain Modernization. This project was
in spring 2022
Construction Utilities Spring 2022 $3,055,472
This project upgraded safety, site amenities, playground facilities, a new restroom, irrigation,
and ADA accessibility improvements at Rinconada Park. These improvements were
in the Rinconada Long Range Plan (LRP). Phase 1 of construction started in August
and construction was completed in spring 2022.
Rinconada Park Parks and OpenPE‐08001 Public Works
This project reconfigured the distribution circuits to the substation transformer at Quarry
EL‐14005 Reconfigure Quarry Feeders Substation. Design of QR 27 feeder replacement was completed in spring 2021. Construction Construction Electric Utilities Fall 2021 $792,034
was completed in December 2021 .
This project provided for the relocation of the Junior Museum and Zoo to Cubberley for two
while a new JMZ was being built, tenant improvements to the Cubberley Auditorium and Buildings and CommunityAC‐18001 JMZ Renovation then removal of tenant improvements post‐construction. Construction of the new Junior
and Zoo started in June 2018 and was completed in late 2021. The new Junior Museum
Zoo was opened to the public on November 12, 2021.
2,927,870.00
4
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Attachment A - Semiannual Update
on the Status of Capital
Improvement Program Projects
Item A: Staff Report Pg. 79 Packet Pg. 347 of 413
List of Completed Projects
Season
Completed Completed
Year Total Project BudgetCIP #Project Name Project Description Project Type Fund Source Department CMR Date
This project included a systems analysis and repaired the water proofing system in the High
and Bryant Street parking garages. Water proofing repairs were completed in the High
parking garage. Additional funding was added and the contractor completed
repairs in the subterranean stairwells in the Bryant Street garage in fall 2021.
High and Bryant Street
PE‐18002 Garages Waterproofing and Buildings andConstruction Public Works Fall 2021 $264,235.00
Repairs
As part of the 2014 Council Infrastructure Plan, this project designed and constructed a new
bridge across Highway 101 at Adobe Creek. Council approved a contract with Granite
in November 2019. Construction began in January 2020. The project construction
on November 20, 2021, with a ribbon‐cutting ceremony and a community
Highway 101 Pedestrian
Overpass Project
Traffic and
TransportationPE‐11011
‐12001
Construction Public Works Fall 2021 $22,889,453
This project undergrounded the existing overhead utility systems in the area along the 400 block
West Charleston and El Camino Real. Staff completed cable, equipment installation and
of customer service conversions. The construction for the final phase of the project to
two 60 foot tall steel poles and to reconductor the 60 kV sub‐transmission lines was
in the fall 2021.
Underground District 46 Electric Utilities
This project improved the Pearson Arastradero Preserve parking lot by improving the base rock
adding drainage, widening the entrance for safety, and new fencing. This new
will allow the overflow parking area to be open year round. The work was
in May 2021.
Pearson Arastradero
OS‐18001 Preserve Parking lot Parks and Open CommunityConstruction Spring 2021 $170,300
Improvement
Cubberley Community
Master Plan
This project developed the master plan for future use of the Cubberley Community Center site
the City and Palo Alto Unified School District.
Buildings and CommunityCB‐16001
‐19001
This project replaced the Building management System(BMS) controls for the pavilion, Theater,
I, and Gyms A and B boiler rooms at the Cubberley Community Center. The project
the installation of control points for each building along with controllers, valve and
actuators.
Cubberley Building
Systems
Buildings andConstruction Public Works
Fire Ringdown System This project replaced the current ring down system that provides an audible alert of calls in the
stations. Ongoing installations started in 2018 and were completed with Fire Station #3.
Buildings andFD‐14002
‐14000
Construction Fire Departent Spring
Winter
Spring
2021 $400,144
Internal Alarm System The project replaced the citywide internal alarm system. The alarms at City Hall migrated to this
system in FY 2019, but was completed in early 2021.
Buildings and Police
Department
Self Contained Breathing
FD‐20001 Apparatus (SCBA) Air
This project replaced the central air compressor that provides air for the self‐contained breathing
(SCBA) tanks to ensure firefighter safety when entering environments with hazardous Construction
quality.
Buildings and Fire
DepartmentCompressor Replacement
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Attachment A - Semiannual Update
on the Status of Capital
Improvement Program Projects
Item A: Staff Report Pg. 80 Packet Pg. 348 of 413
List of Completed Projects
Season
Completed Completed
Year Total Project BudgetCIP #Project Name Project Description Project Type Fund Source Department CMR Date
Airport Electrical This project replaced the outdated electrical panels for the Palo Alto Airport office rental spaces.
was completed in January 2021.AP‐20000 Construction Airport Public Works Winter 2021 $146,466
This project built the California Avenue Area Parking Garage, as part of the 2014 Council
Plan. The parking garage has 627 parking spaces with 2 basement levels and 4
grade floors. The garage features an automated parking space guidance system, EV
stations, bicycle parking, and motorcycle parking. The garage was opened to the public
December 8, 2020.
New California Avenue Area
Garage
Buildings andPE‐18000 Construction Public Works
Works
50,119,976
This project updated the individual sleeping quarters in the firehouse to address gender issues
privacy concerns. Fire Station #1 was the only fire station in the City that did not have
bedrooms to accommodate male and female firefighters. This project was completed
fall 2020.
Buildings andPF‐14002 Fire Station 1 Improvements Fall 2020 $187,064
This project replaced gas services laterals constructed of Acrylonitrile‐butadiene‐styrene (ABS) or
material on various streets. Council approved funding in June 2019. The project replaced
ABS and Tenite gas services. The WQCP ABS gas service is assigned to Utility Operations for
and the remaining five ABS gas services will be scheduled for replacement once the
‐year moratorium ends on those streets. As of November 2020, this project is complete.
Gas ABS/Tenite ReplacementGS‐18000
‐19000
‐19000
Construction Gas Utilities 2,615,100
This project replaced 1,750 linear feet of storm drain with 48‐inch diameter High Density
(HDPE) pipe and associated catch basins, laterals and manholes. In addition to
work, additional street restoration and concrete work was completed. Work
resurfacing one full lane on Loma Verde from the beginning to the end of the project
replacement of driveways, sidewalk, and 718 linear feet of curb and gutter. The contract
awarded in June 2020, construction work began in August 2020, and was completed in
2020.
Loma Verde Avenue Trunk
Improvements Storm Drain Fall 2020 $2,976,813
This project is part of the City’s recent Seismic Upgrade and Emergency Water Supply and
Projects. The reservoir was drained in 2012 for approximately two years to allow
seismic rehabilitation work to be performed and construction of a new pump station.
hairline cracks were sealed in the reservoir. A geotechnical consultant was hired to Construction
the tank foundation. This study was completed and there were several options
Staff has completed the design and construction of the vent screen replacement and
sealing.
Mayfield Reservoir Subgrade
Venting Repair Water Utilities Fall 2020 $600,000
This project undergrounded the existing overhead distribution system in the area bounded by
Road, Homer Avenue, Webster Street, and Addison Avenue. Installation of
and utility electric system is completed. Where possible, the overhead electric
were removed and poles cut down to the level of the communication lines.
Underground District 47
EL‐11010 Middlefield, Homer,Construction Electric 3,649,356
Webster, Addison
6
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Attachment A - Semiannual Update
on the Status of Capital
Improvement Program Projects
Item A: Staff Report Pg. 81 Packet Pg. 349 of 413
List of Completed Projects
Season
Completed Completed
Year Total Project BudgetCIP #Project Name Project Description Project Type Fund Source Department CMR Date
This project replaced of 8,972 linear feet of wastewater mains. The sanitary sewer mains,
and manholes to be rehabilitated or replaced in this project are located in the
Meadows neighborhood. Construction started in February 2020 and was suspended
almost 3 months due to COVID‐19 County’s Shelter‐in‐Place Order. The project is complete as
December 2020.
Wastewater Collection
WC‐16001 System Rehabilitation WastewaterConstruction Utilities Fall 2020 $4,434,839
Augmentation Project 29
This project modernized the existing elevators at parking Lot J. The project involves upgrading
interior of the elevators, elevator control interface, call buttons, and meeting current ADA
Construction started in April 2019. Project is complete except for the State final
on the second car. State is behind because of COVID, but the inspection should be
by the end of July 2020.
Parking Lot J Elevator Buildings andPF‐18000 Construction Public Works
Works
Spring 2020 $781,324
This project replaced the existing Fire Station at Embarcadero Road and Newell Road with a new
PE‐15003 Fire Station 3 Replacement structure that meets essential services standards and current program needs. Construction Buildings and 10,080,258
completed in March 2020.
This project included the recoating of four steel tanks. Work under this project was included in
Seismic Upgrade of four Steel Tanks and the three Turnout Projects. Once construction
it was found that the Montebello Reservoir was in very poor condition. Due to escalating Construction
associated with roof replacement, staff decided to complete construction of the
Reservoir and re‐evaluate the remaining three tanks for replacement.
Water Reservoir CoatingWS‐08001
‐13001
Water Utilities Spring 2020 $2,141,172
This project replaced approximately 9,600 linear feet of structurally deficient, aging, or corroded
mains and services along the mains on Sand Hill Road, Oak Creek Drive (5%) and FultonWater Main Replacement ‐
Project 27 Construction Utilities Spring 2020 $7,786,998
This project enabled the design and construction of a high priority wastewater main and lateral
work to reduce inflow of rainfall and ground water into the collection system. The
replaced or rehabbed a total of 7,655 linear feet of wastewater mains located in the
Manor/Garland, Midtown West, and Lower Page Mill/Los Altos Hills areas of the City.
Wastewater Collection WastewaterWC‐15001 System Rehabilitation
Augmentation Project 28
This project met the growing electric needs of the VA Hospital. Staff has had numerous
with VA Hospital on electric load growth at the hospital and anticipated needs from
utility. Much of the cost is reimbursed to the City by the VA Hospital. Staff has prepared
designs for interim solutions and is awaiting additional information from VA to
long range plans to meet their future needs.
VA Hospital ‐ Customer LoadEL‐17003 Design Electric Utilities Spring 2020 $84,984
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Attachment A - Semiannual Update
on the Status of Capital
Improvement Program Projects
Item A: Staff Report Pg. 82 Packet Pg. 350 of 413
List of Completed Projects
Season
Completed Completed
Year Total Project BudgetCIP #Project Name Project Description Project Type Fund Source Department CMR Date
This project added electronic security systems at utility sites to protect equipment at electric
water pumping plants, reservoirs, and gas stations from intrusion and vandalism.
and detection systems have been installed at nine electric substations, three water
and one natural gas station to monitor facilities.
Utility Site SecurityEL‐04012 Construction Electric Utilities Spring 2020 $1,644,681
Rebuild Underground District This project rebuilt and replaced the underground electric system in Underground District 19, theEL‐11008
‐18000
Construction Electric Utilities19area bounded by Forest Avenue, Waverley Street, Addison Avenue, and Alma Street.
This project replaced Self Contained Breathing Apparatus equipment (SCBA) used by firefighters
entering hazardous conditions when responding to fire and hazardous materials incidents.
SCBA provides breathable air for firefighters when entering environments where the
is immediately dangerous to life or health. The expected service life for SCBAs is 15
Self Contained Breathing
Replacement
Buildings and Fire
Department Spring 2020 $799,999
This project replaced the entire complement of twenty cardiac monitors in the Department.
with other tools needed for patient assessment and airway verification, cardiac monitors
cardiac activity in patients and provide defibrillation and pacing.
Cardiac Monitor Buildings and Fire
DepartmentFD‐20000
‐16001
Purchase Spring 2020 $850,000
Downtown Mobility and
Improvements
This project included the construction of curb extensions and the installation of new pedestrian
heads and traffic signal modifications in 2019 as part of the Upgrade Downtown project.
Traffic and
Transportation Transportation
Office ofConstruction 1,819,847
This project replaced the Thermal Imaging Cameras (TICs) on all fire and response vehicles used
help identify the location of victims; assess the source of fires, smoke, and heat; to assist in
a plan of action.
Thermal Imaging Cameras Buildings and Fire
DepartmentFD‐20002 Purchase Fall 2019 $99,000
Wastewater Collection
WC‐11000 System Rehabilitation
This project addressed areas that were identified in Wastewater Capital Improvement Project 17
and Video Inspection of the Collection System) as needing rehabilitation. This project
combined with Project 25 and 26(WC‐12001; WC‐13001).
WastewaterConstruction Utilities Fall 2019 $3,131,595
Augmentation Project 24
Wastewater Collection
WC‐13001 System Rehabilitation
Augmentation Project 26
This project was combined with Project 24 and 25(WC‐11001; WC‐12001). All new service
were installed from the new sewer main to the new sewer cleanouts located in the City’s Construction
‐of‐way.
Wastewater
Cubberley Track and Field Parks and OpenCB‐19000
‐14018
This project replaced the synthetic turf field, installed an all‐weather track and a fitness area.Construction Public Works
Baylands Boardwalk Buildings andThis project replaced the existing boardwalk with similar alignment and configuration.Construction Public Works
Works
Winter 2019 $2,123,681
This project improved the Administrative Services Department offices on the fourth floor of City Buildings andPE‐17009 City Hall Floor 4 Remodel
8
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Attachment A - Semiannual Update
on the Status of Capital
Improvement Program Projects
Item A: Staff Report Pg. 83 Packet Pg. 351 of 413
List of Completed Projects
Season
Completed Completed
Year Total Project BudgetCIP #Project Name Project Description Project Type Fund Source Department CMR Date
Lucie Stern Buildings
PE‐14015 Mechanical and Electrical
This project replaced and upgraded the mechanical, electrical, and fire/life safety systems at
Stern Children’s Theater, Lucie Stern Community Theater, and Lucie Stern Community Buildings andConstruction Public Works Spring 2019 $6,142,607
Upgrades
Planning andQuarry Road Improvements This project included planning, design and construction of bicycle and pedestrian improvements Traffic and
TransportationPL‐16000
‐17008
Construction Spring
Winter
2019 $5,148,378and Transit Center Access along Quarry Road.
Utility Control Center This project upgraded the Utility Control Center working environment.Electric Utilities
Gas Main Replacement
22
This project replaced approximately 23,700 linear feet of gas mains and services along University
and other streets in the Downtown North nieghborhood.GS‐12001 Construction Utilities Spring
Spring
Spring
Spring
Summer
2019 $11,658,997
Wastewater Collection
WC‐12001 System Rehabilitation /This project was combined with Project 24 and 26 (WC‐11001; WC‐13001) replacing 45,294 linear
of sanitary sewer mains in university South, Professorville and Old palo Alto neigborhoods.
Wastewater Utilities
Public Works
Utilities
Augmentation Project 25
Dewatering and Loadout This project provides funding for the design and construction of the sludge dewatering facility
truck loadout to retire existing dewatering and sewage sludge incinerators.
WastewaterWQ‐14001
‐12001 Water Main Replacement – This project replaced approximately 11,000 linear feet of aging water mains and services which WaterProject 26 included water main replacement as part of the Upgrade Downtown Project.
This project improved the Planning and Community Environment (PCE) Department offices on
fifth floor of City Hall.
Buildings andPE‐17009 City Hall Floor 5 Remodel Public Works
Baylands Nature Interpretive This project replaced worn out or non‐functioning exhibits at the Baylands Nature Interpretive
Exhibit Improvements Center.
Buildings and CommunityAC‐14001
‐17000
‐14000
Construction Summer 2018 $56,000
250,000
78,000
Mitchell Park Adobe Creek
Replacement
Parks and OpenThis project replaced the existing bridge over Adobe Creek in Mitchell Park.Public Works
Internal Alarm System This project replaced the citywide system of panic alarms from various departments and the
chambers.
Buildings and
Maybell 1&2 4/12kVEL‐14004
‐15001
This project converted circuits 1 & 2 at Maybell substation from 4kV to 12kV.Construction Electric Utilities Fall 2018 $364,796
Security at City Gas Receiving This project equiped the City’s four Gas Receiving Stations with video surveillance systems.Summer
Matadero Creek Storm
SD‐13003 Water Pump Station and This project upgraded the capacity to the Matadero Creek Storm Water Pump Station, which
a low‐lying 1200‐acre area of southeastern Palo Alto.Construction Storm Drain Public Works Summer 2018 $6,685,317
Trunk Line Improvements
9
Item A
Attachment A - Semiannual Update
on the Status of Capital
Improvement Program Projects
Item A: Staff Report Pg. 84 Packet Pg. 352 of 413
List of Completed Projects
Season
Completed Completed
Year Total Project BudgetCIP #Project Name Project Description Project Type Fund Source Department CMR Date
Wildlife Hazard Management The Wildlife hazard Management Plan identified the specific actions the airport will take toAP‐16002 Study
Construction
Study
Airport Public Works Summer 2018 $63,415
4,022,455
167,741
Plan mitigate the risk of wildlife strikes on or near the airport.
Wastewater Collection
WC‐14001 System Rehabilitation This project replaced 16,859 linear feet of sanitary sewer mains of various sizes on various Wastewater
Augmentation Project 27
Buckeye Creek Hydrology This project analyzed flooding conditions and recommended flood control structures and
and erosion control solutions for the creek located within Foothills Park.
Parks and OpenPG‐15000 Public Works
CalTrain Corridor Video
PE‐17004 Management System This project replaced two existing gateway signs in the right‐of‐way for the California Avenue
district.
Streets andConstruction Public Works
Works
Spring 2018 $1,550,000
Installation
Parking Lot Q Elevator Buildings andPF‐16003
‐13003
This project modernized the existing elevator at Parking Lot Q.
Parks, Trails, Open Space,
Recreation Master Plan parks, trails, open space and recreational programs.
This master plan provided guidance on the recreation and improvement needs for Palo Alto’s Parks and Open Community Fall 627,057
This project developed a plan for short, medium and long range improvements to the regional
PE‐12003 Rinconada Park Master Plan park including the consideration of pathways, new restrooms and playgrounds, new landscaping,Parks and Open CommunityStudy Fall 541,355
and revitalization of underutilized areas within the park.
The project developed an inventory of all City‐owned bridges and culvert structures, condition
cost estimate for rehabilitation, and recommendation for future inspection
assessment and improvements.
Structural Assessment of City Buildings andPE‐13012 Study Public Works Fall 198,529
Wastewater Collection
WC‐11000 System Rehabilitation /
Combined with Project 25 and 26 (WC‐12001; WC‐13001), this project replaced and/or
approximately 42,398 linear feet of sanitary sewer mains of various sizes, 779
laterals, and 121 sewer manholes.
WastewaterConstruction Fall 3,119,806
Augmentation Project 24
Wastewater Collection
WC‐13001 System Rehabilitation /
Augmentation Project 26
Combined with Project 25 and 26 (WC‐12001; WC‐13001), this project replaced and/or
approximately 42,398 linear feet of sanitary sewer mains of various sizes, 779
laterals, and 121 sewer manholes.
Wastewater Utilities Fall
Golf Reconfiguration and
PG‐13003 Baylands Athletic Center
Improvements
This project completed the rehabilitation of the Palo Alto Municipal Golf Course, including a new
for the course, new prefabricated restroom, new water‐saving turf and irrigation system,
rebranded the course as the Baylands Golf Links.
Parks and OpenConstruction Public Works Fall 2017 $13,675,177
Gas Main Replacement –GS‐11000 This project combined with GWR 19B & GMR 20 and replaced ABS gas mains and services.Gas WinterProject 21
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Attachment A - Semiannual Update
on the Status of Capital
Improvement Program Projects
Item A: Staff Report Pg. 85 Packet Pg. 353 of 413
List of Completed Projects
Season
Completed Completed
Year Total Project BudgetCIP #Project Name Project Description Project Type Fund Source
Water
Department
Utilities
Utilities
Utilities
Utilities
Utilities
Utilities
CMR Date
This project provided installation of approximately 11,869 linear feet of new High Density
(HDPE) water mains, 232 new HDPE water services, and 15 new fire hydrants within Construction
City limits.
Water Main Replacement –
25WS‐11000 Winter 2017 $5,445,069
The 2015 Water System Master Plan identified present capital improvements and replacement
required to ensure optimal reliability levels of service to the existing distribution and
systems.
WS‐15004 Water System Master Plan Study Water
Wastewater Collection
WC‐10002 System Rehabilitation /
Augmentation Project 23
Combined with Project 22 (WC‐09001). This project replaced and/or rehabilitated approximately
linear feet of sanitary sewer mains of various sizes, 554 sewer laterals, and 102 sewer WastewaterConstruction
Street Light System Street
EL‐10009 Light System Conversion
Project
This project converted HPS streetlights to LED and the conversion of approximately 4500
streetlight fixtures.Electric
Sand Hill / Quarry 12kVEL‐13006
‐15001
This project installed new wire to connect circuits QR‐24 and QR‐27 in the Sand Hill/Quarry area. Construction
Electric Substation Battery This project replaced the batteries in all nine of the City's electric substations.
project replaced the synthetic turf at the Stanford/Palo Alto Playing Fields.
Construction
Stanford/Palo Alto Playing Parks and Open CommunityPG‐13001 Fields Soccer Turf
Replacement
Park Maintenance Shop This project renovated and remodeled the Parks maintenance shop for safety and efficienciency Parks and Open CommunityPG‐09003
‐12017
Summer
City Hall First Floor This project installed new elevator control panels and replaced the gray‐painted panels inside the Buildings and Public Works
Works
Works
3,974,963
This project created a temporary main Library to be used while the new one was being Buildings andPE‐11012 Temporary Main Library
The project replaced decking, railings, structural framing members, exterior wood flooring, and
restroom reconfiguration, and provided Americans with Disabilities Act (ADA)Baylands Nature Interpretive
Facility Improvement
Buildings andPE‐15029 Spring 2017
This project improved the children’s playground and included park amenity upgrades such as
playground equipment, a new retaining wall, surfacing and pathway upgrades, planting
and irrigation renovations, and replaced of damaged wood benches and the
perimeter fence.
Parks and Open CommunityPE‐13008 Bowden Park Improvements Summer
11
Item A
Attachment A - Semiannual Update
on the Status of Capital
Improvement Program Projects
Item A: Staff Report Pg. 86 Packet Pg. 354 of 413
List of Completed Projects
Season
Completed Completed
Year Total Project BudgetCIP #Project Name Project Description Project Type
Construction
Construction
Construction
Construction
Fund Source Department
Public Works
Public Works
Public Works
CMR Date
Parks and OpenPE‐13020 Byxbee Park Trails This project provided trail and site amenities over the remaining area of the landfill cap.Fall 2016 $334,607
440,000
3,247,248
65,000
This project improved the Utilities Department administrative offices on the third floor of City
It included new carpet, wall reconfiguration, a kitchenette, cabinets, paint, soundproofing,
furniture, doors, and associated building systems.
Buildings andPE‐17002 City Hall Floor 3 Remodel Spring
Lucie Stern Buildings
PE‐14015 Mechanical and Electrical
Upgrades – Phase 1
This project replaced and upgraded the mechanical, electrical, and fire/life safety systems at
Stern Children’s Theater, Lucie Stern Community Theater, and Lucie Stern Community Buildings and Summer
Sarah Wallis Park This project improved site amenities with new concrete pathways, replaced old furnishings, and
landscape with drought tolerant species.
Parks and Open CommunityPG‐12004
This project replaced the perimeter fencing and gates surrounding the Palo Alto Airport
to prevent unauthorized access to the airport runway in accordance with Federal and Construction
standards.
AP‐16003 Airport Perimeter Fence Airport
Storm Drain
Gas
Public Works
Works
2,003,540
Channing Avenue/Lincoln
SD‐11101 Avenue Storm Drain
Improvements
This project installed of 5,800 linear feet of 36‐inch to 60‐inch diameter storm drain along
and Lincoln Avenues over three project phases to increase drainage system capacity.Construction Winter
Summer
Winter
Winter
Gas Distribution System This project included the development, model installation, testing, documentation, and staff
of a natural gas distribution system model.GS‐14004
‐14000 Art Center Auditorium Audio, This project replaced outdated audio visual equipment and furnishings following the
and Furnishings
Buildings and CommunityConstructionauditorium’s use as a temporary library.
This project renovated the Rinconada Pool locker room including the changing area, restrooms,
showers in the women's and men's locker rooms.
Buildings andPF‐15000 Rinconada Pool Locker Room Public Works
This project installed new athletic fields, synthetic turf, field lighting, fencing, a new restroom,Parks and Open CommunityPE‐13016 El Camino Park Restoration scorekeeper booth and storage buildings, an expanded parking lot, new bike and pedestrian Fall $5,611,122
pathways, landscaping, benches, and other amenities.
Notes: ** Final Project Actuals may be different from Total Project Budget amounts Grand Total $434,107,677
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Attachment A - Semiannual Update
on the Status of Capital
Improvement Program Projects
Item A: Staff Report Pg. 87 Packet Pg. 355 of 413
City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Administrative Services
Meeting Date: June 17, 2025
Report #:2506-4764
TITLE
Approval of and Authorization for the City Manager or Designee to Negotiate and Execute a
Purchase and Sale Agreement with C H LLC to Acquire the Industrial Property Located at 2575
East Bayshore Road (Assessor’s Parcel Number 008-03-015) for $8.5 million, with Leaseback to
Insulation Sources, Inc. (dba Ico Rally) for $12,600/Month; CEQA Status – Exempt Under CEQA
Guidelines Section 15301
RECOMMENDATION
Staff recommends that the Council approve the Purchase and Sale Agreement in Attachment A
and authorize the City Manager or their designee to take all actions necessary, including
negotiating and executing the final Purchase and Sale Agreement, including necessary exhibits,
in Attachment A, to acquire the industrial property at 2575 East Bayshore Road (Assessor’s
Parcel Number 008-03-015) in an amount not to exceed $8.5 million plus typical closing costs
and lease back the property to the existing tenant for $12,600 per month for up to six months.
EXECUTIVE SUMMARY
Utilities staff have had an ongoing need for storage space and contractor office workspace for
capital improvement projects (CIPs). The property at 2575 East Bayshore Road is listed for sale
and ideally situated between the Municipal Service Center (MSC) and the Regional Water
Quality Control Plant for Utilities’ needs. Staff recommend to acquire the property in an
amount not to exceed $8.5 million plus typical closing costs and lease the property back to the
existing tenant for up to six months. The terms of the Purchase and Sale Agreement have been
finalized in Attachment A, while the Lease Agreement is pending minor revisions.
BACKGROUND
The Utilities Department has many CIPs, such as recurring gas main replacement, sewer main
replacement, and water main replacement projects, that require a contractor to independently
acquire access to space to store and stage construction materials, equipment, and vehicles.
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Given the limited availability and high cost of leasing commercial space in or near Palo Alto, the
cost is generally passed through to the City by the contractor at $100,000 - $200,000 per CIP.
1 The parties were unable to
reach an agreement and staff continued to explore other options.
ANALYSIS
•Zoning: ROLM (E)(D)(AD) [Research, Office and Limited Manufacturing Subdistrict –
Embarcadero (Site and Design Review) (Automobile Dealership)]
•Comp Plan: RO (Research/Office Park)
•Flood Zone: AE; flood insurance required.
•Building Area: +/- 14,640 square feet plus 2,000 – 3,000 square feet of mezzanine
storage
•Age: 65 years (built 1960)
1 City Council, August 19, 2024; Agenda Item #10;
https://cityofpaloalto.primegov.com/Portal/viewer?id=0&type=7&uid=fdbb3b9b-bb6f-4362-9d5c-1a55454ecd2a
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•Buildout: 20% office, balance manufacturing/warehouse space
•Land area: +/- 1 acre; A southeastern portion of the parking lot encroaches on the
adjacent City parcel, as shown on the aerial image below.
•Parking: +/- 46 parking spaces as currently striped
•Features: 4 – 14’ roll up doors (one door currently covered), sprinklered, 3 space heaters
in manufacturing/warehouse area, +/-23’8” clear height
Staff toured the property at 2575 East Bayshore Road in March 2025. The property is attractive
to Utilities because of its proximity to the MSC, Warehouse, Operations, and Elwell Engineering
offices (less than one mile); the size of the lot; indoor warehouse capacity; and office space.
Utilities will be able to utilize this space for multiple CIPs concurrently. In the next seven to 10
years, Utilities will be purchasing $20M - $40M of equipment which can be stored indoors for
the modernization of the electric grid. Because the lead time for some of the materials required
ranges from eight to 24 months, Utilities needs to place the orders in advance to secure
reasonable delivery dates and prices. The new warehouse will enable Utilities to pre-order and
secure materials required for grid modernization and prevent future project delays due to
potential supply chain issues.
The property has eight offices and a conference room which can serve as a satellite office for
staff and contractors during projects. Given the property’s proximity to MSC and Elwell, it can
also serve as another location for Engineering and Operations staff to convene and collaborate
if conference rooms are not available in either facility. With these offices, Utilities could also
reduce the cost of leasing mobile offices for contractors during multi-year construction
projects, which is generally a pass-through cost to the City. Given the location, size, existing
improvements, general condition, and price of 2575 East Bayshore Road, as well as storage
requirements for planned critical long-term CIPs, staff believe this is a cost-effective
investment.
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After several conversations with the sellers, parties reached agreement on $8.5 million. Staff
engaged an outside attorney to draft the purchase and sale agreement and lease agreement in
Attachment A. Below is a summary of the key provisions.
•Purchase Price: $8,500,000
•Refundable Deposit: $255,000 (3% of Purchase Price)
•Contingencies: City has 35 days from the execution of the purchase and sale agreement
to conduct due diligence and remove contingencies
•Close of Escrow: Within 10 days from the buyer’s removal of contingencies
•Lease: Month to month, up to six months, at $12,600.33 per month, industrial gross
FISCAL/RESOURCE IMPACT
Funds are available in the FY 2025 Electric Grid Modernization for Electrification CIP budget (EL-
24000). Due to lengthy lead time for materials and delay of construction contracts, there is $23
million remaining in the FY 2025 Grid Mod CIP budget. Instead of returning $23 million back to
Electric CIP reserves, Staff will reassign $8.5 million to the warehouse purchase. Staff will
return the remaining $14.5 million to CIP reserves at fiscal year-end. The FY 2025 and proposed
FY 2026 electric rates will not be impacted by the warehouse purchase.
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Staff recommend use of the Grid Modernization CIP budget for the initial purchase, with
reimbursement of the CIP to replenish it to be completed through the initial debt financing of
the Grid Modernization capital project estimated to cost $300 million over the life of the
project. This strategy would have no initial rate impact on customers and allow for the
smoothing of the costs to the rate payers. With the new warehouse, Utilities will avoid paying
contractors $100,000 - $200,000 per CIP project for leasing a staging area and warehouse for
materials and equipment. Should equipment or projects from utilities other than the electric
utility need warehouse space, staff would appropriately allocate a rental cost to ensure
compliance with the restricted nature of enterprise funds.
STAKEHOLDER ENGAGEMENT
ENVIRONMENTAL REVIEW
ATTACHMENTS
APPROVED BY:
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PURCHASE AND SALE AGREEMENT
between
CITY OF PALO ALTO,
a California chartered municipal corporation
(“Buyer”)
and
C H LLC,
a California limited liability company
(“Seller”)
June 18, 2025
2575 East Bayshore Road
Palo Alto, California
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TABLE OF CONTENTS
Page
ARTICLE 1 Purchase and Sale....................................................................................................... 1
1.1 The Property............................................................................................................ 1
1.2 Buyer’s Due Diligence. ........................................................................................... 2
1.3 Title Review. ........................................................................................................... 4
ARTICLE 2 Purchase Price ............................................................................................................ 5
2.1 Amount and Payment .............................................................................................. 5
2.2 Deposit .................................................................................................................... 5
2.3 Independent Consideration ..................................................................................... 5
2.4 Liquidated Damages ............................................................................................... 6
2.5 Seller Default. ......................................................................................................... 6
2.6 1031 Exchange Cooperation ................................................................................... 7
ARTICLE 3 Completion of Sale ..................................................................................................... 7
3.1 Place and Date......................................................................................................... 7
3.2 Post-Closing Lease.................................................................................................. 7
ARTICLE 4 Title and Condition .................................................................................................... 8
4.1 Title to the Property ................................................................................................ 8
4.2 “AS IS” Sale ........................................................................................................... 8
4.3 No Implied Warranties ............................................................................................ 8
4.4 Environmental Laws; Hazardous Materials ............................................................ 8
4.5 Release of Seller ..................................................................................................... 9
4.6 California Waiver Provision ................................................................................... 9
ARTICLE 5 Representations and Warranties ............................................................................... 10
5.1 Seller ..................................................................................................................... 10
5.2 Buyer ..................................................................................................................... 13
ARTICLE 6 Covenants ................................................................................................................. 14
6.1 Seller Covenants ................................................................................................... 14
6.2 Eminent Domain ................................................................................................... 15
6.3 Casualty Damage .................................................................................................. 15
6.4 City Council Approval at June 17, 2025 Meeting ................................................ 15
ARTICLE 7 Conditions Precedent; Default ................................................................................. 16
7.1 Seller ..................................................................................................................... 16
7.2 Buyer ..................................................................................................................... 16
7.3 Buyer’s Default ..................................................................................................... 17
ARTICLE 8 Closing ..................................................................................................................... 18
8.1 Closing Deliveries ................................................................................................. 18
8.2 Procedure .............................................................................................................. 19
8.3 Possession ............................................................................................................. 19
8.4 Closing Costs ........................................................................................................ 19
8.5 Prorations .............................................................................................................. 19
8.6 Closing Statements................................................................................................ 20
8.7 Post-Closing Deliveries ........................................................................................ 21
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ARTICLE 9 General ..................................................................................................................... 21
9.1 Notices .................................................................................................................. 21
9.2 Attorneys’ Fees ..................................................................................................... 22
9.3 Brokers .................................................................................................................. 22
9.4 Governing Law ..................................................................................................... 22
9.5 Construction .......................................................................................................... 22
9.6 Terms Generally.................................................................................................... 23
9.7 Further Assurances................................................................................................ 23
9.8 Partial Invalidity.................................................................................................... 23
9.9 Waivers ................................................................................................................. 23
9.10 Miscellaneous ....................................................................................................... 23
9.11 Electronic Signatures ............................................................................................ 24
EXHIBITS
Exhibit A Legal Description of Real Property
Exhibit B Grant Deed
Exhibit C General Assignment
Exhibit D Post-Closing Lease
SCHEDULES
Schedule 1 List of Service Contracts
Schedule 2 List of Environmental and Engineering Reports
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PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT (this “Agreement”), dated for reference
purposes as of June 18, 2025, is entered into by and between CITY OF PALO ALTO, a
California chartered municipal corporation (“Buyer”), and C H LLC, a California limited
liability company (“Seller”), with reference to the following facts:
RECITALS
A. Seller owns that certain real property commonly known by its mailing address as
2575 East Bayshore Road, Palo Alto, California (APN: 008-03-015) and more particularly
described in Exhibit A attached hereto (the “Real Property”), which includes an approximately
14,640 square foot commercial building on the site (the “Building”).
B. Seller’s affiliate, Insulation Sources, Inc., a California corporation, dba ICO
RALLY (“ICO RALLY”), leases the Building from Seller pursuant to that certain Lease
Agreement dated January 1, 2003 (“Existing Lease”).
C. Seller and Buyer desire to proceed with the sale of the Real Property upon the
terms and conditions contained in this Agreement, including the right for ICO RALLY to retain
possession of the Real Property post-closing pursuant to a short-term lease by and between
Buyer and ICO RALLY.
NOW, THEREFORE, in consideration of the mutual covenants of the parties herein
contained and other valuable consideration, Seller and Buyer hereby agree as follows:
ARTICLE 1
Purchase and Sale
1.1 The Property. Subject to the terms of this Agreement (including approval of this
Agreement by the Palo Alto City Council (“City Council”) pursuant to Section 6.4 below),
Seller agrees to sell to Buyer and Buyer agrees to purchase from Seller, in accordance with and
subject to the terms of this Agreement, all of Seller’s right, title and interest in and to the
following property (collectively, the “Property”):
(a) The Real Property and all rights appurtenant to the Real Property, if any, including
without limitation, any strips and gores abutting the Real Property, and any land lying in the bed
of any street, road, or avenue in front of, or adjoining the Real Property, to the center line
thereof;
(b) The Building, the parking lot, the drive aisles and all other improvements located on
the Real Property, and any and all fixtures attached thereto (collectively, the “Improvements”);
(c) All other rights, privileges, easements, licenses, appurtenances, and hereditaments
relating to the Real Property;
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(d) All building permits, certificates of occupancy, and other certificates, permits,
licenses and approvals (the “Permits”) pertaining to the Real Property, to the extent assignable;
(e) All Approved Service Contracts as defined in Section 1.2(e) below, to the extent
assignable;
(f) All plans, specifications, surveys, architectural, and engineering drawings, and other
rights relating to the construction of the Property (collectively, the “Plans and Surveys”); and
(g) Any warranty, guaranty, or other obligation from any contractor, manufacturer, or
vendor to any improvements, furnishings, fixture, or equipment located at the Property, to the
extent assignable in connection with the sale of the Property (collectively, the “Assumed
Warranties and Guaranties”).
1.2 Buyer’s Due Diligence.
(a) The “Effective Date” shall mean the date that the parties mutually execute and
deliver copies of this Agreement. During the period commencing on the Effective Date and
expiring at 5:00 p.m., California local time, on the date thirty-five (35) days after the Effective
Date (the “Property Approval Period”), Buyer shall, at Buyer’s sole cost and expense, review
and investigate the physical and environmental condition of the Property, the character, quality
and general utility of the Property, the zoning, land use, environmental and building
requirements and restrictions applicable to the Property and the state of title to the Property.
Buyer shall determine whether or not the Property is acceptable to Buyer within the Property
Approval Period. If, during the Property Approval Period, Buyer determines in Buyer’s sole and
absolute discretion (and for any or no reason) that the Property is not acceptable to Buyer, Buyer
shall have the right, by giving written notice (the “Termination Notice”) to Seller on or before
the expiration of the Property Approval Period, to terminate this Agreement. If Buyer is satisfied
with the due diligence investigation, it shall notify Seller by giving written notice (the
“Approval Notice”) on or before the expiration of the Property Approval Period. If Buyer
delivers a Termination Notice, this Agreement shall terminate and the Deposit (defined below)
shall be immediately returned to Buyer. If Buyer delivers the Approval Notice, or fails to
provide any notice by the expiration of the Property Approval Period, this Agreement shall
continue in full force and effect, and Buyer shall have no further right to terminate this
Agreement pursuant to this Section 1.2(a).
(b) Upon the Effective Date, Seller shall deliver to Buyer all material documents related
to the ownership, operation and use of the Property, that are in the possession or control of
Seller, including, without limitation, the following items (collectively, the “Diligence
Documents”):
(i) Copies of all service contracts and agreements entered into by Seller
related to the Property including without limitation those described in Schedule 1
attached hereto (the “Service Contracts”).
(ii) Copies of all environmental and engineering reports prepared for and/or
provided to Seller (including the reports disclosed on Schedule 2) in connection with
Seller’s purchase, ownership or management of the Property.
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(iii) Copy of the Existing Lease, including all amendments and modifications
thereto.
(iv) Copies of all of Seller’s books and records relating to the operation of the
Property including, without limitation:
(A) all building plans, licenses, permits, authorizations, approvals and
other documents associated with any entitlements issued by all governmental authorities
having jurisdiction over the Property;
(B) copies of each bill for current real estate, personal property and
possessory interest taxes, water charges and other utilities; and
(C) all records, documents and files relating to the operation and
maintenance of the Property.
(v) Surveys and site plans.
(vi) Maintenance reports.
(c) Seller is required to disclose if any of the Property lies within the following
natural hazard areas or zones: (i) a special flood hazard area designated by the Federal
Emergency Management Agency; (ii) an area of potential flooding; (iii) a very high fire hazard
severity zone; (iv) a wild land area that may contain substantial forest fire risks and hazards; (v)
an earthquake fault or special studies zone; or (vi) a seismic hazard zone. Seller shall promptly
engage the services of a natural hazard consultant to examine the maps and other information
specifically made available to the public by government agencies and within five (5) days of the
Effective Date Seller shall cause such consultant to deliver to Buyer a natural hazard report and
disclosure statement prepared by the consultant containing the results of its examination.
(d) Following the Effective Date Buyer and its agents, employees and contractors
shall be afforded full and complete access to the Property during normal business hours
following at least one (1) business day’s prior written or telephonic notice from Buyer to Seller,
accompanied by evidence reasonably acceptable to Seller that Buyer has named Seller as an
additional insured on Buyer’s general liability, worker’s compensation and/or property insurance
(as applicable), for the purpose of making such investigations as Buyer deems prudent with
respect to the physical condition of the Property, including, without limitation, engineering
studies, seismic tests, environmental studies (including, without limitation, surface and
subsurface tests, borings, samplings (including, without limitation, soil, groundwater and
asbestos sampling) and measurements) and a survey of the Property. Buyer may conduct such
feasibility studies and environmental investigations (including a Phase I environmental report) as
Buyer deems necessary and investigate all matters relating to the zoning, use and compliance
with other applicable laws which relate to the use and occupancy of the Property and any
proposed impositions, assessments or governmental regulations affecting the Property. Seller
shall reasonably cooperate to assist Buyer in completing such inspections. Buyer shall
indemnify and hold Seller harmless from any damage to the Property resulting from the entry
onto the Property of Buyer and its agents, employees and contractors pursuant to this Section
1.2(d), except that Buyer shall have no obligation to indemnify Seller as a result of damage to the
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Property caused by the negligence or wrongful misconduct of Seller or as a result of the
discovery or presence of any preexisting conditions, including any Hazardous Materials (as
defined below) on the Property. The provisions of this Section 1.2(d) will survive the termination
of this Agreement and will not be deemed to have merged into any of the documents executed or
delivered at Closing.
(e) On or before the expiration of the Property Approval Period, Buyer shall have the
right to disapprove, by written notice to Seller, any of the Service Contracts that are not
terminable upon no more than thirty (30) days prior notice. If Buyer desires to have any Service
Contract terminated that is not expressly terminable upon no more than thirty (30) days’ notice
without penalty (each a “Non-Terminable Service Contract”), then Buyer shall notify Seller in
writing of any such Non-Terminable Service Contract that it desires to have terminated, and
Seller shall terminate the same at or before Closing (as defined below). All of the Service
Contracts which are either terminable on no more than thirty (30) days’ notice without penalty or
which are not disapproved by Buyer, are referred to as the “Approved Service Contracts”.
(f) No later than twenty (20) days after the Effective Date, Seller shall deliver to
Buyer an agreement executed by Seller and ICO RALLY (in a form reasonably approved by
Buyer in advance), pursuant to which Seller and ICO RALLY agree to (i) terminate the Existing
Lease effective as of the Closing and (ii) release Buyer of any and all liability arising under the
Existing Lease (the “Lease Termination Agreement”).
1.3 Title Review.
(a) Within five (5) days following the Effective Date, Seller shall (i) cause Title
Company (as defined below) to deliver to Buyer a current preliminary title report covering the
Property, together with true, legible (to the extent available), and complete copies of any
exceptions to title to the Property (the “Title Report”) and (ii) deliver Seller’s most recent
survey of the Property (the “Survey”) which Buyer may cause to be updated at Buyer’s expense.
(b) No later than twenty (20) days after the date Buyer receives the Title Report and
Survey (“Title Objection Date”) or if additional exceptions to title are first identified by Title
Company after Buyer’s receipt of the Title Report, then Buyer shall have until the later of: (i) the
Title Objection Date; and (ii) that day which is five (5) days following Buyer’s receipt of an
amendment or supplement of the Title Report (unless an additional matter shown on such
subsequent update first arises on the Closing Date, in which event notice of same may be given
on the Closing Date and the Closing Date shall be extended day for day without need for
additional action by either party), Buyer shall deliver to Seller, in writing (the “Title Objection
Notice”), any objections to those matters set forth in the Title Report or the Survey (collectively,
“Title Objections”). Buyer hereby acknowledges and agrees that TIME IS OF THE ESSENCE
with respect to all time periods relating to Buyer’s delivery of the Title Objection Notice. Buyer
shall be deemed to have unconditionally waived its right to object to all matters shown in the
Title Report and the Survey, unless Buyer objects to any title exception in accordance with this
Section 1.3. If Buyer makes any such objection, Seller may, by giving notice to Buyer on or
before the date that is five (5) days after the Title Objection Notice, elect either to remove such
objections or not to remove such objections. Seller shall be deemed to have elected not to
remove any such Title Objection unless Seller elects to remove any such Title Objection in
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accordance with this Section 1.3. If Seller elects to remove any such Title Objection, Seller shall
remove the title exception in question on or before the Closing Date. If Seller elects (or is
deemed to have elected) not to remove any such Title Objection, Buyer shall have the right, by
giving notice to Seller on or before the date that is five (5) days after Seller’s election not to cure
(or deemed election not to cure), either to terminate this Agreement (in which case the Deposit
shall be returned to Buyer) or to withdraw such Title Objection and accept title to the Property
subject to the title exception in question. If Buyer does not exercise the right to terminate this
Agreement in accordance with this Section 1.3, Buyer shall be deemed to have approved title to
the Property subject to the title exception in question and to have withdrawn such objection;
provided that, notwithstanding anything to the contrary contained in this Agreement, Seller shall
be obligated to cure those matters affecting title to the Property, whether or not objected to by
Buyer that are described in any of the following clauses: (i) that are mortgage or deed of trust
liens or security interests against the Property; (ii) taxes and assessments other than taxes and
assessments not yet delinquent; (iii) that have been placed against the Property by Seller after the
Effective Date and that are not otherwise permitted pursuant to the provisions hereof; or
(iv) judgment or other liens arising from actions of Seller.
ARTICLE 2
Purchase Price
2.1 Amount and Payment. The total purchase price for the Property (the “Purchase
Price”) shall be Eight Million Five Hundred Thousand Dollars ($8,500,000). At the Closing on
the Closing Date, Buyer shall pay the total purchase price for the Property (less the amount of the
Deposit and subject to prorations described in this Agreement) to Seller, through escrow, in cash
in immediately available funds.
2.2 Deposit. Within five (5) business days following the Effective Date, Buyer shall
deposit the sum of Two Hundred Fifty-Five Thousand Dollars ($255,000) (the “Deposit”) in
cash in immediately available funds in escrow with Chicago Title Company (“Title Company”)
care of Sherri Keller at the address set forth in Section 9.1 below. The Deposit shall be held by
Title Company in an interest-bearing account reasonably approved by Buyer. If Seller and
Buyer complete the purchase and sale of the Property in accordance with this Agreement, the
Deposit and all interest thereon shall be applied to payment of the Purchase Price for the
Property in accordance with Section 2.1. If the purchase and sale of the Property is not
completed and this Agreement terminates for any reason other than a default by Buyer as
described in Section 2.4 below, then the Deposit and all interest thereon shall be returned to
Buyer upon such termination of this Agreement.
2.3 Independent Consideration. Notwithstanding anything in this Agreement to the
contrary, One Hundred Dollars ($100) of the Deposit is delivered to Title Company for delivery
to Seller as non-refundable “Independent Consideration”, and the Deposit is hereby reduced by
and shall no longer include the amount of the Independent Consideration so delivered to Seller.
Seller and Buyer agree that the Independent Consideration has been bargained for as
consideration for Seller’s execution and delivery of this Agreement and for Buyer’s right to
conduct due diligence regarding the Property, and is independent of any other consideration or
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payment provided for in this Agreement. The Independent Consideration shall be non-
refundable, and shall not be applied to the Purchase Price at the Closing.
2.4 Liquidated Damages. SELLER AND BUYER AGREE THAT, IF THE
PURCHASE AND SALE OF THE PROPERTY IS NOT COMPLETED IN
ACCORDANCE WITH THIS AGREEMENT AS A DIRECT RESULT OF A BUYER
DEFAULT (AS DEFINED IN SECTION 7.3 BELOW), SELLER SHALL BE ENTITLED
TO TERMINATE THIS AGREEMENT AND UPON TERMINATION THE DEPOSIT
SHALL BE PAID TO SELLER AS LIQUIDATED DAMAGES AND AS SELLER’S
SOLE AND EXCLUSIVE REMEDY. SELLER AND BUYER AGREE THAT, UNDER
THE CIRCUMSTANCES EXISTING AS OF THE EFFECTIVE DATE, ACTUAL
DAMAGES MAY BE DIFFICULT TO ASCERTAIN AND THE DEPOSIT IS A
REASONABLE ESTIMATE OF THE DAMAGES THAT WILL BE INCURRED BY
SELLER IF BUYER MATERIALLY DEFAULTS UNDER OR MATERIALLY
BREACHES THIS AGREEMENT AND FAILS TO PURCHASE THE PROPERTY IN
ACCORDANCE WITH THIS AGREEMENT. SUCH RETENTION OF THE DEPOSIT
BY SELLER IS INTENDED TO CONSTITUTE LIQUIDATED DAMAGES TO SELLER
PURSUANT TO SECTIONS 1671, 1676 AND 1677 OF THE CALIFORNIA CIVIL
CODE, AND SHALL NOT BE DEEMED TO CONSTITUTE A FORFEITURE OR
PENALTY WITHIN THE MEANING OF SECTION 3275 OR SECTION 3369 OF THE
CALIFORNIA CIVIL CODE OR ANY SIMILAR PROVISION. BY PLACING ITS
INITIALS BELOW, EACH PARTY SPECIFICALLY CONFIRMS THE ACCURACY
OF THE STATEMENTS MADE ABOVE AND THE FACT THAT EACH PARTY WAS
REPRESENTED BY COUNSEL WHO EXPLAINED, AT THE TIME THIS
AGREEMENT WAS MADE, THE CONSEQUENCES OF THIS LIQUIDATED
DAMAGES PROVISION. NOTWITHSTANDING ANYTHING TO THE CONTRARY
SET FORTH IN THIS AGREEMENT, IN NO EVENT WHATSOEVER WILL EITHER
BUYER OR SELLER BE ENTITLED TO RECOVER FROM THE OTHER ANY
PUNITIVE, CONSEQUENTIAL OR SPECULATIVE DAMAGES PURSUANT TO THIS
AGREEMENT.
SELLER’S INITIALS:_____ BUYER’S INITIALS:_____
2.5 Seller Default. If Seller fails to perform any of its covenants or agreements
contained herein and Seller does not cure such failure within five (5) business days after receipt
of written notice from Buyer of such failure or if Seller breaches any of its representations or
warranties (each a “Seller Default”), Buyer shall have the right to exercise any or all of the
following remedies: (i) waive such failure and proceed to the Closing with no reduction in the
Purchase Price; provided, however, that this provision will not limit Buyer’s right to receive
reimbursement for attorneys’ fees in connection with any legal proceedings instituted by either
party or Title Company with respect to the enforcement of this Agreement, nor waive or affect
Seller’s indemnity obligations under this Agreement or Buyer’s rights to enforce those indemnity
obligations, nor waive or affect any of Seller’s other obligations under this Agreement to be
performed after the Closing or Buyer’s rights to enforce those obligations; (ii) exercise any other
rights or remedies Buyer may have at law or in equity, including without limitation the filing of
an action for specific performance to cause Seller to convey the Property to Buyer pursuant to
the terms and conditions of this Agreement; or (iii) terminate this Agreement by written notice to
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Seller and Title Company to that effect, to recover the full amount of the Deposit and all earnings
thereon, and to recover all damages and seek such other relief at law or in equity to which Buyer
may be entitled as a result of Seller’s breach
2.6 1031 Exchange Cooperation. Buyer agrees to cooperate with Seller to accomplish
a tax deferred exchange, provided however that such exchange shall not delay the Closing or
amend or modify any of the terms or provisions of this Agreement and shall be at no cost or
liability to Buyer. Seller shall not be released or relieved of any liability or obligation as a result
of its assignment to exchange or intermediary party (“Seller’s Intermediary”); provided,
further, that notwithstanding Seller’s assignment to Seller’s Intermediary, all warranties,
representations, and obligations of Seller under this Agreement which are intended to survive the
Closing shall continue in full force and effect as Seller’s warranties, representations, and
obligations and shall survive the Closing. Seller shall pay all additional costs (including, without
limitation, reasonable attorneys’ fees) incurred by Buyer as a result of cooperating with any
exchange. Buyer makes no representation regarding and shall have no liability with respect to the
tax treatment of Seller’s attempted exchange transaction. Buyer shall not have to incur any
liability or expense in connection with Seller’s attempt to structure an exchange transaction, nor
shall Buyer have to take title to another property or enter into any other agreements in connection
therewith, and Seller shall indemnify and hold Buyer harmless from and against any such
liability and expense, which indemnity shall survive Closing or any termination of this
Agreement.
ARTICLE 3
Completion of Sale
3.1 Place and Date. The purchase and sale of the Property shall be completed in
accordance with Article 8 hereof (the “Closing”). The Closing shall occur through an escrow
established with Title Company on the date ten (10) calendar days after the expiration of the
Property Approval Period or such other day mutually agreed to by Buyer and Seller (the
“Closing Date”). Prior to the Closing Date, Seller and Buyer each shall give appropriate written
escrow instructions, consistent with this Agreement, to Title Company for the Closing in
accordance with this Agreement provided that, in the event of any conflict between the
provisions of this Agreement and any such escrow instructions, the terms of this Agreement shall
control.
3.2 Post-Closing Lease. The parties acknowledge that ICO RALLY desires to
continue to occupy the Property following the Closing. Therefore, to effectuate ICO RALLY’s
occupancy and to document the parties’ rights and obligations thereto, the Buyer shall execute
and deliver, and Seller shall cause ICO RALLY to execute and deliver to Buyer, a Industrial
Gross lease agreement to be effective at Closing in the form attached hereto as Exhibit D (the
“Post-Closing Lease”) in accordance with Section 8.1 below.
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ARTICLE 4
Title and Condition
4.1 Title to the Property. Seller shall convey to Buyer fee title to the Real Property,
by a duly executed and acknowledged grant deed (the “Grant Deed”) in the form of Exhibit B
attached hereto (or otherwise reasonably acceptable to Buyer), free and clear of liens,
encumbrances, leases, easements, restrictions, rights, covenants and conditions, except the
following (the “Permitted Exceptions”): (a) the title matters approved by Buyer in accordance
with Section 1.3; (b) taxes and assessments which are not past due as of the Closing Date; and
(c) any other matters created, permitted or approved by Buyer (including without limitation the
Post-Closing Lease).
4.2 “AS IS” Sale. Except for those representations and warranties included in this
Agreement and any document delivered by Seller at Closing: (i) Seller makes no representations
or warranties regarding the Property; (ii) Seller hereby disclaims, and Buyer hereby waives, any
and all representations or warranties of any kind, express or implied, concerning the Property or
any portion thereof, as to its condition, value, compliance with laws, status of permits or
approvals, existence or absence of hazardous material on site, occupancy rate or any other matter
of similar or dissimilar nature relating in any way to the Property, including the warranties of
fitness for a particular purpose, tenantability, habitability and use; (iii) Buyer otherwise takes the
Property “AS IS”; and (iv) Buyer represents and warrants to Seller that Buyer has sufficient
experience and expertise such that it is reasonable for Buyer to rely on its own pre-closing
inspections and investigations.
4.3 No Implied Warranties. Except for Seller’s representations, warranties and
covenants set forth in this Agreement (including without limitation Seller’s representations and
warranties in Sections 5.1 and 9.3) or in the documents delivered by Seller at the Closing
(collectively, “Seller’s Warranties”), Seller hereby specifically disclaims all warranties,
promises, covenants, agreements or guaranties of any kind, whether express or implied, oral or
written, concerning or with respect to the income or expenses produced from the Property; the
suitability of the Property for any activities and use; the compliance or non-compliance of the
Property with any laws, rules, ordinances or regulations of any applicable governmental
authority or body, including, without limitation, all zoning, building, health, fire and
environmental matters; the habitability, merchantability, marketability, profitability, or fitness
for a particular purpose of the Property; the manner quality, state of repair or lack of repair of the
Property; or any other matter with respect to the Property. The provisions of this Section will
survive the termination of this Agreement and will not be deemed to have merged into any of the
documents executed or delivered at Closing.
4.4 Environmental Laws; Hazardous Materials. EXCEPT FOR SELLER’S
WARRANTIES, SELLER EXPRESSLY DISCLAIMS ALL WARRANTIES OR
REPRESENTATIONS MADE CONCERNING THE PRESENCE OF ANY HAZARDOUS
MATERIALS (DEFINED BELOW) ON, ABOVE, OR BENEATH THE PROPERTY (OR
ANY PARCEL IN PROXIMITY THERETO) OR ANY WATER OR MINERALS ON OR
UNDER THE PROPERTY.
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4.5 Release of Seller. IN DETERMINING THE PHYSICAL CONDITION OF THE
PROPERTY, BUYER IS AND WILL RELY SOLELY ON BUYER’S OWN KNOWLEDGE
OF THE PROPERTY OBTAINED DURING BUYER’S INVESTIGATION AND
INSPECTION OF THE PROPERTY. SUBJECT TO SELLER’S WARRANTIES, BUYER
HEREBY EXPRESSLY ASSUMES THE RISK THAT ADVERSE MATTERS MAY NOT BE
REVEALED DURING BUYER’S INVESTIGATION OF THE PROPERTY, INCLUDING
BUT NOT LIMITED TO, CONSTRUCTION DEFECTS AND ADVERSE PHYSICAL AND
ENVIRONMENTAL CONDITIONS. EXCEPT AS EXPRESSLY SET FORTH IN THIS
AGREEMENT TO THE CONTRARY AND EXCEPT FOR THE EXCLUDED MATTERS (AS
DEFINED BELOW), BUYER HEREBY RELEASES AND DISCHARGES SELLER, FROM
AND AGAINST ANY AND ALL CLAIMS THAT BUYER OR ANY PARENT OR
AFFILIATE OF BUYER (EACH, A “BUYER AFFILIATE”) HAS OR MAY HAVE
AGAINST SELLER ARISING FROM OR IN CONNECTION WITH ANY MATTER
ARISING OUT OF OR RELATED TO THE PROPERTY, INCLUDING THE DOCUMENTS
AND INFORMATION REFERRED TO HEREIN; ANY CONSTRUCTION DEFECTS,
ERRORS, OR OMISSIONS IN THE DESIGN OR CONSTRUCTION OF THE
IMPROVEMENTS; AND ANY ENVIRONMENTAL CONDITIONS. EXCEPT AS
EXPRESSLY SET FORTH IN THIS AGREEMENT TO THE CONTRARY AND EXCEPT
FOR THE EXCLUDED MATTERS, NEITHER BUYER NOR ANY BUYER AFFILIATE
MAY LOOK TO SELLER IN CONNECTION WITH THE FOREGOING FOR ANY
REDRESS OR RELIEF. BUYER’S RELEASE AND DISCHARGE OF SELLER
CONTEMPLATED BY THIS SECTION OF THE AGREEMENT WILL BE GIVEN FULL
FORCE AND EFFECT ACCORDING TO EACH OF THE EXPRESS TERMS AND
PROVISIONS HEREIN, INCLUDING THOSE RELATING TO UNKNOWN AND
UNSUSPECTED CLAIMS, DAMAGES, AND CAUSES OF ACTION. TO THE EXTENT
REQUIRED TO BE OPERATIVE, THE DISCLAIMERS AND WARRANTIES CONTAINED
HEREIN ARE “CONSPICUOUS” DISCLAIMERS FOR PURPOSES OF ANY APPLICABLE
LAW, RULE, REGULATION, OR ORDER. THE PROVISIONS OF THIS SECTION WILL
SURVIVE THE TERMINATION OF THIS AGREEMENT AND WILL NOT BE DEEMED
TO HAVE MERGED INTO ANY OF THE DOCUMENTS EXECUTED OR DELIVERED AT
CLOSING. “EXCLUDED MATTERS” SHALL COLLECTIVELY MEAN ANY OF THE
FOLLOWING: (i) A BREACH OF SELLER’S WARRANTIES, (ii) THE GROSS
NEGLIGENCE, FRAUD OR WILLFUL MISCONDUCT OF SELLER OR ANY OF ITS
EMPLOYEES, AGENTS OR REPRESENTATIVES, (iii) THE RELEASE OF HAZARDOUS
MATERIALS ONTO THE PROPERTY BY SELLER OR ANY OF ITS EMPLOYEES,
AGENTS OR REPRESENTATIVES, (iv) CLAIMS MADE BY THIRD PARTIES FOR
PERSONAL INJURY OR PROPERTY DAMAGE THAT RESULTED FROM EVENTS THAT
OCCURRED ON THE PROPERTY PRIOR TO THE CLOSING (EXCLUDING ANY INJURY
OR DAMAGE ARISING FROM OR RELATED TO THE ENTRY ONTO THE PROPERTY
BY BUYER AND ITS AGENTS, EMPLOYEES OR REPRESENTATIVES), OR (v)
SELLER’S BREACH OF THIS AGREEMENT.
4.6 California Waiver Provision.
(a) IN FURTHERANCE OF THE WAIVERS AND RELEASES DESCRIBED IN
THIS AGREEMENT, BUYER HEREBY WAIVES ANY AND ALL BENEFITS AND
RIGHTS WHICH IT HAS NOW OR IN THE FUTURE MAY HAVE, CONFERRED UPON IT
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BY VIRTUE OF THE PROVISIONS OF SECTION 1542 OF THE CALIFORNIA CIVIL
CODE, WHICH PROVIDES AS FOLLOWS (OR BY THE PROVISIONS OF ANY SIMILAR
STATUTE):
“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS THAT THE
CREDITOR OR RELEASING PARTY DOES NOT KNOW OR SUSPECT TO EXIST
IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE AND
THAT, IF KNOWN BY HIM OR HER, WOULD HAVE MATERIALLY AFFECTED
HIS OR HER SETTLEMENT WITH THE DEBTOR OR RELEASED PARTY.”
___________________
Buyer’s Initials
(b) Buyer hereby represents and warrants that it is familiar with, has read, understands,
and has consulted legal counsel of its choosing with respect to California Civil Code Section
1542 and the matters now unknown to it which may have given, or which may hereinafter give,
rise to actions, legal or administrative proceedings, claims, demands, debts, controversies,
damages, costs, losses, liabilities and expenses which are presently unknown, unanticipated and
unsuspected, and Buyer further agrees, represents and warrants that the provisions of this Section
4.6 have been negotiated and agreed upon in light of that realization and that Buyer nevertheless
hereby intends to release, discharge and acquit the Seller and any affiliate of Seller, from any
such unknown causes of action, legal or administrative proceedings, claims, demands, debts,
controversies, damages, costs, losses, liabilities and expenses which are in any way related to this
Section 4.6.
ARTICLE 5
Representations and Warranties
5.1 Seller. As a material inducement for Buyer to enter into this Agreement, Seller
represents and warrants to Buyer that the following representations and warranties of Seller in
this Section 5.1 shall be true as of the Effective Date and shall be true and correct as of the
Closing Date. Seller’s representations and warranties under this Section 5.1 shall survive the
Closing provided that such representations and warranties shall terminate on the date which is
one (1) year after the Closing Date.
(a) Seller is a limited liability company duly organized, validly existing and in good
standing in the State of California. Seller has the full power and authority to enter into this
Agreement and to perform this Agreement. The execution, delivery and performance of this
Agreement by Seller have been duly and validly authorized by all necessary action on the part of
Seller, and all required consents or approvals have been duly obtained. This Agreement is a
legal, valid and binding obligation of Seller, enforceable against Seller in accordance with its
terms, subject to the effect of applicable bankruptcy, insolvency, reorganization, arrangement,
moratorium or other similar laws affecting the rights of creditors generally. The execution,
delivery and performance of the obligations under this Agreement by Seller shall not violate or
conflict with any other material agreement, order, decree, judgment or settlement to which Seller
is a party or by which Seller is otherwise bound.
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(b) Seller has or will deliver or make available to Buyer complete copies of all the
Diligence Documents to the extent in Seller’s possession or under Seller’s control with regard to
the Property. To the best of Seller’s knowledge, without a duty of inquiry or investigation, none
of such Diligence Documents contains any untrue statement of a material fact or omits to state a
fact necessary to make the statement of fact contained therein not misleading in any material
respect.
(c) There is no agreement to which Seller is a party or to Seller’s knowledge binding on
Seller which prevent or impair Seller from performing Seller’s obligations under this Agreement.
Seller has not received written notice from any person (including, without limitation, any
applicable governmental authority) of any pending or threatened action against Seller or the
Property, including condemnation proceedings, which challenges or impairs Seller’s ability to
execute or perform its obligations under this Agreement.
(d) Seller has not received any written notice, addressed specifically to Seller and sent by
any governmental authority or agency having jurisdiction over the Property, that the Property or
its use is in material violation of any law, ordinance or regulation.
(e) The Existing Lease is in full force and effect and there exists no material defaults,
events which, with the giving of notice or passage of time, or both, would constitute a material
default, or default or events with such notice or passage of time, by either party under the
Existing Lease. The Existing Lease shall terminate at Closing in accordance with the Lease
Termination Agreement and Buyer will have no liability whatsoever arising under the Existing
Lease.
(f) Except for the Existing Lease which shall be terminated at Closing and the Post-
Closing Lease to be effective at Closing, there are no leases, licenses and occupancy agreements
affecting the Property.
(g) Except as shown on Schedule 1, there are no service contracts, maintenance
contracts, management contracts, construction contracts, architectural or design contracts or
similar agreements to which Seller is a party and which relate to the Property that will remain in
effect following the Closing or that shall be binding upon Buyer or the Property following the
Closing.
(h) To the knowledge of Seller, there exists no material defaults, events which, with the
giving of notice or passage of time, or both, would constitute a material default, or default or
events with such notice or passage of time, or both, would give rise to a termination right (i) by
Seller under the Service Contracts, or (ii) by the respective other parties to any of the Service
Contracts.
(i) There is no litigation, arbitration, or other legal or administrative suit, action,
proceeding, or investigation pending or threatened against or involving Seller or the ownership
or operation of the Property.
(j) No attachments, execution proceedings, assignments for the benefit of creditors,
insolvency, bankruptcy, reorganization, or other proceedings are pending or threatened against
Seller, nor are any such proceedings contemplated by Seller.
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(k) Seller has delivered or made available to Buyer all material facts, information and
documents relating to the Property that are in Seller’s possession or control. Seller is not aware
of any other material facts, information or documents that have not been delivered or made
available to Buyer.
(l) All permits required for the Property have been duly and validly issued, are in full
force and effect, have been fully paid for (other than normal recurring annual permit or license
fees set forth in the operating statements of the Property provided to Buyer), and Seller has
received no notice of violation of any permit.
(m) To the knowledge of Seller there are no condemnation, environmental or zoning
proceedings instituted or planned to be instituted that would affect the Property and Seller has
not received notice of any special assessment proceedings affecting the Property.
(n) At the time of Closing there will be no outstanding written or oral contracts made by
Seller for any improvements to the Property which have not been fully paid for and Seller shall
cause to be discharged all liens arising from any labor or materials furnished to the Property prior
to the time of Closing.
(o) Except for the Approved Service Contracts (and the Post-Closing Lease), there are no
obligations in connection with the Property which could be binding upon Buyer or affect the
Property after Closing and there are no assessments or bonds assessed or, to the knowledge of
Seller, proposed to be assessed, against the Property. To the knowledge of Seller, there are no
existing or proposed easements, covenants, conditions, restrictions, agreements or other
documents which affect title to the Property and which are not disclosed by the Title Policy.
Seller has not granted any option or right of first refusal or first opportunity to any party to
acquire any interest in any of the Property.
(p) Neither Seller nor, to the knowledge of Seller, any prior owner or occupant of the
Property has engaged in or permitted any activity on the Property involving the handling,
manufacture, treatment, storage, use, release, or disposal of any Hazardous Materials. Seller has
not received written notice, and otherwise Seller has no knowledge, that removal or other
remedial action with respect to Hazardous Materials in, on, under or about the Property is
required by any governmental authority having jurisdiction over the Property. For purposes of
this Agreement, the term “Hazardous Materials” shall mean any toxic or hazardous waste,
material or substance, including, without limitation, asbestos, asbestos containing materials,
petroleum, petroleum products, underground storage tanks now or previously containing any
other Hazardous Materials, substances defined as “hazardous substances”, “hazardous waste” or
“toxic substances” in the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended, 42 U.S.C. Sec. 9601, et seq.; Hazardous Materials Transportation Act,
49 U.S.C. Sec. 5101 et seq.; and Resource Conservation and Recovery Act, 42 U.S.C. Sec. 6901
et seq.; and other substances defined as hazardous waste and/or hazardous substances in
applicable state or local laws and/or in any regulations and publications promulgated pursuant to
said laws and shall also include mold (which has been or is proven to be harmful to human
beings), fungus (which has been or is proven to be harmful to human beings) and toxic and
mycotoxin spores.
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(q) Seller is not a “foreign person” as defined in section 1445 of the Internal Revenue
Code of 1986, as amended, and the Income Tax Regulations thereunder.
(r) Neither Seller nor any holder of a direct or indirect interest in Seller, or any person,
group, entity or nation that Seller is acting, directly or indirectly for, or on behalf of, is named by
any Executive Order (including the September 24, 2001, Executive Order Blocking Property and
Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support
Terrorism) or the United States Treasury Department as a terrorist, “Specially Designated
National and Blocked Person,” or is otherwise a banned or blocked person, group, entity, or
nation pursuant to any law that is enforced or administered by the Office of Foreign Assets
Control (“OFAC”), and Seller is not engaging in the transaction contemplated under this
Agreement, directly or indirectly, on behalf of, or instigating or facilitating such transaction,
directly or indirectly, on behalf of, any such person, group, entity or nation. Seller is not
engaging in the transaction contemplated under this Agreement, directly or indirectly, in
violation of any laws relating to drug trafficking, money laundering or predicate crimes to money
laundering.
5.2 Buyer. As a material inducement for Seller to enter into this Agreement, Buyer
represents and warrants to Seller that the following representations and warranties of Buyer in
this Section 5.2 shall be true as of the Effective Date and shall be true and correct as of the
Closing Date. Buyer’s representations and warranties under this Section 5.2 shall survive the
Closing provided that such representations and warranties shall terminate on the date which is
one (1) year after the Closing Date.
(a) Buyer has full power and authority to enter into this Agreement and to perform this
Agreement. The execution, delivery and performance of this Agreement by Buyer have been
duly and validly authorized by all necessary action on the part of Buyer and all required consents
or approvals have been duly obtained or will be obtained. This Agreement is a legal, valid and
binding obligation of Buyer, enforceable against Buyer in accordance with its terms, subject to
the effect of applicable bankruptcy, insolvency, reorganization, arrangement, moratorium or
other similar laws affecting the rights of creditors generally. The execution, delivery and
performance of the obligations under this Agreement by Buyer shall not violate or conflict with
any other material agreement, order, decree, judgment or settlement to which Buyer is a party or
by which Buyer is otherwise bound. There are no actions, lawsuits, litigation, or proceedings
pending or threatened in any court or before any governmental or regulatory agency that affect
Buyer’s power or authority to enter into or perform this Agreement
(b) The execution, delivery and performance of the obligations under this Agreement by
Buyer shall not violate or conflict with any other material agreement, order, decree, judgment or
settlement to which Buyer is a party or by which Buyer is otherwise bound.
(c) Neither Buyer nor any holder of a direct or indirect interest in Buyer, or any person,
group, entity or nation that Buyer is acting, directly or indirectly for, or on behalf of, is named by
any Executive Order (including the September 24, 2001, Executive Order Blocking Property and
Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support
Terrorism) or the United States Treasury Department as a terrorist, “Specially Designated
National and Blocked Person,” or is otherwise a banned or blocked person, group, entity, or
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nation pursuant to any law that is enforced or administered by OFAC, and Buyer is not engaging
in the transaction contemplated under this Agreement, directly or indirectly, on behalf of, or
instigating or facilitating such transaction, directly or indirectly, on behalf of, any such person,
group, entity or nation. Buyer is not engaging in the transaction contemplated under this
Agreement, directly or indirectly, in violation of any laws relating to drug trafficking, money
laundering or predicate crimes to money laundering.
ARTICLE 6
Covenants
6.1 Seller Covenants. Seller covenants and agrees with Buyer as follows:
(a) After the execution of this Agreement, Seller (i) shall not execute any contract, lease
or agreement affecting the Property without the prior approval of Buyer, which approval may be
withheld by Buyer in its sole discretion, provided that Seller will not be obligated to obtain
Buyer’s written approval if Seller is contractually or legally obligated to take such action, but
Seller shall promptly provide Buyer with notice of such action; and (ii) shall maintain the
Property in the ordinary course of business; comply with all laws, statutes, rules, regulations and
ordinances that are applicable to the Property and the use, occupation, ownership, and
conveyance thereof; pay, before delinquency, all indebtedness secured by any portion of the
Property, taxes assessments, charges and other expenses affecting the Property.
(b) During the period between the Effective Date and the Closing Date, Seller (i) shall
promptly deliver to Buyer a copy of any tax bill, notice of assessment, or notice of change in a
tax rate affecting the Property; any notice or claim of violation from any governmental authority;
any notice of any taking affecting or relating to the Property; any notice by any party to a
reciprocal easement, lease or operating agreement relating to the Property; or any other similar
notice affecting or relating to the Property; and (ii) shall not apply for or consent to any change
or modification with respect to zoning, development or use of the Property without Buyer’s prior
written consent, nor cause any liens or other encumbrances to be placed on the Property.
(c) Between the Effective Date and the Closing Date, Seller shall (i) continue to keep or
cause to be kept in force property insurance covering all buildings, structures, improvements,
machinery, fixtures and equipment included in the Real Property insuring against risks of
physical loss or damage, subject to standard exclusions, with such policy limits as Seller has
maintained prior to the entry into this Agreement and (ii) maintain the Property in compliance
with all applicable laws, rules and regulations and in good order, condition and repair, and in at
least substantially the same manner as at present, reasonable wear and tear excepted, and shall
not materially alter the condition of the Property or make any material changes or alterations to
the Improvements without Buyer’s prior written consent, which consent may be withheld by
Buyer in its sole discretion.
(d) Seller shall promptly notify Buyer of any change in any condition with respect to the
Property or of any event or circumstance which makes any representation or warranty of Seller
to Buyer under this Agreement materially untrue or misleading, and of any covenant of Seller
under this Agreement which Seller will be incapable of performing or less likely to perform.
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6.2 Eminent Domain. If, before the Closing Date, proceedings are commenced for
the taking by exercise of the power of eminent domain of any part of the Property which, as
reasonably determined by Buyer, would render the Property unsuitable for Buyer’s intended use,
Buyer shall have the right, by giving notice to Seller within thirty (30) days after Seller gives
notice of the commencement of such proceedings to Buyer, to terminate this Agreement, in
which event this Agreement shall terminate and the Deposit shall be returned to Buyer. If,
before the Closing Date, proceedings are commenced for the taking by exercise of the power of
eminent domain of less than such a material part of the Property, or if Buyer has the right to
terminate this Agreement pursuant to the preceding sentence but Buyer does not exercise such
right, then this Agreement shall remain in full force and effect and, on the Closing Date, the
condemnation award (or, if not theretofore received, the right to receive such award) payable to
Seller on account of the taking shall be transferred to Buyer. Seller shall give notice to Buyer
reasonably promptly after Seller’s receiving notice of the commencement of any proceedings for
the taking by exercise of the power of eminent domain of all or any part of the Property. If
necessary, at Buyer’s election, the Closing Date shall be postponed until Seller has given any
notice to Buyer required by this Section 6.2 and the period of thirty (30) days described in this
Section 6.2 has expired.
6.3 Casualty Damage. If, before the Closing Date, the improvements on the Property
are damaged by any casualty and the cost to restore such improvements, as reasonably agreed by
Seller and Buyer, is more than One Hundred Thousand Dollars ($100,000), Buyer shall have the
right, by giving notice to Seller within thirty (30) days after Seller gives notice of the occurrence
of such casualty to Buyer, to terminate this Agreement, in which event this Agreement shall
terminate and the Deposit shall be returned to Buyer. If, before the Closing Date, the
improvements on the Property are damaged by any casualty and Buyer elects to proceed with the
acquisition of the Property, then this Agreement shall remain in full force and effect and, on the
Closing Date, any insurance proceeds (or, if not theretofore received, the right to receive such
proceeds) payable to Seller on account of the damage shall be transferred to Buyer and the
amount of any deductible under Seller’s insurance policy (or, if less, the restoration cost as
reasonably determined by Seller and Buyer) shall be a credit to Buyer against the total purchase
price for the Property. Seller shall give notice to Buyer promptly after the occurrence of any
damage to the improvements on the Property by any casualty.
6.4 City Council Approval at June 17, 2025 Meeting. The parties acknowledge and
agree that the parties’ obligations are contingent upon the approval of this Agreement by the City
Council at its council meeting scheduled for June 17, 2025. To facilitate the City Council’s
approval of this Agreement, Seller shall execute and deliver to Buyer a copy of this Agreement
provided that such delivery will not create a binding contractual obligation of Seller until the
City Council approves the Agreement and the authorized representative of Buyer executes and
delivers to Seller a copy of this Agreement. If this Agreement is not approved by the City
Council in accordance with the foregoing, this Agreement shall be deemed void and the parties
shall have no further rights or obligations hereunder. If this Agreement is approved by the City
Council in accordance with the foregoing, Buyer shall promptly deliver a counter-signed copy of
this Agreement to Seller.
6.5 Confidentiality.
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(a) Except as may be required under applicable law, court order, or regulation, or to the
extent required to perform and enforce this Agreement, both parties shall (and shall cause their
employees and contractors to) keep all Information (defined below) confidential and shall not
disclose it to any third party, from the Effective Date until the Closing Date.
(b) As used in this Agreement, the term “Information” shall mean all information and
documents relating to the Property. Information excludes information that: (i) was publicly
known at the time it was provided; or (ii) was rightfully in a party’s possession free of any
obligation of confidence prior to receipt of Information; (iii) is rightfully obtained by a party
from a third party without breach of any confidentiality obligation outlined this Agreement; (iv)
is independently developed by employees of Seller or the Buyer; or (v) either party has written
consent to disclose.
(c) Notwithstanding anything else to the contrary contained in this Agreement, Seller
hereby acknowledges and expressly agrees, that Buyer is subject to the California Public Records
Act (Cal. Gov. Code Section 7920.000 et seq., as amended from time to time) and the Brown Act
(Cal. Gov. Code Section 54950 et seq., as amended from time to time) and is required, upon
request, to disclose information, unless such information is protected from disclosure.
ARTICLE 7
Conditions Precedent; Default
7.1 Seller. The obligations of Seller under this Agreement are subject to satisfaction
of all of the conditions set forth in this Section 7.1. Seller may waive any or all of such
conditions in whole or in part but any such waiver shall be effective only if made in writing.
After the Closing, any such condition that has not been satisfied shall be treated as having been
waived in writing. No such waiver shall constitute a waiver by Seller of any of its rights or
remedies if Buyer defaults in the performance of any covenant or agreement to be performed by
Buyer under this Agreement or if Buyer breaches any representation or warranty made by Buyer
in Section 5.2. If any condition set forth in this Section 7.1 is not fully satisfied or waived in
writing by Seller, this Agreement shall terminate, but without releasing Buyer from liability if
Buyer defaults in the performance of any such covenant or agreement to be performed by Buyer
or if Buyer breaches any such representation or warranty made by Buyer before such
termination.
(a) On the Closing Date, Buyer shall not be materially in default in the performance of
any material covenant to be performed by Buyer under this Agreement.
(b) On the Closing Date, all representations and warranties made by Buyer in Section 5.2
shall be true and correct in all material respects as if made on and as of the Closing Date.
(c) On or before the Closing Date, Buyer and Seller shall have executed the Post-Closing
Lease in accordance with Section 3.2.
7.2 Buyer. The obligations of Buyer under this Agreement are subject to satisfaction
of all of the conditions set forth in this Section 7.2. Buyer may waive any or all of such
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conditions in whole or in part but any such waiver shall be effective only if made in writing.
After the Closing, any such condition that has not been satisfied shall be treated as having been
waived in writing. No such waiver shall constitute a waiver by Buyer of any of its rights or
remedies in the event of a Seller Default. If any condition set forth in this Section 7.2 is not fully
satisfied or waived in writing by Buyer, this Agreement shall terminate and the Deposit shall be
returned to Buyer, but without releasing Seller from liability due to a Seller Default.
(a) On the Closing Date, Seller shall not be materially in default in the performance of
any material covenant to be performed by Seller.
(b) On the Closing Date, all representations and warranties made by Seller in Section 5.1
shall be true and correct in all material respects as if made on and as of the Closing Date.
(c) On or before the Closing Date, Buyer and Seller shall have executed the Post-Closing
Lease in accordance with Section 3.2.
(d) On the Closing Date, Title Company shall be irrevocably and unconditionally (save
for payment of the applicable premium) committed to issue to Buyer an Extended Owner’s Title
Policy (with such endorsements required by Buyer) (the “Title Policy”), with liability equal to
the total purchase price for the Property, insuring Buyer that fee title to the Real Property is
vested in Buyer subject only to the Permitted Exceptions.
7.3 Buyer’s Default. Buyer will be deemed to be in default of this Agreement (a
“Buyer Default”) if: (i) Buyer fails to timely observe or perform any covenant or satisfy any
condition applicable to Buyer under this Agreement and Buyer fails to perform or observe such
covenant or satisfy such condition (as applicable) within ten (10) days from the date that Seller
delivers to Buyer written notice thereof specifying such failure; (ii) Buyer breaches any warranty
made by Buyer under this Agreement; or (iii) if any representation made by Buyer under this
Agreement is false, in any material respect. Upon a Buyer Default, Seller may terminate this
Agreement by providing written notice to Buyer and Title Company and receive the Deposit as
liquidated damages (not as a penalty), without additional instructions to Title Company.
Notwithstanding the provision of Section 2.4, if Buyer creates a cloud on Seller’s title to the
Property (except for a lis pendens filed in connection with a complaint by Buyer for specific
performance as authorized under this Agreement), fails to timely repair any damage to the
Property caused by Buyer or Buyer’s agents, or is obligated to pay any sums related to any claim
for indemnification or attorneys’ fees and court costs hereunder, then in addition to retaining the
Deposit, Seller may pursue all remedies available to Seller under this Agreement, at law, or in
equity to all sums expended and all damages incurred by Seller on account thereof. The terms
and conditions of this Section will survive Closing or the earlier termination of this Agreement
and will not be deemed to have merged into any of the documents executed or delivered at
Closing.
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ARTICLE 8
Closing
8.1 Closing Deliveries. The parties shall deliver the following to Title Company no
later than one (1) business day prior to the Closing Date.
(a) Seller shall deliver to Title Company the following:
(i) The Grant Deed duly executed by Seller with the appropriate
acknowledgment form and otherwise in proper form for recording conveying to Buyer
the Real Property as required by this Agreement.
(ii) A certification that Seller is not a “foreign person” as such term is defined
in Section 1445 of the Internal Revenue Code, as amended, and the regulations
thereunder, and a California Franchise Tax Board (FTB) Form 593, as applicable, each
duly executed by Seller.
(iii) Two (2) original counterpart copies of the assignment and assumption of
contracts, warranties, permits, and licenses (the “General Assignment”) in substantially
the form of Exhibit C attached hereto, duly executed by Seller, assigning to Buyer all of
Seller’s right, title, and interest in the Permits, the Approved Service Contracts, the Plans
and Surveys, and the Assumed Warranties and Guaranties.
(iv) Two (2) original counterpart copies of the Post-Closing Lease, each duly
executed by ICO RALLY.
(v) An owner’s affidavit in a form reasonably acceptable to Buyer and to Title
Company, duly executed by Seller.
(vi) An original or electronically signed copy of the Closing Statement
prepared by Title Company under Section 8.6 for Seller, executed by Seller.
(vii) All other documents necessary or otherwise required by Title Company to
consummate the transaction contemplated by this Agreement.
(b) Buyer shall deliver to Title Company the following:
(i) The balance of the Purchase Price, as adjusted for prorations pursuant to
Section 8.5 of this Agreement.
(ii) Two (2) original counterpart copies of the General Assignment, each duly
executed by Buyer.
(iii) Two (2) original counterpart copies of the Post-Closing Lease, each duly
executed by Buyer.
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(iv) A California Preliminary Change of Ownership Report, duly executed by
Buyer.
(v) An original or electronically signed copy of the Closing Statement
prepared by Title Company under Section 8.6 for Buyer, executed by Buyer.
(vi) All other documents necessary or otherwise required by Title Company to
consummate the transaction contemplated by this Agreement.
8.2 Procedure. Upon satisfaction or waiver of the conditions in Article 7 above and
the parties delivery of the items set forth in Section 8.1, the parties shall direct Title Company, as
escrow holder, to effectuate the following at the Closing:
(a) The Grant Deed for the Real Property, duly executed and acknowledged by Seller,
shall be recorded in the Official Records of the County of Santa Clara, State of California.
(b) Title Company shall disburse all funds in accordance with the Closing Statements
executed by Seller and Buyer.
(c) Title Company shall deliver to Buyer (i) a conformed copy of the Grant Deed
showing the applicable recording information thereon and (ii) the Title Policy.
(d) Title Company shall deliver to each party (i) a copy of their respective final Closing
Statement and (ii) originals (or copies where originals are not available) of each of the other non-
recorded documents submitted into escrow by Buyer and Seller.
8.3 Possession. Seller shall transfer possession of the Property to Buyer on the
Closing Date, subject to ICO RALLY’s interest as tenant pursuant to the Post-Closing Lease.
8.4 Closing Costs. Seller shall pay any county transfer taxes and the parties shall
split equally any transfer taxes imposed by the City of Palo Alto. Seller shall pay that portion of
the Title Policy premium for standard ALTA owner’s title insurance policy coverage and Buyer
shall pay the additional Title Policy premium for ALTA extended coverage and any title
endorsements requested by Buyer. Seller shall pay any escrow fees. Notwithstanding the
foregoing, the parties shall share equally any escrow cancellation fee or other fees due upon a
termination of this Agreement, provided that, if this Agreement is terminated due to the default
of either party, the defaulting party shall bear all such cancellation fees or other fees due upon
the Agreement’s termination. Any other closing costs shall be allocated in accordance with
custom in Santa Clara County. Seller and Buyer shall pay the fees of their respective attorneys,
accountants and other professionals.
8.5 Prorations. The items in subparagraphs (a) and (b) of this Section 8.5 shall be
prorated between Seller and Buyer based on the actual number of days in the applicable period,
as of the end of day immediately preceding the Closing Date, with Seller being entitled to
income and obligated for expenses attributable to the period prior to the Closing Date, and Buyer
being entitled to the income and obligated for expenses attributable to the Closing Date and
thereafter.
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(a) Real Estate Taxes and Assessments. Seller or Buyer, as the case may be, shall be
allocated real estate taxes and assessment installment payments (including, any assessments
imposed by private covenant) (“Taxes”) applicable to Buyer’s period of ownership or applicable
to Seller’s period of ownership, respectively, even if such taxes and assessment installment
payments are not yet due and payable, with Seller being obligated for real estate taxes and
assessments pertaining to the period prior to the Closing Date, and Buyer being obligated for real
estate taxes and assessments attributable to the Closing Date and thereafter. Notwithstanding the
foregoing in this Section, if, on the Closing Date, Seller has paid the Taxes for the current tax
year in which the Closing occurs, Seller will receive a credit at Closing equal to the prorated
amount of Taxes paid by Seller, which is based on the number of days in the year that Seller
owned the Property. If the amount of any installment of Taxes is not known as of the Closing
Date, then a proration shall be made by the parties based on a reasonable estimate of the Taxes
applicable to the Property and the parties shall adjust the proration when the actual amount
becomes known upon the written request of either party made to the other in accordance with
Section 8.5(d).
(b) Utilities. Unreimbursed charges for assessments for sewer and water and other
utilities, including charges for consumption of electricity, steam and gas and any other receipts or
charges, as applicable, shall be apportioned by Buyer and Seller at the Closing based on the last
ascertainable bill issued to Seller, subject to adjustment within four (4) weeks after the Closing
when next bills are available. Seller shall use reasonable efforts to have all meters read as close
to, but before, the Closing as is feasible, and shall be responsible for amounts shown due by
reason of such readings. The parties acknowledge and agree that ICO RALLY shall be
responsible for the payment of utilities after Closing in accordance with the terms of the Post-
Closing Lease.
(c) Base Rent and Security Deposit Under the Post-Closing Lease. At Closing ICO
RALLY shall remit payment to Buyer in the amount of Twenty-Five Thousand Two Hundred &
66/100 Dollars ($25,200.66) constituting the first month’s base rent and the security deposit to be
paid by ICO RALLY, as tenant, pursuant to the Post-Closing Lease.
(d) Post-Closing Reconciliation. The provisions of this Section 8.5 will survive the
consummation of the transaction contemplated by this Agreement. If, within twelve (12) months
following the Closing Date, either party discovers that the estimated prorations at the Closing
Date were not accurate for any reason, it shall notify the other party of such inaccuracy and the
parties shall promptly make any adjustment required. Neither party shall be obligated to adjust
any prorations after such twelve (12) month period. If either Party is entitled to a readjustment or
re-proration, the party responsible for paying such correction must do so by wire transfer of
immediately available funds.
8.6 Closing Statements. At least two (2) business days prior to the Closing Date, the
parties shall agree upon all of the prorations to be made and submit that information to Title
Company. At least one (1) business day prior to the Closing Date, Title Company shall prepare
and deliver for Seller’s and Buyer’s review and approval a final closing statement for each party
reflecting the prorations and adjustments agreed to by Seller and Buyer, together with all
remaining charges, credits, and adjustments and the balance of the Purchase Price due Seller
(each, a “Closing Statement”). In the event that any prorations, apportionments, or
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computations made under this Article 8 require final adjustment, then the parties shall make the
appropriate adjustments promptly when accurate information becomes available and either party
hereto shall be entitled to an adjustment to correct the same. Any corrected adjustment or
proration shall be paid in cash to the party entitled thereto. The provisions of this Section shall
survive the Closing.
8.7 Post-Closing Deliveries. Immediately after the Closing, Seller shall deliver to
Buyer:
(a) A notice to each vendor under the Assumed Contracts (if required by the terms of
such Assumed Contracts) in a form and substance acceptable to Buyer advising the recipient of
the sale of the Property to Buyer.
(b) All keys, key cards, and codes relating to the operation of the Property, provided that
ICO RALLY may retain two (2) sets of keys and key cards (if any) in accordance with the Post-
Closing Lease.
(c) Originals or, if originals are not in the possession or control of Seller, copies of Plans
and Surveys, to the extent the same are in Seller’s possession or under Seller’s control.
ARTICLE 9
General
9.1 Notices. All notices and other communications under this Agreement shall be
properly given only if made in writing and (i) mailed by certified mail, return receipt requested,
postage prepaid, or (ii) delivered by hand (including messenger or recognized delivery, courier
or air express service), or (iii) by electronic mail. Such notices and other communications shall
be effective on the date of receipt (evidenced by the certified mail receipt) if mailed, on the date
of such hand delivery if hand delivered, or on the date of electronic mail confirmation if sent on
a business day, provided that if such email transmission is completed after 5 p.m. California local
time or on a non-business day then such notice shall be effective as of 9 a.m. California local
time on the next business day. If any such notice or other communication is not received or
cannot be delivered due to a change in the address of the receiving party of which notice was not
previously given to the sending party or due to a refusal to accept by the receiving party, such
notice or other communication shall be effective on the date delivery is attempted. Any notice or
other communication under this Agreement may be given on behalf of a party by the attorney for
such party.
(a) The address of Seller:
C H LLC
14250 Baleri Ranch Rd.
Los Altos Hills, CA 94022
Attn: Edwina Cioffi
Email: ecioffi@icorally.com
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(b) The address of Buyer is:
City of Palo Alto
250 Hamilton Avenue
Palo Alto, CA 94301
Attn: Manager, Real Property
E-Mail: sunny.tong@paloalto.gov
(c) The address of Title Company is:
Chicago Title Company
675 N. First Street, Suite 300
San Jose, CA 95112
Attn: Sherri Keller
Tel: 408-292-4212
Email: sherri.keller@ctt.com
9.2 Attorneys’ Fees. If there is any legal action or proceeding between Seller and
Buyer arising from or based on this Agreement, the unsuccessful party to such action or
proceeding shall pay to the prevailing party all costs and expenses, including reasonable
attorneys’ fees and expenses, incurred by such prevailing party in such action or proceeding and
in any appeal in connection therewith. If such prevailing party recovers a judgment in any such
action, proceeding or appeal, such costs, expenses and attorneys’ fees and expenses shall be
included in and as a part of such judgment.
9.3 Brokers. Except for Renault & Handley (the “Listing Broker”) who shall be paid
a commission by Seller pursuant to a separate agreement between Seller and Listing Broker,
each of the parties represents and warrants that it has not employed, retained or otherwise
utilized any broker or finder in connection with any of the transactions contemplated by this
Agreement and no other broker or person is entitled to any commission or finder’s fees in
connection with any of these transactions. Listing Broker is an independent contractor and is not
authorized to make any agreement or representation on behalf of either party. Except as
expressly set forth above, the parties each agree to indemnify and hold harmless one another
against any loss, liability, damage, cost, claim or expense incurred by reason of any brokerage
commission or finder’s fee alleged to be payable because of any act, omission or statement of the
indemnifying party. The provisions of this Section 9.3 shall survive the Closing and the delivery
and recordation of the Grant Deed, or the earlier termination of this Agreement.
9.4 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of California without regard to principles of conflicts of
laws.
9.5 Construction. Seller and Buyer acknowledge that each party and its counsel have
reviewed and revised this Agreement and that the rule of construction to the effect that
ambiguities are to be resolved against the drafting party shall not be employed in the
interpretation of this Agreement or any document executed and delivered by either party in
connection with the transactions contemplated by this Agreement. The captions or section titles
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in this Agreement are for convenience of reference only and shall not be used to interpret this
Agreement. Unless the context otherwise requires, all periods terminating on a given day, period
of days, or date shall terminate at 5:00 p.m. (local California time) on such date or dates and
references to “days” shall refer to calendar days except if such references are to “business days”
which shall refer to days which are not a Saturday, Sunday or legal holiday. Notwithstanding the
foregoing, if any period terminates on a Saturday, Sunday or legal holiday, the termination of
such period shall be on the next succeeding business day. The time in which any act provided
under this Agreement is to be done shall be computed by excluding the first day and including
the last day, unless the last day is a Saturday, Sunday or legal holiday under the laws of
California, and then it is also so excluded.
9.6 Terms Generally. The defined terms in this Agreement shall apply equally to
both the singular and the plural forms of the terms defined. Whenever the context may require,
any pronoun shall include the corresponding masculine, feminine and neuter forms. The term
“person” includes individuals, corporations, partnerships, limited liability companies, trusts,
other legal entities, organizations and associations, and any government or governmental agency
or authority. The words “include,” “includes” and “including” shall be deemed to be followed
by the phrase “without limitation.” The words “approval,” “consent” and “notice” shall be
deemed to be preceded by the word “written.”
9.7 Further Assurances. From and after the Effective Date, Seller and Buyer agree to
do such things, perform such acts, and make, execute, acknowledge and deliver such documents
as may be reasonably necessary or proper and usual to complete the transactions contemplated
by this Agreement and to carry out the purpose of this Agreement in accordance with this
Agreement.
9.8 Partial Invalidity. If any provision of this Agreement is determined by a proper
court to be invalid, illegal or unenforceable, such invalidity, illegality or unenforceability shall
not affect the other provisions of this Agreement and this Agreement shall remain in full force
and effect without such invalid, illegal or unenforceable provision.
9.9 Waivers. No waiver of any provision of this Agreement or any breach of this
Agreement shall be effective unless such waiver is in writing and signed by the waiving party
and any such waiver shall not be deemed a waiver of any other provision of this Agreement or
any other or subsequent breach of this Agreement.
9.10 Miscellaneous. The Exhibits and Schedules attached to this Agreement are by
this reference incorporated herein and made a part of this Agreement. Buyer shall have the right
to assign this Agreement without the prior consent of Seller. Time is of the essence of this
Agreement. This Agreement may be executed in counterparts, each of which shall be an
original, but all of which shall constitute one and the same Agreement. This Agreement may not
be amended or modified except by a written agreement signed by Seller and Buyer. This
Agreement constitutes the entire and integrated agreement between Seller and Buyer relating to
the purchase and sale of the Property and supersedes all prior agreements, understandings, offers
and negotiations, oral or written, with respect to the sale of the Property.
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9.11 Electronic Signatures. Each party (i) has agreed to permit the use, from time to
time, of telecopied or electronic signatures in order to expedite the transaction contemplated by
this Agreement, (ii) intends to be bound by its telecopied or electronic signature, (iii) is aware
that the other will rely on the telecopied or electronic signature, and (iv) acknowledges such
reliance and waives any defenses (other than fraud) to the enforcement of any document based
on the fact that a signature was sent by telecopy. As used herein, the term “telecopied
signature” shall include any signature sent via facsimile or via email in portable document
format (“.pdf”).
[SIGNATURE PAGE TO FOLLOW]
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IN WITNESS WHEREOF, Seller and Buyer have executed this Agreement as of the
Effective Date.
BUYER:
CITY OF PALO ALTO
By
Name
Title
Date
Approved as to form:
Jennifer Fine
Deputy City Attorney
SELLER:
C H LLC
By
Name
Title
Date
Title Company acknowledges receipt of a copy of this Agreement and hereby executes below to
evidence its agreement to act as escrow holder in accordance with the terms and conditions of
this Agreement.
Date ______________ CHICAGO TITLE COMPANY
By
Its
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EDWINA CIOFFI
6/12/2025
Managing Member
Ed Shikada
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EXHIBIT A
LEGAL DESCRIPTION OF REAL PROPERTY
(to be attached)
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EXHIBIT B
GRANT DEED
Recorded at Request of and
When Recorded Mail to:
Mail Tax Statements to:
SPACE ABOVE THIS LINE FOR RECORDER’S USE
THE UNDERSIGNED GRANTOR(S) DECLARE(S)
DOCUMENTARY TRANSFER TAX is $__________________________
computed on full value of property conveyed, or
computed on full value less value of liens or encumbrances remaining at time of sale.
unincorporated area
City of Palo Alto
GRANT DEED
For valuable consideration, receipt of which is acknowledged,
[______________________, a __________] (“Grantor”) hereby grants to
[_________________, a _________], the real property located in the City of Palo Alto, County
of Santa Clara, State of California, described in Exhibit A attached hereto and made a part
hereof, together with the tenements, easements, rights of way and appurtenances belonging or in
any way appertaining to the same, and the improvements thereon, subject to all matters of record.
Dated: ____________, 2025
[______________________________], a
__________________
By: ____________________________
Name: _________________________
Title: __________________________
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EXHIBIT C
GENERAL ASSIGNMENT
This General Assignment (this “Assignment”), dated as of _______, 2025 (“Effective
Date”), is by and between C H LLC, a California limited liability company (“Assignor”), and
CITY OF PALO ALTO, a California chartered municipal corporation (“Assignee”).
RECITALS
A. Assignor, as seller, and Assignee, as buyer, have entered into that certain
Purchase and Sale Agreement dated as of June 18, 2025 (the “Purchase Agreement”), for the
purchase and sale of that certain property having an address of 2575 East Bayshore Road, Palo
Alto, California and as more particularly described in the Purchase Agreement (the “Property”).
B. In connection with the purchase and sale of the Property, the Purchase Agreement
obligates Assignor to assign to Assignee, and Assignee to assume from Assignor, the contracts,
warranties, guaranties, permits and licenses each as further defined herein, subject to the terms
and conditions set forth in this Assignment.
NOW, THEREFORE, in consideration of the mutual covenants, terms and conditions set
forth herein, and for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties agree as follows:
1. Assignment. As of the Effective Date Assignor hereby assigns, transfers, and sets
onto Assignee, all of its right, title and interest, in, under and to all benefits and privileges
accruing to Assignor thereunder to each of the following (collectively, the “Assumed
Agreements”):
(a) All Permits (as defined in the Purchase Agreement);
(b) All Approved Service Contracts (as defined in the Purchase Agreement)
and further identified on Attachment 1 attached hereto and made a part hereof;
(c) All Plans and Surveys (as defined in the Purchase Agreement);
(d) All Assumed Warranties and Guaranties (as defined in the Purchase
Agreement) and as further identified on Attachment 2 attached hereto and made a part hereof.
2. Assumption. Assignee hereby assumes and agrees to perform any and all of the
obligations and liabilities of Assignor under each of the Assumed Agreements accruing from and
after the Effective Date.
3. Indemnification.
(a) Assignor hereby agrees to indemnify and to hold Assignee harmless from
and against any and all loss, cost, liability, damage or expense, including without limitation,
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reasonable attorneys’ fees, arising from Assignor’s breach or default of its obligations or duties
under any Assumed Agreement before the Effective Date.
(b) Assignee hereby agrees to indemnify and to hold Assignor harmless from
and against any and all loss, cost, liability, damage or expense, including, without limitation,
reasonable attorneys’ fees, arising from Assignee’s breach or default of its obligations or duties
under any Assumed Agreement on or after the Effective Date.
4. Miscellaneous.
(a) This Assignment shall be governed by and construed in accordance with
the laws of the State of California, without regard to conflict of law rules.
(b) No modification, waiver, amendment, discharge or change of this
Assignment shall be valid unless the same is in writing and signed by the party against which the
enforcement of such modification, waiver, amendment, discharge or change is or may be sought.
(c) Assignor shall promptly execute and deliver to Assignee any additional
instrument or other document which Assignee reasonably requests to evidence or better effect
the assignment contained herein.
(d) This Assignment and the obligations of the parties hereunder shall be
binding upon and inure to the benefit of the parties hereto and their respective legal
representatives, successors and assigns.
(e) This Assignment may be executed in any number of counterparts, each of
which when so executed and delivered shall be deemed an original for all purposes, and all such
counterparts shall together constitute but one and the same instrument.
[Signatures on the next page]
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IN WITNESS WHEREOF, the parties have executed this Assignment as of the Effective
Date.
ASSIGNOR:
C H LLC
By
Name
Title
ASSIGNEE:
CITY OF PALO ALTO
By
Name
Title
Approved as to form:
By
Name
Title
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EXHIBIT D
POST-CLOSING LEASE
(to be attached)
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SCHEDULE 1
LIST OF SERVICE CONTRACTS
(to be attached)
None.
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SCHEDULE 2
LIST OF ENVIRONMENTAL AND ENGINEERING REPORTS
(to be attached)
Environmental Data Resources Radius Map with GeoCheck dated August 8, 2001, Inquiry
Number 0666216.1r.
Docusign Envelope ID: 4D0241C8-9A32-40D4-BE7F-F990D02F2E1E
Item 8
Late Packet Attachment
A - Purchase and Sale
Agreement and Lease
Agreement
Item 8: Staff Report Pg. 41 Packet Pg. 396 of 413
Item No. 14. Page 1 of 1
City Council
Supplemental Report
From: Kristen O'Kane, Community Services Director
Meeting Date: June 17, 2025
Item Number: 14
Report #:2506-4847
TITLE
Approval of Professional Services Contract No. C26193874 with Palo Alto Community Child Care
in an Amount Not-to-Exceed $3,228,146 to Provide Management of the City’s Childcare Subsidy
Program for a Term of Five Years. CEQA Status – Not A Project
RECOMMENDATION
The link to the Palo Alto Community Child Care contract #C26193874, as listed in footnotes 1, 5,
and 6 of staff report #2505-4680 was incorrect. The correct link is as follows,
https://www.paloalto.gov/files/assets/public/v/1/community-services/human-services/palo-
alto-community-child-care-contract-c26193874.pdf.
APPROVED BY:
Kristen O'Kane, Community Services Director
Item 14
Item 14 Supplemental
Report
Item 14: Staff Report Pg. 1 Packet Pg. 397 of 413
Item No. 8. Page 1 of 2
City Council
Supplemental Report
From: Lauren Lai, Administrative Services Director
Meeting Date: June 17, 2025
Item Number: 8
Report #:2506-4859
TITLE
Approval of and Authorization for the City Manager or Designee to Negotiate and Execute a
Purchase and Sale Agreement with C H LLC to Acquire the Industrial Property Located at 2575
East Bayshore Road (Assessor’s Parcel Number 008-03-015) for $8.5 million, with Leaseback to
Insulation Sources, Inc. (dba Ico Rally) for $12,600/Month; CEQA Status – Exempt Under CEQA
Guidelines Section 15301
BACKGROUND
This supplemental report is in response to an email from a Palo Alto resident as it relates to
Report #2506-4764, Item #8. The resident is the owner of a property located at 1020 O’Brien
Drive, in Menlo Park, and suggests that property is available for $7,000,000.
ANALYSIS
Staff have reviewed the information provided and recommends no change. As noted in the staff
report, the 2575 East Bayshore property is attractive because of its location, lot size, indoor
warehouse capacity, and office space.
While the 1020 O’Brien property is slightly larger, the building covers a higher percentage of the
site (nearly 42% building to land area coverage ratio compared to just under 34% of the Palo
Alto property). Staff previously evaluated 1020 O’Brien and deemed this property not feasible
due to building access and vehicle maneuverability constraints, posing a turning radius
challenge for large commercial vehicles.
Utilities staff has verified the turning radius at 2575 East Bayshore is sufficient for large
commercial vehicles carrying utility poles. The 1020 O’Brien property also has only one rollup
door in the building, so City staff and contractors would have to reverse their vehicles out of
the building or dedicate space in the warehouse for a turning radius. The 2575 East Bayshore
Item 8
Item 8 Supplemental
Report
Item 8: Staff Report Pg. 1 Packet Pg. 398 of 413
Item No. 8. Page 2 of 2
property has four rollup doors with a clear height of 23’8”, compared to 16’6” at 1020 O’Brien,
allowing for more storage space and maneuverability. Other potential complications with the
1020 O’Brien property is its location in another city and county, which can lead to less certainty
in permitting, zoning, or other local requirements when compared to a property within the city
of Palo Alto. The location would also increase inefficiencies, with extra commute of city staff
(Utilities, Stores Warehouse) for regular receipt, testing and delivery of materials.
APPROVED BY:
Item 8
Item 8 Supplemental
Report
Item 8: Staff Report Pg. 2 Packet Pg. 399 of 413
Item No. 11. Page 1 of 1
City Council
Supplemental Report
From: Darren Numoto, Chief Information Officer
Meeting Date: June 17, 2025
Item Number: 11
Report #:2506-4864
TITLE
Authorize the City Manager to Negotiate and Execute 14 Professional Services Contracts for GIS
On-Call Services, supplemental staffing, and programming services: C26193271A with Lynx
Technologies Inc, C26193271B with Seven Tablets Inc, C26193271C with iSpatial Techno
Solutions Inc, C26193271D with Geodesy, C26193271E with UDC, C26193271F with NV5
Geospatial Inc, C26193271G with SSP Innovations, C26193271H with Timmons Group,
C26193271I with Infojini Inc, C26193271J with Sybyte Technologies Inc, C26193271K with
360S2G, C26193271L with Enterprise Maps, C26193271M with Farallon Geographics,
C26193271N with Arini Geographics, Each in an Amount Not-to-Exceed $2,000,000 for a Term
of One Year; CEQA Status – Not a Project
RECOMMENDATION
Staff recommends that the City Council authorize the City Manager to negotiate, approve, and
execute one year contracts with each of the vendors above for on-call GIS services. Each
vendor is not guaranteed any amount of work; the City must approve a task order for specific
projects with binding terms on schedule and price. Each on-call contract will have a maximum
not-to-exceed of $2,000,000, and the total spend on all 14 contracts combined shall not exceed
$2,000,000.
BACKGROUND
The report originally distributed contained incorrect descriptions of multiyear terms and dollar
values recommended. This supplemental report revises the title and recommendation to
clarify the intent of the item.
Upon City Council approval of the revised recommendation, staff will revise the contracts to
reflect a one-year term with four optional years. Staff will return to Council for approval in
Fiscal Year 2027 through Fiscal year 2030 to amend the contracts term based on the anticipated
needs in the future.
APPROVED BY:
Darren Numoto, Chief Information Officer
Item 11
Item 11 Supplemental
Report
Item 11: Staff Report Pg. 1 Packet Pg. 400 of 413
Item No. 12. Page 1 of 1
City Council
Supplemental Report
From: Darren Numoto, Chief Information Officer
Meeting Date: June 17, 2025
Item Number: 12
Report #:2506-4865
TITLE
Authorize the City Manager to Negotiate and Execute Professional Services Contracts for SAP
Enterprise Resource System On-call Programming Services: Contract C26193272A with 360S2G,
C26193272B with Sage Group Technologies Inc, C26193272C with Avertra Corp, C26193272D
with Amick Brown LLC, C26193272E with 2iSolutions Inc, C26193272F with the Peloton Group,
C26193272G with Phoenix Business Inc, C26193272H with EPI-USE America, Each in an Amount
Not-to-Exceed $2,000,000 for a Term of One Year; CEQA Status – Not a Project
RECOMMENDATION
Staff recommends that the City Council authorize the City Manager to negotiate, approve, and
execute one-year contracts with each of the vendors above for on-call SAP services. Each
vendor is not guaranteed any amount of work; the City must approve a task order for specific
projects with binding terms on schedule and price. Each on-call contract will have a maximum
not-to-exceed of $2,000,000, and the total spend on all 14 contracts combined shall not exceed
$2,000,000.
BACKGROUND
The report originally distributed contained incorrect descriptions of multiyear terms and dollar
values recommended. This supplemental report revises the title and recommendation to
clarify the intent of the item.
Upon City Council approval of the revised recommendation, staff will revise the contracts to
reflect a one-year term with four optional years. Staff will return to Council for approval in
Fiscal Year 2027 through Fiscal year 2030 to amend the contracts term based on the anticipated
needs in the future.
APPROVED BY:
Darren Numoto, Chief Information Officer
Item 12
Item 12 Supplemental
Report
Item 12: Staff Report Pg. 1 Packet Pg. 401 of 413
Item No. 13. Page 1 of 1
City Council
Supplemental Report
From: Darren Numoto, Chief Information Officer
Meeting Date: June 17, 2025
Item Number: 13
Report #:2506-4866
TITLE
Authorize the City Manager to Negotiate and Execute Eight Professional Services Contracts for
On-Call IT Project Support and supplemental staffing: Contract C26193247A with INSPYR
Solutions, C26193247B with AgreeYa Solutions, C26193247C with TechLink Systems,
C26193247D with Compunnel Software Group, C26193247E with Progile Tech Inc, C26193247F
with Omm IT Solutions, C26193247G with Infojini Inc, and C26193247H with California Creative
Solutions Inc., Each in an Amount Not-to-Exceed $1,500,000 for a Term of One Year; CEQA
Status – Not a Project
RECOMMENDATION
Staff recommends that the City Council authorize the City Manager to negotiate, approve,
and execute one-year contracts with each of the vendors above for on-call Information
Technology related services. Each vendor is not guaranteed any amount of work; the City
must approve a task order for specific projects with binding terms on schedule and price.
Each on-call contract will have a maximum not-to-exceed of $1,500,000, and the total spend
on all 14 contracts combined shall not exceed $1,500,000.
BACKGROUND
The report originally distributed contained incorrect descriptions of multiyear terms and dollar
values recommended. This supplemental report revises the title and recommendation to
clarify the intent of the item.
Upon City Council approval of the revised recommendation, staff will revise the contracts to
reflect a one-year term with four optional years. Staff will return to Council for approval in
Fiscal Year 2027 through Fiscal year 2030 to amend the contracts term based on the anticipated
needs in the future.
APPROVED BY:
Darren Numoto, Chief Information Officer
Item 13
Item 13 Supplemental
Report
Item 13: Staff Report Pg. 1 Packet Pg. 402 of 413
City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Transportation
Meeting Date: June 17, 2025
Report #:2506-4869
TITLE
Approval of Amendment No. 3 to Contract Number C23184827 with Nomad Transit, LLC (Via) in
the Amount of $1,100,000 for a total not to exceed $4,901,550 over a Four-Year Term to
Continue the City of Palo Alto On-Demand Transit Service through June 30, 2026; CEQA status -
not a project. (Originally Published on the June 16, 2025 City Council Meeting Agenda Item
Number #18 - Deferred to June 17, 2025 City Council Meeting)
BACKGROUND
Original Staff Report #2506-4761 published on the June 16, 2025 City Council meeting agenda
item number #18 and deferred to June 17, 2025 City Council meeting and is now before you.
ATTACHMENTS
Attachment A: 6/16/25 Staff Report #2506-4761
Attachment B: 6/16/25 Attachment A - Nomad Transit LLC (Via) Contract, C23184827
Amendment #3
APPROVED BY:
Ria Lo, Chief Transportation Official
Item AA2
Item AA2 Staff Report
Item AA2: Staff Report Pg. 1 Packet Pg. 403 of 413
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City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Transportation
Meeting Date: June 16, 2025
Report #:2506-4761
TITLE
Approval of Amendment No. 3 to Contract Number C23184827 with Nomad Transit, LLC (Via) in
the Amount of $1,100,000 for a total not to exceed $4,901,550 over a Four-Year Term to
Continue the City of Palo Alto On-Demand Transit Service through June 30, 2026; CEQA status -
not a project.
RECOMMENDATION
Staff recommends that the City Council approve and authorize the City Manager or their
designee to execute Amendment No. 3 to Contract C23184827 with Nomad Transit, LLC (Via)
(Attachment A) to provide Palo Alto Link Services, extending the contract term to June 30,
2026, in an amount not to exceed of $1,100,000. This amendment results in revised not-to-
exceed amount of $4,901,550.
BACKGROUND
Palo Alto Link provides on-demand transit service Monday-Friday for a 12-hour service span
7:00 am-7:00 pm. The service operates within most of the City, with exceptions only to the east
and west ends that primarily house large open spaces and conservation lands. PAL is utilizing a
ten (10) vehicle fleet to provide virtually positioned pick-up and drop-off locations within an
acceptable walking distance with the help of a web application. Door-to-door service is
available for riders who may require extra assistance. The service addresses first-/last-mile
challenges in Palo Alto and provides a convenient and affordable transportation option for
residents, employees, and vulnerable/transit-dependent populations.
Finding and securing funding partners such as Stanford Research Park (SRP) is an integral
strategy to establish a long-term path forward for funding PAL transit services. The City Council
approved the contract for this service December 12, 20221 and further discussed service levels
1 City Council meeting 12/12/2022, Item#8:
https://cityofpaloalto.primegov.com/portal/item/?meetingItemId=20f80994-de00-4d1a-aa0b-9e37365ba583
Item AA2
Attachment A - 61625
Item 18 Staff Report
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and funding in April 2023 and as part of the FY 2025 budget process in May 2024. For the FY
2026 Budget process in May 2025, a reduction in service and contract funding to $1.1 million
was recommended to mitigate the potential nonrenewal of grant sources. Staff will bring
forward subsequent budget adjustments as needed if grant renewals are awarded. Notification
is expected in the next several weeks.
The contract with Nomad Transit LLC (Via) provided on-demand transit services in the amount
of $2,043,000 for up two years, which the City conducted a formal solicitation for and was
primarily funded through the 2016 Measure B Innovative Transit Grant ($2,000,000). On April
10, 2023, the Council approved contract Amendment No. 12, adding a cost sharing agreement
with Stanford Research Park. On November 4, 2024, the Council approved contract
Amendment No. 2, making some service and fee adjustments, and updating the revenue
sharing approach with SRP3. The City continues to work in conjunction with SRP to increase the
service area of PAL to also serve SRP, with SRP contributing per month to the City to cover the
increased cost of providing the expanded service area.
ANALYSIS
4 to discuss the service levels of this
program in light of the sunset of the Innovative Transit Grant. This discussion reviewed the
funding necessary to support different levels of services in preparation for the FY 2025 budget
process. During the FY 2025 budget process, the Finance Committee and City Council adopted a
revised level of service and funding plan including changes to ride fares, partnerships with other
agencies, and grant funding to lower the net financial impact on the City’s General Fund. The FY
2025 Adopted Budget reflected gross program expenses of $1.2. million, reflecting a reduction
in service level from FY 2024.
2 City Council meeting 4/10/2023, Item#7 SR#2303-1128:
https://cityofpaloalto.primegov.com/meeting/document/1875.pdf?name=Item%207%20Staff%20Report
3 City Council meeting 11/4/2023, Item#AA1 SR#2410-3699:
4 City Council meeting 4/1/2024, Item#3 SR#:
https://cityofpaloalto.primegov.com/portal/item/?meetingItemId=5b78bb81-6e97-4ba6-8d46-559b1f4c45f8
Item AA2
Attachment A - 61625
Item 18 Staff Report
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Figure 1: Average Pickup ETA for On Demand Rides
Item AA2
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Item 18 Staff Report
Item AA2: Staff Report Pg. 4 Packet Pg. 406 of 413
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Figure 4. Driver Hours.
FISCAL/RESOURCE IMPACT
STAKEHOLDER ENGAGEMENT
ENVIRONMENTAL REVIEW
ATTACHMENTS
APPROVED BY:
Item AA2
Attachment A - 61625
Item 18 Staff Report
Item AA2: Staff Report Pg. 5 Packet Pg. 407 of 413
AMENDMENT NO. 3 TO CONTRACT NO. C23184827
BETWEEN THE CITY OF PALO ALTO AND NOMAD TRANSIT, LLC
This Amendment No. 3 (this “Amendment”) to Contract No. C23184827 (the “Contract”)
is entered into as of June 30, 2025, by and between the CITY OF PALO ALTO, a California
chartered municipal corporation (“CITY”), and NOMAD TRANSIT, LLC, a Delaware limited liability
corporation, located at 10 Crosby Street, 2nd Floor, New York, NY 10013 (“CONSULTANT”). CITY
and CONSULTANT are referred to collectively as the “Parties” in this Amendment.
RECITALS
A. The Contract was entered into by and between the Parties for the provision of transit
and shuttle services, including equipment, transportation planning, customer engagement,
marketing services, labor, vendor services, and the technology to support services, as detailed
therein.
B. The Parties now wish to amend the Contract to extend the term by six months from
December 31, 2025, to June 30, 2026, to increase billing rates, and to increase the
compensation by One Million One Hundred Thousand Dollars ($1,100,000.00) from Three
Million, Eight Hundred One Thousand Five Hundred Fifty Dollars ($3,801,550.00) to a new total
not-to-exceed compensation amount of Four Million, Nine Hundred One Thousand, Five
Hundred Fifty Dollars ($4,901,550.00), as detailed herein.
NOW, THEREFORE, in consideration of the covenants, terms, conditions, and provisions
of this Amendment, the Parties agree:
SECTION 1. Definitions. The following definitions shall apply to this Amendment:
a. Contract. The term “Contract” refers to Contract No. C23184827 between
CONSULTANT and CITY, dated December 12, 2022, as amended by:
Amendment No. 1, dated April 10, 2023, and
Amendment No. 2, dated September 23, 2024.
b. Other Terms. Capitalized terms used but not defined in this Amendment shall
have the meanings assigned to such terms in the Contract.
SECTION 2. Section 2, "TERM", of the Contract is hereby amended to read as follows:
"The term of this Agreement shall be from the date of its full execution through June 30, 2026,
unless terminated earlier pursuant to Section 19 (Termination) of this Agreement."
Docusign Envelope ID: F2E682D7-C646-49E6-9401-0A3E35243C92
Item AA2
Attachment B - 61625
Attachment A - Nomad
Transit LLC (Via) Contract,
C23184827 Amendment
#3
Item AA2: Staff Report Pg. 6 Packet Pg. 408 of 413
SECTION 3. Section 4, "NOT TO EXCEED COMPENSATION", of the Contract is amended to read
as follows:
"The compensation to be paid to CONSULTANT for performance of the Services shall be based
on the compensation structure detailed in Exhibit C, including any reimbursable expenses
specified therein, and the maximum total compensation shall not exceed Four Million, Nine
Hundred One Thousand, Five Hundred Fifty Dollars ($4,901,550.00). The hourly schedule of
rates, if applicable, is set out in Exhibit C-1. Any work performed or expenses incurred beyond
this maximum compensation shall be at no cost to the CITY."
SECTION 4. The following exhibit(s) to the Contract is/are hereby amended or added, as
indicated below, to read as set forth in the attachment(s) to this Amendment, which is/are
hereby incorporated in full into this Amendment and into the Contract by this reference:
a. Exhibit "C" entitled "COMPENSATION, AMENDMENT NO. 3", AMENDED,
REPLACES PREVIOUS.
b. Exhibit “C-1” entitled “SCHEDULE OF RATES, AMENDMENT NO. 3” AMENDED,
REPLACES PREVIOUS.
SECTION 5. Legal Effect. Except as modified by this Amendment, all other provisions of the
Contract, including any exhibits thereto, shall remain in full force and effect.
SECTION 6. Incorporation of Recitals. The recitals set forth above are terms of this Amendment
and are fully incorporated herein by this reference.
(SIGNATURE BLOCK FOLLOWS ON THE NEXT PAGE.)
Docusign Envelope ID: F2E682D7-C646-49E6-9401-0A3E35243C92
Item AA2
Attachment B - 61625
Attachment A - Nomad
Transit LLC (Via) Contract,
C23184827 Amendment
#3
Item AA2: Staff Report Pg. 7 Packet Pg. 409 of 413
SIGNATURES OF THE PARTIES
IN WITNESS WHEREOF, the Parties have by their duly authorized representatives
executed this Amendment effective as of the date first above written.
CITY OF PALO ALTO NOMAD TRANSIT, LLC
City Manager: Officer 1
APPROVED AS TO FORM: By:
Name:
City Attorney or designee Title:
Officer 2
By:
Name:
Title:
Attachments
EXHIBIT “C”: “COMPENSATION, AMENDMENT NO. 3”, AMENDED, REPLACES PREVIOUS.
EXHIBIT “C-1”: “SCHEDULE OF RATES, AMENDMENT NO. 3, AMENDED, REPLACES PREVIOUS
Docusign Envelope ID: F2E682D7-C646-49E6-9401-0A3E35243C92
Manager
Alex Laoie
Chief Legal Officer
Erin Abrams
Item AA2
Attachment B - 61625
Attachment A - Nomad
Transit LLC (Via) Contract,
C23184827 Amendment
#3
Item AA2: Staff Report Pg. 8 Packet Pg. 410 of 413
EXHIBIT C
COMPENSATION, AMENDMENT NO. 3
(AMENDED, REPLACES PREVIOUS)
CITY agrees to compensate CONSULTANT for Services performed in accordance with the terms
and conditions of this Agreement, and as set forth in the budget schedule below. Compensation
shall be calculated based on the rate schedule attached as Exhibit C-1 up to the not to exceed
budget amount for each task set forth below.
CITY’s Project Manager may approve in writing the transfer of budget amounts between any of
the tasks or categories listed below, provided that the total compensation for the Services,
including any specified reimbursable expenses, and the total compensation for Additional
Services (if any, per Section 4 of the Agreement) do not exceed the amounts set forth in Section
4 of this Agreement.
CONSULTANT agrees to complete all Services, any specified reimbursable expenses, and
Additional Services (if any, per Section 4), within this/these amount(s). Any work performed or
expenses incurred for which payment would result in a total exceeding the maximum amount
of compensation set forth in this Agreement shall be at no cost to the CITY.
BUDGET SCHEDULE
Task 1 (Upfront Costs) $92,500.00 + $13,500.00*
Task 2
(Vehicle Hours compensated at the rate specified in Exhibit
C-1)
***
(Estimated Electricity Cost (To be Treated as a Pass-
Through))
3,801,550
Docusign Envelope ID: F2E682D7-C646-49E6-9401-0A3E35243C92
Item AA2
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Attachment A - Nomad
Transit LLC (Via) Contract,
C23184827 Amendment
#3
Item AA2: Staff Report Pg. 9 Packet Pg. 411 of 413
Reimbursable Expenses (if any) $0.00
Total for Services and Reimbursable Expenses $4,901,550
Additional Services (if any, per Section 4) $0.00
Maximum Total Compensation $4,901,550
Should Customer require additional WAV retrofits or vehicle wraps, CONSULTANT will bill CITY as
incurred as a pass-through, so long as the amount stays within the not-to-exceed amount.
* The $13,500 is added by Amendment 2 for the cost of moving from hybrid vans to fully
electric vans per TFCA requirements.
** The $1,186,500 is added by Amendment 2.
***The $1,100,000 is added by Amendment 3.
Note: Pricing assumes that the Services provided hereunder are tax exempt and assumes service
hours of 8am-6pm M-F. Pricing assumes launch within 4 months of contract signing. Estimated
Electricity Cost assumes 2 active EVs with 171 Wh/km efficiency and electricity cost at $0.23 /
kWh. Electricity costs will be treated as a pass-through. In the event that the Services cease to
be tax exempt, such taxes will be treated as pass-through and charged 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: NONE up to the not-to-exceed amount of: $0.00.
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: F2E682D7-C646-49E6-9401-0A3E35243C92
Item AA2
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Attachment A - Nomad
Transit LLC (Via) Contract,
C23184827 Amendment
#3
Item AA2: Staff Report Pg. 10 Packet Pg. 412 of 413
EXHIBIT C-1
SCHEDULE OF RATES, AMENDMENT NO. 3
(AMENDED, REPLACES PREVIOUS)
CONSULTANT’s schedule of rates is as follows:
Cost per Driver Hour, Months 1-12: $88.65
Cost per Driver Hour, Months 18 and onward: $89.00
Note: Annual rate increase for Months 13-18 will be the greater of 5% (as shown) or the last 12
months U.S. all-items CPI. A Driver Hour is defined as each hour during which a driver is paid on
the Via platform.
Docusign Envelope ID: F2E682D7-C646-49E6-9401-0A3E35243C92
Item AA2
Attachment B - 61625
Attachment A - Nomad
Transit LLC (Via) Contract,
C23184827 Amendment
#3
Item AA2: Staff Report Pg. 11 Packet Pg. 413 of 413