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2024-06-17 City Council Agenda Packet
CITY COUNCIL Special Meeting Monday, June 17, 2024 CITY O F Council Chambers & Hybrid PALO 4:00 PM ALTO Palo Alto City Council meetings will be held as "hybrid" meetings with the option to attend by teleconference or in person. To maximize public safety while still maintaining transparency and public access, members of the public can choose to participate from home or attend in person. Information on how the public may observe and participate in the meeting is located at the end of the agenda. Masks are strongly encouraged if attending in person. 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(@CityofPaloAlto.org 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@CityofPaloAlto.org 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 subiect to chance at any time. includine 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. June 17, 2024 Materials submitted after distribution of the agenda packet are available for public inspection at www.CityofPaloAlto.org/agendas. CALL TO ORDER SPECIAL ORDERS OF THE DAY (4:00 - 4:35 PM) 1. Proclamation June 2024 as LGBTQIA+ Pride Month 2. Proclamations Recognizing Departing Boards and Commissions Commissioners 3. Review List of Applications for Historic Resources Board Vacancies and Provide Direction for Interviews CLOSED SESSION (4:35 - 6:05 PM) 4. CONFERENCE WITH CITY ATTORNEY- EXISTING LITIGATION Subject: Eric Figueroa, et al. v. City of Palo Alto Santa Clara County Superior Court Case No. 21 -CV -383740 (One Case, as Defendant) Authority: Government Code Section 54956.9(d)(1) AGENDA CHANGES. ADDITIONS AND DELETIONS PUBLIC COMMENT (6:05 - 6:35 PM) Members of the public may speak in -person ONLY to any item NOT on the agenda. 1-3 minutes depending on # 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 (6:35 - 6:40 PM) Members of the public may not speak to the item(s). CONSENT CALENDAR (6:40 - 6:45 PM) Items will be voted in one motion unless removed from the calendar by three Council Members. 5. Adoption of Fiscal Year 2025 Investment Policy as Recommended by the Finance Committee 6. Utilities Advisory Commission Recommends Adoption of the 2024 Annual Water Shortage Assessment Report 7. CONSENT: Approval of a Record of Land Use Action to Upgrade the Property Located at 411 Kipling Street From a Category 4 Resource on the Local Historic Inventory to a Category 2 Resource. June 17, 2024 Materials submitted after distribution of the agenda packet are available for public inspection at www.CityofPaloAlto.org/agendas. 8. CONSENT: Approval of a Record of Land Use Action to Upgrade the Property Located at 271 University Avenue From a Category 3 Resource on the Local Historic Inventory to a Category 2 Resource. 9. Approval of Construction Contract C24190748 with Ross Recreation Equipment Company Inc. in the Amount of $305,600 and Authorization for the City Manager or Their Designee to Negotiate and Execute Change Orders up to a Not -to -Exceed Amount of $30,600 for the Ramos Park Improvements, Capital Improvement Program Project PG -14000; CEQA Status —Exempt Under CEQA Guidelines Section 15301 10. QUASI-JUDICIAL. 420 Acacia: Final Map and Street Naming [24PLN-00027]: Request for a Final Map to Subdivide a 35,573 Square Foot Parcel Having Split Zoning Designations (R-1 and RM-30) for Condominium Purposes (16 Residential Units). Environmental Assessment: Exempt from the Provisions of the California Environmental Quality Act in Accordance with CEQA Guidelines Section 15332 (In -fill Development). 11. Approval of Contract Amendment Number 1 to Contract C24189570 with Downtown Streets Team in the Amount of $548,958 to Combine Contracts to Increase Operational Efficiency for a Revised Total Not -to -Exceed Amount of $1.1 Million Over Three Years ; CEQA Status: Not a Project 12. Approval of Construction Contract Number C24190081 with Marina Landscape, Inc. in the Amount Not -to -exceed $338,459 for Dog Park Installation and Renovation Project PG -18001; and Authorization of Contract Contingency in an Amount Not -to -Exceed $50,769 for Related, Additional but Unforeseen Work Which May Develop During the Project; and Amend the FY2024 Budget in the Capital Improvement Fund (2/3 vote required); CEQA status — categorically exempt. 13. Approval of Contract Amendment Number 1 to Contract Number S24189598 with Good City Company in the Amount of $18,120 for a Stream Corridor Protection Ordinance Update; the Total not -to -exceed Amount of the Contract is $92,293. CEQA Status: Exempt Pursuant to CEQA Guidelines 15061(b)(3). 14. Authorization for the Mayor to sign a 3 -Year Friendship Cities Agreement with Narok, Kenya 15. Approval of a Funding Agreement with Federal Railroad Administration to Receive $6 Million for the Preliminary Engineering and Environmental Documentation Phase for the Grade Separation Projects at Churchill Avenue, Meadow Drive, and Charleston Road crossings. CEQA status — statutorily exempt per CEQA section 15262; this funding agreement will partially fund CEQA/NEPA review of the grade separation projects. 16. Adopt a Resolution to Allow Consumption of Alcohol under PAMC section 9.04.010 on California Avenue in Conjunction with the 3rd Thursday Event June 17, 2024 Materials submitted after distribution of the agenda packet are available for public inspection at www.CityofPaloAlto.org/agendas. 17. Approval of 1) Increase of Construction Contingency for Contract No. C21178123B with Swinerton Builders in the Amount of $1,000,000; 2) Contract Amendment No. 4 for Contract No. S20176170 with Romig Engineers, Inc. in the Amount of $21,786 and to Extend the Contract Term; 3) Increase of Contingency for Purchase Order with Pivot Interiors Inc. in the Amount of $23,440; and 4) Authorization for the City Manager to Execute a General Services Contract for Moving Services in an Amount of up to $250,000 for the New Public Safety Building Capital Project (PE -15001); CEQA - Environmental Impact Report for the New Public Safety Building and New California Avenue Area Parking Garage (Resolution No. 9772) 18. Approval of Contracts with US Bank and its Wholly Owned Subsidiary Elavon for General Banking, Safekeeping (Custodial), and Merchant Services for a Period of Five Years; and Approval of Contract with Wells Fargo for Lockbox Services for a Period of One Year; CEQA Status: Not a Project. 19. Authorization for the City Manager or Designee to Negotiate and Execute a Line of Credit totaling $31 Million to Address Regional Wastewater Treatment Fund Cashflow as Recommended by the Finance Committee; CEQA Status — Not a Project 20. Resolution to Vacate Portions of Three Public Service Easements at 1700 Embarcadero Road 21. Approval of an Extension to Building Permit 18000-00536 for 429 University Ave; CEQA status — Mitigated Negative Declaration (ENV20718). 22. SECOND READING: Adoption of an Ordinance extending the Term of Ordinance No. 5517 by an Additional 12 Months from June 16, 2024 to June 30, 2025. Ordinance 5517 Amends Title 18 (Zoning) of the Palo Alto Municipal Code to Update Definitions, Broaden Permitted Uses and Provide Limits on Certain Uses through Updates to the Conditional Use Permit Thresholds. Environmental Review: CEQA Exemption 15061(b) (3) (FIRST READING: June 3, 2024 PASSED 7-0) 23. SECOND READING: Ordinance Amending Chapter 16.14 (California Green Building Standards, California Code of Regulations, Title 24, Part 11) of the Palo Alto Municipal Code to Adopt the 2022 Green Building Standards Code, Along With Local Modifications Related to Electrical Vehicle Charging Infrastructure Requirements and Building Electrification Requirements and an Ordinance Amending Chapter 16.17 (California Energy Code, California Code of Regulations, Title 24, Part 6) of the Palo Alto Municipal Code to Adopt the 2022 California Energy Code, Along with Local Modifications to Increase Energy Efficiency Standards for Buildings, Mandate Electric -Ready Requirements and Incentivize All -Electric New Construction. CEQA Status: Exempt under CEQA Guidelines Sections 15308 and 15061(b)(3) (FIRST READING: June 3, 2024 PASSED 6-1, Tanaka no and 7-0) June 17, 2024 Materials submitted after distribution of the agenda packet are available for public inspection at www.CityofPaloAlto.org/agendas. 24. Adoption of a Resolution Approving an Initial Study/Mitigated Negative Declaration for Citywide Implementation of Fiber -to -the -Premises Project (FTTP), Including the Mitigation, Monitoring and Reporting Program; Approval of Purchase Order No. 4524000496 With Thermo Bond Buildings in an Amount Not to Exceed of $339,076 for the Design, Build and Delivery of a Modular Building "Fiber Hut"; Authorization for the City Manager or Their Designee to Negotiate and Execute Change Orders in the Amount Not -to -Exceed of $31,384 for Related Additional but Unforeseen Work That may Develop During the Project, for a Total Not -to -Exceed Amount of $370,460 with Thermo Bond Buildings. 25. Approval of a Professional Services Contract Number C24188127 with Telecommunications Engineering Associates (TEA) in an Amount Not to Exceed $834,882 for Public Safety Radio Network Maintenance and Construction for a Period of Five (5) Years; CEQA Status: Not a Project 26. Approval of Assignment and Assumption Agreement to transfer Baker Tilly US LLP's contract to Baker Tilly Advisory Group, LP; CEQA — Not a Project 27. Approval of: (1) Contract No. C24187724 with LensLock, Inc (Lenslock) for replacement of the police public contact audio/video system for a five (5) year term in an amount not to exceed $1,128,225; and (2) Police Audio/Video Technology Surveillance Use Policy; CEQA status — categorically exempt. CITY MANAGER COMMENTS (6:45 - 7:00 PM) BREAK (15 MINUTES) ACTION ITEMS (Item 28: 7:15 - 8:30 PM, Item 29: 8:30 - 9:15 PM, Item 30: 9:15 - 10:00 PM, Item 31: 10:00 - 11:00 PM) Include: Report of Committees/Commissions, Ordinances and Resolutions, Public Hearings, Report of Officials, Unfinished Business and Council Matters. 28. PUBLIC HEARING: Adoption of Budget Ordinance for Fiscal Year 2025, Including the Operating and Capital Budgets and Municipal Fee Schedule; Adoption of a Resolution determining the Appropriations Limit for Fiscal Year 2025; Acceptance of Updates to the Retiree Healthcare Actuarial Report; and Approval of Contributions for Retiree Healthcare Benefits 29. PUBLIC HEARING & PROPOSITION 218 HEARING: Finance Committee Recommends Adoption of Six Resolutions: 1) Approving the Fiscal Year 2025 Wastewater Collection Utility Financial Plan, Including Approval of a Short -Term Loan From the Fiber Optics Fund Reserve to the Wastewater Collection Fund Operations Reserve for Fiscal Year 2024, and Amending Wastewater Collection Rate Schedules S-1, S-2, S-6 and S-7; 2) June 17, 2024 Materials submitted after distribution of the agenda packet are available for public inspection at www.CityofPaloAlto.org/agendas. Approving the Fiscal Year 2025 Water Utility Financial Plan, and Amending Water Rate Schedules W-1, W-2, W-3, W-4, and W-7; 3) Approving the Fiscal Year 2025 Gas Utility Financial Plan, and Amending Gas Rate Schedules G-1, G-2, G-3 and G-10; 4) Approving the Fiscal Year 2025 Electric Utility Financial Plan and Accepting the 2024 City of Palo Alto Electric Cost of Service and Rate Study, and Amending Electric Rate Schedules E-1, E-2, E-4, E-4 TOU, E-7, E-7 TOU, E-14, E -EEC -1, E-NSE-1, E -2-G, E -4-G and E -7-G; 5) Amending Utility Rate Schedules EDF-1 and EDF-2 to Increase Dark Fiber Rates 2.6 Percent; 6) Amending Utility Rate Schedule D-1 Increasing the Storm Water Management Fee by 2.6 Percent per Month per Equivalent Residential Unit for FY 2025; CEQA Status: Not a project under CEQA Guidelines Sections 15378(b)(4) and (5) and Exempt Under Section 15273(a) 30. Approve Retention of the Current Western Area Power Administration (WAPA) Hydroelectricity Base Resource Contract Allocation From 2025-2030; CEQA Status: Not a Project. 31. Discussion Regarding Caltrans' Repaving Project on El Camino Real Replacing Existing Parking with Bicycle Lanes, Authority for Staff to Make Adjustments to the Residential Preferential Parking Permit Programs and Return to Council on Consent if Needed, Authority for Staff to Enter into Agreements As Needed to Provide Temporary Safe Parking Along the Corridor in Palo Alto, and Approval of a Resolution Supporting the Removal of On -Street Parking for this Project; 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 during this meeting's agenda. 32. Informational Report on the Public Art Commission Presentation to Policy & Services Committee May 14, 2024 33. Sales Tax Digest Summary, Calendar Year 2023 Q4 (October 2023 -December 2023) 34. Establishment of Community Advisory Group for Downtown Housing Plan. CEQA Status - - Not a Project. OTHER INFORMATION Standing Committee Meetings this week Rail Committee June 18, 2024 CANCELED June 17, 2024 Materials submitted after distribution of the agenda packet are available for public inspection at www.CityofPaloAlto.org/agendas. Finance Committee June 18, 2024 CANCELED Retail Committee June 19, 2024 CANCELED City/Schools Liaison Committee June 20, 2024 Public Comment Letters Schedule of Meetings June 17, 2024 Materials submitted after distribution of the agenda packet are available for public inspection at www.CityofPaloAlto.org/agendas. PUBLIC COMMENT INSTRUCTIONS Members of the Public may provide public comments to teleconference meetings via email, teleconference, or by phone. 1. Written public comments may be submitted by email to city.council@cityofpaloalto.org. 2. For in person public comments please complete a speaker request card located on the table at the entrance to the Council Chambers and deliver it to the Clerk prior to discussion of the item. 3. Spoken public comments for agendized items using a computer or smart phone will be accepted through the teleconference meeting. To address the Council, click on the link below to access a Zoom -based meeting. Please read the following instructions carefully. o You may download the Zoom client or connect to the meeting in- browser. If using your browser, make sure you are using a current, up-to-date browser: Chrome 30 , Firefox 27 , Microsoft Edge 12 , Safari 7 . Certain functionality may be disabled in older browsers including Internet Explorer. Or download the Zoom application onto your smart phone from the Apple App Store or Google Play Store and enter in the Meeting ID below. o You may be asked to enter an email address and name. We request that you identify yourself by name as this will be visible online and will be used to notify you that it is your turn to speak. o When you wish to speak on an Agenda Item, click on "raise hand." The Clerk will activate and unmute speakers in turn. Speakers will be notified shortly before they are called to speak. o When called, please limit your remarks to the time limit allotted. A timer will be shown on the computer to help keep track of your comments. 4. Spoken public comments for agendized items using a phone use the telephone number listed below. When you wish to speak on an agenda item hit *9 on your phone so we know that you wish to speak. You will be asked to provide your first and last name before addressing the Council. You will be advised how long you have to speak. When called please limit your remarks to the agenda item and time limit allotted. CLICK HERE TO JOIN Meeting ID: 362-027-238 Phone: 1-669-900-6833 Americans with Disability Act (ADA) It is the policy of the City of Palo Alto to offer its public programs, services and meetings in a manner that is readily accessible to all. Persons with disabilities who require materials in an appropriate alternative format or who require auxiliary aids to access City meetings, programs, or services may contact the City's ADA Coordinator at (650) 329-2550 (voice) or by emailing ada@cityofpaloalto.org. Requests for assistance or accommodations must be submitted at least 24 hours in advance of the meeting, program, or service. June 17, 2024 Materials submitted after distribution of the agenda packet are available for public inspection at www.CityofPaloAlto.org/agendas. Item 1 Item 1 Staff Report City Council Staff Report Report Type: SPECIAL ORDERS OF THE DAY CITY O F Lead Department: City Clerk PALO LTO Meeting Date: June 17, 2024 Report #:2406-3116 TITLE Proclamation June 2024 as LGBTQIA+ Pride Month ATTACHMENTS Attachment A: June 2024 LGBTQIA+ Pride Month Proclamation APPROVED BY: Mahealani Ah Yun Item 1: Staff Report Pg. 1 Packet Pg. 9 of 857 Item 1 Attachment A - June 2024 LGBTQIA+ Pride Month Proclamation enati LGBTQIA+ PRIDE MONTH WHEREAS, Lesbian, Gay, Bisexual, Transgender, Queer, Intersex, and Asexual (LGBTQIA+) Pride Month is celebrated nationwide each year in the month of June; and WHEREAS, this month commemorates the riots that took place 50 years ago at the Stonewall Inn in Manhattan, New York, on the morning of June 28, 1969, often viewed as the birth of the modem LGBTQIA+ Rights Movement; and WHEREAS, it is fitting that several major United States Supreme Court decisions impacting LGBTQIA+ rights in a positive way have been announced in June, including Lawrence v. Texas, 539 U.S. 558 (2003), which struck down sodomy laws; U.S. v. Windsor, 570 U.S. 744 (2013), which struck down the federal Defense of Marriage Act; Obergefell v. Hodges, 135 S. Ct. 2584 (2015), which affirmed the right of same -sex couples to marry; and Pavan v. Smith, 137 S. Ct. 2075 (2017), which held that both mothers of a child had the legal right to be listed on their child's birth certificate; and WHEREAS, despite this extraordinary progress, the LGBTQIA+ community continues to face systematic discrimination through anti-LGBTQIA+ legislation targeting LGBTQIA+ families, children, athletes, and students; and WHEREAS, Palo Alto has a diverse LGBTQIA+ community and many allies, and the City of Palo Alto is committed to supporting visibility, dignity, and equity for all people in the LBGTQIA+ community; and WHEREAS, we will continue to push back against the forces of hate and intolerance to ensure all feel safe and welcomed. We continuously create spaces to assess the needs and explore ways to provide more services and resources to our LGBTQIA+ community. Acknowledging how the need for education and awareness remains vital to end discrimination and prejudice, the City is offering training opportunities to City Staff to enhance their knowledge about gender, gender identity, and gender expression, expanding the tools available to sustain an environment of inclusion, connection, and belonging. NOW, THEREFORE, I, Greer Stone, Mayor of the City of Palo Alto, on behalf of the entire City Council do hereby proclaim the month of June as Lesbian, Gay, Bisexual, Transgender, Queer, Intersex, and Asexual (LGBTQIA+) Pride Month and encourage all citizens to join in celebrating our diversity, promoting inclusion and equal protection under the law, and eliminating discriminatory policies toward any culture, race, or other identity, expression, or group. Presented: June 17th, 2024 Greer Stone Mayor Item 1: Staff Report Pg. 2 I 1 Packet Pg. 10 of 857 Item 2 Item 2 Staff Report City Council Staff Report Report Type: SPECIAL ORDERS OF THE DAY CITY O F Lead Department: City Clerk PALO LTO Meeting Date: June 17, 2024 Report #:2406-3127 TITLE Proclamations Recognizing Departing Boards and Commissions Commissioners RECOMMENDATION Adopt proclamations recognizing and thanking departing Boards and Commissions Commissioners for their service. BACKGROUND The following Commissioners are departing their respective Board or Commission. The City would like to take this opportunity to honor and thank each commissioner for their service. • Gogo Heinrich, Historic Resources Board • Michael Makinen, Historic Resources Board • Margaret Wimmer, Historic Resources Board • Daryl Savage, Human Relations Commission • Nia Taylor, Public Art Commission • David Bower, Stormwater Management Oversight Committee • Marilyn Keller, Stormwater Management Oversight Committee • Lisa Forsell, Utilities Advisory Commission • Lauren Segal, Utilities Advisory Commission ATTACHMENTS Attachment A: Gogo Heinrich, Historic Resources Board Attachment B: Michael Makinen, Historic Resources Board Attachment C: Margaret Wimmer, Historic Resources Board Attachment D: Daryl Savage, Human Relations Commission Attachment E: Nia Taylor, Public Art Commission Item 2: Staff Report Pg. 1 Packet Pg. 11 of 857 Item 2 Item 2 Staff Report Attachment F: David Bower, Stormwater Management Oversight Committee Attachment G: Marilyn Keller, Stormwater Management Oversight Committee Attachment H: Lisa Forsell, Utilities Advisory Commission Attachment I: Lauren Segal, Utilities Advisory Commission APPROVED BY: Mahealani Ah Yun Item 2: Staff Report Pg. 2 Packet Pg. 12 of 857 Item 2 Attachment A - Gogo Heinrich, Historic Resources Board Gogo Heinrich Historic Resources Board WHEREAS, the Historic Resources Board has acted as a steward for the City's historic resources and has upheld the purpose of the Historic Preservation Ordinance, thereby contributing to the retention of historically and culturally important features of our built environment; and WHEREAS, the Historic Resources Board acts responsibly, upholding the City's status as a Certified Local Government designated by the State of California's Historic Preservation Office; and WHEREAS, the Historic Resources Board provides design advice and recommendations to owners of historic properties to help guide projects in a manner that upholds Palo Alto's values for the preservation of historic resources; and WHEREAS, the Historic Resources Board has reviewed complex historic rehabilitation projects, including additions to historic buildings that are consistent with local and national historic preservation and rehabilitation standards in the Downtown Palo Alto area, areas South of Forest Avenue, and homes in the Professorville National Register Historic District; and WHEREAS, Gogo served for three years (since 2021) as a contributing member and resident of the Professorville Historic neighborhood active in volunteering on the draft Professorville Design Guidelines. She is a licensed architect member and LEED accredited professional with over 40 years of experience in the construction industry, specializing in program management, design management, project management, and construction management of large complex projects including airport terminals, fire stations, correctional facilities, office buildings, zoo facilities, education facilities, and civic buildings. NOW, THEREFORE, I, Greer Stone, Mayor of the City of Palo Alto, on behalf of the City Council, do hereby proclaim appreciation for outstanding public service to Gogo Heinrich for her service and contributions rendered as a Historic Resources Board Member. Presented: June 171, 2024 Greer Stone Mayor O O Item 2: Staff Report Pg. 3 Packet Pg. 13 of 857 Mike Makinen Item 2 Attachment B - Mike Makinen, Historic Resources Board Historic Resources Board WHEREAS, the Historic Resources Board has acted as a steward for the City's historic resources and has upheld the purpose of the Historic Preservation Ordinance, thereby contributing to the retention of historically and culturally important features of our built environment; and WHEREAS, the Historic Resources Board acts responsibly, upholding the City's status as a Certified Local Government designated by the State of California's Historic Preservation Office; and WHEREAS, the Historic Resources Board provides design advice and recommendations to owners of historic properties to help guide projects in a manner that upholds Palo Alto's values for the preservation of historic resources; and WHEREAS, the Historic Resources Board has reviewed complex historic rehabilitation projects, including additions to historic buildings that are consistent with local and national historic preservation and rehabilitation standards in the Downtown Palo Alto area, areas South of Forest Avenue, and homes in the Professorville National Register Historic District; and WHEREAS, Mike Makinen served for 26 years (from 1998 through May 2024), including serving one year as Vice Chair from fall 2014 to fall 2015. Mike's contributions were based on his educational background (Masters in Mechanical Engineering) and experience as an Aerospace Engineer, Design Engineer, Facilities Planner, Project Manager, and working as the NASA -Ames Historic Preservation Officer and working as Chief of the Ames Facilities Planning Office. NOW, THEREFORE, I, Greer Stone, Mayor of the City of Palo Alto, on behalf of the City Council, do hereby proclaim appreciation for outstanding public service to Mike Makinen for his service and contributions rendered as a Historic Resources Board Member. Presented: June 171, 2024 Greer Stone Mayor O Item 2: Staff Report Pg. 4 I Packet Pg. 14 of 857 O Item 2 Attachment C - Margaret Wimmer, Historic Resources Board Margaret Wimmer Historic Resources Board WHEREAS, the Historic Resources Board has acted as a steward for the City's historic resources and has upheld the purpose of the Historic Preservation Ordinance, thereby contributing to the retention of historically and culturally important features of our built environment; and WHEREAS, the Historic Resources Board acts responsibly, upholding the City's status as a Certified Local Government designated by the State of California's Historic Preservation Office; and WHEREAS, the Historic Resources Board provides design advice and recommendations to owners of historic properties to help guide projects in a manner that upholds Palo Alto's values for the preservation of historic resources; and WHEREAS, the Historic Resources Board has reviewed complex historic rehabilitation projects, including additions to historic buildings that are consistent with local and national historic preservation and rehabilitation standards in the Downtown Palo Alto area, areas South of Forest Avenue, and homes in the Professorville National Register Historic District; and WHEREAS, Margaret Wimmer served for seven years (since 2017), including serving one year as Vice Chair 2016 to April 2017. Margaret's contributions were based on her educational background from the College of Architecture at Arizona State University and her expertise as a Palo Alto based Residential Designer with over 24 years of professional experience in the San Francisco Bay Area. NOW, THEREFORE, I, Greer Stone, Mayor of the City of Palo Alto, on behalf of the City Council, do hereby proclaim appreciation for outstanding public service to Margaret Wimmer for her service and contributions rendered as a Historic Resources Board Member. Presented: June 17th, 2024 Greer Stone Mayor O Item 2: Staff Report Pg. 5 I 1 Packet Pg. 15 of 857 O Item 2 Attachment D - Daryl Savage, Human Relations Commission Daryl Savage Human Relations Commission WHEREAS, Daryl's unwavering dedication to public service is evidenced by her tenure on the Human Relations Commission (HRC) at different times for a total of 17 years, the longest commitment to the Commission of any individual on record, is truly commendable; and WHEREAS, Daryl served as the Commission's liaison to the Palo Alto Police Department throughout her tenure on the HRC, demonstrating her ability to foster collaboration and understanding; and WHEREAS, Daryl's exceptional service extended beyond her regular HRC duties, as she served as a community representative on numerous Palo Alto Police Department promotional panels over many years, providing a valuable perspective and engaging in thoughtful questioning that greatly benefited our community; and WHEREAS, Daryl's insightful contributions and vast experience were instrumental to the HRC as they navigated vital and challenging issues such as police reforms, renter protections, hate crimes, and inclusion and belonging, among others; and WHEREAS, Daryl served for several years on an ad hoc subcommittee for recommendations for the Human Services Emerging Needs grant program; and WHEREAS, Daryl, along with other commissioners, conducted site visits of many of the agencies that receive HSRAP funding to better understand the services offered and hear about the agencies' successes and challenges. NOW, THEREFORE, I, Greer Stone, Mayor of the City of Palo Alto, on behalf of the City Council, do hereby proclaim appreciation for outstanding public service to Daryl Savage for her service and contributions rendered as a Human Relations Commissioner. Presented: June 17t'', 2024 Greer Stone Mayor O Item 2: Staff Report Pg. 6 I Packet Pg. 16 of 857 O Item 2 ,ttachment E - Nia Taylor, Public Arts Commission Nia Taylor Public Art Commission WHEREAS, Nia Taylor, a beacon of dedication, served nine years on the Public Art Commission, generously devoting her time and expertise to serve on selection panels and shape the landscape of public art in Palo Alto; and WHEREAS, Nia Taylor supported long-term public art planning efforts in the City, such as the Public Art Master Plan and the California Avenue District Plan; and WHEREAS, Nia Taylor, a true visionary, consistently brought a unique perspective and fresh eyes to every project, enriching the public art landscape of Palo Alto; and WHEREAS, Nia Taylor played a pivotal role in the selection of sixteen artist teams and the successful implementation of a city mural, showcasing her exceptional leadership and decision -making abilities; and WHEREAS, Nia Taylor, through her strong advocacy, successfully spearheaded temporary public art initiatives that not only enhanced our commercial corridors but also significantly boosted visitor attraction, such as the Code: ART and mural festivals on California Avenue and downtown Palo Alto; and NOW, THEREFORE, I, Greer Stone, Mayor of the City of Palo Alto, on behalf of the City Council, do hereby proclaim appreciation for outstanding public service to Nia Taylor for her service and contributions rendered as a Public Art Commissioner. Presented: June 17th, 2024 Greer Stone Mayor O Item 2: Staff Report Pg. 7 I 1 Packet Pg. 17 of 857 O Item 2 Attachment F - David Bower, Stormwater Management Oversight Committee ekmatt rte_, -,€-_j-_________ David Bower Stormwater Management Oversight Committee WHEREAS, the Stormwater Management Oversight Committee was selected and appointed by the City Council to ensure the stormwater management fees approved by property owners via a 2017 Ballot Measure are used to fund the approved stormwater management programs and storm drain capital improvement projects; and WHEREAS, David Bower's four decades of experience in construction was a valuable asset to fellow members of the Stormwater Management Oversight Committee and City staff, and he contributed both awareness of technical issues affecting stormwater infrastructure and advocacy for the needs of City residents; and WHEREAS, during his six -year tenure, David listened intently to staff's presentations of six capital improvement projects, several storm drain system rehabilitation and repair projects, and was in support of the proposed improvements and work performed by staff; and WHEREAS, David has taken a leadership role in advocating for additional investment in our city's infrastructure as well as diligent and effective maintenance of its existing physical resources; and WHEREAS, David additionally served on the Historic Resource Board for nearly 16 years, including four combined years as chair and vice chair, on the Mills Act Ad Hoc Committee, and on the Storm Drain Blue Ribbon Committee that recommended the 2017 Stormwater Management Fee to Council. NOW, THEREFORE I, Greer Stone, Mayor of the City of Palo Alto, on behalf of the City Council, do hereby proclaim appreciation for outstanding public service to David Bower for his service and contributions rendered as a Stornwater Management Oversight Committee Member. Presented: June 17th, 2024 Greer Stone Mayor O Item 2: Staff Report Pg. 8 I 1 Packet Pg. 18 of 857 O Item 2 Attachment G - Marylin Keller, Stormwater Management Oversight Committee ekmattit Marilyn Keller Stormwater Management Oversight Committee WHEREAS, the Stormwater Management Oversight Committee was selected and appointed by the City Council to ensure the stormwater management fees approved by property owners via a 2017 Ballot Measure are used to fund the approved stormwater management programs and storm drain capital improvement projects; and WHEREAS, Marilyn Keller's professional experience and interest in green stormwater infrastructure and nature -based solutions, as well as her academic background in Biology, Environmental and Earth Sciences, are aligned with the stormwater management focus and therefore have been a resource to City staff and Stormwater Management Oversight Committee members; and WHEREAS, Marilyn's contributions to the Committee reflected both a local perspective and global awareness, and was characterized by the utmost in personal courtesy, respect, collegiality, and leadership in working toward consensus; and WHEREAS, during her six -year tenure, Marilyn listened intently to staff's presentations of six capital improvement projects, several storm drain system rehabilitation and repair projects, and was in support of the proposed improvements and work performed by staff. NOW, THEREFORE I, Greer Stone, Mayor of the City of Palo Alto, on behalf of the City Council, do hereby proclaim appreciation for outstanding public service to Marylin Keller for her service and contributions rendered as a Stormwater Management Oversight Committee Member. Presented: June 17th, 2024 Greer Stone Mayor O Item 2: Staff Report Pg. 9 I Packet Pg. 19 of 857 O Item 2 Attachment H - Lisa Forssell, Utilities Advisory Commission Lisa Forssell Utilities Advisory Commission WHEREAS, the Utilities Advisory Commission provides dedicated service to the residents and businesses of this community through the review of Utilities Department budgets, policies, and practices; and WHEREAS, the Commissioners lend their collective and extensive knowledge of financial forecasting, environmental sustainability, and energy and water efficiency in their review of fiber optics, recycled water, and research & development on utilities -related advancements, including communications with the community, utilities, and commodities markets, the application of economics and business, public service and many other utilities related matters; and WHEREAS, the Utilities Advisory Commission's deliberations add valuable insights and ideas through constructive discussion of complex utilities issues, leading to sound advice for the City Council on a wide range of utilities related items; and WHEREAS, the Commissioners assisted in the development of the annual Utilities Capital and Operating Budgets, the annual Utilities Legislative Policy Guidelines, the long-term Financial Plans and Reserves Guidelines, the Recycled Water Distribution Project, the long-term integrated resource plans for electric, gas, water, and wastewater utilities, and consideration of new long-term renewable energy contracts and fiber optics plans; and WHEREAS, the Utilities Advisory Commission expends significant personal time researching and facilitating efforts with staff, participating on subcommittees to develop reasoned, thorough and useful recommendations, representing the Commission at City Council and Committee meetings and working within the community to communicate and clarify issues and policies, and in addition, listen openly to members of the public, which enables good civic engagement; and NOW, THEREFORE, I, Greer Stone, Mayor of the City of Palo Alto, on behalf of the City Council, do hereby proclaim appreciation for outstanding public service to Lisa Forssell for her service and contribution rendered as a Utilities Advisory Commissioner. Presented: June 17t'', 2024 Greer Stone Mayor Item 2: Staff Report Pg. 10 I Packet Pg. 20 of 857 Item 2 Attachment I - Lauren Segal, Utilities Advisory Commission ehnati Lauren Segal Utilities Advisory Commission WHEREAS, the Utilities Advisory Commission provides dedicated service to the residents and businesses of this community through the review of Utilities Department budgets, policies, and practices; and WHEREAS, the Commissioners lend their collective and extensive knowledge of financial forecasting, environmental sustainability, and energy and water efficiency in their review of fiber optics, recycled water, and research & development on utilities -related advancements, including communications with the community, utilities, and commodities markets, the application of economics and business, public service and many other utilities related matters; and WHEREAS, the Utilities Advisory Commission's deliberations add valuable insights and ideas through constructive discussion of complex utilities issues, leading to sound advice for the City Council on a wide range of utilities related items; and WHEREAS, the Commissioners assisted in the development of the annual Utilities Capital and Operating Budgets, the annual Utilities Legislative Policy Guidelines, the long-term Financial Plans and Reserves Guidelines, the Recycled Water Distribution Project, the long-term integrated resource plans for electric, gas, water, and wastewater utilities, and consideration of new long-term renewable energy contracts and fiber optics plans; and WHEREAS, the Utilities Advisory Commission expends significant personal time researching and facilitating efforts with Staff, participating on subcommittees to develop reasoned, thorough, and useful recommendations, representing the Commission at City Council and Committee meetings, and working within the community to communicate and clarify issues and policies, and in addition, listen openly to members of the public, which enables good civic engagement; and NOW, THEREFORE, I, Greer Stone, Mayor of the City of Palo Alto, on behalf of the City Council, do hereby proclaim appreciation for outstanding public service to Lauren Segal for her service and contribution rendered as a Utilities Advisory Commissioner. Presented: June 17t'', 2024 Greer Stone Mayor O Item 2: Staff Report Pg. 11 I Packet Pg. 21 of 857 O Item 3 Item 3 Staff Report City Council Staff Report Report Type: SPECIAL ORDERS OF THE DAY CITY O F Lead Department: City Clerk PALO ALTO Meeting Date: June 17, 2024 Report #:2405-3042 TITLE Review List of Applications for Historic Resources Board Vacancies and Provide Direction for Interviews RECOMMENDATION Review list of applicants and provide direction for conducting interviews with selected applicants for vacancies on the Historic Resources Board. BACKGROUND The extended Historic Resources Board recruitment closed on June 2nd, 2024. A total of 5 applications were submitted during the recruitment period. At the February 26, 2024 meeting the City Council deliberated on the process to select candidates to interview. The direction provided was to allow each Council Member a limited number of votes (number of vacancies plus 50%, round up) to select their preferred candidates to interview with a threshold of 2 votes for an interview. At the June 3, 2024 meeting the City Council approved an ordinance to reduce membership on the Historic Resources Board from seven to five members. As such, the number of vacancies to be filled this recruitment cycle is reduced from four to two vacancies. MEMBESHIP REQUIREMENTS Each Board or Commission has different requirements for appointment such as mandatory residency, specialized training, or professional service in a specified area. Additionally, appointed members cannot be council members, officers or employees of the City of Palo Alto. At the June 3, 2024 meeting the City Council approved an ordinance to modify membership requirements for the Historic Resources Board. The updated membership requirements are listed below: • Demonstrated interest in and knowledge of history, architecture or historic preservation (PAMC 2.27.010). • Two members shall be professionals in the disciplines of architecture, architectural history, planning, landscape architecture, or related disciplines, or pre -historic and Item 3: Staff Report Pg. 1 Packet Pg. 22 of 857 Item 3 Item 3 Staff Report historic archeology, folklore, cultural anthropology, curation, or conservation (PAMC 2.27.010). This requirement is currently fulfilled by Caroline Willis (term expires 2024), Alisa Eagleston-Cieslewicz (term expires 2026), Gogo Heinrich (term expires 2024), Margaret Wimmer (term expires 2024), and Michael Makinen (term expires 2024). • At least one member shall possess academic education or practical experience in history or a related field (PAMC 2.27.010). This requirement is currently fulfilled by Samantha Rohman (term expires 2026) and Michael Makinen (term expires 2024). PUBLIC OUTREACH The extended Historic Resources Board recruitment invited applications from January 1, 2024 through June 2, 2024 through the new online application process. Palo Alto Municipal Code 2.16.060 requires public notification regarding vacancies of the Commissions as follows, "The City Clerk shall exercise their discretion in choosing the method of advertisement that will most effectively reach potential candidates." Based on the September 14, 2021 Policy & Services Committee meeting report regarding Board and Commission Member demographics and community representation, the City Clerk's office expanded recruitment efforts through additional means to "most effectively reach potential candidates". This recruitment was advertised through various methods including paid print and digital advisements in The Palo Alto Weekly and the Daily Post; via the City's website and social media channels; in physical locations of the Palo Alto Libraries and Community Centers; and distributed by e-mail through established distribution lists to community based organizations including the Palo Alto Historical Association, individuals and City subscription based notification lists. ATTACHMENTS Attachment A — Historic Resources Board Applications Redacted APPROVED BY: Mahealani Ah Yun, City Clerk Item 3: Staff Report Pg. 2 Packet Pg. 23 of 857 Item 3 Attachment A - Historic Resources Board Applications Redacted Submitted on Receipt number Related form version I Personal Information 2 June 2024, 9:59am 16 15 Name Barry Katz Cell Phone Number Home Phone Number Email Address Are you a Palo Alto resident? Yes Address City Postal Code Do you have any relatives or members of your household who No are employed by the City of Palo Alto, who are currently serving on the City Council, or who are Commissioners or Board Members? Are you available and committed to complete the term applied Yes for? Fair Political Practices No California state law requires board/commission members to file a disclosure of financial interests (Fair Political Practices Commission, Conflict of Interest. Form 700). Do you/your spouse have an investment in, or do you or your spouse serve as an officer or director of, a company doing business in Palo Alto which you believe is likely to: 1. Engage in business with the City; 2. Provide products or services for City projects; or 3. Be affected by decisions of this Board or Commission? Excluding your principal residence, do you or your spouse No own real property in Palo Alto? How did you learn about the vacancy on the Historic Email from the City Resources Board? 1 of 3 Item 3: Staff Report Pg. 3 Packet Pg. 24 of 857 Item 3 Attachment A - Historic Resources Board Consent to Publish Personal Information on the City of PalApplicationsRedacted Read the code, and check only ONE option below: I Personal and Job Experience Occupation Please list your relevant education, training, experience, certificates of training, licenses, and professional registration. If describing work experience, please include company/employer name and occupation. Please describe your involvement in community activities, volunteer and civic organizations, including dates and any offices held. I Application Questions I give permission for the City of Palo Alto to post to the City's website the attached Board and Commission Application intact. I have read and understand my rights under Government Code Section 6254.21. I may revoke this permission at any time by providing written notice to the Palo Alto City Clerk. Professor (retired) Ph.D., University of California, Santa Cruz: Consulting Professor, Design Group, Stanford University (1980-2022) Professor, Industrial and Interaction Design, California College of the Arts (1993-2023) Fellow, IDEO, Inc. (1997-2022) Extensive academic and journalistic publishing record including: Make it New. The History of Silicon Valley Design (MIT Press, 2015); Change By Design (with Tim Brown: Harper Collins, 2009/2019). Ventura Neighbors Association: active member Congregation Etz Chayim: Design Committee (chair and active member) 1. Why are you interested in serving on the Historic Resources I have academic expertise in the history and theory of design, with Board and what experience would you bring to the position? particular interest in design and architecture in Silicon Valley. 2. Please describe an issue that recently came before the Board that is of particular interest to you and describe why you are interested in it. Archived video meetings are available from the Midpen Media Center. 3. If appointed, what specific goals would you like to see the Historic Resources Board achieve, and how would you help in the process? I am interested in serving on the Historic Resources Board because I believe, in the tradition of William Morris, that we are not simply inheritors but custodians of an architectural legacy. As he stated in 1889, "They are not in any sense our property, to do with as we like. We are only trustees for those that come after us... My belief is that our descendants will thank us for our share of the work." I have actively followed, and to some extent participated in discussions of the North Ventura Coordinated Plan, specifically the cannery site previously occupied by Fry's Electronics. I would like to see balanced development that responds to the needs of present without translating our 130 year old city into a featureless and generic exurban landscape. To my mind this would entail more than a bronze plaque. Above all I would like to encourage thoughtful and respectful discussion of what will inevitably involve some contentious issues. I would also like the Historic Resources Board to serve an educational function, perhaps with greater outreach to the larger community than simply reporting its proceedings on the City's website. Palo Alto has played an outsize role in framing the character of modern life, and I would like the AHR to be a leader in demonstrating how to leverage the past as we look to the future. 4. Historic Resources Board Members work with the I have some familiarity but no direct experience with this body of documents listed below. If you have experience with any of documents. these documents, please describe that experience. Experience with these documents is not required for selection. Palo Alto Comorehensive Plan Land Use Element (2017t 2 of 3 Item 3: Staff Report Pg. 4 Packet Pg. 25 of 857 Item 3 Attachment A - Historic Palo Alto Municipal Code Chapter 16 49 Resources Board Secretary of the Interiors Standards for the Treatment of Historic Properties (2017) California Environmental Quality Act Applications Redacted The Professorville Historic District Design Guidelines (2016) Other documents listed on this website as well. 5. Please identify a project or projects that you find to be examples of good historic architecture, and explain why. You may attach samples, identify project addresses, or provide links. If you'd like to provide any additional documents, please upload below. Please confirm that you have read the Boards and Commissions Handbook. View the Boards and Commissions Handbook. Signature Date Completed Graduate Hotel, 488 University Ave. I am appreciative of the work of ELS Architecture and Design in the renovation of the original Birge Clark President's Hotel. The project demonstrates that it's possible to preserve an important historic structure while adapting it to current requirements. Unlike too many of its neighbors, it honors the streetscape without resorting to artificial stylistic gestures. Barry Katz resume-books-2024..df Yes Name of signatory: Barry Katz 06/02/2024 3 of 3 Item 3: Staff Report Pg. 5 Packet Pg. 26 of 857 Item 3 Attachment A - Historic Resources Board Applications Redacted BARRY M. KATZ 1 +74M Barry Katz was educated at McGill University in Montreal, the London School of Economics, and holds a doctorate from the University of California at Santa Cruz. He has served as Consulting Professor in the Design Group, Department of Mechanical Engineering, at Stanford University and Professor of Industrial and Interaction Design at the California College of the Arts in San Francisco. He has lectured at universities across North and South America, Europe, Asia, and the Middle East. In addition to his academic affiliations, Barry worked for more than twenty years with IDEO, Inc., the global design and innovation consultancy, where he conducted front-end research in support of IDEO project work. He continues to advise governments, companies, and academic institutions worldwide on issues pertaining to design and innovation. Dr. Katz is the author of eight books, including Change by Design with Tim Brown (Harper Collins, 2009/2019), which explores the nature of design thinking as a strategy of business, and NONOBJECT, with Branko Lukic, (MIT, 2010), a conceptual exploration of "the space between person and product." Make it New: The History of Silicon Valley Design, was published by the MIT Press in Fall, 2015 and has been translated into, Chinese, Japanese, Korean, and Spanish. He is currently researching the new architecture of Silicon Valley, "Structure and Symbol in the Age of Data." His writings on design as a strategy of innovation have appeared in many academic, professional, and popular journals. Bar M. Katz MAKE IT NEW TI -IF H SrOR OF WeChat ID: BarryKatz SILICON VALLEY 0€SIG#! linkedin.com/in/barry-katz-58b183/ CHANGE M 9ROWN Item 3: Staff Report Pg. 6 Packet Pg. 27 of 857 Submitted on Receipt number Related form version I Personal information 11 March 2024, 1:02pm 10 15 Name H. Caroline Willis Cell Phone Number Home Phone Number Email Address Are you a Palo Alto resident? Yes Address City Postal Code Do you have any relatives or members of your household who No are employed by the City of Palo Alto, who are currently serving on the City Council, or who are Commissioners or Board Members? Are you available and committed to complete the term applied Yes for? Fair Political Practices No California state law requires board/commission members to file a disclosure of financial interests (Fair Political Practices Commission. Conflict of Interest, Form 700). Do you/your spouse have an investment in, or do you or your spouse serve as an officer or director of, a company doing business in Palo Alto which you believe is likely to: 1. Engage in business with the City; 2. Provide products or services for City projects; or 3. Be affected by decisions of this Board or Commission? Excluding your principal residence, do you or your spouse Yes own real property in Palo Alto? How did you learn about the vacancy on the Historic Other: currently serving on the Board Resources Board? Item 3: Staff Report Pg. 7 Packet Pg. 28 of 857 1 of 3 Item 3 Attachment A - Historic Resources Board Consent to Publish Personal Information on the City of PalApplicationsRedacted e Read the code, and check only ONE option below: I Personal and Job Experience Occupation Please list your relevant education, training, experience, certificates of training, licenses, and professional registration. If describing work experience, please include company/employer name and occupation. Please describe your involvement in community activities, volunteer and civic organizations, including dates and any offices held. I Application Questions 1. Why are you interested in serving on the Historic Resources Board and what experience would you bring to the position? 2. Please describe an issue that recently came before the Board that is of particular interest to you and describe why you are interested in it. Archived video meetings are available from the Midpen Media Center. 3. If appointed, what specific goals would you like to see the Historic Resources Board achieve, and how would you help in the process? 4. Historic Resources Board Members work with the documents listed below. If you have experience with any of these documents, please describe that experience. Experience with these documents is not required for selection. Palo Alto Comprehensive Plan Land Use Element (2017) Palo Alto Municipal Code Chapter 16.49 Secretary of the Interiors Standards for the Treatment of Historic Prooerties (2017) California Environmental Quality Act The Professorville Historic District Desian Guidelines (20161 Other documents listed on this website as well I request that the City of Palo Alto redact my home address, phone numbers, and email address from the attached Board and Commission Application prior to posting to the City's website. Landlord. housewife Architectural degree from the Rhode Island School of Design Licensed to practice Architecture in California, License # C 14615 Former President of PAST Heritage Docent for PAST Heritage I believe that the structures from our past have important messages to convey to us: reminding of us of the history we are building on, how quickly life changes, that we are making decisions influencing future generations. The Board is currently trying to bring the Historic Inventory up to date for the first time since its inception in the 70s. This action is long overdue. The fact that it has been ignored for so long has created an unfounded dread in the community that there are lurking unknown negative consequences to being on the Inventory. We need to move forward and update our Inventory and create a system for keeping the Inventory up to date. Property owners need to be supported in their efforts to maintain their historic properties instead of being made to feel that they are subject to additional burdens and regulations. We need a staff person with a deep understanding of and appreciation for preservation and the willingness to advocate for our historic property owners. I am familiar with the PA code section 16.49 regarding preservation and the Sec'y of the Interior Standards. I have referenced these documents to help my decision making while serving on the Board and over the years restoring historic houses and advising homeowners. 5. Please identify a project or projects that you find to be I am particularly partial to the Ramona Street Historic District for its examples of good historic architecture, and explain why. You unique architecture. I love wandering through and admiring the many may attach samples, identify project addresses, or provide handcrafted details. It contains the work of the Architect Birge Clark and links, the designer Pedro de Lemos who contributed some of our most treasured buildings around town. It represents an early destination shopping district predating the mall concept. It pains me to see the 2 of 3 Item 3: Staff Report Pg. 8 Packet Pg. 29 of 857 Item 3 Attachment A- Historic hodgepodge assembled in the stree Resources Board e will invest in finding an appropriate response t of too distant future. Applications Redacted If you'd like to provide any additional documents, please upload below. Please confirm that you have read the Boards and Commissions Handbook. View the Boards and Commissions Handbook Signature Date Completed Yes Name of signatory: H Caroline Willis a Link to signature 03/11/2024 3 of 3 Item 3: Staff Report Pg. 9 Packet Pg. 30 of 857 Item 3 Attachment A - Historic Resources Board Applications Redacted Submitted on Receipt number Related form version I Personal Information 4 May 2024, 8:48am 12 15 Name Christopher Brosnan Cell Phone Number Home Phone Number Email Address Are you a Palo Alto resident? Yes Address City Postal Code Do you have any relatives or members of your household who No are employed by the City of Palo Alto, who are currently serving on the City Council, or who are Commissioners or Board Members? Are you available and committed to complete the term applied Yes for? Fair Political Practices No California state law requires board/commission members to file a disclosure of financial interests (Fair Political Practices Commission, Conflict of Interest. Form 700). Do you/your spouse have an investment in, or do you or your spouse serve as an officer or director of, a company doing business in Palo Alto which you believe is likely to: 1. Engage in business with the City; 2. Provide products or services for City projects; or 3. Be affected by decisions of this Board or Commission? Excluding your principal residence, do you or your spouse No own real property in Palo Alto? How did you learn about the vacancy on the Historic Email from the City Resources Board? 1 of 3 Item 3: Staff Report Pg. 10 Packet Pg. 31 of 857 Item 3 Attachment A - Historic Resources Board Consent to Publish Personal Information on the City of PalApplicationsRedacted e Read the code, and check only ONE option below: I Personal and Job Experience Occupation I request that the City of Palo Alto redact my home address, phone numbers, and email address from the attached Board and Commission Application prior to posting to the City's website. Basketball Coach Please list your relevant education, training, experience, I have coached basketball for Gunn High School going on ten seasons certificates of training, licenses, and professional registration. If describing work experience, please include company/employer name and occupation. Please describe your involvement in community activities, volunteer and civic organizations, including dates and any offices held. I Application Questions I volunteer for the Palo Alto Pollinator garden. I am a member of my HOA's landscape committee 1. Why are you interested in serving on the Historic Resources I love Palo Alto. I have lived here for over 30 years. I have an excellent Board and what experience would you bring to the position? sense of Palo Alto's historical significance 2. Please describe an issue that recently came before the Board that is of particular interest to you and describe why you are interested in it. Archived video meetings are available from the Midpen Media Center. 3. If appointed, what specific goals would you like to see the Historic Resources Board achieve, and how would you help in the process? 4. Historic Resources Board Members work with the documents listed below. If you have experience with any of these documents, please describe that experience. Experience with these documents is not required for selection. Palo Alto Comprehensive Plan Land Use Element (2017) Palo Alto Municipal Code Chapter 16.49 Secretary of the Interiors Standards for the Treatment of Historic Properties (2017) California Environmental Quality Act The Professorville Historic District Desian Guidelines (20161 Other documents listed on this website as well 5. Please identify a project or projects that you find to be examples of good historic architecture, and explain why. You may attach samples, identify project addresses, or provide links. If you'd like to provide any additional documents, please upload below. Please confirm that you have read the Boards and Commissions Handbook. View the Boards and Commissions Handbook. On San Antonio road there was a mortuary that was very beautiful that was demolished, which I disagreed with Preserving Palo Alto's beautiful history and ecology is extremely important to me. I will bring essential enthusiasm to the table I have seen the comprehensive plan before I am a huge fan of the Palo Alto post office downtown. I love when history is preserved for our enjoyment Yes 2 of 3 Item 3: Staff Report Pg. 11 Packet Pg. 32 of 857 Signature Name of signatory: Chris Brosnan Link to signature Date Completed 5/4/2024 Item 3 Attachment A - Historic Resources Board Applications Redacted 3 of 3 Item 3: Staff Report Pg. 12 Packet Pg. 33 of 857 Item 3 Attachment A - Historic Resources Board Applications Redacted Submitted on Receipt number Related form version I Personal Information Name 14 May 2024, 2:12pm 14 15 Geddes Ulinskas Cell Phone Number Home Phone Number Email Address Are you a Palo Alto resident? Yes Address City _ Postal Code Do you have any relatives or members of your household who No are employed by the City of Palo Alto, who are currently serving on the City Council, or who are Commissioners or Board Members? Are you available and committed to complete the term applied Yes for? Fair Political Practices No California state law requires board/commission members to file a disclosure of financial interests (Fair Political Practices Commission, Conflict of Interest. Form 700). Do you/your spouse have an investment in, or do you or your spouse serve as an officer or director of, a company doing business in Palo Alto which you believe is likely to: 1. Engage in business with the City; 2. Provide products or services for City projects; or 3. Be affected by decisions of this Board or Commission? Excluding your principal residence, do you or your spouse No own real property in Palo Alto? How did you learn about the vacancy on the Historic Email from the City Resources Board? 1 of 3 Item 3: Staff Report Pg. 13 Packet Pg. 34 of 857 Item 3 Attachment A - Historic Resources Board Consent to Publish Personal Information on the City of PalApplicationsRedacted e Read the code, and check only ONE option below: I Personal and Job Experience Occupation Please list your relevant education, training, experience, certificates of training, licenses, and professional registration. If describing work experience, please include company/employer name and occupation. Please describe your involvement in community activities, volunteer and civic organizations, including dates and any offices held. I Application Questions 1. Why are you interested in serving on the Historic Resources Board and what experience would you bring to the position? 2. Please describe an issue that recently came before the Board that is of particular interest to you and describe why you are interested in it. Archived video meetings are available from the Midpen Media Center. I give permission for the City of Palo Alto to post to the City's website the attached Board and Commission Application intact. I have read and understand my rights under Government Code Section 6254.21. I may revoke this permission at any time by providing written notice to the Palo Alto City Clerk. Architect I received a bachelor of architecture from Pratt Institute in Brooklyn New York. My early professional experience in New York included projects such as the restoration of Bryant Park, the New York Public Library and the restoration and re -construction of seven Carnegie Grant libraries in Brooklyn, Queens, the Bronx and Manhattan. After moving to San Francisco, I established my own architectural practice. My projects in San Francisco include the re -construction of the Congregation Chevra Thilim, home to one of the oldest traditional Jewish Communities in San Francisco as well as the renovation and restoration of multiple historic homes. Our renovation of the historic Henning Thode residence at Dolores Street was a restoration on a significant home of Historical Merit. I have been a member of the American Institute of Architects for over two decades. I have volunteered for many committees and panels for the AIA San Francisco Chapter. From 2002 to 2007, I was a member of the Bernal Heights design review board. I attended monthly meetings to review design proposals for projects in the Bernal Heights Special use district and evaluate how proposals conformed to the special rules for the Bernal Heights district. After moving to Palo Alto, I have worked on two residential projects in Professorville, the most historically significant neighborhood in Palo Alto. I am very familiar with the design guidelines for Professorville and the rich architectural history that shaped this neighborhood. Palo Alto is a very special place to me and it is quickly developing. I see development as a healthy part of the any city and there are benefits for the economy and culture, but the special character and charm of a community can get lost unless special care is taken to identify the unique elements of the environment and there is a plan for how to respect those elements. My experience working with Planning and Preservation on many projects in San Francisco, my experience as a member of the Bernal Heights Design Review Board and my experience designing residential projects in Professorville all provide background that I could bring to the Historic Resources Board. I have also worked closely with the historic resource firm of Page and Turnbull for many projects. I understand that Page and Turnbull has drafted many of the historic reports for the city of Palo Alto. I was very interested by the recent Historic review of 261 Hamilton Avenue. Although the discussion was focused on the replacement of tile accents on the base of the building, the history of that structure was reviewed and as part of the proceedings, the structure was revised from a category 3 contributing building to a major historic resource. What was also inspiring was that the owner of the building spoke about its history 2 of 3 Item 3: Staff Report Pg. 14 Packet Pg. 35 of 857 Item 3 Attachment A - Historic and the owner has been a resident i Resources Board he had a clear passion for the significance of Iistoric buildings in the Ramona Architectur Applications Redacted onstrates is that historic preservation is not an academic exercise, but rather the stewardship of parts of the environment that are tied to the history and memories of our neighbors, friends and families. 3. If appointed, what specific goals would you like to see the Historic Resources Board achieve, and how would you help in the process? 4. Historic Resources Board Members work with the documents listed below. If you have experience with any of these documents, please describe that experience. Experience with these documents is not required for selection. Palo Alto Comprehensive Plan Land Use Element (2017) Palo Alto Municipal Code Chapter 16.49 Secretary of the Interiors Standards for the Treatment of Historic Prooerties (2017) California Environmental Quality Act The Professorville Historic District Desian Guidelines (201 6t Other documents listed on this website as well 5. Please identify a project or projects that you find to be examples of good historic architecture, and explain why. You may attach samples, identify project addresses, or provide links. If you'd like to provide any additional documents, please upload below. Please confirm that you have read the Boards and Commissions Handbook. View the Boards and Commissions Handbook. Signature Date Completed There are many guidelines for renovating historic buildings that have been identified as contributing and known resources. I would like to see some recommendations for new developments in non -historic areas help make new construction reflect some more of the characteristics that make Palo Alto special. Historic guidelines for new construction in new development zones of the city would also help to unify new and old and create a more integrated architectural vocabulary. It is still important that new construction be visibly of its time, and attempting to imitate historic styles in problematic, but there are attitudes and treatments of materials and massing that can unify new and historic construction. To research my designs for projects in Palo Alto, I have referenced the Municipal code - Chapter 16.49 I have been familiar with the Secretary of the Interior's Standards for more than two decades. I have attended many seminars on its application and many of the updates that have been issued. I have had to follow the Environmental Quality Act for many of my project including coastal commission review. I have had to work with the Professorville Guidelines since 2020 with one design project at Bryant Street and a second design project at Melville. I have also worked in Page and Turnbull on specific application and evaluation of my designs. I am very impressed with the restoration of the Paly Tower at Paly High School. I understand the project was a joint effort by Palo Alto Stanford Heritage and Palo Alto Historical Association. The restoration of the Hoover Pavilion at the Stanford University Medical Center is also an example of a beautiful historic building remaining current and fulfilling a vital role in the community. I am also a fan of all the Eichler homes in Palo Alto and all the owners who have made updates and improvements, but keep the spirit of their homes the same. Yes Name of signatory: Geddes Ulinskas 05/14/2024 3 of 3 Item 3: Staff Report Pg. 15 Packet Pg. 36 of 857 Item 3 Attachment A - Historic Resources Board Applications Redacted Submitted on Receipt number Related form version I Personal Information 8 May 2024, 2:40pm 13 15 Name Zachary Pozner Cell Phone Number Home Phone Number Email Address Are you a Palo Alto resident? Address City Postal Code Yes Do you have any relatives or members of your household who No are employed by the City of Palo Alto, who are currently serving on the City Council, or who are Commissioners or Board Members? Are you available and committed to complete the term applied Yes for? Fair Political Practices No California state law requires board/commission members to file a disclosure of financial interests (Fair Political Practices Commission, Conflict of Interest. Form 700). Do you/your spouse have an investment in, or do you or your spouse serve as an officer or director of, a company doing business in Palo Alto which you believe is likely to: 1. Engage in business with the City; 2. Provide products or services for City projects; or 3. Be affected by decisions of this Board or Commission? Excluding your principal residence, do you or your spouse own real property in Palo Alto? How did you learn about the vacancy on the Historic Resources Board? No Email from the City 1 of 4 Item 3: Staff Report Pg. 16 Packet Pg. 37 of 857 Item 3 Attachment A - Historic Resources Board Consent to Publish Personal Information on the City of PalApplicationsRedacted e Read the code, and check only ONE option below: I Personal and Job Experience Occupation Please list your relevant education, training, experience, certificates of training, licenses, and professional registration. If describing work experience, please include company/employer name and occupation. Please describe your involvement in community activities, volunteer and civic organizations, including dates and any offices held. I request that the City of Palo Alto redact my home address, phone numbers, and email address from the attached Board and Commission Application prior to posting to the City's website. Director of Architecture, Senior Campus Planner Director of Architecture, Senior Campus Planner Stanford University: University Architect / Campus Planning and Design [March 2012 - Present] Senior Project Manager, Design Manager, Entitlements Manager Stanford University Medical Center: Planning Design & Construction [February 2006 - February 20121 Senior Designer, Project Architect SmithGroupJJR [May 2002 - February 2006] Designer KMD Architects [June 1999 - January 2002] Designer Bohlin Cywinski Jackson [February 1999 - June 1999] Designer Desmone & Associates Architects [August 1997 - December 1998] Education Carnegie Mellon University Bachelor of Architecture (BArch) Minor in English Studies 1994- 1999 Cornell University Architecture Study Abroad (Rome, Italy) Architecture, Art & Planning 1998- 1998 Kunming University of Science and Technology Architecture Study Abroad (Kunming, China) Architecture, Art & Planning 1997- 1997 Licensure Registered Architect, New York State License #36269 I I lived in San Francisco from 1999 - 2023, but never held any official public office or had ample time to volunteer to help my local community. After 20 years commuting to Stanford every day, I finally moved to Palo Alto in the summer of 2023. I have spent the majority of my career helping to guide the planning and design of the Stanford's Land, Buildings and Real Estate, including: Stanford University Stanford Redwood City Stanford Belmont Stanford Research Park Stanford Linear Accelerator Center Stanford Shopping Center Activities & Volunteering: Series Director Stanford University Spring Lecture Series in Architecture + Landscape + Urban Design June 2012 — Present 2 of 4 Item 3: Staff Report Pg. 17 Packet Pg. 38 of 857 Item 3 LAttachment A- Historic Studio Critic & Lecturer Resources Board Stanford University - Architectural D Applications Redacted Jan 2016 - Present Studio Critic Academy of Art University - School of Architecture Jan 2018 - Present I Application Questions 1. Why are you interested in serving on the Historic Resources During my 20 years working at Stanford Hospital and Stanford Board and what experience would you bring to the position? University, I have performed many different roles in the public process on behalf of those institutions, including: Entitlements Manager Project Manager Campus Planner Director of Architecture I have collaborated with CoPA Planning, Public Works, Transportation, Fire & Police Departments. I have presented at ARB, Planning Commission, and City Council meetings. in my capacity as landlord, have successfully guided dozens of Research Park and Shopping Center tenants through the ARB process. I believe I have a strong understanding of the values of the Palo Alto Community and the HRB, and the public process of planning and design review. I realize that I would need to recuse myself from Stanford projects, but I still feel that I could make a positive impact on the HRB. I am overjoyed to finally be living in Palo Alto, and would love the opportunity to help the guide the future of the Palo Alto built environment. 2. Please describe an issue that recently came before the Board that is of particular interest to you and describe why you are interested in it. Archived video meetings are available from the Midpen Media Center. 3. If appointed, what specific goals would you like to see the Historic Resources Board achieve, and how would you help in the process? 4. Historic Resources Board Members work with the documents listed below. If you have experience with any of these documents, please describe that experience. Experience with these documents is not required for selection. Palo Alto Comprehensive Plan Land Use Element (2017) Palo Alto Municipal Code Chapter 16.49 Secretary of the Interiors Standards for the Treatment of Historic Properties (2017) California Environmental Quality Act The Professorville Historic District Desian Guidelines (201 61 Other documents listed on this website as well I have not attended any recent sessions, but I presented to the HRB when I was managing the Hoover Pavilion Renovation project. One of the primary roles in my current position is to critique planning and design within a specific context. This requires the ability to zoom in & out of a project: focusing on the detail of how the proposed project itself is designed, while also considering how it meshes with the broader neighborhood. This ability to focus on different scales is critical to guiding design professionals who do not spend as much time in our community as we do. I also take pride in my ability to remove my own ego from the design process. My goal is not to make my personal imprint on a project. Rather, it is to assist the consultant teams to reach the optimal version of their concept & design. This often involves a skill for asking the right questions of the designer, rather than proposing specific solutions. I think I could help project applicants to clarify their own objectives in order to validate (or modify) their proposed solutions. I have read these documents in the past, and would familiarize myself with them if selected to the HRB. 5. Please identify a project or projects that you find to be I am very proud of our historic renovation of Hoover Pavilion. We examples of good historic architecture, and explain why. You restored the exterior to its original glory, while renovating the interior to a may attach samples, identify project addresses, or provide modern medical clinic with a warm aesthetic that makes our patients and 3 of 4 Item 3: Staff Report Pg. 18 Packet Pg. 39 of 857 links. If you'd like to provide any additional documents, please upload below. Please confirm that you have read the Boards and Commissions Handbook. View the Boards and Commissions Handbook Signature Date Completed staff feel comfortable and valued Yes Name of signatory: Zachary Pozner Link to signature 05/08/2024 Item 3 Attachment A - Historic Resources Board Applications Redacted 4 of 4 Item 3: Staff Report Pg. 19 Packet Pg. 40 of 857 Item 5 Item 5 Staff Report City Council Staff Report From: City Manager CITY O F Report Type: CONSENT CALENDAR PALO Lead Department: Administrative Services ALTO Meeting Date: June 17, 2024 Report #:2402-2592 TITLE Adoption of Fiscal Year 2025 Investment Policy as Recommended by the Finance Committee RECOMMENDATION The Finance Committee and Staff recommend the City Council adopt the Fiscal Year 2025 Investment Policy (Policy) (Attachment A) with the following changes: 1. A report of transactions, including but not limited to investments, reinvestment, sold, and exchanged securities, will be made available to the City Council on a monthly basis, per California Government Code Section 53607, and 2. Annually, require brokers and dealers provide documentation of financial condition and relevant registration and certify that they have reviewed relevant California Government Code Section and the City's Investment Policy. ANALYSIS The Investment Policy (Policy) and California Government Code Section 53646(a)(2)1 requires that the Policy be reviewed, and any changes proposed by staff be review and approved annually by the City Council at a public meeting, which the City has done during the annual budget process. The Finance Committee discussed the Policy at its May 21, 2024, meeting (Report # 2402-2588)2 and unanimously recommended Council approval. The City Auditor's Office performed the Investment Management Audit in spring 2023 and transmitted this report to the Council on January 16, 2024 (Report # 2312-2402)3. The Policy has been updated to include the City Auditor's recommended changes. 1 FindLaw.com - California Code, Government Code - GOV § 53646: https://codes.findlaw.com/ca/government- code/gov-sect-53646/ 2 Finance Committee, May 21, 2024, Agenda Item #3: https://cityofpaloaIto.primegov.com/Portal/Meeting?meetingTemplate Id=14280 3 City Council, January 16, 2024, Agenda Item #9: Item 5: Staff Report Pg. 1 Packet Pg. 41 of 857 Item 5 Item 5 Staff Report Monthly Report of Transactions California Government Code Section 536073 requires that a monthly a report of transactions (investments, reinvestment, sold, and exchanged securities) be transmitted to the agency's legislative body. This reporting requirement is separate and distinct from the more detailed quarterly investment activity report submitted under California Government Code Section 53646(b)5 . Staff concurs with this recommendation and will make this information available for the month beginning July 2024. Broker and Dealer Financial Condition and Registration The Administrative Services Department maintains a list of authorized investment brokers and dealers. The Policy outlines two criteria for a dealer to eligible as an authorized investment broker or dealer: 1. At least three years' experience operating with California municipalities 2. Maintain an inventory of trading securities of at least $10 million Section 53601.5 of the California Government Code states that if an investment is not purchased directly from the issuer, the purchase shall be from either an institution licensed by the state as a broker dealer or from a member of a federal regulated securities exchange, from a national or state -chartered bank, from a savings association or federal association, or from a brokerage firm designated as a primary government dealer by the Federal Reserve bank. To address the City Auditor's recommendations, the Policy has been updated to include the following: 1. Annually require that brokers and dealers who wish to sell and buy securities to/from the City to provide documentation showing their financial condition and relevant registration. 2. Annually require broker dealers to certify in writing that they reviewed the applicable California Government Code sections and the City's Investment Policy. 4 FindLaw.com - California Code, Government Code - GOV § 53607: https://codes.findlaw.com/ca/government- code/gov-sect-53607/ 5 FindLaw.com - California Code, Government Code - GOV § 53601.5: https://codes.findlaw.com/ca/government- code/gov-sect-53601-5/ Item 5: Staff Report Pg. 2 Packet Pg. 42 of 857 Item 5 Item 5 Staff Report FISCAL/RESOURCE IMPACT Approval of the recommendation will not have a financial impact. It will require existing staff resources for the additional reporting. STAKEHOLDER ENGAGEMENT Staff works internally, with the City Auditor's Office (BakerTilly auditor), and reviews the Government Code and publications by the California Debt and Investment Advisory Commission (CDIAC). ENVIRONMENTAL REVIEW This activity is not a project under California Environmental Quality Act (CEQA) as defined in CEQA Guidelines, section 15378, because it has no potential for resulting in either a direct or reasonably foreseeable indirect physical change in the environment. ATTACHMENTS Attachment A: FY 2025 Proposed Investment Policy APPROVED BY: Lauren Lai, Director of Administrative Services Item 5: Staff Report Pg. 3 Packet Pg. 43 of 857 Item 5 Attachment A - FY 2025 Proposed Investment Policy Attachment A PROPOSED CITY OF PALO ALTO Investment Policy Fiscal Year 2024-25 INTRODUCTION The City of Palo Alto invests its pooled idle cash according to State of California law and the charter of the City of Palo Alto. In particular, the City follows "The Prudent Investor Standard" cited in the State Government Code (Section 53600.3). Under this standard, all governing bodies of local agencies or persons authorized to make investment decisions on behalf of the City are trustees and therefore fiduciaries subject to the prudent investor standard. When investing, reinvesting, purchasing, acquiring, exchanging, selling, or managing public funds, a trustee shall act with care, skill, prudence, and diligence under the circumstances then prevailing, including, but not limited to the general economic conditions and the anticipated needs of the agency, that a prudent person acting in a like capacity and familiarity with those matters would use in the conduct of funds of a like character and with like aims, to safeguard the principal and maintain the liquidity needs of the agency. INVESTMENT PHILOSOPHY The basic principles underlying Palo Alto's investment philosophy is to ensure the safety of public funds, provide that sufficient money is always available to meet current expenditures, and achieve a reasonable rate of return on its investments. The City's preferred and chief practice is to buy securities and to hold them to their date of maturity rather than to trade or sell securities prior to maturity. The City may, however, elect to sell a security prior to its maturity should there be a significant financial need. If securities are purchased and held to their maturity date, then any changes in the market value of those securities during their life will have no effect on their principal value. Under a buy and hold philosophy, the City is able to protect its invested principal. The economy, the money markets, and various financial institutions (such as the Federal Reserve System) are monitored carefully to make prudent investments and to assess the condition of the City's portfolio. INVESTMENT OBJECTIVES The primary objectives, in priority order, of investment activities shall be safety, liquidity, and yield: 1. Safety: Safety of principal is the foremost objective of the investment program. Investments shall be undertaken in a manner that seeks to ensure the preservation of capital in the overall portfolio. The objective will be to mitigate credit risk and interest Fiscal Year 2025 Item 5: Staff Report Pg. 4 Packet Pg. 44 of 857 Item 5 Attachment A - FY 2025 Proposed Investment Policy rate risk. a) Credit risk is the risk that an obligation will not be paid and a loss will result. The City will seek to minimize this risk by: Limiting investment to the safest types of securities or minimum credit quality rating as listed in the "Authorized Investment" section Diversifying its investments among the types of securities that are authorized under this investment policy b) Interest rate risk is the risk that changes in interest rates will adversely affect the value of an investor's portfolio. For example, an investor with large holdings in long-term bonds has assumed significant interest rate risk because the value of the bonds will fall if interest rates rise. The City can minimize this risk by: • Buying and holding its securities until maturity • Structuring the investment portfolio so that securities mature to meet cash flow requirements To further achieve the objective of safety, the amount that can be invested in all investment categories, excluding obligations of the U.S. Government and its agencies, is limited either as a percentage of the portfolio or by a specific dollar amount. These limits are defined under the "Authorized Investments" section. 2. Liquidity: Liquidity is the second most important objective of the investment program. The investment portfolio shall remain sufficiently liquid to meet all operating requirements that may be reasonably anticipated. This is accomplished by maintaining a portion of the portfolio in liquid money market mutual funds or local government investment pools. In addition, the City will maintain one month's net cash needs in short term and/or liquid investments and at least $50 million shall be maintained in securities maturing in less than two years. Although the City's practice is to buy and hold securities to maturity, since all possible cash demands cannot be anticipated, the portfolio will consist of securities with active secondary or resale markets should the need to sell a security prior to maturity arises. Yield: Yield on the City's portfolio is last in priority among investment objectives. The investment portfolio shall be designed to obtain a market rate of return that reflects the authorized investments, risk constraints, and liquidity needs outlined in the City's investment policy. Compared to similar sized cities, the City of Palo Alto should be able to take advantage of its relatively large reserve balances to achieve higher yields through long-term investments. In addition, the City will strive to maintain the level of investment of idle funds as close to 100 percent as possible. ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) RESPONSIBILITIES Fiscal Year 2025 2 Item 5: Staff Report Pg. 5 Packet Pg. 45 of 857 Item 5 Attachment A - FY 2025 Proposed Investment Policy In addition to and subordinate to the Safety, Liquidity, and Yield investment objectives, investments that support sound environmental, social and governance (ESG) objectives are also considered. While the City's portfolio is not classified as an ESG portfolio, investments in entities that support community well-being through practices that emphasize safe and environmentally sound objectives; fair labor practices; and equality of rights regardless of sex, race, age, disability, or sexual orientation, is encouraged. Direct investments in entities that manufacture tobacco products, firearms, and engage in direct production or drilling of fossil fuels is discouraged. This section applies to new investments (after November 5, 2018) only and does not require divestment of existing investments. Investments in Certificates of Deposit (CDs) and Negotiable Certificates of Deposit are exempt from the ESG investing objective. SCOPE A. This investment policy shall apply to all financial assets of the City of Palo Alto as accounted for in the Annual Comprehensive Financial Report (ACFR), including but not limited to the following funds: 1. General Fund 2. Special Revenue Funds 3. Debt Service Funds 4. Capital Project Fund 5. Enterprise Funds 6. Internal Service Funds 7. Trust and Agency Funds B. The policy does not cover funds held by the California Public Employees Retirement System (CalPERS), the California Employers' Retiree Benefit Trust (CERBT), Deferred Compensation programs (e.g. ICMA, Hartford), the Authority for California Cities Excess Liability (ACCEL), and the Public Agency Retirement Services (PARS) Section 115 Irrevocable Trust. C. Investments of bond proceeds shall be governed by the provisions of the related bond indentures. GENERAL INVESTMENT GUIDELINES The maximum stated final maturity of individual securities in the portfolio should be ten years. 2. A maximum of 30 percent of the par value of the portfolio shall be invested in securities with maturities beyond five years. The City shall maintain a minimum of one month's net cash needs in short term and/or liquid investments. Fiscal Year 2025 3 Item 5: Staff Report Pg. 6 Packet Pg. 46 of 857 Item 5 Attachment A - FY 2025 Proposed Investment Policy 4. At least $50 million shall be maintained in securities maturing in less than two (2) years. Should the ratio of the market value of the portfolio to the book value of the portfolio fall below 95 percent, the Administrative Services Department will report this fact to the City Council within a reasonable time frame and evaluate whether there is any risk of holding any of the securities to maturity. 6. Commitments to purchase securities newly introduced on the market shall be made no more than three (3) working days before pricing. 7. Whenever possible, the City will obtain three or more quotations on the purchase or sale of comparable securities and take the higher yield on purchase or higher price on sale. This rule will not apply to new issues, which are purchased at market no more than three (3) working days before pricing, as well as to LAIF, City of Palo Alto bonds, money market accounts and mutual funds, all of which shall be evaluated separately. Where the Investment Policy specifies a percentage limitation for a particular category of investment, that percentage is applicable only at the date of purchase. A later increase or decrease in a percentage resulting from a change in the portfolio's assets or values shall not constitute a violation of that restriction. As soon as possible, percentage limitations will be restored as investments mature in each category. AUTHORIZED INVESTMENTS The California Government Code (Sections 53600 et seq.) governs investment of City funds. The following investments are authorized: U.S. Government Securities (e.g. Treasury notes, bonds and bills) Securities that are backed by the full faith and credit of the United States a) There is no limit on purchase of these securities. b) Securities will not exceed 10 years maturity. c) All purchased securities must have an explicit or a de facto backing of the full faith and credit of the U.S. Government. 2. U.S. Government Agency Securities — Obligations issued by the Federal Government agencies (e.g. Federal National Mortgage Association, etc.). a. There is no limit on purchase of these securities except for: • Callable and Multi -step-up securities provided that: Fiscal Year 2025 4 Item 5: Staff Report Pg. 7 Packet Pg. 47 of 857 Item 5 Attachment A - FY 2025 Proposed Investment Policy - The potential call dates are known at the time of purchase - The interest rates at which they "step-up" are known at the time of purchase - The entire face value of the security is redeemed at the call date - No more than 25 percent of the par value of the portfolio b. Securities will not exceed 10 years maturity. 3. California State, California Local Government Agencies, and other United States State Bonds a) Having at time of investment a minimum Double A (AA/Aa2) rating as provided by a nationally recognized rating service (e.g. Moody's, Fitch, and/or Standard and Poor's). b) May not exceed 40 percent of the par value of the portfolio. c) Investments include: i) Registered state warrants or treasury notes or bonds of the State of California and bonds, notes, warrants, or other evidences of indebtedness of any local agency within California, including bonds payable solely out of the revenues from a revenue producing property owned, controlled, or operated by the state or local agency or by a department, board, agency, or authority of the state or local agency. ii) Registered treasury notes or bond of any of the 49 United States in addition to the State of California, including bonds payable solely out of the revenues from a revenue -producing property owned, controlled, or operated by a state or by a department, board, agency or authority of any of the other 49 United States, in addition to the State of California. 4. Certificates of Deposit (CD) - A debt instrument issued by a bank for a specified period of time at a specified rate of interest. Purchase of CD's are limited to: a) May not exceed 20 percent of the par value of the portfolio. b) No more than 10 percent of the par value of the portfolio in collateralized CDs in any institution. c) Purchase collateralized deposits only from federally insured large banks that are rated by a nationally recognized rating service (e.g. Moody's, Fitch, and/or Standard and Poor's). Fiscal Year 2025 5 Item 5: Staff Report Pg. 8 Packet Pg. 48 of 857 Item 5 Attachment A - FY 2025 Proposed Investment Policy d) For non -rated banks, deposit should be limited to amounts federally insured (FDIC). — See Appendix C e) Rollovers are not permitted without specific instruction from authorized City staff. Banker's Acceptance Notes (BA) — Bills of exchange or time drafts drawn on and accepted by commercial banks. Purchase of banker's acceptances are limited to: a) No more than 30 percent of the par value of the portfolio. b) Not to exceed 180 days maturity. c) No more than $5 million with any one institution. 6. Commercial Paper - Short-term unsecured obligations issued by banks, corporations, and other borrowers. Purchases of commercial paper are limited to: a) Having highest letter or numerical rating as provided for by a nationally recognized rating service (e.g. Moody's, Fitch, and/or Standard and Poor's). b) No more than 15 percent of the par value of the portfolio. c) Not to exceed 270 days maturity. d) No more than $3 million or 10 percent of the outstanding commercial paper of any one institution, whichever is lesser. 7. Local Agency Investment Fund (LAIF) — A State of California managed investment pool may be used up to the maximum permitted by California State Law. Short -Term Repurchase Agreements (REPO) — A contractual agreement between a seller and a buyer, usually of U.S. government securities, whereby the seller agrees to repurchase the securities at an agreed upon price and, usually, at a stated time. Purchases of REPO's must: a) Not to exceed 1 year. b) Market value of securities that underlay a repurchase agreement shall be valued at 102 percent or greater of the funds borrowed against those securities. c) A Master Repurchase agreement must be signed with the bank or dealer. Fiscal Year 2025 6 Item 5: Staff Report Pg. 9 Packet Pg. 49 of 857 Item 5 Attachment A - FY 2025 Proposed Investment Policy 9. Money Market Deposit Accounts Liquid bank accounts which seek to maintain a net asset value of $1.00. 10. Mutual Funds which seek to maintain a net asset value of $1.00 and which are limited essentially to the above investments and further defined in note 9 of Appendix A a) No more than 20 percent of the par value of the portfolio. b) No more than 10 percent of the par value with any one institution. 11. Negotiable Certificates of Deposit (NCD) issued by nationally or state -chartered banks and state or federal savings institutions and further defined in note 11 of Appendix A. Purchases of negotiable certificates of deposit: a) May not exceed 20 percent of the par value of the portfolio. b) No more than $5 million in any one institution. 12. Medium -Term Corporate Notes — Issued by corporation organized and operating within the United States or by depository institutions licensed by the United States or any state and operating with the United States. a) Not to exceed 5 years maturity. b) Securities eligible for investment shall have a minimum rating of AA or Aa2 from a nationally recognized rating service (e.g. Moody's, Fitch, and/or Standard & Poor's). c) No more than 10 percent of the par value of the portfolio. d) No more than $5 million of the par value may be invested in securities of any single issuer, other than the U.S. Government, its agencies and instrumentality. e) If securities owned by the City are downgraded by Moody's, Fitch, or Standard & Poors to a level below AA or Aa2, it shall be the City's policy to review the credit situation and make a determination as to whether to sell or retain such securities in the portfolio. 13. Supranational Organizations Securities — Supranational organizations refer to International Bank for Reconstruction and Development (IBRD), International Finance Corporation (IFC) and Inter -American Development Bank (IADB). a. Securities will not exceed 5 years maturity. b. No more than 20 percent of the par value of the portfolio. Fiscal Year 2025 7 Item 5: Staff Report Pg. 10 Packet Pg. 50 of 857 Item 5 Attachment A - FY 2025 Proposed Investment Policy c. No more than 10 percent of the par value with any one institution. d. Securities eligible for investment shall have a minimum rating of AA or Aa2 from a nationally recognized rating service (e.g. Moody's, Fitch, and/or Standard & Poor's). e. Limited to United States dollar denominated senior unsecured unsubordinated obligations issued or unconditionally guaranteed by IBRD, IFC, and IADB. Appendix A provides a more detailed description of each investment vehicle and its security and liquidity features. Most of the City's short-term investments will be in securities which pay principal upon maturity, while long-term investments may be in securities that periodically repay principal, as well as interest. Most of the City's investments will be at a fixed rate. However, some of the investments may be at a variable rate, so long as that rate changes on specified dates in pre- determined increments. PROHIBITED INVESTMENTS: Includes all investments not specified above, and in particular: 1. Reverse repurchase agreements 2. Derivatives, as defined in Appendix B Appendix B provides a more detailed description of each investment, which is prohibited, for City investment. AUTHORIZED INVESTMENT PERSONNEL Idle cash management and investment transactions are the responsibility of the Administrative Services Department. The Administrative Services Department is under the control of the Director of Administrative Services (Director), as treasurer, who is subject to the direction and supervision of the City Manager. The Assistant Directors of Administrative Services (Assistant Director), who reports to the Director, are authorized to make all investment transactions allowed by the Statement of Investment Policy. The Assistant Director may authorize the Manager of Treasury, Debt & Investments and/or Senior Management Analyst (Manager and/or Analyst) to enter into investments within clearly specified parameters. The Investment function is under the supervision of the Assistant Director. The Assistant Director is charged with the responsibility to manage the investment program (portfolio), which includes developing and monitoring the City's cash flow model and developing long-term revenue and financing strategies and forecasts. The Manager and/or Analyst are subject to the direction and supervision of the Assistant Director. The Manager and/or Analyst assist the Assistant Director, in the purchase and sale of securities. The Manager and/or Analyst also prepare the quarterly report, and record daily all investment Fiscal Year 2025 8 Item 5: Staff Report Pg. 11 Packet Pg. 51 of 857 Item 5 Attachment A - FY 2025 Proposed Investment Policy transactions as to the type of investment, amount, yield, and maturity. Cash flow projections are prepared as needed. In all circumstances, approval from the Director of Administrative Services is required before selling securities from the City's portfolio. The Manager and/or Analyst may also transfer no more than a total of $10 million a day from the City's general account to any one financial institution, without the prior approval of the Assistant Director. No other person has authority to make investment transactions without the written authority of the Director or Assistant Director of Administrative Services. USE OF BROKERS AND DEALERS The Administrative Services Department maintains a list of acceptable dealers. A dealer acts as a principal in security transactions, selling securities from and buying securities for their own position. A dealer must have: a) At least three years experience operating with California municipalities; b) Maintain an inventory of trading securities of at least $10 million; and c) Annually provide documentation showing their financial condition and relevant registration; b -)d) Annually certify in writing that they have reviewed the applicable California Government Code sections and the City's Investment Policy; and e) Be approved by the Assistant Director before being added to the City's list of approved dealers; including individual traders or agents representing a dealer: A dealer will be removed from the list should there develop a history of problems to include: failure to deliver securities as promised, failure to honor transactions as quoted, or failure to provide accurate information. SAFEKEEPING AND CUSTODY All securities shall be delivered to the City's safekeeping custodian and held in the name of the City of Palo Alto, with the exception of the following investments: a) Certificates of deposit, which may be held by the City itself. b) City shares in pooled investment funds, under contract. c) Mutual funds d) Local Agency Investment Fund (LAIF) Fiscal Year 2025 9 Item 5: Staff Report Pg. 12 Packet Pg. 52 of 857 Item 5 Attachment A - FY 2025 Proposed Investment Policy POLICY REVIEW AND REPORTING ON INVESTMENTS Monthly, the Administrative Services Department will review performance in relation to Council adopted Policy. Per California Government Code Section 53646, @quarterly, the Department will report to Council investment activity, including: the portfolio's performance in comparison to policy, explain any variances from policy, provide any recommendations for policy changes, and discuss overall compliance with the City's Investment Policy. In addition, the Department will provide Council with: a) A detailed list of all securities, investments and monies held by the City, and b) Report on the City's ability to meet expenditure requirements over the next six months. Per California Government Code Section 53607, the Department shall provide a monthly report of transactions (investments, reinvestment, sold, and exchanged securities) made during the month to the Council. This reporting requirement is separate and distinct from the quarterly investment report submitted under Code Section 53646. Annually, the Administrative Services Department will present a Proposed Statement of Investment Policy, to include the delegation of investment authority, to the City Council for review during the annual budget process. All proposed changes in policy must be approved by the Council prior to implementation. Adopted by City Council October 22, 1984 Amended by City Council June 17, 2002 Monthly reporting effective January 1985 Amended by City Council June 17, 2003 Amended and Adopted by City Council June 24, 1985 Amended by City Council June 28, 2004 Amended by City Council December 2, 1985 Amended by City Council June 20, 2005 Amended by City Council June 23, 1986 Amended by City Council June 12, 2006 Amended by City Council June 22, 1987 Amended by City Council June 11, 2007 Amended by City Council August 8, 1988 by City Council June 09, 2008 Amended by City Council November 28, 1988 by City Council June 15, 2009 Amended by City Council June 26, 1989 by City Council June 28, 2010 Amended by City Council May 14, 1990 UAmended i Council June 20, 2011 Amended b Ci Council June 24,1991 Cit Council June 18, 2012 Amended b Ci Council June 22, 1992 City Council June 03, 2013 Amended by City Council June 23, 1993 Amended by City Council June 16, 2014 Amended by City Council June 20, 1994 Amended by City Council June 15, 2015 Amended by City Council June 19, 1995 Amended by City Council June 13, 2016 Amended by City Council June 24, 1996 Amended by City Council June 27, 2017 Amended by City Council June 23, 1997 Amended by City Council November 5, 2018 Amended by City Council January 26, 1998 Amended by City Council June 24, 2019 Amended by City Council June 22, 1998 Adopted by City Council June 22, 2020 Amended by City Council June 28, 1999 Amended by City Council June 21, 2021 Amended by City Council June 19, 2000 Adopted by City Council June 20, 2022 Amended by City Council June 11, 2001 Adopted by City Council June 19, 2023 Fiscal Year 2025 10 Item 5: Staff Report Pg. 13 Packet Pg. 53 of 857 Item 5 Attachment A - FY 2025 Proposed Investment Policy APPENDIX A EXPLANATION OF PERMITTED INVESTMENTS 1. U.S. Government Securities: United States Treasury notes, bonds, bills, or certificates of indebtedness or those for which the faith and credit of the United States are pledged for the payment of principal and interest. 2. U.S. Government Agency Securities: U.S. Government Agency Obligations include the securities of the Federal National Mortgage Association (FNMA), Federal Land Banks (FLB), Federal Intermediate Credit Banks (FICB), banks for cooperatives, Federal Home Loan Banks (FHLB), Government National Mortgage Association (GNMA), Federal Home Loan Mortgage Corporation (FHLMC), Student Loan Marketing Association (SLMA), Small Business Administration (SBA), Federal Farm Credit (FFC), and Federal Agricultural Mortgage Corporation (FAMC or FMAC). Federal Agency securities are debt obligations that essentially result from lending programs of the Government. Federal agency securities differ from other types of securities, as well as among themselves. Their characteristics depend on the issuing agency. It is possible to distinguish three types of issues: (A) participation certificates (pooled securities), (B) Certificates of interest (pooled loans), (C) notes, bonds, and debentures. The securities of a few agencies are explicitly backed by the full faith and credit of the U.S. Government. All other issues purchased by the City have the de facto backing from the federal government, and it is highly unlikely that the government would let any agency default on its obligations. 3. Certificates of Deposit: A certificate of deposit (CDs) is a receipt for funds deposited in a bank, savings bank, or savings and loan association for a specified period of time at a specified rate of interest. Denominations are $250,000 and up. The first $250,000 of a certificate of deposit is guaranteed by the Federal Deposit Insurance Corporation (FDIC), if the deposit is with a bank or savings bank, or the Savings Association Insurance Fund (SAIF), if the deposit is with a savings and loan. CDs with a face value in excess of $250,000 can be collateralized by U.S. Government Agency and Treasury Department securities or first mortgage loans. Government securities must be at least 110 percent of the face value of the CD collateralized in excess of the first $250,000. The value of first mortgages must be at least 150 percent of the face value of the CD balance insured in excess of the first $250,000. Generally, CDs are issued for more than 30 days and the maturity can be selected by the purchaser. 4. Bankers' Acceptance: A Banker's Acceptance (BA) is a negotiable time draft or bill of exchange drawn on and accepted by a commercial bank. Acceptance of the draft irrevocably obligates the bank to pay the bearer the face amount of the draft at maturity. BAs are usually created to finance the import and export of goods, the shipment of goods within the United States and storage of readily marketable staple commodities. In over 70 years of usage in the United States, there has been no known instance of principal loss to any investor in BAs. In addition to the guarantee by the accepting bank, the transaction is identified with a specific commodity. Warehouse receipts verify that the pledged commodities exist, and, by Fiscal Year 2025 1 1 Item 5: Staff Report Pg. 14 Packet Pg. 54 of 857 Item 5 Attachment A - FY 2025 Proposed Investment Policy definition, these commodities are readily marketable. The sale of the underlying goods generates the necessary funds to liquidate the indebtedness. BAs enjoy marketability since the Federal Reserve Bank is authorized to buy and sell prime BAs with maturities of up to nine months. The Federal Reserve Bank enters into repurchase agreements in the normal course of open market operations with BA dealers. As are sold at a discount from par. An acceptance is tied to a specific loan transaction; therefore, the amount and maturity of the acceptance is fixed. 5. Commercial Paper: Commercial paper notes are unsecured promissory notes of industrial corporations, utilities, and bank holding companies. Interest is discounted from par and calculated using actual number of days on a 360 -day year. The notes are in bearer form, with maturities up to 270 days selected by the purchaser, and denominations generally start at $100,000. There is a small secondary market for commercial paper notes and an investor may sell a note prior to maturity. Commercial paper notes are backed by unused lines of credit from major banks. Some issuer's notes are insured, while some are backed by irrevocable letters of credit from major banks. State law limits a City to investments in United States corporations having assets in excess of five hundred million dollars with an "A" or higher rating by a nationally recognized rating service for the issuer's debentures. Cities may not invest more than 25 percent of idle cash in commercial paper. 6. Local Agency Investment Fund Demand Deposit: The Local Agency Investment Fund LAIF) was established by the State to enable treasurers to place funds in a pool for investments. The City is limited to an investment of the amount allowed by LAIF (currently $75 million). LAIF has been particularly beneficial to those jurisdictions with small portfolios. Palo Alto uses this fund for short-term investment, liquidity, and yield. 7. Repurchase Agreements: A Repurchase Agreement (REPOS) is not a security, but a contractual arrangement between a financial institution or dealer and an investor. The agreement normally can run for one or more days. The investor puts up funds for a certain number of days at a stated yield. In return, the investor takes title to a given block of securities as collateral. At maturity, the securities are repurchased and the funds repaid, plus interest. Usually, amounts are $500,000 or more, but some REPOS can be smaller. 8. Money Market Deposit Accounts: Money Market Deposit Accounts are market -sensitive bank accounts, which are available to depositors at any time, without penalty. The interest rate is generally comparable to rates on money market mutual funds, though any individual bank's rate may be higher or lower. These accounts are insured by the Federal Deposit Insurance Corporation or the Savings Association Insurance Fund. Fiscal Year 2025 12 Item 5: Staff Report Pg. 15 Packet Pg. 55 of 857 Item 5 Attachment A - FY 2025 Proposed Investment Policy 9. Mutual Funds: Mutual funds are shares of beneficial interest issued by diversified management companies, as defined by Section 23701 M of the Revenue and Taxation Code. To be eligible for investment, these funds must: a) Attain the highest ranking in the highest letter and numerical rating provided by not less than two of the three largest nationally recognized rating services; or b) Have an investment advisor registered with the Securities and Exchange Commission with not less than five years' experience investing in the securities and obligations, as authorized by subdivisions (a) to (n), inclusive, of Section 53601 of the California Government Code, and with assets under management in excess of five hundred million dollars; and c) Invest solely in those securities and obligations authorized by Sections 53601 and 53635 of the California Government Code. Where the Investment Policy of the City of Palo Alto may be more restrictive than the State Code, the Policy authorizes investments in mutual funds that shall have minimal investment in securities otherwise restricted by the City's Policy. Minimal investment is defined as less than 5 percent of the mutual fund portfolio; and d) The purchase price of shares of beneficial interest purchased shall not include any commission that these companies may charge. e) Have a net asset value of $1.00. 10. Callable Securities and Multi -Step-ups: Callable securities are defined as fixed interest rate government agency securities that give the issuing agency the option of returning the invested funds at a specific point in time to the purchaser. Multi -step-ups are government agency securities in which the interest rate increases ("steps -up") at preset intervals, and which also have a callable option that allows the issuing agency to return the invested funds at a preset interval. Callable and multi -step-ups are permitted, provided that: • the potential call dates are known at the time of purchase; • the interest rates at which they "step-up" are known at the time of purchase; and • the entire face value of the security is redeemed at the call date. Fiscal Year 2025 13 Item 5: Staff Report Pg. 16 Packet Pg. 56 of 857 Item 5 Attachment A - FY 2025 Proposed Investment Policy 11. Negotiable Certificates of Deposit (NCD): NCDs are large -dollar -amount, short-term certificate of deposit. Such certificates are issued by large banks and bought mainly by corporations and institutional investors. They are payable either to the bearer or to the order of the depositor, and, being negotiable, they enjoy an active secondary market, where they trade in round lots of $5 million. Although they can be issued in any denomination from $100,000 up, the typical amount is $1 million also called a Jumbo Certificate of Deposit. State law prohibits the investment of local agency funds in negotiable certificates of deposit issued by a state or federal credit union if a member of the legislative body of the local agency, or any person with investment decision making authority in the administrative, manager's, budget, auditor -controller's, or treasurer's offices of the local agency also serves on the board of directors, other credit committee or the supervisory committee of the state or federal credit union issuing the negotiable certificate of deposit. 12. Medium -Term Corporate Notes: All corporate and depository institution debt securities with a maximum remaining maturity of five years or less, issued by corporations organized and operating within the United States or by depository institutions licensed by the United States or any state and operating within the United States. According to California Government Code Section 53601, "Notes eligible for investment under this subdivision shall be rated in a rating category of "A" or its equivalent or better by a nationally recognized rating service. Purchase of medium -term notes shall include other instruments authorized by this section and shall not exceed 30 percent of the agency's moneys that may be invested pursuant to this section." 13. Supranational Securities: California Government Code Section53601 defines allowable supranational securities as United States dollar denominated senior unsecured unsubordinated obligations issued or unconditionally guaranteed by the International Bank for Reconstruction and Development, the International Finance Corporation, and Inter - American Development Bank. Supranationals are well capitalized and in most cases have strong credit support from contingent capital calls from their member countries. Section 53601 was amended effective January 1, 2015 to allow local agencies to invest in the senior debt obligations of these three supranational issuers which are eligible for purchase and resale within the United States. These entities were established with the purpose of ending poverty and raising the standard of living around the world through sustainable economic growth. a) The supranationals are international organization owned by member countries. These are: • International Bank for Reconstruction and Development (IBRD or World Bank), a member of the World Bank Group, provides direct loans and guarantees to sovereigns and government -backed projects • International Finance Corporation (IFC), a member of the World Bank Group, supports the creation and growth of private companies through direct lending and equity investment, attracting third party capital, and providing advisory services • Inter -American Development Bank (IADB), a member of the Inter - Fiscal Year 2025 14 Item 5: Staff Report Pg. 17 Packet Pg. 57 of 857 Item 5 Attachment A - FY 2025 Proposed Investment Policy American Development Bank Group, provides loans, grants, and guarantees to sovereigns in Latin America and the Caribbean b) Additional characteristics shared by the IBRD, IFC, and IADB include: • Headquartered in Washington, D.C. with the United States as the largest shareholder of each organization • Rated AAA/Aaa by S&P and Moody's Fiscal Year 2025 15 Item 5: Staff Report Pg. 18 Packet Pg. 58 of 857 Item 5 Attachment A - FY 2025 Proposed Investment Policy APPENDIX B EXPLANATION OF PROHIBITED INVESTMENTS Reverse Repurchase Agreements: A Reverse Repurchase Agreement (Reverse REPO) is a contractual agreement by the investor (e.g. local agency) to post a security it owns as collateral, and a bank or dealer temporarily exchanges cash for this collateral, for a specific period of time, at an agreed -upon interest rate. During the period of the agreement, the local agency may use this cash for any purpose. At maturity, the securities are repurchased from the bank or dealer, plus interest. California law contains a number of restrictions on the use of Reverse REPOS by local agencies. 2. Derivatives: A derivative is a financial instrument created from, or whose value depends on (is derived from), the value of one or more underlying assets or indices. The term "derivative" refers to instruments or features, such as collateralized mortgage obligations, forwards, futures, currency and interest rate swaps, options, caps and floors. Except for those callable and multi -step-up securities as described under Permitted Investments, derivatives are prohibited. Certain derivative products have characteristics which could include high price volatility, liquid markets, products that are not market -tested, products that are highly leveraged, products requiring a high degree of sophistication to manage, and products that are difficult to value. According to California law, a local agency shall not invest any funds in inverse floaters, range notes, or interest -only strips that are derived from a pool of mortgages. Fiscal Year 2025 l 6 Item 5: Staff Report Pg. 19 Packet Pg. 59 of 857 Item 5 Attachment A - FY 2025 Proposed Investment Policy APPENDIX C GLOSSARY OF INVESTMENT TERMS AGENCIES: Federal agency and instrumentality securities. ASKED: The price at which securities are offered. BID: The price offered by a buyer of securities (when one sells securities, one asks for a bid). See "Offer". BROKER: A person or institution that conducts investment transactions on behalf of the buyer and seller of the investment and earns a commission on the transaction. COLLATERAL: Securities, evidence of deposit, or other property, which a borrower pledges to secure repayment of a loan. Also refers to securities pledged by a bank to secure deposits of public monies. ANNUAL COMPREHENSIVE FINANCIAL REPORT (ACFR): The official annual report for the City of Palo Alto. It includes combined financial statements for each individual fund and account group prepared in conformity with Generally Accepted Accounting Principles and pronouncements set forth by the Governmental Accounting Standards Board (GASB). The ACFR also includes supporting schedules that are necessary to demonstrate compliance with finance -related legal and contractual provisions, extensive introductory material, and a detailed statistical section. COUPON: The annual rate of interest that a bond's issuer promises to pay the bondholder on the bond's face value or the certificate attached to a bond evidencing interest due on a payment date. DEALER: A dealer, as opposed to a broker, acts as a principal in all transactions, buying and selling for his own account. DEBENTURE: A bond secured only by the general credit of the issuer. DELIVERY VERSUS PAYMENT: There are two methods of delivery of securities: (1) delivery versus payment (DVP); and (2) delivery versus receipt (DVR). DVP is delivery of securities with an exchange of money for the securities. DVR is delivery of securities with an exchange of a signed receipt for the securities. DISCOUNT: The difference between the acquisition cost of a security and its value at maturity when quoted at lower than face value. A security that sells below original offering price shortly after sale, is also is considered to be at a discount. DISCOUNT SECURITIES: Non -interest -bearing money market instruments that are issued a discount and that are redeemed at maturity for full face value (e.g., U.S. Treasury Bills). Fiscal Year 2025 17 Item 5: Staff Report Pg. 20 Packet Pg. 60 of 857 Item 5 Attachment A - FY 2025 Proposed Investment Policy DIVERSIFICATION: Dividing investment funds among a variety of securities that offer independent returns. FEDERAL AGRICULTURAL MORTGAGE CORPORATION ("FAMC" or "FMAC"): A federal agency established in 1988 to provide a secondary market for farm mortgage loans. Informally called Farmer Mac. FEDERAL CREDIT AGENCIES: Agencies of the Federal Government that were established to supply credit to various classes of institutions and individuals (e.g., S&Ls, small business firms, students, farmers, farm cooperatives, and exporters). FEDERAL DEPOSIT INSURANCE CORPORATION ("FDIC"): A federal agency that insures all types of deposits received at an insured bank, including deposits in a checking account, negotiable order of withdrawal (NOW) account, savings account, money market deposit account (MMDA) or time deposit such as a certificate of deposit (CD). FDIC insurance covers depositors' accounts at each insured bank, dollar -for -dollar, including principal and any accrued interest through the date of the insured bank's closing, up to the insurance limit. The FDIC does not insure money invested in stocks, bonds, mutual funds, life insurance policies, annuities or municipal securities, even if these investments are purchased at an insured bank. The FDIC does not insure U.S. Treasury bills, bonds or notes, but these investments are backed by the full faith and credit of the United States government. The standard maximum deposit insurance amount is described as the "SMDIA" in FDIC regulations. The SMDIA is $250,000 per depositor, per insured bank. FEDERAL FUNDS RATE: The rate of interest at which Fed funds are traded. This rate is currently pegged by the Federal Reserve through open -market operations. FEDERAL HOME LOAN BANKS ("FHLB"): Government -sponsored wholesale banks (currently 12 regional banks) which lend funds and provide correspondent banking services to member commercial banks, thrift institutions, credit unions, and insurance companies. The mission of the FHLBs is to liquefy the housing -related assets of its members, who must purchase stock in their District Bank. FEDERAL NATIONAL MORTGAGE ASSOCIATION ("FNMA"): FNMA, like GNMA, was chartered under the Federal National Mortgage Association Act in 1938. FNMA is a federal corporation working under the auspices of the Department of Housing and Urban Development (HUD). It is the largest single provider of residential mortgage funds in the United States. Fannie Mae, as the corporation is called, is a private stockholder -owned corporation. The corporation's purchases include a variety of adjustable mortgages and second loans, in addition to fixed-rate mortgages. FNMA's securities are also highly liquid and are widely accepted. FNMA assumes and guarantees that all security holders will receive timely payment of principal and interest. FEDERAL OPEN MARKET COMMITTEE ("FOMC"): The FOMC consists of seven Fiscal Year 2025 18 Item 5: Staff Report Pg. 21 Packet Pg. 61 of 857 Item 5 Attachment A - FY 2025 Proposed Investment Policy members of the Federal Reserve Board and five of the 12 Federal Reserve Bank Presidents. The President of the New York Federal Reserve Bank is a permanent member, while the other Presidents serve on a rotating basis. The Committee periodically meets to set Federal Reserve guidelines regarding purchases and sales of government securities in the open market, as a means of influencing the volume of bank credit and money. FEDERAL RESERVE SYSTEM: The central bank of the United States created by Congress and consisting of a seven -member Board of Governors in Washington, D.C., 12 regional banks, and about 5,700 commercial banks that are members of the system. GOVERNMENT NATIONAL MORTGAGE ASSOCIATION ("GNMA" or "Ginnie Mae"): Securities that influence the volume of bank credit that is guaranteed by GNMA and issued by mortgage bankers, commercial banks, savings and loan associations, and other institutions. A security holder is protected by the full faith and credit of the U.S. Government. Ginnie Mae securities are backed by the FHA, VA, or FMHM mortgages. The term "pass- throughs" is often used to describe Ginnie Maes. LIQUIDITY: A liquid asset is one that can be converted easily and rapidly into cash without a substantial loss of value. In the money market, a security is said to be liquid if the spread between bid and asked prices is narrow, and reasonable amount can be done at those quotes. LOCAL GOVERNMENT AGENCY: A local government agency is any city, county, city and county, district, or other local governmental body or corporation, including the California State Universities (CSU) and University of California (UC) systems, K-12 schools and community colleges empowered to expend public funds. LOCAL GOVERNMENT INVESTMENT FUND ("LAIF"): Monies from local governmental units may be remitted to the California State Treasurer for deposit in this special fund for the purpose of investment. MARKET VALUE: The price at which a security is trading and could presumably be purchased or sold. MASTER REPURCHASE AGREEMENT: A written contract covering all future transactions between the parties to repurchase -reverse repurchase agreements that establish each party's rights in the transactions. A master agreement will often specify, among other things, the right of the buyer (lender) to liquidate the underlying securities in the event of default by the seller (borrower). MATURITY: The date upon which the principal or stated value of an investment becomes due and payable. MONEY MARKET: The market in which short-term debt instruments (e.g., bills, commercial paper, and bankers' acceptances) are issued and traded. OFFER: The price asked by a seller of securities (when one buys securities, one asks for an offer). See "Asked" and "Bid". Fiscal Year 2025 19 Item 5: Staff Report Pg. 22 Packet Pg. 62 of 857 Item 5 Attachment A - FY 2025 Proposed Investment Policy OPEN MARKET OPERATIONS: Purchases and sales of government and certain other securities in the open market by the New York Federal Reserve Bank, as directed by the FOMC in order to influence the volume of money and credit in the economy. Purchases inject reserves into the bank system and stimulate growth of money and credit; sales have the opposite effect. Open market operations are the Federal Reserve's most important and most flexible monetary policy tool. PORTFOLIO: A collection of securities that an investor holds. PRIMARY DEALER: A group of government securities dealers that submit daily reports of market activity and positions, and monthly financial statements to the Federal Reserve Bank of New York, and are subject to its informal oversight. Primary dealers include Securities and Exchange Commission (SEC) -- registered securities broker -dealers, banks, and a few unregulated firms. PRUDENT INVESTOR RULE: An investment standard cited in the California Government Code Section 53600 et seq. Under this standard, all governing bodies of local agencies or persons authorized to make investment decisions on behalf of the City are trustees and therefore fiduciaries subject to the prudent investor standard. When investing, reinvesting, purchasing, acquiring, exchanging, selling, or managing public funds, a trustee shall act with care, skill, prudence, and diligence under the circumstances then prevailing, including, but not limited to the general economic conditions and the anticipated needs of the agency, that a prudent person acting in a like capacity and familiarity with those matters would use in the conduct of funds of a like character and with like aims, to safeguard the principal and maintain the liquidity needs of the agency. QUALIFIED PUBLIC DEPOSITORIES: A financial institution that: (1) does not claim exemption from the payment of any sales, compensating use, or ad valorem taxes under the laws of this state; (2) has segregated for the benefit of the commission eligible collateral having a value of not less than its maximum liability; and (3) has been approved by the Public Deposit Protection Commission to hold public deposits. RATE OF RETURN: The yield obtainable on a security based on its purchase price or its current market price. SAFEKEEPING: A service to customers rendered by banks for a fee whereby securities and valuables of all types and descriptions are held in the bank's vaults for protection. SECONDARY MARKET: A market made for the purchase and sale of outstanding issues following the initial distribution. SECURITIES AND EXCHANGE COMMISSION: An agency created by Congress to administer securities legislation for the purpose of protecting investors in securities transactions. STRUCTURED NOTES: Notes issued by instrumentalities (e.g., FHLB, FNMA, SLMA) and by corporations, that have imbedded options (e.g., call features, step-up coupons, floating rate Fiscal Year 2025 20 Item 5: Staff Report Pg. 23 Packet Pg. 63 of 857 Item 5 Attachment A - FY 2025 Proposed Investment Policy coupons, derivative -based returns) in their debt structure. The market performance of structured notes is affected by fluctuating interest rates; the volatility of imbedded options; and shifts in the yield curve. SUPRANATIONALS: International institutions that provide development financing, advisory services and/or financial services to their member countries to achieve the overall goal of improving living standards through sustainable economic growth. The California Government Code Section 53601 allows local agencies to purchase the United States dollar denominated senior unsecured unsubordinated obligations issued or unconditionally guaranteed by the International Bank for Reconstruction and Development (IBRD), International Finance Corporation (IFC), or Inter -American Development Bank (IADB). TIME CERTIFICATE OF DEPOSIT: A non-negotiable certificate of deposit, which cannot be sold prior to maturity. TREASURY BILLS: A non -interest -bearing discount security that is issued by the U.S. Treasury to finance the national debt. Most T -bills are issued to mature in three months, six months, or one year. TREASURY BONDS: Long-term, coupon -bearing U.S. Treasury securities that are issued as direct obligations of the U.S. Government, and having initial maturities of more than 10 years. TREASURY NOTES: Medium -term, coupon -bearing U.S. Treasury securities that are issued as direct obligations of the U.S. Government, and having initial maturities of two to 10 years. YIELD: The rate of annual income return on an investment, expressed as a percentage. YIELD -TO -CALL (YTC): The rate of return an investor earns from a bond assuming the bond is redeemed (called) prior to its nominal maturity date. YIELD -TO -MATURITY: The current income yield minus any premium above par or plus any discount from par in purchase price, with the adjustment spread over the period from the date of purchase to the date of maturity. ZERO -COUPON SECURITIES: Security that is issued at a discount and makes no periodic interest payments. The rate of return consists of a gradual accretion of the principal of the security and is payable at par upon maturity. Fiscal Year 2025 21 Item 5: Staff Report Pg. 24 Packet Pg. 64 of 857 Item 6 Item 6 Staff Report City Council Staff Report From: City Manager CITY O F Report Type: CONSENT CALENDAR PALO Lead Department: Utilities ALTO Meeting Date: June 17, 2024 Staff Report: 2404-2876 TITLE Utilities Advisory Commission Recommends Adoption of the 2024 Annual Water Shortage Assessment Report RECOMMENDATION The Utilities Advisory Commission (UAC) and staff recommend the City Council adopt the 2024 Annual Water Shortage Assessment Report. X1:400111y/ 11111► I► l_1Wil Beginning in 2022, every urban water supplier in California must conduct an Annual Water Supply and Demand Assessment as required by California Water Code Section 10632 (a). Each urban water supplier must also submit an Annual Water Shortage Assessment Report to the Department of Water Resources (DWR) on or before July 1, as required by California Water Code Section 10632.1. The City's Annual Water Shortage Assessment Report (Attachment A, Tables 1- 5) show that there is no water shortage anticipated for Fiscal Year 2025. On April 15, 2024, the San Francisco Public Utilities Commission (SFPUC), Palo Alto's water supplier, provided Palo Alto with the Water Supply Availability Update indicating for the current water year, Hetch Hetchy watershed has experienced nearly average conditions for precipitation and snowpack. The City of Palo Alto encourages continued water conservation efforts and the City's website contains more information about available water conservation programs.' BACKGROUND To prepare the 2024 Annual Water Shortage Assessment Report, staff followed the procedures outlined in its Water Shortage Contingency Plan, contained in Section 7 of the City's 2020 Water Management Plan (UWMP).2 Palo Alto's 2024 Annual Water Shortage Assessment Report uses the DWR-developed Optional Annual Assessment Tool format. This format includes the 5 1 Water Conservation Programs https://www.citvofpaloalto.org/Departments/Utilities/SustainabilitV/WaVs-to- Save 2 UWMP https://www.citVofpaloalto.org/files/assets/public/v/1/utilities/uwmp/2020-uwmp final-submission-to- dwr.pdf Item 6: Staff Report Pg. 1 Packet Pg. 65 of 857 Item 6 Item 6 Staff Report tables shown in Attachment A. Staff will submit the standard tables to DWR by July 1, 2024. "Table 1. Annual Assessment Information" (Table 1) provides required overview information. The remaining tables project water supply and demand for FY 2025 under dry conditions, as required, and finds that there is no projected water shortage. After Palo Alto and other urban water suppliers report to DWR on the 2024 Annual Water Shortage Assessment Reports, DWR will prepare a summary report on its review of the Annual Water Supply and Demand Assessment results and provide it to the State Water Resources Control Board (State Board) by September 30. The DWR report will include water shortage information at the supplier level, as well as regional and statewide analysis of water conditions as required by California Water Code Section 10644 (c)(1)(B). Potable Water Palo Alto receives 100% of its potable water supply from the SFPUC Regional Water System and staff used the SFPUC's April 15, 2024 Water Supply Availability Update to determine water supply. • "Table 2: Water Demands" (Table 2) provides a demand projection for each month of FY 2025; • "Table 3: Water Supplies" (Table 3) notes that there is sufficient supply to meet Palo Alto's demand and projects supply equal to the demand projection since there is no projected water shortage in FY 2025; • "Table 4(P): Potable Water Shortage Assessment" (Table 4(P)) compares projected FY 2025 demand with supply and illustrates that there is no shortage projected for FY 2025; • "Table 5: Planned Water Shortage Response Actions" (Table 5) shows no triggered water shortage actions. Palo Alto's eight permanent water use regulations remain in effect (see Palo Alto Municipal Code Section 12.32.010). Non -Potable Water For non -potable recycled water, Table 2 provides the demand projection and Table 3 notes that there is sufficient supply to meet Palo Alto's non -potable recycled water demand in FY 2025. For that reason, the supply is set to equal demand and there is no shortage of non -potable water projected in Table 4(NP), "Non -Potable Water Shortage Assessment". ANALYSIS Upon Council adoption, staff will submit the 2024 Annual Water Shortage Assessment Report to the Department of Water Resources. California Water Code Section 10632.1 requires the Annual Water Shortage Assessment Report to be submitted to DWR by July 1 each year. FISCAL/RESOURCE IMPACT There is no fiscal impact from Council approving the 2024 Annual Water Shortage Assessment Report. Item 6: Staff Report Pg. 2 Packet Pg. 66 of 857 Item 6 Item 6 Staff Report STAKEHOLDER ENGAGEMENT Staff encourages interested parties to comment or provide feedback on the draft Annual Water Shortage Assessment Report at the Council meeting where the report will be considered for approval, or to submit written comments prior to those meetings. COMMISSION REVIEW The 2024 Annual Water Shortage Assessment Report was presented to the UAC at its June 3, 2024 meeting. The UAC voted unanimously to recommend the City Council adopt the 2024 Annual Water Shortage Assessment Report. A Commissioner asked what documents staff plans to file with the State and staff responded that the tables shown in the attachment will be filed with no cover report. ENVIRONMENTAL REVIEW Adoption of the 2024 Annual Water Shortage Assessment Report is exempt from California Environmental Quality Act's (CEQA) review pursuant to Water Code Section 10652. ATTACHMENTS Attachment A: 2024 Annual Water Shortage Assessment Report Tables APPROVED BY: Dean Batchelor, Director of Utilities Staff: Lisa Bilir, Senior Resource Planner Item 6: Staff Report Pg. 3 Packet Pg. 67 of 857 Item 6 Attachment A - 2024 Annual Water Shortage ssessment Report Table Attachment A: 2024 Annual Water Shortage Assessment Report Tables Item 6: Staff Report Pg. 4 Packet Pg. 68 of 857 Item 6 Attachment A - 2024 Annual Water Shortage Assessment Report Tables Table 1. Annual Assessment Information Annual Assessment Information Year Covered By This Shortage Report (Required) Start: July 1, 2024 End: June 30, 2025 Volume Unit for Reported Supply and Demand: AF (Must use the some unit throughout) Supplier's Annual Assessment Planning Cycle (Required) Start Month: July End Month: June Data Interval: Monthly (12 data points per year) Water Supplier's Contact Information (Required) Water Supplier's Name: City of Palo Alto Contact Name: Lisa Bilir Contact Title: Senior Resource Planner Street Address: 250 Hamilton Avenue, Palo Alto ZIP Code: 94301 Phone Number: (650)329-2543 Email Address: Iisa.bilir@cityofpaloalto.org Report Preparer's Contact Information (if d! erent from above Preparer's Organization Name: Preparer's Contact Name: Phone Number: Email Address: Supplier's Water Shortage Contingency Plan WSCP Title 2020 Water Shortage Contingency Plan of the City of Palo Alto WSCP Adoption Date 6/7/2021 Other Annual Assessment Related AafiwjRelatedties Activity Timeline/ Outcomes / Links / Notes Annual Assessment/ Shortage Report Title: Optiona I Annual Assessment / Shortage Report Approval Date: 6/19/2024 Other Annual Assessment Related Activities: The 2020 Water Shortage Contingency Plan of the City of Palo Alto states that Palo Alto will utilize the BAWSCA Regional Reliability Model to evaluate water supply availability, however, the plan also permits the City to use SFPUC data since SFPUC is the City's sole supplier. Specifically, the 2020 Water Shortage Contingency Plan states: "Because Palo Alto relies on only one potable water supply source, SFPUC RWS water, the Annual Assessment will rely on key data inputs from the SFPUC." Palo Alto used the SFPUC's April 15, 2024 Water Supply Availability Update to determine water supply. (Add rows as needed Item 6: Staff Report Pg. 5 1 Packet Pg. 69 of 857 Item 6 Attachment A - 2024 Annual Water Shortage Assessment Report Tables = From prior to bl e s = Auto calculated Level of Drop -down list May select each use multiple times Treatment These are the only Use Types that Additional for Non - will be recognized bythe WDEdata Description Potable Projected Water Demands - Volume3 (as needed) Supplies online submittal tool Drop -down (Add additional rows as needed) list Jul Aug Sep Cd Nov Dec Jan Feb Mar Apr May Jun total by water Demand Type Demands Served by PoIupplies All Demands 1309 1284 1306 1087 929 685 653 574 660 697 969 1134 11287 0 0 0 0 0 0 0 0 Total by Month (Potable) 1309 1204 1306 1087 929 685 653 574 660 697 969 1134 11287 Demands Served All Demands Tertiary 54 53 35 22 11 2 2 11 9 24 42 50 315 0 0 0 0 Total by Month (Non -Potable) 54 53 35 22 11 2 2 11 9 24 42 50 315 Notes: Potable unconstrained customer demand determined usingthe end -use model described in the 2020 UWMPSection 4. Non -potable unconstrained customer demand determined based on 2020 UWMP projection. optional (for comparison purposes) tut Aug Sep cd Nov Dec Jan Feb Mar Apr May Jun Total Last year's total demand 0 Twoyears agototal demand 0 Three years agototal demand 0 Fouryears agototal demand 0 Item 6: Staff Report Pg. 6 1 Packet Pg. 70 of 857 Item 6 Attachment A - 2024 Annual Water Shortage Assessment Report Tables = From prior tables = Auto calculated Drop -down List May use each category multiple Water Additional Total Right times.These are the only water Projected Water Supplies Volume3 Quality or Safe supply categories that will be Water recognized by the WUEdata Yield' Drop -down Total by (optional) List Supply online submittal tool (Add additional rows as needed) Jul Aug Sep Dot Nov Dee Jan Feb Mar Apr May Jun Water Supply Type San Francisco Public Utilities Purchased/Imported Water Commission 1309 1284 1306 1087 929 685 653 574 666 697 969 1134 11287 Regional Water Supply System 0 0 0 0 0 0 0 0 0 Total by Month (Potable) 1309 1284 1306 1087 929 585 553 574 550 697 959 1134 11287 0 Recycled Water from the Regional Recycled Water 54 53 35 22 11 2 2 11 9 24 42 50 375 Water Quality Control Plant 0 0 0 0 Total by Month (Non -Potable) 54 53 35 22 11 2 2 11 9 24 42 50 315 0 Notes: PaloAlto purchases 100% of its potable water from SFPUC; Palo Alto used the SFPUC's March 1, 2024 Water Supply Availability Update to determine water supply. Palo Alto supplies recycled water for irrigation of the municipal olf course a ark and some other minors lications. There is sufficient supply of bothpotable and re cled waterto meet demand. Optional (for comparison purposes) 1ui Aug Sep Oct Nov Dec lan Feb Mar Apr May Pun Total eAR Reported Total Water Supplies 0 Item 6: Staff Report Pg. 7 1 Packet Pg. 71 of 857 Item 6 Attachment A - 2024 Annual Water Shortage Assessment Report Tables = Auto calculated = From prior tables = For manual input Table 4(P): Potable Water Shortage Assessment' Start Year: 2024 Volumetric Unit Used': AF Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun3 Total Anticipated Unconstrained Demand 1309 1284 1306 1087 929 4585 653 574 660 697 969 1134 11297 Anticipated Total Water5upply 1309 1284 1306 1087 929 585 653 574 550 697 969 1134 11287 Surplus/Shortage w/o WSCP Action 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 %Surplus/Shortage w/o WSCP Action 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% State Standard Shortage Level 0 0 0 0 0 0 0 0 0 0 0 0 0 Planned WSCPActions" BenefitfromWSCP: Supply Augmentation 0.0 Benefit from WSCP: Demand Reduction Revised Surplus/Shortage with WSCP j J I i 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 % Revised Surplus/Shortage with WSCP 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% = Auto calculated = From prior tables = For manual input Table 4(NP): Non -Potable Water Shortage Assessment' Start Year: 2024 Volumetric Unit Used': AF Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun3 Total Anticipated Unconstrained Demand: Non -Potable 54 53 35 22 11 2 2 11 9 24 42 50 315 Anticipated Total Water5upply:Non-Potable 54 53 35 22 11 2 2 11 9 24 42 50 315 Surplus/Shortage w/o WSCP Action: Non -Potable 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 %Surplus/Shortagew/oWSCPAction: Non -Potable 0% 0% 0% 5% 0% 0% 0% 0% 0% 0% 0% 0% 0% Planned WSCPActionsa Benefit from WSCP: Supply Augmentation 0.0 Benefit from WSCP: Demand Reduction Revised Surplus/shortage with WSCP I I 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 % Revised Surplus/Shortage with WSCP 0% 0% 0% 0% 0% 0% 0% 0% 9% 0% 0% 0% 0% Item 6: Staff Report Pg. 8 1 Packet Pg. 72 of 857 Item 6 Attachment A - 2024 Annual Water Shortage Assessment Report Tables ACTIONSI: Demand Reduction, How much is action going to Anticipated Shortage Supply Augmentation, and Other reduce the shortage gap? g p Level Actions. Is action (O till Drop -down List of already being State Standard Levels (1 (Drop -down List) implemented? (Drop -down 6) and Level 0 (No These are the only categories that will (YIN) List) Shortage) be accepted by the WUEdata online EnterAmount Select % or submittal tool. Select those that apply. Unit When is shortage response action anticipated to be implemented z? Start Month I End Month Add ❑dditionol rows os needed NOTES: Palo Alto currently inplements permanent water use restrictions according to the Palo Alto Municipal Code Section Notes Section to be used 12.32.010 https://codellbrary.amlegal.com/codes/paIoalto/latest/paloalto_ca/0O"0-69362#JD_Chapter12.32. There only for clarifying details, is currently no water shortage projected for FY 2025 in Table 4(P). and not for listing specific actions. Actions must be Item 6: Staff Report Pg. 9 1 Packet Pg. 73 of 857 Item 7 Item 7 Staff Report City Council Staff Report From: City Manager CITY O F Report Type: CONSENT CALENDAR PALO Lead Department: Planning and Development Services ALTO Meeting Date: June 17, 2024 Report #:2404-2909 TITLE CONSENT: Approval of a Record of Land Use Action to Upgrade the Property Located at 411 Kipling Street From a Category 4 Resource on the Local Historic Inventory to a Category 2 Resource. RECOMMENDATION Staff recommends that Council reclassify 411 Kipling Street, an existing one -and -a -half -story residential building currently used as a commercial building located in the Downtown North neighborhood, from Historic Inventory Category 4 Resource ('Contributing Building') to a Category 2 Resource ('Major Building') as recommended by the Historic Resources Board (HRB). BACKGROUND This report and Record of Land Use Action (Attachment B) provide background and support for the HRB's April 11, 2024, recommendation to upgrade the one -and -a -half -story building, located at 411 Kipling Street, from Historic Inventory Category 4 ('Contributing Building') to Category 2 ('Major Building'). The HRB staff report' included the consultant's assessment and inventory form. These documents are also available on the project webpage (Attachment C). 411 Kipling Street, located within the Downtown Commercial Community (CD -C) zone district with Pedestrian Combining District (P), was built in 1902 and was part of a group of early Palo Alto residences surviving the change to commercial zoning and commercial development in the vicinity. It provides a contrast to the larger commercial scale and higher density of University Avenue and sections of Lytton Avenue and Cowper Streets. The subject building was designed by George W. Mosher in Square Cottage style with stylistic elements of Colonial Revival and Queen Anne Free Classic. The building is individually listed on a local historic resources inventory as Category 4 "Contributing Building." The building at 411 Kipling Street, built in 1902, was first evaluated and added to the local historic inventory in 1983 as a Category 4 resource for its architecture. The one-story utilitarian 1 Link to April 11, 2024 HRB staff report with consultant assessment and inventory form https://www.cityofpaloalto.org/files/assets/public/v/1/agendas-minutes-reports/agendas-minutes/historic- resou rces-board/2024/hrb-4.11-411-kipli ng.pdf Item 7: Staff Report Pg. 1 Packet Pg. 74 of 857 Item 7 Item 7 Staff Report version of the four-square form has a hipped roof, clapboard exterior, small porch, modest ornamental elements include the porch columns, lentil cornices, attic dormer with diamond -pattern mullions in the windows, and wreath molding applied to the lower section of the front door. Just after World War II it served as a rooming house. ANALYSIS On April 11, 2024, the Historic Resources Board (HRB) reviewed the applicant's proposal to reclassify the subject building from the current "Contributing Building" designation in Category 4 on the Historic Inventory to Category 2 "Major Building." The Historic Resource Board (HRB) voted unanimously to recommend that the City Council reclassify 411 Kipling Street Avenue to Category 2. The analysis concluded that the qualities and values of 411 Kipling Street are considerably more significant than the Municipal Code's definition of the qualities of a Category 4 building. The HRB staff report included three detailed findings for the consistency of the qualities of 411 Kipling Street with the Municipal Code definition of a Category 2 building. The analysis found the building retains its historic integrity and represents outstanding and regionally important architecture consistent with the definition of a Category 2 resource in the Municipal Code Chapter 16.49. The HRB discussed its support for the reclassification to a Category 2 resource. The applicant and the property owner participated in the review of the proposed reclassification and support this recommendation; no members of the public spoke to the item. The language of the three findings for reclassification that HRB adopted are provided in the attached draft Record of Land Use Action (Attachment B). Each of the three findings reflect the language of the Municipal Code's definition of Category 2. FISCAL/RESOURCE IMPACT There is no significant fiscal or resource impact associated with this application. The City's consultant costs were covered by the property owner. PUBLIC COMMENTS As of the writing of this report, no project -related, public comments were received. ENVIRONMENTAL REVIEW Maintenance of historic designation of a property or reclassification of historic designation of a property is not a project under the California Environmental Quality Act and CEQA Guidelines Section 21065 because it will not cause a direct change to the physical environment nor a reasonably foreseeable indirect physical change in the environment. Attachment A: Location Map Attachment B: Draft Record of Land Use Action Attachment C: Project Webpage with Plan Set APPROVED BY: Jonathan Lait, Planning and Development Services Director Item 7: Staff Report Pg. 2 Packet Pg. 75 of 857 Item 7 Attachment B - Draft Record of Land Use Action MENT B APPROVAL NO. 2024 - RECORD OF THE COUNCIL OF THE CITY OF PALO ALTO LAND USE APPROVAL FOR 411 KIPLING STREET: HISTORIC RESOURCES INVENTORY CATEGORY 4 TO CATEGORY 2 UPGRADE (24PLN-00032) On June 17, 2024, the Council held a duly noticed public hearing and, after considering all of the evidence presented, approved the property owner's request to reclassify the commercial building at 411 Kipling Street currently a Local Category 4 Historic Resource. The Council approved the Historic Resources Board (HRB) recommendation to an upgraded level, Category 2 Historic Resource on the City of Palo Alto Historic Resources Inventory. In approving the application, the Council make the following findings, determination, and declarations: SECTION 1. Background. A. On February 6, 2024, the property owner contacted staff to request a reclassification of a one-story commercial building at 411 Kipling Street, designed by George W. Mosher in the Square Cottage style with stylistic elements of Colonial Revival and Queen Anne Free Classic style, completed in 1902 from a 'Contributing Building' Category 4 resource to a 'Major Building' Category 2 resource on the Palo Alto Historic Inventory. With the owner's request and funding, staff obtained a historic resource evaluation from the City's consultant, Page & Turnbull, including an integrity evaluation to understand building's eligibility for a classification upgrade. The historic resource evaluation supports a classification upgrade to a Category 2 historic resource. The consultant describes the building's eligibility in a report dated November 21, 2023, noting its eligibility under local criteria 2, 5, and 6: • Criterion 2 (The structure or is particularly representative of an architectural style or way of life important to the city, state or nation) 411 Kipling Street is an excellent extant example of the Square Cottage house type in Palo Alto's Downtown North neighborhood. The Square Cottage is a Palo Alto residential house type that mixed familiar forms and finishes of the Colonial Revival, Queen Anne Free Classic, and sometimes Craftsman styles in later examples. The subject building is an early extant example of this important building type and is also a unique variation featuring a hipped roof, simple Tuscan columns, and a flat front facade, instead of the more common cross -gabled roof and projecting bay window. Criterion 5 (The architect or building was important) George W. Mosher was a builder of merit who made important contributions to the early built environment of Palo Alto. While Mosher's works are considered more modest in size and design compared with other architect -designed residences from the same period, he built and designed numerous "Square Cottage" house types and was the builder for several larger high style residences in Palo Alto. The subject building is an important extant example of George W. Mosher's contributions to the high -quality housing stock built in Palo Alto's early period of development. Criterion 6 (The structure or site contains elements demonstrating outstanding attention to architectural design, detail, materials or craftsmanship) 411 Kipling Street showcases the high level of craftsmanship and architectural design implemented by builder -of -merit George W. Mosher. Elements of the facade that meet the Page 1 of 2 Item 7: Staff Report Pg. 4 Packet Pg. 77 of 857 Item 7 Attachment B - Draft Record of Land Use definition of Criterion 6 include original wood windows with one-ov Action sashes, ogee lugs, and cottage windows with diamond mullions, along with shiplap siding and cornice with dentil molding. 1. On April 11, 2024, the HRB received a staff report (ID #2403-2766), conducted a public hearing, and concurred with the consultant's evaluation regarding the building's eligibility for category upgrade from the current local historic inventory Category 4 to Category 2. SECTION 2. Environmental Review. The project is exempt from the provisions of the California Environmental Quality Act (CEQA), as it is not a project under CEQA Guidelines per Section 21065. SECTION 3. Designation Findings. A. The following criteria, as specified in Municipal Code Section 16.49.040 (b), shall be used as criteria for designating historic structures/sites to the historic inventory: 1. The structure or site is identified with the lives of historic people or with important events in the city, state or nation; 2. The structure or site is particularly representative of an architectural style or way of life important to the city, state or nation; 3. The structure or site is an example of a type of building which was once common, but is now rare; 4. The structure or site is connected with a business or use which was once common, but is now rare; 5. The architect or building was important; 6. The structure or site contains elements demonstrating outstanding attention to architectural design, detail, materials or craftsmanship. The building at 411 Kipling Street met many of the above criteria when it was first listed on Palo Alto's Historic Resource Inventory in 1983. With the historic assessment in 2023, the building's status as a historic resource has remained per Page & Turnbull's conclusion. B. The definition of Category 2 in Municipal Code Section 16.49.020 (b) must be met to allow the upgrade to the structure's category designation: Category 2 Definition: "Major building" means any building or group of buildings of major regional importance, meritorious works of the best architects or an outstanding example of an architectural style or the stylistic development of architecture in the state or region. A major building may have some exterior modifications, but the original character is retained. The applicant requested and the consultant found Category 2 appropriate for this building. Page & Turnbull historic consultant supported applicant's request. The City's consultant found the building at 411 Kipling Street meets the Palo Alto Inventory Category 2 Definition. The integrity evaluation found that the building at 411 Kipling Street retains all seven aspects of integrity (location, setting, design, materials, workmanship, feeling, and association). The minor exterior modifications cited in the consultant's report have not caused the building to lose its original character. National Register of Historic Places and California Register of Historical Resources listing: 411 Kipling Street is currently listed in the City of Palo Alto Historic Inventory as a Category 4: "Contributing Building." It was surveyed for the Historic Resources Inventory and added to the local register in 1983. Page 2 of 2 Item 7: Staff Report Pg. 5 Packet Pg. 78 of 857 Item 7 Attachment B - Draft Record of Land Use Action SECTION 4. Category Upgrade Approved. The City Council approves the property owner's request for re-classification of 411 Kipling Street to a Category 2 historic resource on the City's Historic Resources Inventory. PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: City Clerk APPROVED AS TO FORM: Deputy City Attorney APPROVED: Director of Planning and Development Services Page 3 of 2 Item 7: Staff Report Pg. 6 Packet Pg. 79 of 857 Item 7 Attachment C - Project Webpage With Plan Set Attachment C Direct Link to Project Webpage: https://www.cityofpaloaIto.org/Departments/Planning-Development-Services/Current- Planning/Protects/411-KipIing-Street Item 7: Staff Report Pg. 7 Packet Pg. 80 of 857 Item 8 Item 8 Staff Report City Council Staff Report From: City Manager CITY O F Report Type: CONSENT CALENDAR PALO Lead Department: Planning and Development Services ALTO Meeting Date: June 17, 2024 Report #:2404-2910 TITLE CONSENT: Approval of a Record of Land Use Action to Upgrade the Property Located at 271 University Avenue From a Category 3 Resource on the Local Historic Inventory to a Category 2 Resource. RECOMMENDATION Staff recommends Council reclassify 271 University Avenue, a one-story commercial building with a mezzanine at the rear, from Historic Inventory Category 3 Resource ('Contributing Building') to a Category 2 Resource ('Major Building') as recommended by the Historic Resources Board (HRB). BACKGROUND This report and Record of Land Use Action (Attachment A) provide background and support for the HRB's April 11, 2024 recommendation to upgrade the one-story commercial building from Historic Inventory Category 3 ('Contributing Building') to Category 2 ('Major Building'). The HRB staff report1 included the consultant's assessment and inventory form. These documents are also available on the project webpage. 271 University Avenue is located in the Downtown North neighborhood and provides retail space. The subject building was designed by Carl I. Warnecke of Miller & Warnecke in Art Deco style with Zig-Zag Moderne characteristics and completed in 1930 for use as a clothing store. The building is currently listed on the City's local Historic Resources Inventory as a Category 3 "Contributing Building." The building at 271 University Avenue was first evaluated and added to the local historic inventory in 1978 as a Category 3 resource for its "zig-zag moderne" architectural style created in concrete. ANALYSIS On April 11, 2024, the Historic Resources Board (HRB) reviewed the applicant's proposal to reclassify the subject building from the current "Contributing Building" designation of Category 1 Link to April 11, 2024 HRB staff report with consultant assessment and inventory form https://www.cityofpaloalto.org/files/assets/public/v/1/agendas-minutes-reports/agendas-minutes/historic- resou rces-board/2024/hrb-4.11-271-university.pdf Item 8: Staff Report Pg. 1 Packet Pg. 81 of 857 Item 8 Item 8 Staff Report 3 on the Historic Inventory to Category 2 "Major Building." The evaluation indicated the building has retained its historic integrity and is outstanding and regionally important architecture consistent with the definition of resource Category 2. The Historic Resource Board (HRB) voted unanimously to recommend that the City Council reclassify 271 University Avenue to a Category 2 resource. The applicant and the property owner participated in the review of the proposed reclassification and support this request; no members of the public spoke to the item. The Record of Land Use Action (Attachment B) contains the findings for the category upgrade. FISCAL/RESOURCE IMPACT There is no significant fiscal or resource impact associated with this project. The City's consultant cost to prepare the Historic Resource Evaluation was covered by the property owner. PUBLIC COMMENTS As of the writing of this report, no project -related, public comments were received. ENVIRONMENTAL REVIEW Maintenance of historic designation of a property or reclassification of historic designation of a property is not a project under the California Environmental Quality Act and CEQA Guidelines Section 21065 because it will not cause a direct change to the physical environment nor a reasonably foreseeable indirect physical change in the environment. ATTACHMENTS Attachment A: Location Map Attachment B: Draft Record of Land Use Action Attachment C: Project Webpage with Plan Set APPROVED BY: Jonathan Lait, Planning and Development Services Director Item 8: Staff Report Pg. 2 Packet Pg. 82 of 857 Item 8 Attachment B - Draft Record of Land Use Action MENT B APPROVAL NO. 2024 - RECORD OF THE COUNCIL OF THE CITY OF PALO ALTO LAND USE APPROVAL FOR 271 UNIVERSITY AVE: HISTORIC RESOURCES INVENTORY CATEGORY 3 TO CATEGORY 2 UPGRADE (24PLN-00039) On June 17, 2024, the Council held a duly noticed public hearing and, after considering all of the evidence presented, approved the property owner's request to reclassify the commercial building at 271 University Avenue, currently a Local Category 3 Historic Resource. The Council approved the Historic Resources Board (HRB) recommendation to an upgraded level, Category 2 Historic Resource on the City of Palo Alto Historic Resources Inventory. In approving the application, the Council make the following findings, determination, and declarations: SECTION 1. Background. A. On February 7, 2024, the property owner contacted staff to request a reclassification of a one-story commercial building designed by Carl I. Warnecke of Miller & Warnecke in the Art Deco style completed in 1930 from a 'Contributing Building' Category 3 resource to a 'Major Building' Category 2 resource on the Palo Alto Historic Inventory. With the owner's request and funding, staff obtained a historic resource evaluation from the City's consultant, Page & Turnbull, including an integrity evaluation to understand building's eligibility for a classification upgrade. The historic resource evaluation supports a classification upgrade to a Category 2 historic resource. The consultant describes the building's eligibility in a report dated November 1, 2023, noting its eligibility under local criteria 2, 5, and 6. • Criterion 2 (The structure or is particularly representative of an architectural style or way of life important to the city, state or nation) 271 University Avenue is an excellent and rare commercial example of the Art Deco style in Palo Alto. The defining style of Palo Alto throughout its commercial and residential areas is by far the Spanish Colonial Revival (also called Spanish Eclectic or Mediterranean Revival), as well as other predominant styles, including Queen Anne, Craftsman, and Midcentury Modern. Overall, there are only a handful of buildings built in the Art Deco style in the area, the most notable being the Hoover Pavilion at Stanford University and a few others that would be considered Streamline or "Nautical" Moderne style. Research uncovered no other commercial buildings in Palo Alto designed in the Art Deco style specifically with Zig-Zag Moderne characteristics, which include zigzags and chevron motifs, molded ornamentation, decorative parapets and cornice, and metal window hardware. 271 University Avenue is an important extant example of commercial Art Deco with Zig-Zag Moderne characteristics that retains its character -defining features such as original metal casement windows, stepped parapet walls, molded chevron cornice and floral medallion ornamentation, reeded pilasters, and zigzag structural motifs. Despite alterations to the storefront system, the building has retained the majority of its original Art Deco characteristics and has been a stately and elegant presence on University Avenue for nearly the last century. • Criterion 5 (The architect or building was important) Carl I. Warnecke is an architect of merit who contributed a rich legacy to the architectural field, and specifically to the East Bay where he predominantly worked in Oakland and Piedmont through the partnership of Miller and Warnecke. Throughout his career and partnership, Warnecke designed largely in the Tudor Revival style, and was also known mostly for his residential and later civic and Page 1 of 2 Item 8: Staff Report Pg. 4 Packet Pg. 84 of 857 Item 8 Attachment B - Draft Record of Land Use institutional designs. Research uncovered no other examples of buildings Action in Palo Alto, regionally in the South Bay, or overall designed in the Art Deco style. The subject building is therefore important as both a rare example of work by Carl I. Warnecke locally and regionally in Palo Alto and the South Bay, and also stylistically as a unique variation of the commercial Art Deco Zig-Zag Moderne style. Criterion 6 (The structure or site contains elements demonstrating outstanding attention to architectural design, detail, materials or craftsmanship) The primary facade of the subject building features excellent examples of Art Deco ornamentation that is not only unique within the architectural context of Palo Alto, but also showcases the high level of craftsmanship and architectural design implemented by architect of merit Carl I. Warnecke. Elements of the facade that meet the definition of Criterion 6 include the stepped parapet walls, the molded chevron cornice and floral medallion ornamentation, reeded pilasters, and zigzag structural motifs. B. On April 11, 2024, the HRB received a staff report (ID #2403-2767), conducted a public hearing, and concurred with the consultant's evaluation regarding the building's eligibility for category upgrade from the current local historic inventory Category 3 to Category 2. SECTION 2. Environmental Review. The project is exempt from the provisions of the California Environmental Quality Act (CEQA), as it is not a project under CEQA Guidelines per Section 21065. SECTION 3. Designation Findings. A. The following criteria, as specified in Municipal Code Section 16.49.040 (b), shall be used as criteria for designating historic structures/sites to the historic inventory: 1. The structure or site is identified with the lives of historic people or with important events in the city, state or nation; 2. The structure or site is particularly representative of an architectural style or way of life important to the city, state or nation; 3. The structure or site is an example of a type of building which was once common, but is now rare; 4. The structure or site is connected with a business or use which was once common, but is now rare; 5. The architect or building was important; 6. The structure or site contains elements demonstrating outstanding attention to architectural design, detail, materials or craftsmanship. The building at 271 University Avenue met many of the above criteria when it was first listed on Palo Alto's Historic Resource Inventory in 1983. With the historic assessment in 2023, the building's status as a historic resource has remained per Page & Turnbull's conclusion. B. The definition of Category 2 in Municipal Code Section 16.49.020 (b) must be met to allow the upgrade to the structure's category designation: Category 2 Definition: "Major building" means any building or group of buildings of major regional importance, meritorious works of the best architects or an outstanding example of an architectural style or the stylistic development of architecture in the state or region. A major building may have Page 2 of 2 Item 8: Staff Report Pg. 5 Packet Pg. 85 of 857 Item 8 Attachment B - Draft Record of Land Use some exterior modifications, but the original character is retained. The a Action and the consultant found Category 2 appropriate for this building. Page & Turnbull historic consultant supported applicant's request. The City's consultant found the building at 271 University Avenue meets the Palo Alto Inventory Category 2 Definition. The integrity evaluation found that the building at 271 University Avenue retains all seven aspects of integrity (location, setting, design, materials, workmanship, feeling, and association). The minor exterior modifications cited in the consultant's report have not caused the building to lose its original character. National Register of Historic Places and California Register of Historical Resources listing: 271 University Avenue is currently listed in the City of Palo Alto Historic Inventory as a Category 3: "Contributing Building." It was surveyed for the Historic Resources Inventory in 1978 and added to the local register in 1979 when the Palo Alto Historic Inventory was first adopted by the City Council. SECTION 4. Category Upgrade Approved. The City Council approves the property owner's request for re-classification of 271 University Avenue to a Category 2 historic resource on the City's Historic Resources Inventory. PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: City Clerk APPROVED AS TO FORM: Deputy City Attorney APPROVED: Director of Planning and Development Services Page 3 of 2 Item 8: Staff Report Pg. 6 Packet Pg. 86 of 857 Item 8 Attachment C - Project Webpage With Plan Set Attachment C Direct Link to Project Webpage: https://www.cityofpaloaIto.org/Departments/Planning-Development-Services/Current- Planning/Protects/271-University-Avenue Item 8: Staff Report Pg. 7 Packet Pg. 87 of 857 Item 9 Item 9 Staff Report City Council Staff Report From: City Manager CITY O F Report Type: CONSENT CALENDAR PALO Lead Department: Public Works ALTO Meeting Date: June 17, 2024 Report #:2404-2922 TITLE Approval of Construction Contract C24190748 with Ross Recreation Equipment Company Inc. in the Amount of $305,600 and Authorization for the City Manager or Their Designee to Negotiate and Execute Change Orders up to a Not -to -Exceed Amount of $30,600 for the Ramos Park Improvements, Capital Improvement Program Project PG -14000; CEQA Status —Exempt Under CEQA Guidelines Section 15301 RECOMMENDATION Staff recommends that Council: 1. Approve and authorize the City Manager or their designee to execute Contract No. C24190748 with Ross Recreation Equipment, Inc. in an amount not to exceed $305,600 for the purchase and installation of a playground for Ramos Park Improvements Capital Improvement Program project (PG -14000); and 2. Authorize the City Manager or their designee to negotiate and execute one or more change orders to the contract with Ross Recreation for related additional but unforeseen work which may develop during the project, the total value of which shall not exceed $30,600. BACKGROUND In 2014, Council approved capital improvement program funding to address Ramos Park playground renovation and maintenance needs as part of the Fiscal Year 2015 Capital Budget. The renovation includes infrastructure, accessibility, and maintenance improvements. The City engaged the community in a series of community and Parks and Recreation Commission (PRC) meetings to review the proposed renovation and maintenance work. The playground equipment at Ramos Park is over 20 years old. Due to its age, the equipment replacement parts are difficult to find if it all; for this reason, playgrounds over the age of 15 are scheduled to be replaced. As part of the project, community outreach was performed providing opportunity for input. The playground replacement includes all equipment and surfacing. Item 9: Staff Report Pg. 1 Packet Pg. 88 of 857 Item 9 Item 9 Staff Report Community Outreach Process The first community meeting was held on January 29, 2020 to capture input from the community regarding the proposed park renovations. The community was asked to provide input using a series of sticker boards, and stickers were used to identify a desired restroom location and to answer questions regarding the desire to have a restroom, use of the playground and of the concrete court area. An on-line community survey was created that collected input regarding the playground and park renovation. A total of 198 community members provided survey input. A PRC meeting was held on February 25, 20201 to review the proposed renovations. A second community meeting was held on August 13, 20202. On December 15, 2020, the PRC voted unanimously to recommend Council approval of the Park Improvement Ordinance (PIO) for Ramos Park. Council adopted the PIO on March 8, 20211, with a second reading occurring on March 22, 20214. All materials presented to the community and the PRC can be viewed on the project web site at www.cityofpaloalto.org/ramospark. ANALYSIS Staff recommends approval of Contract No. C241907485 for the purchase and installation of the playground at Ramos Park. Staff has reviewed the City of Cupertino's contract terms and pricing for a similar project with this contractor and determined, per Palo Alto Municipal Code 2.30.360(k), that the use of another governmental or public agency's contract or substantially the same contract terms meets the threshold required by the municipal code. The Ramos Park Improvements project was initially bid in 2023 for the same playground renovations project scope. The low bid was approximately $50,000 more than the budget and so the City exercised its right to reject all bids. After rejecting all bids, staff started exploring other options for renovating playgrounds, which led to the discovery of the recommended Cupertino Agreement. The City typically renovates one existing park playground every year. Based on this yearly cycle, staff is consistently updated on costs of playground renovation 1 Parks and Recreation Commission, February 25, 2020, https://www.cityofpaloalto.org/files/assets/public/v/1/agendas-minutes-reports/agendas-minutes/parks-and- recreation-commission/agendas-m inutes/2020-agenda-and-minutes/ramos-park-staff-report-022520-da-ed its.pdf 2 Parks and Recreation Commission, August 13, 2020, https://www.cityofpaloalto.org/files/assets/public/v/1/agendas-minutes-reports/agendas-minutes/parks-and- recreation-commission/agendas-minutes/2020-agenda-and-minutes/august-25-2020-parks-and-recreation- commission-agenda-item-3-ramos-project-update. pdf 3 City Council, March 8, 2021; Agenda Item #5; SR #11976, https://www.cityofpaloalto.org/files/assets/public/v/1/agendas-minutes-reports/reports/city-manager-reports- c m rs/yea r -a rc h ive/2021/i d-11976. pdf 4 City Council, March 22, 2021; Agenda Item #6; SR #12103, https://www.cityofpaloalto.org/files/assets/public/v/1/agendas-minutes-reports/reports/city-manager-reports- c m rs/yea r-archive/2021/i d-12103-[806011. pdf 5 Ross Recreation Construction Contract C24190748; https://www.cityofpaloalto.org/files/assets/public/v/1/public-works/engineering-services/cip- contracts/c24190748-ross-recreation cc 05.20.2024 staff -report. pdf Item 9: Staff Report Pg. 2 Packet Pg. 89 of 857 Item 9 Item 9 Staff Report projects and has confirmed the Cupertino pricing is cost competitive, and is better than pricing received during the prior solicitation. The construction contract includes a not -to -exceed cost of $305,560. A construction contingency amount of $30,556, which equals 10 percent of the contract value, is requested for related, additional, but unforeseen work which may develop during the project, to be implemented via City -approved Change Order. Staff anticipates approximately 2-3 months to fabricate the playground equipment, with installation later this fall. FISCAL/RESOURCE IMPACT Funding for this contract is available in the Fiscal Year 2024 Capital Improvement Program Ramos Park Improvements project (PG -14000). STAKEHOLDER ENGAGEMENT Extensive stakeholder engagement has been completed in developing the proposed project improvement plan, including the several community and public meetings described in this report. ENVIRONMENTAL REVIEW The proposed Ramos Park Improvement project is categorically exempt from the California Environmental Quality Act (CEQA) under Title 14 California Code of Regulations Section 15301 (Existing Facilities). APPROVED BY: Brad Eggleston, Director Public Works/City Engineer Item 9: Staff Report Pg. 3 Packet Pg. 90 of 857 Item 10 Item 10 Staff Report City Council Staff Report From: City Manager CITY O F Report Type: CONSENT CALENDAR PALO Lead Department: Planning and Development Services ALTO Meeting Date: June 17, 2024 Report #:2405-2999 TITLE QUASI-JUDICIAL. 420 Acacia: Final Map and Street Naming [24PLN-00027]: Request for a Final Map to Subdivide a 35,573 Square Foot Parcel Having Split Zoning Designations (R-1 and RM- 30) for Condominium Purposes (16 Residential Units). Environmental Assessment: Exempt from the Provisions of the California Environmental Quality Act in Accordance with CEQA Guidelines Section 15332 (In -fill Development). RECOMMENDATION Staff recommends that the City Council: 1. Approve the final subdivision map, which follows the approved Vesting Tentative Map, for the previously approved residential project at 420 Acacia Avenue pursuant to Palo Alto Municipal Code Section 21.16 and the Subdivision Map Act. 2. Approve the street names Koa Court and Acacia Lane recommended by the Palo Alto Historical Association for the two new private streets. BACKGROUND On March 8, 2023, Acacia El Camino Investors, LLC filed a Vesting Tentative Map application [23PLN-00059] concurrently with a Streamlined Housing Development review application [23PLN-00058]. In accordance with the Vesting Tentative Map Code Sections 21.13, the map application was deferred until all other entitlements were approved. The associated entitlements for the proposed improvements were approved on December 6, 2023, following a study session with the Architectural Review Board on October 5, 2023. On January 30, 2024, Acacia El Camino Investors, LLC filed a Final Map application. The Final Map application is the second of a two -phased process to subdivide the existing 35,573 square foot (0.8 acre) parcel into sixteen (16) condominium lots and associated private streets. The Final Map is the official, legal document that is recorded with the County that establishes the property lines, streets, and easements within the subdivision. The Final Map must be prepared under the direction of a registered civil engineer or a licensed land surveyor and be based on a survey. Approval of a Final Map is ministerial if the Final Map is in substantive compliance with the approved Vesting Tentative map and the subdivider has satisfied the conditions of approval Item 10: Staff Report Pg. 1 Packet Pg. 91 of 857 Item 10 Item 10 Staff Report attached to the tentative map. While many cities delegate approval of the Final Map to the City Engineer, under PAMC Section 21.16.240, the City Council is responsible for the approval. The condominium lots would each be developed with two- or three-story buildings for a total of 16 multi -family units within the approved 35,354 sf development. To finalize the subdivision of the condominium units, the Applicant must also apply to the California Bureau of Real Estate. The condominium units would be accessed from two new private streets off of Acacia Avenue. ANALYSIS The Final Map is the document containing the statements, acknowledgements, and agreements from the property owner, surveyor, City officials and beneficiaries that the Final Map is in conformance with all applicable regulations and the approved Vesting Tentative Map. There are no policy implications related to the approval of the Final Map, since the map is consistent with the approved Vesting Tentative Map. The proposed condominium subdivision includes private streets for vehicular access to the units. In accordance with City's Street Naming policy (resolution 5739), the Palo Alto Street Naming Committee selected, and the Palo Alto Historical Association board voted on proposed street names for the new private streets. The proposed street names for the project site are Koa Court and Acacia Lane. These are then forwarded to Council for its approval. These proposed street names related to acacia, one of the very common species in Australia and other locales. Other names considered included Wattle Court and Acacia Court. FISCAL/RESOURCE IMPACT There are no fiscal impacts related to the recommended action; development impacts fees of $1,093,305 as well as the applicable public art in -lieu fees that will be collected. STAKEHOLDER ENGAGEMENT No additional outreach provided beyond agenda noticing and prior public meetings. ENVIRONMENTAL REVIEW The proposed action is ministerial and CEQA does not apply. The was previously evaluated in accordance with the California Environmental Quality Act and found to be exempt. ATTACHMENTS Attachment A: Record of Land Use Action for 420 Acacia Final Map Attachment B: Record of Land Use Action for the Vesting Tentative Map Attachment C: Project Plans & Environmental Documents APPROVED BY: Jonathan Lait, Planning and Development Services Director Item 10: Staff Report Pg. 2 Packet Pg. 92 of 857 Item 10 Attachment A - Record of Land Use Action for 420 Acacia Final Map RECORD OF THE COUNCIL OF THE CITY OF PALO ALTO LAND USE ACTION FOR 420 ACACIA AVENUE: FINAL MAP, 24PLN-00027 At its meeting on , 2024 the City Council of the City of Palo Alto ("City Council") approved the Final Map for the development of a one -lot subdivision to create 16 residential condominium units, including a density bonus waiver from street width requirements making the following, findings, determination and declarations: SECTION 1. Background. A. On March 8, 2023, Dividend Homes applied for a Vesting Tentative Map for the development of a one (1) parcel, 16 -unit condominium subdivision project, including a density bonus waiver from street width requirements to permit a 22 -foot wide private street. ("The Project"). B. The project site is comprised of one existing lot (APN No. 132-38-042) of approximately 35,573 square feet. The site contains an existing paved surface level parking lot. Single family residential uses abut the site to the north. Commercial land uses are located adjacent to the lot to the east and south. A five -story 129 -unit affordable housing project has been approved to the west, replacing a surface level parking lot along El Camino Real. C. Following staff review, the Planning and Transportation Commission reviewed the project and recommended approval on December 13, 2023, subject to conditions of approval. D. On January 22, 2024 the City Council held a duly noticed public hearing, at which evidence was considered and all persons were afforded an opportunity to be heard in accordance with the City Council's policies and procedures and approved the Vesting Tentative Map for the development of a one -lot subdivision to create 16 residential condominium units, including a density bonus waiver from street width requirements. SECTION 2. Environmental Review. The City, as the lead agency for the Project, has determined that the project is exempt from the California Environmental Quality Act (CEQA) in accordance with CEQA Guideline section 15332, which provides an exemption for infill development projects. Documentation to support the exemption is available as part of the public record on file with the Planning and Development Services Division. SECTION 3. Final Map Approved. The City Council finds that the Final Map conforms with the previously approved Vesting Tentative Map (RLUA 2024-02) and all requirements of the Subdivision Map Act and Title 21 of the Palo Alto Municipal Code. The City Council further finds that that the conditions of approval of the Vesting Tentative Map have been met in accordance with PAMC Section 21.16.010[c]. Accordingly, the Final Map is approved. Item 10: Staff Report Pg. 3 Packet Pg. 93 of 857 Item 10 Attachment A - Record of Land Use Action for 420 Acacia Final Map INTRODUCED: June 17, 2024 PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: City Clerk APPROVED AS TO FORM: Assistant City Attorney PLANS AND DRAWINGS REFERENCED: APPROVED: Mayor Director of Planning and Development Services Those plans prepared by BKF Engineers titled "Tract No. 10630 Acacia Townhomes being a Single Lot Condominium Development consisting of 16 Residential Condominium Units," consisting of four pages, dated May 2024 and submitted May 28, 2024. Item 10: Staff Report Pg. 4 Packet Pg. 94 of 857 DocuSign Envelope ID: 58210381-9471-4EDE-91 F8-3B71C9303BA9 Item 10 Attachment B - Record of Land Use Action for the Vesting Tentative Map ACTION NO. 2024-02 RECORD OF THE COUNCIL OF THE CITY OF PALO ALTO LAND USE ACTION FOR 420 ACACIA AVENUE: VESTING TENTATIVE MAP, 23PLN-00059 At its meeting on January 22, 2024, the City Council of the City of Palo Alto ("City Council") approved the Vesting Tentative Map for the development of a one -lot subdivision to create 16 residential condominium units, including a density bonus waiver from street width requirements making the following findings, determinations and declarations: SECTION 1. Background. A. On March 8, 2023, Dividend Homes applied for a Vesting Tentative Map for the development of a one (1) parcel, 16 -unit condominium subdivision project, including a density bonus waiver from street width requirements to permit a 22 -foot wide private street. ("The Project"). B. The project site is comprised of one existing lot (APN No. 132-38-042) of approximately 35,573 square feet. The site contains an existing paved surface level parking lot. Single family residential uses abut the site to the north. Commercial land uses are located adjacent to the lot to the east and south. A five -story 129 -unit affordable housing project has been approved to the west, replacing a surface level parking lot along El Camino Real. C. Following staff review, the Planning and Transportation Commission reviewed the project and recommended approval on December 13, 2023, subject to conditions of approval. D. On January 22, 2024 the City Council held a duly noticed public hearing, at which evidence was considered and all persons were afforded an opportunity to be heard in accordance with the City Council's policies and procedures. SECTION 2. Environmental Review. The City, as the lead agency for the Project, has determined that the project is exempt from the California Environmental Quality Act (CEQA) in accordance with CEQA Guideline section 15132, which provides an exemption for infill development projects. Documentation to support the exemption is available as part of the public record on file with the Planning and Development Services Division. SECTION 3. Vesting Tentative Map Findings. A legislative body of a city shall deny approval of a Parcel Map, if it makes any of the following findings (California Government Code Section 66474). The City Council cannot make these findings for the following reasons: Item 10: Staff Report Pg. 5 Packet Pg. 95 of 857 DocuSign Envelope ID: 58210381-9471-4EDE-91 F8 -3B71 C9303BA9 Item 10 Attachment B - Record of Land Use Action for the Vesting Tentative Map 1. That the proposed map is not consistent with applicable general and specific plans as specified in Section 65451: The site is consistent with the Comprehensive Plan as described below. 2. That the design or improvement of the proposed subdivision is not consistent with applicable general and specific plans: There is no adopted specific plan for this project site. The proposed vesting tentative map and related improvements is consistent with the Comprehensive Plan in that it facilitates housing development on a site designated for multi -family use and in a transit -oriented location within the urban services area, consistent with Goal 2 of the Housing Element and Goal L1.2 of the Land Use Element. The proposed density (20 DU/AC) is consistent with the allowable density (16 to 30 DU/AC) in the multi -family land use designation as outlined in the Land Use Element. The project replaces paved surface level parking with housing in a transit -oriented area and improves the city's jobs housing imbalance consistent with the Transportation Element's goals and policies to reduce vehicle miles traveled. 3. That the site is not physically suitable for the type of development: The Project site is suitable for multi -family residential development in that it's located within the multi -family zone district on a site designated on the City's Land Use Map for multi -family use. The existing parcel meets the minimum code requirements for the RM-30 zone district with respect to lot area, width and depth. The parcel would not change with approval of this condominium subdivision. The proposed number of condominium units complies with the applicable densities set forth in the land use element and zone district. 4. That the site is not physically suitable for the proposed density of development: The project would create a total of sixteen multi -family residential units which is 20 dwelling units (DU) per acre. This density complies with the maximum allowable residential density as calculated for the total site area (30 DU/acre = 24 DU). Building, Palo Alto Fire Department, Planning, Transportation, and Public Works Engineering have reviewed the requested density bonus waiver to permit a 22 -foot street width to ensure that all necessary requirements for safety, including but not limited to, fire safety and traffic safety (e.g. curb cut location, back-up space, turning radius, etc.) have been met. 5. That the design of the subdivision or the proposed improvements are likely to cause substantial environmental damage or substantially and avoidably injure fish or wildlife or their habitat: The project is located within the built environment that does not contain quality habitat for fish or other wildlife on the site or within the vicinity of the site. The nearest stream is approximately 700 feet south east from the project site. The adopted Palo Alto 2030 Item 10: Staff Report Pg. 6 Packet Pg. 96 of 857 DocuSign Envelope ID: 58210381-9471-4EDE-91 F8 -3B71 C9303BA9 Item 10 Attachment B - Record of Land Use Action for the Vesting Tentative Map Comprehensive Plan includes Map N-1, which identified sensitive animal and plant species within the Palo Alto quadrangle, a large geographic area that includes the urban portions along the bay and within the foothills, based on information in the California natural Diversity Database (CNDDB). Based on this map, and the urban nature of the site, the subject property does not contain any habitat for endangered, rare, or threatened species and has not historically supported any of these species. 6. That the design of the subdivision or type of improvements is likely to cause serious public health problems: The subdivision of this parcel and associated improvements would not have the potential to result in serious health problems. The proposed multi -family use would not include use or storage of hazardous materials and the use is located within the urban environment adjacent to other residential uses. The site is not located on a hazardous waste site pursuant to government code 65962.5. 7. That the design of the subdivision or the type of improvements will conflict with easements, acquired by the public at large, for access through or use of, property within the proposed subdivision. In this connection, the governing body may approve a map if it finds that alternate easements, for access or for use, will be provided, and that these will be substantially equivalent to ones previously acquired by the public. This subsection shall apply only to easements of record or to easements established by judgment of a court of competent jurisdiction and no authority is hereby granted to a legislative body to determine that the public at large has acquired easements for access through or use of property within the proposed subdivision. There are no public access easements over the property currently. Therefore, the design of the subdivision will not conflict with any public easements for access through, or use of, the property. An existing shared private access easement with the neighboring property to the east is maintained. New public utility easements will be provided to existing and proposed electrical utilities as part of this subdivision map as required in accordance with City of Palo Alto Utilities standards. SECTION 4. Vesting Tentative Map Approval Granted. Vesting Tentative Map Approval is filed and processed in accordance to PAMC Section 21.13.020 and granted by the City Council under PAMC Sections 21.12 and 21.20 and the California Government Code Section 66474, subject to the conditions of approval in Section 6 of this Record of Land Use Action. SECTION 5. Final Map. The Final Map submitted for review and approval by the City Council shall be in substantial conformance with the Vesting Tentative Map prepared by BKF Engineers titled "Vesting Tentative Map Acacia Avenue at El Camino Real For Condominium Purposes City of Palo Alto, California," consisting of seven (7) pages, stamped as received November 16, 2023, except as modified to incorporate the conditions of approval in Section 6. A copy of the Vesting Tentative Map is on file in the Department of Planning and Development Services, Current 3 Item 10: Staff Report Pg. 7 Packet Pg. 97 of 857 DocuSign Envelope ID: 58210381-9471-4EDE-91 F8-3B71C9303BA9 Item 10 Attachment B - Record of Land Use Action for the Vesting Tentative Map Planning Division. Prior to the expiration of the Vesting Tentative Map approval, the subdivider shall cause the subdivision or any part thereof to be surveyed, and a Final Map, as specified in Chapter 21.08, to be prepared in conformance with the Vesting Tentative Map as conditionally approved, and in compliance with the provisions of the Subdivision Map Act and PAMC Title 21 and submitted to the City Engineer (PAMC Section 21.16.010[a]). SECTION 6. Conditions of Approval. Planning 1. PROJECT PLANS. The Vesting Tentative Map submitted for review and approval by the City Council shall be in substantial conformance with the Vesting Tentative Map titled "Vesting Tentative Map Acacia Avenue at El Camino Real for Condominium Purposes, City of Palo Alto, California", prepared by BKF Engineers and submitted November 16, 2023, except as modified to incorporate the conditions of this approval. 2. DENSITY BONUS UNITS. The project seeks a waiver of the minimum street width requirements to permit a 22 -foot wide private street. In order to qualify for a waiver from this development standard the project shall provide a minimum of two (2) dwelling units at rates affordable to moderate -income households, as defined in Section 50093 of the Health and Safety Code. 3. FINAL MAP COVER PAGE. At such time as the Final Map is filed, the cover page shall include the name and title of the Director of Planning and Development Services. 4. STANDARD CC&R REQUIREMENTS. Section 16.38 of Palo Alto's Municipal Code provides that all condominium and other "community housing projects" shall submit Covenants, Conditions and Restrictions (CC&R's) to the City Attorney for approval before issuance of the Final Map. The City Attorney has developed the following standard covenants which shall be included in all CC&R's. a. PROPERTY SHALL COMPLY WITH CITY ZONING ORDINANCES. The property, including all common areas, private streets and, parks within the property, shall at all times comply with the City's Zoning Code and shall not be used for any purpose other than as permitted in the City Zoning Code. b. MODIFICATIONS TO PROPERTY. Any alterations, modifications, or other improvements to the property shall comply with all applicable City Codes. c. MAINTENANACE AND LANDSCAPING OF COMMON AREAS. The Association is responsible for maintenance and landscaping of all parts of the community housing project which are held in common and such maintenance shall be performed to the standard of maintenance prevalent in the neighborhood. (See PAMC Section 16.38.030(a)). Item 10: Staff Report Pg. 8 Packet Pg. 98 of 857 DocuSign Envelope ID: 58210381-9471-4EDE-91 F8 -3B71 C9303BA9 Item 10 Attachment B - Record of Land Use Action for the Vesting Tentative Map d. TERMINATION OF MANAGER OR MAINTENANCE CONTRACTS. The association may terminate the contract of any person or organization engaged by the developer to perform management or maintenance duties three months after the association assumes control of the community housing project or any time thereafter. (See PAMC Section 16.38.030(b).) e. PROTECTION OF STORM WATER FACILITIES. Neither the association, its residents, nor their agents, employees, representatives, invitees, licensees, customers, or contractors shall alter or modify any storm water facilities in any way including but not limited to placing, maintaining, constructing, or planting any improvements, landscaping or other items, including without limitation decks, stairs, walls, irrigation systems, trees, or any vegetation on any storm water facilities. f. TRASH DISPOSAL AND RECYCLING AREAS SHALL COMPLY WITH CITY ORDINANCES. All trash disposal and recycling areas shall be kept in a clean and sanitary condition and shall comply with all applicable City Ordinances. g. PROHIBITION AGAINST AIR AND WATER POLLUTION. Neither the association, its residents, nor their agents, employees, representatives, invitees, licensees, customers, or contractors shall use the property in any way which emits pollution into the atmosphere in excess of environmental standards set forth by City, State, and Federal laws, ordinances, and regulations. Neither the association, its residents, nor their agents, employees, representatives, invitees, licensees, customers, or contractors shall discharge garbage, trash, waste, or any other substance or materials of any kind into any private or public sewer or waterway on the property in violation of any regulations of any private or public body having jurisdiction over such matters. h. AMENDMENTS TO ORGANIZATION DOCUMENTS REQUIRE CITY APPROVAL. Any amendments or modifications to the organizational documents shall be submitted to the city attorney for approval. No amendment or modification to the organizational documents shall be effective without prior written consent of the city attorney. CITY'S RIGHT TO ENFORCE COVENANTS AND RESTRICTIONS. The City is hereby granted the right, but in no event the duty, to enforce the covenants and restrictions set forth in this section of the organizational documents. The association shall recognize that it has the primary responsibility for enforcement of the organizational documents and unequivocally guarantees to institute and expeditiously prosecute any required legal action to obtain compliance with all provisions set forth in the organizational documents. 5 Item 10: Staff Report Pg. 9 Packet Pg. 99 of 857 DocuSign Envelope ID: 58210381-9471-4EDE-91 F8-3B71C9303BA9 Item 10 Attachment B - Record of Land Use Action for the Vesting Tentative Map NO WAIVER OF CITY'S RIGHTS. No failure of the City to enforce any of the covenants or restrictions contained in the organizational documents will in any event render them ineffective. k. CITY'S REMEDIES TO CURE A BREACH OR VIOLATION. Remedies available to the City to cure any breach or violation of the organizational documents shall be cumulative to any other provisions of law. The City's failure to exercise any remedy provided for in the organizational documents shall not, under any circumstances, be construed as a waiver of the remedy. SEVERABILITY. Invalidation of any one of the City's required covenants or restrictions by judgment or court order shall in no way affect any other provisions which shall remain in full force and effect. 5. ADDITIONAL CC&R REQUIREMENT. The CC&Rs shall also include a provision that dictates the responsibilities of tenants and maintenance staff for the trash pickup for the townhomes as shown in the approved plan set. 6. FINAL MAP EXPIRATION. A Final Map, in conformance with the approved Vesting Tentative Map, all requirements of the Subdivision Ordinance (PAMC Section 21.16), and to the satisfaction of the City of Palo Alto and its representatives, shall be filed with the Planning Division and the Public Works Engineering Division within two years of the Vesting Tentative Map approval date or this approval will expire. A one-year extension may be granted in accordance with the allowances set forth in the municipal code. 7. DEVELOPMENT IMPACT FEES. The Property Owner or their designee shall pay all applicable development impact fees associated with the proposed development and subdivision prior to issuance of the building permit(s), as detailed in the Streamlined Housing Development Review Approval. 8. INDEMNITY. To the extent permitted by law, the Applicant shall indemnify and hold harmless the City, its City Council, its officers, employees and agents (the "indemnified parties") from and against any claim, action, or proceeding brought by a third party against the indemnified parties and the applicant to attack, set aside or void, any permit or approval authorized hereby for the Project, including (without limitation) reimbursing the City for its actual attorneys' fees and costs incurred in defense of the litigation. The City may, in its sole discretion, elect to defend any such action with attorneys of its own choice. Public Works Engineering 9. PUBLIC WORKS APPLICATIONS, FORMS, AND DOCUMENTS. Applicant shall be advised that most forms, applications, and informational documents related to Public Works Engineering conditions can be found at the following link: 6 Item 10: Staff Report Pg. 10 Packet Pg. 100 of 857 DocuSign Envelope ID: 58210381-9471-4EDE-91 F8-3B71C9303BA9 Item 10 Attachment B - Record of Land Use Action for the Vesting Tentative Map https://www.citVofpaloalto.org/Departments/Public-Works/Engineering- Services/Forms-and-Permits 10. MAP THIRD -PARTY REVIEW. The City contracts with a third -party surveyor that will review and provide approval of the map's technical correctness as the City Surveyor, as permitted by the Subdivision Map Act. The Public Works Department will forward a Scope & Fee Letter from the third -party surveyor and the applicant will be responsible for payment of the fee's indicated therein, which is based on the complexity of the map. 11. STREETWORK PERMIT. The applicant shall obtain a Streetwork Permit from the Department of Public Works for all public improvements. 12. GRADING AND EXCAVATION PERMIT. A Grading Permit is required per PAMC Chapter 16.28. The permit application and all applicable documents (see Section H of application) shall be submitted to Public Works Engineering. Add the following note: "THIS GRADING PERMIT WILL ONLY AUTHORIZE GENERAL GRADING AND INSTALLATION OF THE STORM DRAIN SYSTEM. OTHER BUILDING AND UTILITY IMPROVEMENTS ARE SHOWN FOR REFERENCE INFORMATION ONLY AND ARE SUBJECT TO SEPARATE BUILDING PERMIT APPROVAL." 13. ENCROACHMENT PERMIT. Prior to any work in the public right-of-way, the applicant shall obtain an encroachment permit from the Public Works Department for any work that encroaches onto the City right-of-way. 14. STORMWATER POLLUTION PREVENTION. All improvement plan sets shall include the "Pollution Prevention — It's Part of the Plan" sheet. 15. C.3 THIRD -PARTY CERTIFICATION. Applicant shall provide certification from a qualified third -party reviewer that the proposed permanent storm water pollution prevention measures comply with the requirements of Provision C.3 and Palo Alto Municipal Code Chapter 16.11. 16. Submit the following: a. Stamped and signed C.3 data form (April 2023 version) from SCVURPPP. https://scvurppp.org/wp-content/uploads/2023/04/SCVURPPP-C.3-Data-Form- - uadated 4-12-2023 clean fillable.Ddf b. Final stamped and signed letter confirming which documents were reviewed and that the project complies with Provision C.3 and PAMC 16.11. 17. C.3 STORMWATER AGREEMENT. The applicant shall enter into a Stormwater Maintenance Agreement with the City to guarantee the ongoing maintenance of the permanent storm water pollution prevention measures. The City will inspect the treatment measures yearly and charge an inspection fee. The agreement shall be Item 10: Staff Report Pg. 11 Packet Pg. 101 of 857 DocuSign Envelope ID: 58210381-9471-4EDE-91 F8 -3B71 C9303BA9 Item 10 Attachment B - Record of Land Use Action for the Vesting Tentative Map executed by the applicant team prior to building permit final. 18. C.3 FINAL THIRD -PARTY CERTIFICATION PRIOR TO OCCUPANCY. Within 45 days of the installation of the required storm water treatment measures and prior to the issuance of an occupancy permit for the building, the third -party reviewer shall submit to the City a certification verifying that all the Utilities Electric Engineeri 19. Overhead lines along the project frontage on Acacia shall be undergrounded as shown in the approved plans. 20. Public Utility Easements to proposed transformers, as shown on the Vesting Tentative Map and in conformance with city of Palo Alto standards, shall be dedicated to the City prior to final occupancy. Waste -gas -water Engineering 21. METER LAYOUT. Domestic water meter layout: The applicant needs to provide an estimated domestic water load in G.P.M. to design the water service and meter size. A 3" or 4" water meter will require a 4'x8' water meter set with a 2" by-pass per DWG. NO. WD -04. The vault shall be located on private property inside a public utility easement. The applicant's engineer shall obtain, prepare, and record with the county of Santa Clara, and provide the utility engineering section with copies of the public utilities easement on the front of the property adjacent to the City right of way at the water point of service if a 3" or 4" water meter is provided. // // // // // // // // // 8 Item 10: Staff Report Pg. 12 Packet Pg. 102 of 857 DocuSign Envelope ID: 58210381-9471-4EDE-91 F8 -3B71 C9303BA9 Item 10 Attachment B - Record of Land Use Action for the Vesting Tentative Map SECTION 7. Term of Approval. Vesting Tentative Map. All conditions of approval of the Vesting Tentative Map shall be fulfilled prior to approval of a Final Map (PAMC Section 21.16.010[c]). Unless a Final Map is filed, and all conditions of approval are fulfilled within a two-year period from the date of Vesting Tentative Map approval, the Vesting Tentative Map shall expire and all proceedings shall terminate. An extension of time may be granted by the city council after recommendation of the planning commission, upon the written application of the subdivider, prior to the expiration of the Vesting Tentative Map approval, or any previous extension granted. Such extension(s) shall be subject to the maximum limitations set forth in the Subdivision Map Act. INTRODUCED: January 22, 2024 PASSED: 7-0 AYES: Burt, Kou, Lauing, Lythcott-Haims, Stone, Tanaka, Veenker NOES: ABSENT: ABSTENTIONS: A b;cBSigned by: rsaoarannn City Clerk APP5OED \.S TO FORM: Assistant City Attorney APPI�Oocu\.E Dd:by: � Sfax, Mayor DocuSigned by: Lf'"'' �nro1orrrannro CityIsla a�eDr ocu ign y: Director of Planning and Development Services Those plans prepared by BKF Engineers titled "Vesting Tentative Map Acacia Avenue at El Camino Real for Condominium Purposes, City of Palo Alto, California," consisting of seven pages, dated November 8, 2023 and submitted November 16, 2023. 9 Item 10: Staff Report Pg. 13 Packet Pg. 103 of 857 Certificate Of Completion Envelope Id: 5821038194714EDE91F83B71C9303BA9 Subject: Complete with DocuSign: Final Record of Land Use Action 2024-02 for 420 Acacia.pdf Source Envelope: Document Pages: 9 Signatures: 5 Certificate Pages: 2 Initials: 0 AutoNav: Enabled Envelopeld Stamping: Enabled Time Zone: (UTC-08:00) Pacific Time (US & Canada) Record Tracking Status: Original 2/2/2024 10:17:24 AM Security Appliance Status: Connected Storage Appliance Status: Connected Signer Events Jodie Gerhardt Jodie.Gerhardt@CityofPaloAlto.org Manager Planning COPA Security Level: Email, Account Authentication (None) Electronic Record and Signature Disclosure: Not Offered via DocuSign Albert Yang albert.yang@cityofpaloalto.org Assistant City Attorney City of Palo Alto Security Level: Email, Account Authentication (None) Electronic Record and Signature Disclosure: Not Offered via DocuSign Jonathan Lait jonathan.lait@cityofpaloalto.org Interim Director Planning and Community Environment City of Palo Alto Security Level: Email, Account Authentication (None) Electronic Record and Signature Disclosure: Not Offered via DocuSign Ed Shikada ed.shikada@cityofpaloalto.org Ed Shikada City of Palo Alto Security Level: Email, Account Authentication (None) Electronic Record and Signature Disclosure: Not Offered via DocuSign Holder: Veronica Dao Veronica. Dao@CityofPaloAlto.org Pool: StateLocal Pool: City of Palo Alto Signature Completed Using IP Address: 199.33.32.254 by: EDICuSig"ed Ibu2g13" Signature Adoption: Pre -selected Style Using IP Address: 97.113.236.151 CDocuSigned by: 293C94F6_. Signature Adoption: Uploaded Signature Image Using IP Address: 199.33.32.254 ocuSigned by: ED C' F2DCAI0CCC8D4F0. Signature Adoption: Pre -selected Style Using IP Address: 199.33.32.254 Item 10 Attachment B - Record of Land Use Action for the GUST jn Vesting Tentative Map Status: Completed Envelope Originator: Veronica Dao 250 Hamilton Ave Palo Alto , CA 94301 Veronica. Dao@CityofPaloAlto.org IP Address: 199.33.32.254 Location: DocuSign Location: DocuSign Timestamp Sent: 2/2/2024 10:18:23 AM Viewed: 2/5/2024 12:09:24 PM Signed: 2/8/2024 9:15:25 AM Sent: 2/8/2024 9:15:27 AM Viewed: 2/8/2024 11:16:23 AM Signed: 2/8/2024 11:16:42 AM Sent: 2/8/2024 11:16:43 AM Viewed: 2/12/2024 6:38:58 PM Signed: 2/12/2024 6:39:07 PM Sent: 2/12/2024 6:39:09 PM Viewed: 2/12/2024 8:29:58 PM Signed: 2/12/2024 8:32:02 PM Item 10: Staff Report Pg. 14 Packet Pg. 104 of 857 Item 10 Attachment B - Record of Signer Events Signature Timest Land Use Action for the Greer Stone o 59 lby: Sent: 2/1 Vesting Tentative Map greer.stone@cityofpaloalto.org AW Sfbl x Viewed: 2/ . Vice Mayor C174753172A9C49D... Signed: 2/14/2024 10:12:16 AM 9 Security Level: Email, Account Authentication (None) Signature Adoption: Pre -selected Style Using IF Address: 208.185.159.234 Electronic Record and Signature Disclosure: Not Offered via DocuSign Mahealani Ah Yun ED*,uSi ... d by: Sent: 2/14/2024 10:12:18 AM mahealani.ahyun@cityofpaloalto.org 1�4 (WA. Resent: 2/22/2024 2:29:36 PM City Clerk 86910E5898F6400 Resent: 2/26/2024 1:05:09 PM Security Level: Email, Account Authentication Viewed: 3/4/2024 10:33:51 AM (None) Signature Adoption: Pre -selected Style Signed: 3/4/2024 10:33:57 AM Using IP Address: 199.33.32.254 Electronic Record and Signature Disclosure: Not Offered via DocuSign In Person Signer Events Signature Timestamp Editor Delivery Events Status Timestamp Agent Delivery Events Status Timestamp Intermediary Delivery Events Status Timestamp Certified Delivery Events Status Timestamp Carbon Copy Events Status Timestamp Witness Events Signature Timestamp Notary Events Signature Timestamp Envelope Summary Events Status Timestamps Envelope Sent Hashed/Encrypted 2/2/2024 10:18:23 AM Envelope Updated Security Checked 2/7/2024 10:02:49 AM Envelope Updated Security Checked 2/7/2024 10:02:49 AM Envelope Updated Security Checked 2/7/2024 10:02:49 AM Envelope Updated Security Checked 2/7/2024 10:02:50 AM Envelope Updated Security Checked 2/7/2024 10:02:50 AM Envelope Updated Security Checked 2/7/2024 10:02:50 AM Envelope Updated Security Checked 2/7/2024 10:02:50 AM Certified Delivered Security Checked 3/4/2024 10:33:51 AM Signing Complete Security Checked 3/4/2024 10:33:57 AM Completed Security Checked 3/4/2024 10:33:57 AM Payment Events Status Timestamps Item 10: Staff Report Pg. 15 Packet Pg. 105 of 857 Item 10 Attachment C - Project Plans & Environmental Documents Attachment C Project Plans Project plans are only available to the public online. Hardcopies of the plans have been provided to Board members. Environmental Document The City, acting as the lead agency, prepared documentation to support a Class 32 (infill development) categorical exemption for the proposed project. Directions to review Project plans online: 1. Go to: bit.ly/PApendingproiects 2. Scroll down to find "420 Acacia Avenue" and click the address link 3. On this project specific webpage you will find a link to the project plans, the documented exemption and other important information Direct Link to Project Webpage: https://www.cityofpaloaIto.org/Departments/Planning-Development-Services/Current- Planning/Projects/420-Acacia-Avenue Item 10: Staff Report Pg. 16 Packet Pg. 106 of 857 Item 11 Item 11 Staff Report City Council Staff Report From: City Manager CITY O F Report Type: CONSENT CALENDAR PALO Lead Department: City Manager ALTO Meeting Date: June 17, 2024 Report #:2405-3016 TITLE Approval of Contract Amendment Number 1 to Contract C24189570 with Downtown Streets Team in the Amount of $548,958 to Combine Contracts to Increase Operational Efficiency for a Revised Total Not -to -Exceed Amount of $1.1 Million Over Three Years ; CEQA Status: Not a Project RECOMMENDATION Staff recommends that the City Council approve and authorize the City Manager or their designee to execute Amendment Number 1 to Contract C24189570 with Downtown Streets Team (Attachment A) in the amount of $548,958 to combine service contracts and increase operational efficiency. This amendment results in a revised total contract not -to -exceed amount of $1,077,367. EXECUTIVE SUMMARY City staff is recommending amending the C24189570 (cleaning services) agreement to combine two existing contracts with this service provider into one contract to increase operational efficiency. This results in increasing the not -to -exceed amount by $548,958 to $1,077,367 to cover the three years of job readiness training and employment services scope previously under a separate contract. BACKGROUND The Downtown Streets Team, a program founded in Palo Alto, provides street cleaning services in cities throughout the Bay Area, conducted by individuals who are homeless or in danger of becoming homeless, while also providing those individuals job training, employment opportunities, and case management. The University Avenue Business District attracts visitors, shoppers, diners, local residents, and employees who expect a positive experience. To ensure this experience remains positive, the district must be maintained in a safe, clean, and appealing manner. Cleanliness is essential to maintaining a healthy and vibrant economic environment. Item 11: Staff Report Pg. 1 Packet Pg. 107 of 857 Item 11 Item 11 Staff Report The City of Palo Alto has partnered with Downtown Streets Team since 2006. In 2010, University Avenue stakeholders, which included the Palo Alto Business Improvement District (BID) and Palo Alto Downtown Professional and Business Association (PADPBA), proposed a combination of enhanced services that would raise the standards of cleanliness in the University Avenue Business District. The enhanced services included reducing trash from overflowing garbage receptacles, reporting graffiti and vandalism, removing litter in the alleyways and in the five parking structures (S & L, R, J, Q and Civic Center), and reporting suspicious vehicles and/or activities. In 2020, the City developed the Car -Free Streets Program in response to the pandemic. Businesses and residents have raised concerns regarding the cleanliness of the Car -Free Streets locations (Ramona Street and California Avenue). Besides having participants engage in cleaning services, the DST model strives to reduce homelessness by encouraging participants to take an active role in their own development, model positive behavior, and create long-term solutions for their participants. This portion of the DST model incorporates both job readiness training and employment opportunities, services previously provided under contract C23188369. In return, participants can work with a case manager to obtain housing and other supportive services. Each participant is evaluated on their individual performance and recognized for their accomplishments. The skills acquired through this program can then be used to seek further employment. The current not -to -exceed amount for Contract C24189570 (cleaning services) is $548,958 with an expiration date of January 11, 2027.1 The current not -to -exceed amount for Contract C23188369 (job readiness and employment opportunities) is $163,340 and set to expire shortly, on June 30, 2024.2 Additionally, DST was awarded a Human Services Resource Allocation Process (HSRAP) grant in the amount of $82,717 for peer -to -peer outreach with an expiration date of June 30, 2025. HSRAP is a competitive process and non -profits propose various activities each granting a period and are awarded varying sums of money. This differs from both current and historic cleaning services contracts and job readiness and employment opportunities contracts, which have been consistent over time and align with the integral program components that DST provides to the Palo Alto community. Under Palo Alto Municipal Code (PAMC) 2.30.360(b)(2), the City Manager has approved an exemption from competitive solicitation as DST is the only local all -in -one service provider that employs individuals who are homeless and at -risk of homelessness, providing job training and 1 City Council Staff Report, February 12, 2024, https://cityofpaloalto.primegov.com/meetings/ItemWithTemplateType?id=4177&meetingTemplateType=2&comp iledMeetingDocumentld=9079 2 City Council Staff Report, June 19, 2023, https://cityofpaloaIto.primegov.com/meetings/ItemWithTemplateType?id=2632&meetingTemplateType=2. Item 11: Staff Report Pg. 2 Packet Pg. 108 of 857 Item 11 Item 11 Staff Report employment opportunities, case management and outreach while also providing cleaning services. ANALYSIS The City has previously held separate contracts for (1) street cleaning and (2) job training and employment opportunities with different contract managers, expiration dates, and performance measures. As Downtown Streets Team does not operate these as discrete activities, but as integrated aspects of its program, it can be challenging to oversee and manage as separate contracts. Having contracts managed by different people in different departments and different end dates adds layers of administrative work, with each administrator only "seeing" a portion of the service delivery. Amending the existing street cleaning contract to incorporate the other program aspects allows the City to better manage this relationship and eliminate duplicative administrative work. It also enables the parties to negotiate contract terms with a clearer understanding of the total dollar amount being spent. Additionally, after some comments and questions from the public and at Council, City staff closely monitored DST service provision, reviewed DST contracts in Palo Alto and other cities and consulted with colleagues. From this effort, staff identified opportunities for clarifying the contract language relating to street cleaning tasks and improving performance measures. The proposed amended contract includes these clarifications and improved performance measures FISCAL/RESOURCE IMPACT The recommended amendment reduces administrative burdens by decreasing contract processing and staff time associated with multiple contracts leading to more efficient vendor management. Funding for this amendment is included in the FY 2025 Proposed Operating Budget as part of the non -departmental section of the General Fund. No additional resources are required at this time. Funding for future years will be subject to the appropriation of funds through the annual budget process. STAKEHOLDER ENGAGEMENT City staff coordinated meetings with all department staff who have managed agreements with DST, including staff from Community Services, Planning and Development Services, Public Works, and Economic Development to understand the various contracts and related experiences. Staff has also held discussions with University Avenue Business District Stakeholders regarding the efforts of Downtown Streets Team to understand areas of success and potential areas for improvement. Former DST staff, Santa Clara County staff, and colleagues from other cities were contacted to discuss their experiences and what services DST provided for their respective organizations. Item 11: Staff Report Pg. 3 Packet Pg. 109 of 857 Item 11 Item 11 Staff Report ENVIRONMENTAL REVIEW The approval of this amendment is CEQA-exempt pursuant to CEQA Guidelines Section 15061(b)(3) because it can be seen with certainty that there is no possibility of a significant effect on the environment. ATTACHMENTS Attachment A: Downtown Streets Team C24189570 Amendment #1 APPROVED BY: Ed Shikada, City Manager Item 11: Staff Report Pg. 4 Packet Pg. 110 of 857 DocuSign Envelope ID: E8034B7D-BBDF-4373-89B4-F02479AFFBCF Item 11 Attachment A - Downtown Streets Team C24189570 Amendment AMENDMENT NO. 1 TO CONTRACT NO. C24189570 #1 BETWEEN THE CITY OF PALO ALTO AND DOWNTOWN STREETS, INC. This Amendment No. 1 (this "Amendment") to Contract No. C24189570 (the "Contract" as defined below) is entered into as of June 17, 2024, by and between the CITY OF PALO ALTO, a California chartered municipal corporation ("CITY"), and DOWNTOWN STREETS, INC., a California public benefit non-profit corporation, located at 1671 The Alameda, Suite 301, San Jose, CA 95126 ("CONTRACTOR"). CITY and [CONSULTANT or CONTRACTOR] are referred to collectively as the "Parties" in this Amendment. RECITALS A. The Contract (as defined below) was entered into by and between the Parties hereto for the provision of Street Cleaning Services, as detailed therein. B. The Parties now wish to amend the Contract in order to (1) increase the not to exceed total by an additional Five Hundred Forty -Eight Thousand Nine Hundred Fifty -Eight Dollars ($548,958) to a new not to exceed amount of One Million Seventy -Seven Thousand Three Hundred Sixty -Seven dollars and Nine Cents ($1,077,367.09), (2) update Exhibit A Scope of Work to incorporate provision of job readiness training and employment opportunities, (3) update Exhibit B Schedule of Performance and (4) add Exhibit C-1 Professional Services Type Payments for job readiness training and employment opportunities, as detailed herein. NOW, THEREFORE, in consideration of the covenants, terms, conditions, and provisions of this Amendment, the Parties agree: SECTION 1. Definitions. The following definitions shall apply to this Amendment: a. Contract. The term "Contract" shall mean Contract No. C24189570 between CONSULTANT and CITY, dated December 11, 2023, as amended by: b. Other Terms. Capitalized terms used and not defined in this Amendment shall have the meanings assigned to such terms in the Contract. SECTION 2. Section 5: COMPENSATION FOR ORIGINAL TERM" of the Contract is hereby amended to read as follows: E. The total maximum lump sum compensation of dollars ($); OR E. The sum of dollars ($ ) per hour, not to exceed a total maximum Vers.: Aug. 5, 2019 Page 1 of 14 Item 11: Staff Report Pg. 5 Packet Pg. 111 of 857 DocuSign Envelope ID: E8034B7D-BBDF-4373-89B4-F02479AFFBCF Item 11 Attachment A - Downtown Streets Team C24189570 Amendment compensation amount of dollars ($ ); OR #1 E. A sum calculated in accordance with the fee schedule set forth at Exhibit C and Exhibit C-1, not to exceed a total maximum compensation amount of One Million Seventy -Seven Thousand Three Hundred Sixty -Seven Dollars and Nine Cents($1,077,367.09). CONTRACTOR agrees that it can perform the Services for an amount not to exceed the total maximum compensation set forth above. Any hours worked or services performed by CONTRACTOR for which payment would result in a total exceeding the maximum amount of compensation set forth above for performance of the Services shall be at no cost to CITY. r CITY has set aside the sum of dollars ($ ) for Additional Services. CONTRACTOR shall provide Additional Services only by advanced, written authorization from the City Manager or designee. CONTRACTOR, at the CITY's request, shall submit a detailed written proposal including a description of the scope of services, schedule, level of effort, and CONTRACTOR's proposed maximum compensation, including reimbursable expense, for such services. Compensation shall be based on the hourly rates set forth above or in Exhibit C (whichever is applicable), or if such rates are not applicable, a negotiated lump sum. CITY shall not authorize and CONTRACTOR shall not perform any Additional Services for which payment would exceed the amount set forth above for Additional Services. Payment for Additional Services is subject to all requirements and restrictions in this Agreement. SECTION 3. 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 "A" entitled "SCOPE OF SERVICES, AMENDMENT NO. 1", AMENDED, REPLACES PREVIOUS. b. Exhibit "B" entitled "SCHEDULE OF PERFORMANCE, AMENDMENT NO. 1", AMENDED, REPLACES PREVIOUS. c. Exhibit "C-1" entitled "PROFESSIONAL SERVICES TYPE OF PAYMENTS (JOB READINESS, AMENDMENT NO. 1", ADDED SECTION 4. 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. Vers.: Aug. 5, 2019 Page 2 of 14 Item 11: Staff Report Pg. 6 Packet Pg. 112 of 857 DocuSign Envelope ID: E8034B7D-BBDF-4373-89B4-F02479AFFBCF Item 11 Attachment A - Downtown Streets Team C24189570 Amendment #1 SECTION 5. 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.) Vers.: Aug. 5, 2019 Page 3 of 14 Item 11: Staff Report Pg. 7 Packet Pg. 113 of 857 DocuSign Envelope ID: E8034B7D-BBDF-4373-89B4-FO2479AFFBCF Item 11 Attachment A - Downtown Streets Team C24189570 Amendment SIGNATURES OF THE PARTIES #1 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 City Manager APPROVED AS TO FORM: City Attorney or designee DOWNTOWN STREETS, INC. Officer 1 DocuSigned by: By: B5D3E2F316C240E.. Name: Julie Gardner Title: CEO Officer 2 DocuSigned by: By: M aV u a. PdWS6w 643CEC9FC898488... Name: Marina Peterson Title: CFO Attachments: Exhibit "A" entitled "SCOPE OF SERVICES, AMENDMENT NO. 1", AMENDED, REPLACES PREVIOUS. Exhibit "B" entitled "SCHEDULE OF PERFORMANCE, AMENDMENT NO. 1", AMENDED, REPLACES PREVIOUS. Exhibit "C-1" entitled "PROFESSIONAL SERVICES TYPE OF PAYMENT (JOB READINESS), AMENDMENT NO. 1", ADDED Vers.: Aug. 5, 2019 Page 4 of 14 Item 11: Staff Report Pg. 8 Packet Pg. 114 of 857 DocuSign Envelope ID: E8034B7D-BBDF-4373-89B4-F02479AFFBCF Item 11 Attachment A - Downtown Streets Team C24189570 Amendment EXHIBIT A #1 SCOPE OF SERVICES, AMENDMENT NO. 1 AMENDED, AND REPLACES PREVIOUS CONTRACTOR shall provide the Services detailed in this Exhibit A, entitled "SCOPE OF SERVICES". CONTRACTOR shall 1.) Provide unhoused and/or extremely low-income individuals with job readiness training and employment opportunities through job search skill instruction, supportive, services, and direct employment placements with partnering companies and 2), perform Street Cleaning Services. The scope of Street Cleaning Services shall include, but not be limited to the tasks detailed under Tasks 1 and 2 for cleaning of the City's five parking garages, along University Avenue, and portions of Ramona Street, California Avenue , and Ash Street, cleaning Downtown alleyways, reporting suspicious persons and/or vehicles to the proper authorities, reporting safety hazards such as raised sidewalks and lights that are out, and reporting cases of vandalism and graffiti. CONTRACTOR will provide tangible local employment opportunities for motivated, previously unhoused , or at -risk of homeless individuals who have completed the CONSULTANT's Employment Development Course. CONTRACTOR shall be responsible for providing all training, labor, and equipment required to perform the tasks as specified in the contract, including the appropriate training and Personal Protective Equipment (PPE) required for the collection of syringes (sharps). The CITY will provide sharp waste containers and dispose of those containers once filled. It is the responsibility of the CONTRACTOR to inform the Project Manager when sharp waste containers are full and need to be replaced and disposed. This program shall also provide counseling and training to assist participants to develop a plan for self-sustainability by procuring housing or shelter, address physical/mental issues, receive transportation assistance, or providing other services. Training will primarily focus on building Vers.: Aug. 5, 2019 Page 5 of 14 Item 11: Staff Report Pg. 9 Packet Pg. 115 of 857 DocuSign Envelope ID: E8034B7D-BBDF-4373-89B4-F02479AFFBCF Item 11 Attachment A - Downtown Streets Team C24189570 Amendment successful work habits, job readiness skill, resume writing, and employmen #i1 CONTRACTOR shall use employees to encourage other unhoused individuals to explore other options and explaining all of the services that are available to them. Downtown Streets Team shall provide semi-annual activity reports related to this Scope of Services, detailing adherence to Schedule of Performance, for the periods ending December 31 and June 30, within fifteen days after these dates. Each report shall cover the preceding six month period, and other such information as the Project Manager may request, but at minimum, including the below -listed stats. The final report shall be prepared in the form agreed upon by the City and Downtown Streets Team. CONTRACTOR shall provide, at minimum, the following information in its semi-annual activity reports: • Number of sharps (syringes) collected • Amount of debris removed • Total number of current team members • Total number of team members with employment • Total number of team members housed • Total number of team members who maintained employment • Total number of volunteer hours • Number of job placements • Participants trained in job search • Recipients of supportive services • Unduplicated clients • Expense report - program delivery in o Salaries/employee benefits o Overhead o Rent/insurance o Marketing/PR/Supplies o Communications Vers.: Aug. 5, 2019 Page 6 of 14 Item 11: Staff Report Pg. 10 Packet Pg. 116 of 857 DocuSign Envelope ID: E8034B7D-BBDF-4373-89B4-F02479AFFBCF o Mileage • Job placement by income o Extremely low income o Very low income o Low income o Moderate income o Above moderate income • Number of job placement by age group o Youth (0 to 18) o Adults (19-62) o Seniors (63+) o Disabled Individuals • Clients by race/ethnicity Item 11 Attachment A - Downtown Streets Team C24189570 Amendment #1 Task 1— Street Cleaning Services CONTRACTOR shall perform Street Cleaning Services, which includes cleaning of the City's five parking garages (S & L, R, J, Q and Civic Center), sidewalks, and alleyways in the Downtown Palo Alto area. These services shall be performed according to the attached schedule (Attachment B) and shall be performed at a minimum by a two -person crew. The level of service provided shall include, but not be limited to, picking up litter, reducing trash from overflowing trash receptacles, wiping down garbage can lids, reporting safety hazards such as raised sidewalks and lights that are out, and reporting cases of vandalism and graffiti. CONTRACTOR will wipe down the top of newspaper racks at least every two weeks. CONTRACTOR shall be responsible for providing all training and equipment required to perform the tasks as specified in the contract, including but not limited to, appropriate attire or uniform with identifiable company logo, the appropriate training, and Personal Protective Equipment (PPE) required for the collection of syringes (sharps). The CITY will provide sharp waste containers and dispose of those containers once filled. It is the responsibility of the CONTRACTOR to inform the Project Manager when sharp waste containers are full and need to be replaced and disposed. CONTRACTOR shall also, through the use of their employees, encourage other unhoused individuals to explore other options, and to explain all of the services that are available to unhoused individuals. CONTRACTOR shall send teams daily to Palo Alto City Hall to conduct outreach, pick up trash, and ensure that no individuals are violating Palo Alto City Policy 4-07/MGR — Conduct in City Facilities. The Downtown Streets Team (DST) Project Manager shall also attend quarterly meetings with Vers.: Aug. 5, 2019 Page 7 of 14 Item 11: Staff Report Pg. 11 Packet Pg. 117 of 857 DocuSign Envelope ID: E8034B7D-BBDF-4373-89B4-FO2479AFFBCF Item 11 Attachment A - Downtown Streets Team C24189570 Amendment the City's Project Manager when deemed necessary. CONTRACTOR shall p #1 report to Project Manager that reports weekly data for Task 1 and Task 2 separately on the following: • Number of Team members on morning shift and number of Team Members of afternoon shift. • Number of 5 -gallon buckets of debris collected and disposed of per shift. • Total number of gallons collected and disposed. • Self -certification that all tasks were completed at each location per the schedule and scope of work • Number of homeless individuals found in each of the garages. • Total number of interactions with homeless individuals. • Number of homeless individuals who report that they do not want to engage in any services offered. • And other pertinent information that conveys the barriers that unhoused individuals face in accessing, following up with and obtaining needed services. • Include a monthly success story regarding their team members. When requested, the DST Project Manager shall also attend monthly meetings with the Palo Alto Downtown Business and Professional Association (PADBPA) to act as a liaison between the business owners who have a vested interest in the services being provided, City staff who manage the contract, and the Downtown Streets Team who runs the program. The DST Project Manager shall make a brief presentation at these monthly PADBPA meetings to relay what efforts have been undertaken since the last meeting. Task 2— Car -Free Street Cleaning Services (Ramona Street and California Ave) CONTRACTOR shall perform Street Cleaning Services in the Car -Free Streets portions of Ramona St (from Hamilton Ave to University Ave) in downtown, and California Ave (from El Camino Real to Birch St), plus a small portion of Ash Street (from Sherman Ave to California Ave) within the California Ave Business District. These services shall be performed at a minimum by a two -person crew. The level of services provided shall include, but not limited to, picking up litter; removing leaves and debris from areas not accessible to street sweepers (such as near gutters or tight corners); rearranging and resetting City -owned outdoor furniture (such as small tables, foldable chairs, faux -carpeting, and game play areas); and ensuring furniture is upright and clean (include cleaning and/or wiping down tables and chairs); reducing trash from overflowing trash receptacles and wiping down garbage can lids along the Car -free Vers.: Aug. 5, 2019 Page 8 of 14 Item 11: Staff Report Pg. 12 Packet Pg. 118 of 857 DocuSign Envelope ID: E8034B7D-BBDF-4373-89B4-F02479AFFBCF Item 11 Attachment A - Downtown Streets Team C24189570 Amendment streets; reporting safety hazards such as raised sidewalks and lights that ar #1 ng cases of vandalism and graffiti. Tops of newspaper racks are to be wiped down every 2 weeks. CONTRACTOR shall be responsible for providing all training and equipment required to perform the tasks as specified in the contract, including but not limited to, appropriate attire or uniform with identifiable company logo, the appropriate training, and Personal Protective Equipment (PPE) required for the collection of syringes (sharps). The CITY will provide sharp waste containers and dispose of those containers once filled. It is the responsibility of the CONTRACTOR to inform the Project Manager when sharp waste containers are full and need to be replaced and disposed. The CITY reserves the right and at its sole discretion, to cancel Task 2 service at any time. The CITY will provide CONTRACTOR a minimum of two weeks advance notice prior to initiating or canceling these services. Vers.: Aug. 5, 2019 Page 9 of 14 Item 11: Staff Report Pg. 13 Packet Pg. 119 of 857 DocuSign Envelope ID: E8034B7D-BBDF-4373-89B4-F02479AFFBCF EXHIBIT B SCHEDULE OF PERFORMANCE, AMENDMENT NO. 1 AMENDED, AND REPLACES PREVIOUS Item 11 Attachment A - Downtown Streets Team C24189570 Amendment #1 CONTRACTOR shall not perform services in cases of inclement weather (as determined by City staff and the Downtown Streets Team Project Manager) or during observed DST holidays listed below. The schedule and tasks can be modified during the term of the contract based on operational needs through a written mutual agreement between CITY and the CONTRACTOR. Tasks Schedule Clean and conduct outreach along alleyways Daily Monday -Friday and Weekends, see (Downtown North and South), University Detailed Schedule Avenue, Downtown South/City Hall Clean and conduct outreach of garage Twice Daily Weekends, see Detailed Schedule Clean and conduct outreach of garage Twice Daily Monday -Friday, see Detailed Schedule Attain 15 job placements of unduplicated Annual individuals, through job training/employment readiness classes and outreach to local employers Train 15 participants in job search Annual Recruit 15 local employers to create/hold Annual positions or expedite the hiring process for program participants Achieve 75% of employers retaining new Annual employees beyond three months Detailed Schedule: Task 1— Street Cleaning Services Schedule: DAY TIME ACTIVITIES Monday, Tuesday, 8-9 AM Garage cleaning and outreach Wednesday, and 9 -10 AM Alleyways (Downtown North and South) Shift change box Friday 10- 10:15 AM Break 10:15--11 AM University Ave 11-12 AM Downtown South/City Hall 12 PM Shift changes at box 12-1 PM Downtown North 1-2:30 PM Garage cleaning and outreach 2:30-2:45 PM Break 2:45-4 PM Garage cleaning and outreach Vers.: Aug. 5, 2019 Page 10 of 14 Item 11: Staff Report Pg. 14 Packet Pg. 120 of 857 DocuSign Envelope ID: E8034B7D-BBDF-4373-89B4-F02479AFFBCF Item 11 Attachment A - Downtown Streets Team C24189570 Amendment DAY TIME ACTIVITIE #1 4 PM Dismissal at box Thursday 8-8:30 AM Garage cleaning and outreach 8:30-9 AM Downtown South/City Hall and Alleyways 9-10 AM Downtown North and University Ave Alleyways 11:15-1 PM Lead Meeting and Success Meeting Saturday and Sunday 9-10 AM Garage cleaning and outreach 10-10:30 AM Downtown South/City Hall/University Ave 10:30-11:30 AM Downtown North 11:30-11:45 AM Break 11:45-1 PM Garage cleaning and outreach 1 PM Dismissal at box Task 2 Car -Free Street Cleaning Services (Ramona St and California Ave) Schedule: DAY TIME ACTIVITIES Monday 8-10AM Car -free street portion of California Ave (which includes Ash St) and Ramona St (Ramona St. could be done as part of Task 1 schedule). Wednesday 8-10AM Car -free street portion of California Ave (which includes Ash St) and Ramona St (Ramona St. could be done as part of Task 1 schedule). Friday 8-10AM Car -free street portion of California Ave (which includes Ash St) and Ramona St (Ramona St. could be done as part of Task 1 schedule). Vers.: Aug. 5, 2019 Page 11 of 14 Item 11: Staff Report Pg. 15 Packet Pg. 121 of 857 DocuSign Envelope ID: E8034B7D-BBDF-4373-89B4-F02479AFFBCF DST will observe the following holidays in 20 Item 11 Attachment A - Downtown Streets Team C24189570 Amendment #1 Monday, January 1 New Year's Day Monday, January 15 Martin Luther King Day Monday, February 5 Rosa Parks Day Observed Monday, February 19 Presidents' Day Monday, April 1 Cesar Chavez Day Observed Monday, April 22 Earth Day Observed Monday, May 27 Memorial Day Wednesday, June 19 Juneteenth Thursday, July 4 4th of July Monday, July 22-26 Summer Break Monday, September 2 Labor Day Monday, October 14 Indigenous People's Day Monday, November 11 Veterans Day Thursday, November 28 Thanksgiving Day Friday, November 29 Food Coma Day Wednesday, December 25 - Wednesday, Janua 1, 2025 Company Time Off Your choice of day in celebration of your birthday! ( Take the day en the month of your brthday) Your choice of day in celebration of Heritage and Culture Day! Actual dates will vary depending on the year. The listed holidays will be observed even if they fall on a date that is different than the dates listed above.* Vers.: Aug. 5, 2019 Page 12 of 14 Item 11: Staff Report Pg. 16 Packet Pg. 122 of 857 DocuSign Envelope ID: E8034B7D-BBDF-4373-89B4-F02479AFFBCF Item 11 Attachment A - Downtown Streets Team C24189570 Amendment EXHIBIT C-1 #1 PROFESSIONAL SERVICES TYPE OF PAYMENTS (JOB READINESS), AMENDMENT NO.1 ADDED 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. BUDGET SCHEDULE: Description Total Employee Benefits/Taxes $164,900 Rent & Utilities $16,305 Communications, Mileage, and Supplies $1,781 TOTAL EXPENSES PER ANNUM TOTAL NOT TO EXCEED $182,986 $548,958 REIMBURSABLE EXPENSES Unless specifically noted in Exhibit A, Scope of Services, the administrative, overhead, secretarial time or secretarial overtime, word processing, photocopying, in-house printing, insurance, and other ordinary business expenses are included within the scope of payment for services and are not reimbursable expenses. CITY shall reimburse CONSULTANT for the following reimbursable expenses at cost. Expenses for which CONSULTANT shall be reimbursed are: $0.00 ADDITIONAL SERVICES The CONSULTANT shall provide additional services only by advanced, written authorization from the CITY. The CONSULTANT, at the CITY's project manager's request, shall submit a detailed written proposal including a description of the scope of services, schedule, level of effort, and Vers.: Aug. 5, 2019 Page 13 of 14 Item 11: Staff Report Pg. 17 Packet Pg. 123 of 857 DocuSign Envelope ID: E8034B7D-BBDF-4373-89B4-F02479AFFBCF Item 11 Attachment A - Downtown Streets Team C24189570 Amendment CONSULTANT's proposed maximum compensation, including reimbursab #1 uch services based on the rates set forth in Exhibit C-1. The additional services scope, schedule and maximum compensation shall be negotiated and agreed to in writing by the CITY's Project Manager and CONSULTANT prior to commencement of the services. Payment for additional services is subject to all requirements and restrictions in this Agreement. Vers.: Aug. 5, 2019 Page 14 of 14 Item 11: Staff Report Pg. 18 Packet Pg. 124 of 857 Item 12 Item 12 Staff Report CITY OF PALO ALTO City Council Staff Report From: City Manager Report Type: CONSENT CALENDAR Lead Department: Community Services Meeting Date: June 17, 2024 Report #:2405-3009 TITLE Approval of Construction Contract Number C24190081 with Marina Landscape, Inc. in the Amount Not - to -exceed $338,459 for Dog Park Installation and Renovation Project PG -18001; and Authorization of Contract Contingency in an Amount Not -to -Exceed $50,769 for Related, Additional but Unforeseen Work Which May Develop During the Project; and Amend the FY2024 Budget in the Capital Improvement Fund (2/3 vote required); CEQA status — categorically exempt. RECOMMENDATION Staff recommends the City Council: 1. Approve and authorize the City Manager or their designee to execute the attached construction contract with Marina Landscape, Inc. (Contract No. #C24190081) in the amount not to exceed $338,459 for the Mitchell Dog Park improvements pursuant to the Dog Park Installation and Renovation Project (PG -18001); and 2. Authorize the City Manager or designee to negotiate and execute one or more change orders to the construction contract with Marina Landscape, Inc. for related, but unforeseen work which may develop during the project, the total value of the which shall not exceed $50,769; and 3. Amend the Fiscal Year 2024 Budget Appropriation for the Capital Improvement Funds (requires a two-thirds approval by the Council) by: a. Decreasing the Benches, Signage, Walkways, Perimeter Landscaping, and Site Amenities Project (PG -06003) by $74,045; and b. Increasing the Dog Park Installation and Renovation Project (PG -18001) by $74,045. EXECUTIVE SUMMARY The Palo Alto Parks, Trails, Natural Open Space, and Recreation Master Plan has driven the expansion and enhancement of local dog parks since 2018, with projects funded by park impact fees. The Mitchell Park dog park, a well -utilized 0.56 -acre facility, will undergo significant improvements including expansion, new fencing, an added small dog area, additional seating, irrigation upgrades, and better drainage. The City Council approved the necessary Park Improvement Ordinance on September 27, 20221. Marina 1City Council, September 27, 2022; Agenda Item #8; SR# 14781; https://recordsportal.paloalto.gov/Weblink/DocView.aspx?id=82058 Item 12: Staff Report Pg. 1 Packet Pg. 125 of 857 Item 12 Item 12 Staff Report Landscape, Inc. was the lowest responsible bid for the project, with a budget of $389,228, adjusted to include a fifteen percent contingency for unforeseen costs. BACKGROUND The Parks, Trails, Natural Open Space, and Recreation Master Plane provides guidance on adding dog parks. The policy states that Palo Alto should actively pursue adding dedicated, fenced dog parks in multiple neighborhoods, equitably distributed between North and South Palo Alto. The size of the dog parks will vary but should strive to be at least 0.25 acres and each new dog park installation will require a Park Improvement Ordinance (PIO). The Palo Alto Dog Park Installation and Renovation Project has evolved over the years as part of the City's ongoing efforts to enhance recreational opportunities for residents and their dogs. An ongoing Capital Improvement Project was established in 2018, allocating $150,000 per project to expand and enhance dog parks every two years. These funds are sourced from park impact fees, ensuring that the development of dog parks is sustainable and aligned with community priorities. In 2018, the construction of Peers Park Dog Park marked a significant milestone in expanding the city's dog park network in North Palo Alto. There are currently four (4) dog parks: Mitchell Park (0.56 acres), Peers Park (0.84 acres), Greer Park (0.06 acres), and Hoover Park (0.14 acres). Currently, in construction is Boulware Park, which is a full renovation and expansion and will include a new dog park (0.5 acres). ANALYSIS The community recognized a need for the expansion and enhancement of the Mitchell Park dog park, an existing 0.56 -acre facility, which is well -utilized. The current amenities include hose bibs, benches, picnic tables, and waste receptacles. This location was prioritized by community feedback, feasibility, and budget. Several improvements were outlined which included expanding the size of the current dog park, creating a separate area for small dogs, upgrading fencing and entry gates, adding seating, relocating hose bibs, reconfiguring irrigation systems, and ensuring compliance with creek easement regulations. Furthermore, considerations have been made to maintain the existing grass and decomposed granite surfacing in the large dog park area, while the small dog park area will maintain its turf but will eventually transition to decomposed granite. On May 4, 2022, staff reviewed the proposed improvements to the dog park in a community meeting held online to obtain public input. There were 26 participants. The response to the proposed renovations was positive and recommended including hills/slope areas in the dog park, enlarging the dog park area as much as possible, adding more seating/benches, and fixing the existing drainage issues. On June 28, 2022, the Parks and Recreation Commission (PRC) reviewed the proposed plans, which included revisions made in response to community comments. The PRC was supportive of the expansion 2Palo Alto Parks Trails, Natural Open Space and Recreation Master Plan, September 2017; palo-alto-parks-master- plan.pdf (cityofpaloalto.org) Item 12: Staff Report Pg. 2 Packet Pg. 126 of 857 Item 12 Item 12 Staff Report plans and provided comments that were addressed in the plan presented with the PIO. The revisions included: reducing the small dog park fence height to 3 feet and the addition of 15 new native trees, a mix of Valley Oak and California Sycamore, to the area for shade and habitat benefits. At the June 28th PRC meeting, staff presented an alternative fence alignment3 that would provide better privacy for the adjacent picnic area and maintain some shade trees. The alternative fence alignment would reduce the dog park's size but retain some sloped, shaded areas. The staff presentation highlighted issues with the previous three-foot fence at Hoover Dog Park, which was replaced with a five-foot fence due to dogs jumping over it and recommended a similar height for the new Mitchell Park fence. The Commission voted 4:3 to recommend that the City Council adopt a PIO for the Mitchell Park Dog Park with the five-foot high fence, as recommended by staff, and with the alternative fence alignment proposed. The PIO included the following items: 1) expand the size of the existing dog park area with a new 5 -foot tall chain link fence; 2) install a new small dog park area with a 5 -foot tall chain link fence; 3) replace existing irrigation system; 4) replace existing mowed turf with 'no mow' grass to reduce maintenance; 5) add new site amenities including bench seating and waste receptacles; 6) establish a 10 foot set -back along Adobe Creek; 7) install new area drains; and 8) plant new native trees. On September 27, 2022, the City Council approved the Park Improvement Ordinance for the project (second reading)4. Bid Process On April 22, 2024, a notice for invitation for bids (IFB) for the Mitchell Dog Park Renovation Project was posted on the City of Palo Alto's e -procurement website (OpenGov), notifying 3,036 providers of the bid opening. The bidding period was 16 days. Bids were received from three (3) contractors by the bid submission deadline of May 7, 2024. Table : . Project Bid Name/Number Mitchell Park Dog Park Improvements (IFB190081) Proposed Length of Project 53 Number of Bid Packages Downloaded by Contractors 47 Number of Bid Packages Downloaded by Builder's Exchanges 5 Total Days to Respond to Bid 16 Mandatory Pe -Bid Meeting No Number of Company Attendees at Pre -Bid Meeting N/A Number of Bids Received 3 Base Bid Price Range 338,459-426,645 Public Link to Solicitation Project overview (opengov.com) 3 Parks and Recreation Commission, July 28, 2022; Agenda Item #6; AWARD OF CONTRACT CMR (BID (cityofpaloalto.org) "City Council, September 27, 2024; Agenda Item #8; 20220927amccsm.pdf (citvofpaloalto.org) Item 12: Staff Report Pg. 3 Packet Pg. 127 of 857 Item 12 Item 12 Staff Report One proposal was rejected due to it being unresponsive, because it was an incomplete bid. The Landscape Pros ML, Inc. and Marina Landscape, Inc. both met City specifications. Marina Landscape, Inc. is the lowest responsive bid. Staff reviewed the bids along with all the bid alternates. Base bids ranged from $338,459 to $383,712 and the engineer's estimate was $409,765. Staff is requesting a fifteen percent contingency as it bridges the gap between the engineer's estimate and the bid. A fifteen percent contingency is necessary for this project because it accounts for unforeseen circumstances and complexities that can arise during construction, such as unanticipated site conditions that result in changes in scope and fluctuations in material costs. This higher contingency helps ensure the project remains on schedule and within budget despite potential challenges that exceed typical expectations. The native tree planting was not included in the scope of work and will be done in-house. FISCAL/RESOURCE IMPACT The Dog Park Installation and Renovation Project (PG -18001) has funding of $315,183. By amending the Fiscal Year 2024 budget appropriation for the Capital Improvement Funds by decreasing the Benches, Signage, Walkways, Perimeter Landscaping, and Site Amenities Project (PG -06003) by $74,045; and increasing the Dog Park Installation and Renovation Project (PG -18001) by $74,045, this would provide for $389,228 of funding for this project. The ongoing maintenance for this site will be integrated into the existing maintenance contract and will be absorbed within the Community Services Department Operating Budget. STAKEHOLDER ENGAGEMENT There were over 1,500 emails and more than 100 postcards were distributed to residents, encouraging their stakeholder engagement in the community design process. A community meeting was conducted on May 4, 2022, via zoom, with 26 attendees. The proposed expansion of the existing dog park garnered support from those present. Additionally, staff engaged with the Palo Alto Dog Owners group, representing several hundred residents advocating for increased off -leash dog exercise spaces, to discuss the project and gather feedback. A dedicated project webpage5 was established to provide comprehensive information about the proposed renovation of the Mitchell Park Dog Park. For public meetings, the Parks and Recreation Commission (PRC) convened a discussion on the Mitchell Park Dog Park Expansion in June 2022. Subsequently, in July 2022, the PRC recommended a Dog Park Improvement Ordinance. The City Council conducted the first and second readings of the Park Improvement Ordinance in September 2022. ENVIRONMENTAL REVIEW The expansion of the Mitchell Park Dog Park is categorically exempt from the California Environmental Quality Act (CEQA) under Title 14 California Code of Regulations Section 15301 (Existing Facilities), Section 5 Project webpage, City of Palo Alto Dog Parks — City of Palo Alto, CA Item 12: Staff Report Pg. 4 Packet Pg. 128 of 857 Item 12 Item 12 Staff Report 15302 (Replacement or Reconstruction), Section 15303 (New Construction of Small Facilities or Structures), and Section 15311 (Accessory Structures) because it consists of the redevelopment of an existing facility. APPROVED BY: Kristen 0'Kane, Community Services Director Item 12: Staff Report Pg. 5 Packet Pg. 129 of 857 Item 13 Item 13 Staff Report City Council Staff Report From: City Manager CITY O F Report Type: CONSENT CALENDAR PALO Lead Department: Planning and Development Services ALTO Meeting Date: June 17, 2024 Report #:2405-3045 TITLE Approval of Contract Amendment Number 1 to Contract Number S24189598 with Good City Company in the Amount of $18,120 for a Stream Corridor Protection Ordinance Update; the Total not -to -exceed Amount of the Contract is $92,293. CEQA Status: Exempt Pursuant to CEQA Guidelines 15061(b)(3). RECOMMENDATION Staff recommends that Council approve and authorize the City Manager or their designee to execute Amendment No. 1 to Contract No. S24189598 (Attachment A). BACKGROUND The City's Comprehensive Plan recognizes the City's creeks and riparian areas as valuable resources for natural habitat, connectivity, community design, and flood control that require protection and enhancement. As part of this recognition, the City's Stream Corridor Protection Ordinance was identified for an update to reflect their importance. Particularly, Policy N3.3 of the Comprehensive Plan calls for the protection of the city's creeks from the impacts of future buildings, structures, impervious surfaces and ornamental landscaping and preserve their function as habitat connectivity corridors by establishing a range of setback requirements that account for existing creek conditions, land use characteristics, property ownership and flood control potential.' This policy contains three programs that define the potential ordinance update: • Program N3.3.1 calls for the exploration of an ordinance update that expands the current 50 -foot setback along creeks to be expanded to 150 feet for properties west of Foothill Expressway, with the ordinance update also containing design recommendations for development of sites within the setback, exemption opportunities for single-family 1 The other programs to support this riparian corridor protection work include the development of a stewardship program, replacement of non-native/invasive species, discouraging bank instability by limiting site disturbances (including the grading ordinance), avoiding fencing and piping, and working with partners such as the Santa Clara Valley Water District and the San Francisquito Creek Joint Powers Authority. Item 13: Staff Report Pg. 1 Packet Pg. 130 of 857 Item 13 Item 13 Staff Report properties, and appropriate setbacks and conservation measures for undeveloped parcels. • Program N3.3.2 calls for similar work east of Foothill Expressway. • Program N3.3.3 calls for the minimization of impacts in all creeks by limiting recreational trails to one side of natural riparian corridors, and thoughtful design of lighting near riparian corridors. On January 29, 2024, the City Council adopted City Council Priorities and directed staff to update the existing Stream Corridor Protection Ordinance to better align with the Comprehensive Plan policies and programs. On January 29, 2024, the City Manager authorized an exemption from competitive solicitation to engage in a contract with Good City Company. On February 6, 2024, the City entered into a contract with Good City Company in the amount of $74,173 through June 30, 2025. Good City Company is contracted to provide consulting services to produce an existing conditions report, public outreach, and development of the draft ordinance to be considered by the Planning and Transportation Commission and adopted by the City Council. ANALYSIS Upon initiation, the need for a biological assessment became apparent due to the public's potential interest and the complexity of the natural environment involved. To ensure a comprehensive review and address potential concerns, retaining a biologist was deemed necessary. Considering the project scope and urgency to complete the project in 2024, staff recommended Good City Company subcontract a biologist rather than the City directly hiring one under a separate contract. This approach streamlines the process and leverages Good City Company's expertise in managing communication and logistics as the technical work is closely intertwined. Amending the existing contract is the most efficient solution as the additional expertise required falls outside the original scope of services. The requirement for biological expertise necessitates an increased budget allocation of $18,120, exceeding the City Manager's contract authority approval limit. This action increases the not to exceed amount of the contract up to $92,293. FISCAL/RESOURCE IMPACT Funding for the contract and this amendment was included in the Fiscal Year 2024 Adopted Operating Budget. STAKEHOLDER ENGAGEMENT On March 5, 2024, Good City Company along with the City staff conducted a community information session to hear from the community on potential opportunities and constraints for future development near creek and waterways for consideration in the ordinance update. A total of 17 community members attended the virtual information session to provide their input. Prior Item 13: Staff Report Pg. 2 Packet Pg. 131 of 857 Item 13 Item 13 Staff Report to the community information session, Good City Company has contacted and received input from other stakeholders from neighborhood associations and other public agency partners. ENVIRONMENTAL REVIEW Approval of this contract is exempt from review under the California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines Section15061(b)(3) because it can be seen with certainty that this action will not have a significant effect on the environment. ATTACHMENTS Attachment A: Good City Company Contract S24189598 Amendment No. 1 APPROVED BY: Jonathan Lait, Planning and Development Services Director Item 13: Staff Report Pg. 3 Packet Pg. 132 of 857 DocuSign Envelope ID: 05AD8194-684E-4A0E-9788-D6078D 1 A7477 Item 13 Attachment A - Good City Company Contract S24189598 Amendment AMENDMENT NO. 1 TO CONTRACT NO. S24189598 No. 1 BETWEEN THE CITY OF PALO ALTO AND GOOD CITY COMPANY This Amendment No. 1 (this "Amendment") to Contract No. S24189598 (the "Contract" as defined below) is entered into as of June 18, 2024, by and between the CITY OF PALO ALTO, a California chartered municipal corporation ("CITY"), and GOOD CITY COMPANY, a California corporation, located at 601 Allerton Street, Suite 110, Redwood City, CA 94063 ("CONSULTANT"). CITY and CONSULTANT are referred to collectively as the "Parties" in this Amendment. RFCITAI C A. The Contract (as defined below) was entered into by and between the Parties hereto for the provision of updating to Title 16 of the Palo Alto Municipal Code, as detailed therein. B. The Parties now wish to amend the Contract in order to amend adding scope of service and increase compensation by Eighteen Thousand One Hundred Twenty Dollars ($18,120) from Seventy -Four Thousand One Hundred Seventy -Three Dollars ($74,173) to a new total not to exceed compensation of Ninety -Two Thousand Two Hundred Ninety -Three Dollars ($92,293). 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" shall mean Contract No. S24189598 between CONSULTANT and CITY, dated February 5, 2024. b. Other Terms. Capitalized terms used and not defined in this Amendment shall have the meanings assigned to such terms in the Contract. SECTION 2. Section 4. NOT TO EXCEED COMPENSATION of the Contract is hereby 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, entitled "COMPENSATION," including any reimbursable expenses specified therein, and the maximum total compensation shall not exceed Eighty Five Thousand Five Hundred Fifty Dollars ($85,550). The hourly schedule of rates, if applicable, is set out in Exhibit C-1, entitled "SCHEDULE OF RATES." Any work performed or Vers.: Aug. 5, 2019 Page 1 of 10 Item 13: Staff Report Pg. 4 Packet Pg. 133 of 857 DocuSign Envelope ID: 05AD8194-684E-4A0E-9788-D6078D 1 A7477 Item 13 Attachment A - Good City Company Contract S24189598 Amendment expenses incurred for which payment would result in a total exce " 1 um compensation set forth in this Section 4 shall be at no cost to the CITY. ® Optional Additional Services Provision (This provision applies only if checked and a not -to - exceed compensation amount for Additional Services is allocated below under this Section 4.) In addition to the not -to -exceed compensation specified above, CITY has set aside the not -to - exceed compensation amount of Six Thousand Seven Hundred Forty -Three Dollars ($6,743) for the performance of Additional Services (as defined below). The total compensation for performance of the Services, Additional Services and any reimbursable expenses specified in Exhibit C, shall not exceed Ninety -Two Thousand Two Hundred Ninety -Three Dollars ($92,293), as detailed in Exhibit C. "Additional Services" means any work that is determined by CITY to be necessary for the proper completion of the Project, but which is not included within the Scope of Services described at Exhibit A. CITY may elect to, but is not required to, authorize Additional Services up to the maximum amount of compensation set forth for Additional Services in this Section 4. CONSULTANT shall provide Additional Services only by advanced, written authorization from CITY as detailed in this Section. Additional Services, if any, shall be authorized by CITY with a Task Order assigned and authorized by CITY's Project Manager, as identified in Section 13 (Project Management). Each Task Order shall be in substantially the same form as Exhibit A-1, entitled "PROFESSIONAL SERVICES TASK ORDER". Each Task Order shall contain a specific scope of services, schedule of performance and maximum compensation amount, in accordance with the provisions of this Agreement. Compensation for Additional Services shall be specified by CITY in the Task Order, based on whichever is lowest: the compensation structure set forth in Exhibit C, the hourly rates set forth in Exhibit C-1, or a negotiated lump sum. To accept a Task Order, CONSULTANT shall sign the Task Order and return it to CITY's Project Manager within the time specified by the Project Manager, and upon authorization by CITY (defined as counter -signature by the CITY Project Manager), the fully executed Task Order shall become part of this Agreement. The cumulative total compensation to CONSULTANT for all Task Orders authorized under this Agreement shall not exceed the amount of compensation set forth for Additional Services in this Section 4. CONSULTANT shall only be compensated for Additional Services performed under an authorized Task Order and only up to the maximum amount of compensation set forth for Additional Services in this Section 4. Performance of and payment for any Additional Services are subject to all requirements and restrictions in this Agreement." SECTION 3. Section 12. SUBCONTRACTING of the Contract is hereby amended to read as follows: "Subcontracts Authorized: Notwithstanding Section 11 (Assignment) above, CITY agrees that subcontractors may be used to complete the Services. The subcontractor authorized by CITY to perform work on this Project is: Vers.: Aug. 5, 2019 Page 2 of 10 Item 13: Staff Report Pg. 5 Packet Pg. 134 of 857 DocuSign Envelope ID: 05AD8194-684E-4A0E-9788-D6078D 1 A7477 Item 13 Attachment A - Good City Company Contract S24189598 Amendment • Environmental Collaborative No. 1 41 Jeannette Court, Walnut Creek, CA 94596 (510) 393-0770 CONSULTANT shall be responsible for directing the work of any subcontractors and for any compensation due to subcontractors. CITY assumes no responsibility whatsoever concerning compensation of subcontractors. CONSULTANT shall be fully responsible to CITY for all acts and omissions of subcontractors. CONSULTANT shall change or add subcontractors only with the prior written approval of the City Manager or designee." SECTION 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 "A" entitled "SCOPE OF SERVICES", AMENDED, REPLACES PREVIOUS. b. Exhibit "B" entitled "SCHEDULE OF PERFORMANCE",AMENDED, REPLACES PREVIOUS. c. Exhibit "C" entitled "COMPENSATION", 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.) Vers.: Aug. 5, 2019 Page 3 of 10 Item 13: Staff Report Pg. 6 Packet Pg. 135 of 857 DocuSign Envelope ID: 05AD8194-684E-4A0E-9788-D6078D 1 A7477 Item 13 Attachment A - Good City Company Contract S24189598 Amendment SIGNATURES OF THE PARTIES No. 1 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 City Manager City Attorney or Designee Attachments: GOOD CITY COMPANY Officer 1 DocuSigned by: By:55C6A1A91BD384BA aroi&. 1U ut ._. Name:Aaron Akin Title: Principal, Good City Co. Officer 2 (Required for Corp. or LLC) DocuSigned by: By: (AthL ,t 'n 4BA97C548171401._ Name: Lisa Costa Sanders Title: Principal, Good City Co. • Exhibit A — Scope of Services, Amendment No.1 (Amended, Replaces Previous) • Exhibit B — Schedule of Performance, Amendment No.1 (Amended, Replaces Previous) • Exhibit C — Compensation, Amendment No.1 (Amended, Replaces Previous) • Exhibit C-1 — Schedule of Rates, Amendment No.1 (Amended, Replaces Previous) Vers.: Aug. 5, 2019 Page 4 of 10 Item 13: Staff Report Pg. 7 Packet Pg. 136 of 857 DocuSign Envelope ID: 05AD8194-684E-4A0E-9788-D6078D 1 A7477 EXHIBIT "A" SCOPE OF SERVICES, AMENDMENT NO.1 (AMENDED, REPLACES PREVIOUS) Item 13 Attachment A - Good City Company Contract S24189598 Amendment No. 1 MEMORANDUM & ORDINANCE RECOMMENDATION SERVICE CONSULTANT will complete an existing condition memorandum and prepare a Stream Corridor Ordinance for the CITY based on City Council's recommendations. Task 1: Existing Condition Memorandum CONSULTANT will prepare a memorandum that includes the following criteria: • Project description and objectives; • Existing regulatory framework; • Maps, illustrations, and photos to describe the location, path, and general characteristics of all streams in Palo Alto. The report will include a description of stream characteristics west and east of Foothill Expressway and describe sections that are natural stream habitats, channelized areas, or culverts; and • Identify where buildings have encroached into natural creek settings utilizing aerials maps and field observations. Task 2: Stream Corridor Ordinance Recommendations CONSULTANT will prepare a draft ordinance revising the Stream Corridor Ordinance for CITY staff and City Council consideration. The proposed ordinance revisions will directly relate to Comprehensive Plan programs N3.3.1, N3.3.2 and N3.3.3. Task 3: Biological Study (Amendment No. 1) 3.1 Background Review CONSULTANT will assemble and review available mapping and documentation. This will include the Natural Environment Element and Environment Impact Report on of the CITY's Comprehensive Plan and the current Stream Corridor Protection Ordinance. CONSULTANT will assemble and review mapping from the National Wetland Inventory, the Santa Clara Valley Water District, of existing Assessor Parcels, and available aerial mapping of the City. CONSULTANT will conduct a limited reconnaissance to confirm existing field conditions. This will include a 1 -day field reconnaissance to take photos from public property to demonstrate the range of conditions along protected stream segments, including reaches that have been channelized for flood control purposes, locations with natural bank conditions but little riparian cover, and location with well -developed and high value woody riparian vegetation. No detailed field surveys or mapping of existing conditions are proposed as part of this scope. 3.2 Background and Planning Considerations (BPC) Report Vers.: Aug. 5, 2019 Page 5 of 10 Item 13: Staff Report Pg. 8 Packet Pg. 137 of 857 DocuSign Envelope ID: 05AD8194-684E-4A0E-9788-D6078D1A7477 Item 13 Attachment A - Good City Company Contract S24189598 Amendment CONSULTANT will summarize and map available data, which will include th • Existing conditions of protected streams in the City and result of background review • Maps showing protected streams and results of the background review using available CAD. • Photographs from the field reconnaissance • Estimates of the number of parcels that contain segments of protected streams (if data available) • Estimates of the number of parcels containing stream segments that have been channelized, are in a natural state, or contain high quality woody riparian vegetation, if possible. • Consideration of parcel size for different minimum setbacks (under 0.5 acre, 0.5-2 acres, over 2 acres) CONSULTANT will provide a summary of existing Federal, State and Local Regulations. CONSULTANT will provide a narrative of planning alternatives/considerations and options for consideration by the CITY. CONSULTANT will provide methods/options for providing greater avoidance and protection of the stream and include a summary of other cities on stream setback requirements and exceptions for benchmarking. CONSULATNT will provide recommendations to update or refine the CITY's existing stream ordinance. 3.3 Ordinance Refinement CONSULTANT will attend up to three (3) public meetings/hearings in person or virtually. CONSULTANT will contribute providing any technical questions and complete text revisions to the draft ordinance to ensure creation of final ordinance. Final Ordinance Deliverables CONSULTANT will deliver memorandum and ordinance of CONSULTANT's recommendation draft(s) for CITY review. Upon CITY and/or City Council reviewed suggestions, CONSULTANT will update finalizing drafts to submit to CITY final version of the Stream Corridor memorandum and ordinance recommendation. Vers.: Aug. 5, 2019 Page 6 of 10 Item 13: Staff Report Pg. 9 Packet Pg. 138 of 857 DocuSign Envelope ID: 05AD8194-684E-4A0E-9788-D6078D 1 A7477 Item 13 Attachment A - Good City Company Contract S24189598 Amendment No. 1 SCHEDULE OF PERFORMANCE, AMENDMENT NO. 1 (AMENDED, REPLACES PREVIOUS) Completion Dates Milestones (as specified below) from NTP 1. Memorandum & Ordinance of Recommendation Service March 2024 Task #1 Deliverable - Draft Stream Corridor Existing Condition Memorandum 2. Memorandum & Ordinance Recommendation Service March 2024 Task #2 Deliverable - Draft Stream Corridor Ordinance Recommendations 3. Biological Study (Amendment No.1) June 2024 Task #3 Deliverable - Background and Planning Considerations (BPC) Report 4. Memorandum & Ordinance Development Service June 2024 Task# 1 Deliverable - Final Draft Existing Condition Memorandum 5. Memorandum & Ordinance Recommendation September 2024 Task #2 Deliverable - Final Draft Stream Corridor Ordinance Recommendations ® Optional Schedule of Performance Provision for On -Call or Additional Services Agreements. (This provision only applies if checked and only applies to on -call agreements per Section 1 or agreements with Additional Services per Section 4.) The schedule of performance shall be as provided in the approved Task Order, as detailed in Section 1 (Scope of Services) in the case of on -call Services, or as detailed in Section 4 in the case of Additional Services, provided in all cases that the schedule of performance shall fall within the term as provided in Section 2 (Term) of this Agreement. Vers.: Aug. 5, 2019 Page 7 of 10 Item 13: Staff Report Pg. 10 Packet Pg. 139 of 857 DocuSign Envelope ID: 05AD8194-684E-4A0E-9788-D6078D1A7477 EXHIBIT C COMPENSATION, AMENDMENT NO.1 (AMENDED, REPLACES PREVIOUS) Item 13 Attachment A - Good City Company Contract S24189598 Amendment No. 1 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 Memorandum & Ordinance of Recommendation Service — Task 1 & 2 Deliverables (hourly budget rates) Title Rate Hours Cost Planning Director $230 150 $34,500 Senior Planner/Project Manager $170 65 $11,050 Principal Planner $195 32 $6,240 Principal $260 32 $8,320 Associate Planner $135 32 $4,320 Marketing Specialist/Graphic Designer $100 30 $3,000 Task 1 & 2 Sub -total for Services $67,430 Task- Amendment No. 1 _3 Biological Study (Task 3.1 thru 3.3) 195 76 $14,820 Reimbursable Expenses (if, any) $3,300 Total for Services and Reimbursable Expenses $85,550 Additional Services (if any, per Section 4) $6,743 Maximum Total Compensation $92,293 REIMBURSABLE EXPENSES Vers.: Aug. 5, 2019 Page 8 of 10 Item 13: Staff Report Pg. 11 Packet Pg. 140 of 857 DocuSign Envelope ID: 05AD8194-684E-4A0E-9788-D6078D 1 A7477 Item 13 Attachment A - Good City Company Contract S24189598 Amendment CONSULTANT'S ordinary business expenses, such as administrative, overh "° 1 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: mapping solutions and travel expenses up to the not -to -exceed amount of: $3,300. All requests for reimbursement of expenses, if any are specified as reimbursable under this section, shall be accompanied by appropriate backup documentation and information. Vers.: Aug. 5, 2019 Page 9 of 10 Item 13: Staff Report Pg. 12 Packet Pg. 141 of 857 DocuSign Envelope ID: 05AD8194-684E-4A0E-9788-D6078D 1 A7477 Item 13 Attachment A - Good City Company Contract S24189598 Amendment EXHIBIT C-1 No. 1 SCHEDULE OF RATES, AMENDMENT NO. 1 (AMENDED, REPLACES PREVIOUS) CONSULTANT's schedule of rates for Additional Services per Section 4 is as follows: CITY and CONSULTANT may at any time mutually agree to add new position titles, rates, and adjust listed rates so long as the changes do not increase the not to exceed compensation amount as specified in Section 4 of the Agreement. Principal/Partner $260/hour Planning Director $230/hour Principal Planner/Planning Manager $195/hour Economic Development Director $230/hour Public Policy Manager $225/hour Chief Building Official $170/hour Senior Planner/Project Manager $170/hour Housing Services Consultant $170/hour Associate Planner $140/hour Assistant Planner $130/hour Planning Technician $100/hour Marketing Specialist/Graphic Designer $100/hour Administrative Specialist $90/hour Biologist $195/hour Subconsultant Contracts Direct Billing + 10% oversight fee (if applicable) will be detailed in Task Order (Exhibit A-1) form in accordance to Section 4 of the Agreement. Rates subject to adjustment January 1st of each year (up to and not to exceed 3-7% increase) Vers.: Aug. 5, 2019 Page 10 of 10 Item 13: Staff Report Pg. 13 Packet Pg. 142 of 857 Item 14 Item 14 Staff Report City Council Staff Report From: City Manager CITY O F Report Type: CONSENT CALENDAR PALO Lead Department: City Manager ALTO Meeting Date: June 17, 2024 Report #:2405-3074 TITLE Authorization for the Mayor to sign a 3 -Year Friendship Cities Agreement with Narok, Kenya RECOMMENDATION Recommendation for the City Council to authorize the Mayor to sign a 3 -Year Friendship Cities Agreement (Attachment A) with Narok, Kenya, as the first Friendship City for Palo Alto. This recommendation is a result of the Friendship City Program process that includes Neighbors Abroad, the Mayor, the Vice Mayor, and the City Council Liaison to Neighbors Abroad (currently Councilmember Burt). The agreement spans from 2024-2027. There is an option to renew the agreement with mutual agreement of the cities to do so. The pathway to renew has not been defined. Staff is also updating the Friendship City process for future requests in order to inform the full City Council of requests earlier in the process. That slightly modified process is described at the end of the Analysis Section of the report. BACKGROUND The City Council approved the creation of a new Friendship City Program in February 2024 after the October 2023 Policy and Services Committee referral discussion of the June 2023 Colleagues' Memo. The Friendship City Program is intended to be a more modest engagement / connection between cities that does not require significant ongoing commitments by the City or Neighbors Abroad, the local nonprofit that supports the City's international engagement. Neighbors Abroad is a 501(c)(3) organization that, with annual funding from the City of Palo Alto together with donations from the community, supports the City's international engagement. Palo Alto has long benefited from its Sister City and Sibling City relationships with Palo Alto's eight (8) Sister Cities and one (1) Sibling City through sustainability, economic development, innovation practices, student exchanges, academia, and cultural relationships. International engagement with Palo Alto is frequent at multiple levels including government, business, Item 14: Staff Report Pg. 1 Packet Pg. 143 of 857 Item 14 Item 14 Staff Report community, and education. Palo Alto often receives requests from communities abroad requesting a Sister City or other relationship with Palo Alto and the City acknowledges that the Sister City level of engagement with that number of additional communities abroad would be difficult to manage. The City Council created the Friendship City Program to address these requests as a lighter -touch connection with the City of Palo Alto not intended to be an ongoing long-term relationship with new cities which should not require significant commitments by the city or Neighbors Abroad. The level of engagement is intentionally designed to be less than the engagement level of the Sister City and Sibling City programs. This model is also recognized by Sister Cities International, the governing body of Palo Alto's Sister Cities. Through the City Council motion in February 2024, which referenced the original Colleagues Memo, the following framework was established for the consideration of any proposed new Friendship Cities with Palo Alto: A local volunteer that would commit across the term of the Friendship City; A statement document that sets a description of the prospective Friendship City, expected activities with the Friendship City, and a rationale for formation which comports with Neighbors Abroad's policy for Friendship Cities; • Endorsement by the President of Neighbors Abroad, Acceptance by the City Council member serving as liaison to Neighbors Abroad; and Endorsement by the Mayor and Vice -Mayor, and Council approval of the Agreement after placement on the Consent Calendar. Pragmatically, the current approval process includes: - Review and affirmative recommendation by the Neighbors Abroad Board - Review and endorsement by the City Council liaison for Neighbors Abroad - Review and endorsement by the Mayor and Vice Mayor - Full City Council review of the recommendation from the 3 steps above (through a Consent agenda item prepared by City staff including the materials referenced above). In going through this process for this first Friendship City recommendation with Narok, staff identified a few additional steps that should be included in the review process going forward to keep City Council informed on the front end of the process as well as the need to ensure that all requests are going through the same review process. In the Analysis Section of this staff report, staff describes a slightly modified process for future requests. Item 14: Staff Report Pg. 2 Packet Pg. 144 of 857 Item 14 Item 14 Staff Report ANALYSIS Request from Narok: Community Member Barb Mackraz, local head of Oliveseed Kenya Trust, has been active with the community in this part of Kenya for many years and has an established relationship with many community partners there. She brought her recommendation for Narok as a Friendship City to Neighbors Abroad to consider recommending to the City as the City's first Friendship City. Neighbors Abroad's Board reviewed this request and recommended it for City Council approval at their March 5, 2024 Board meeting. The Mayor, Vice Mayor, and City Council liaison to Neighbors Abroad all subsequently endorsed and supported the recommendation. Goals of the Narok Program: 1. To promote and expand the mutually beneficial cooperation between the people of Palo Alto and Narok, Kenya 2. To promote sustainability and literacy The Narok program is expected to involve student exchanges organized through Oliveseed as well as joining the conversation with Palo Alto and our existing Sister and Sibling City partners regarding sharing sustainability best practices. Narok would participate in any future sustainability summits and will coordinate their visits through Neighbors Abroad. About Narok, Kenya: Attachment B contains detailed information about Narok that includes images and further description of the community. Narok is the capital city of the Narok County region of Kenya, home to the Maasai Mara in southwest Kenya; it is the largest city on the way to Maasai Mara National Reserve from Nairobi. It became a municipality in October 2019 due to the rapidly growing population. Narok's population is around 45,000 people that are mostly Maasai. The Maasai are an indigenous community who have lived sustainably with nature and wildlife for millennia. The Narok economy benefits from agriculture, livestock keeping, mining, and tourism. The broader Narok County is responsible for the production of most of Kenya's barley and wheat. According to the Narok County website, the county is also the second largest producer of maize and a major producer of beef and milk. In addition, Narok has a vibrant horticulture sector and a sugar growing belt in the Mara region. The Friendship City with Narok allows Palo Alto to partner with the City and County of Narok, Kenya. The Neighbors Abroad lead for Narok, Kenya (Barb Mackraz) has been active with the Narok community for many years. She and her cofounder of Oliveseed Kenya Trust (nonprofit in the Maasai Mara) are both lifelong advocates and activists on education and environmental conservation. This is fitting for the Narok area because the region is affected by climate change. The focus on education, sustainability, and conservation with Narok aligns with City Council priority areas. An example of a celebration in Narok at a local Narok school can be seen here: https://www.facebook.com/oliveseed.org/videos/1326680617784738/. Item 14: Staff Report Pg. 3 Packet Pg. 145 of 857 Item 14 Item 14 Staff Report The Friendship City Agreement with Narok (Attachment A) is a three- (3-) year agreement and would expire in 2027 without further City Council action. Neighbors Abroad will provide the City Council with a report about Sister Cities, Sibling City, and Friendship City efforts every two (2) years as included in the City Council motion to adopt the Friendship City Program. Update to the Review Process: As referenced in the Background Section of this report, staff is suggesting a slightly modified process for future Friendship City review. This slightly modified process will inform the full City Council of the requests sooner in the process and also allow staff to provide any needed contextual information early in the process, where necessary. The slightly modified process staff will practice going forward is as follows (updated process): 1. Share all Friendship City requests with the Neighbors Abroad President, the City Mayor, City Manager, and City Council Liaison for Neighbors Abroad. (This would be for anyone at the City or Neighbors Abroad who formally receives a Friendship City request). 2. City staff will inform the City Council of the Friendship City requests that are going to the Neighbors Abroad Board for review. 3. City staff will discuss the requests with the Neighbors Abroad President in context of all Friendship Cities, Sister Cities, and Sibling City. 4. Neighbors Abroad Board will review the requests and make a recommendation (affirmative recommendation or denial recommendation). 5. Review and endorsement by the City Council liaison for Neighbors Abroad. 6. Review and endorsement by the Mayor and Vice Mayor. 7. Full City Council review of the recommendation from the steps above (through a Consent agenda item prepared by City staff including relevant materials and reference to the other existing agreements). Staff will implement this new process going forward after the City Council approval of this Consent item to accept Narok, Kenya as the City's first Friendship City. Of note, the City has also been contacted with inquiries for new relationships from the following cities: Svendborg, Denmark; the Ivory Coast; a city in Morocco; Nanjing, China; Dun Laoghaire, Ireland; and Scalia, Italy. FISCAL/RESOURCE IMPACT There is no new fiscal impact to accommodate this request. Neighbors Abroad will handle within existing financial allocations for administrative support and support for delegation hosting which could be used in relationship with the new Friendship City of Narok, Kenya. The ongoing relationship will be managed by Neighbors Abroad though staff anticipates that delegation visits would still require some amount of staff time to participate and help Neighbors Abroad coordinate details related to the City officials and staff participating. Item 14: Staff Report Pg. 4 Packet Pg. 146 of 857 Item 14 Item 14 Staff Report STAKEHOLDER ENGAGEMENT As required by the established review process, this request for a Friendship City with Narok, Kenya went through the Neighbors Abroad Board, the Mayor, the Vice Mayor, and the City Council liaison to Neighbors Abroad before being presented to the City Council for adoption. City staff also reviewed the request. ENVIRONMENTAL REVIEW This is not a project. ATTACHMENTS Attachment A: Friendship City Agreement for Narok, Kenya Attachment B: Information about Narok, Kenya APPROVED BY: Ed Shikada, City Manager Item 14: Staff Report Pg. 5 Packet Pg. 147 of 857 Item 14 ttachment A - Friendship City Agreement for Narok, Kenya AN AGREEMENT FOR THE ESTABLISHMENT OF A FRIENDSHIP CITY RELATIONSHIP BETWEEN NAROK, KENYA AND PALO ALTO, CALIFORNIA (USA) In accordance with authorization from the City Council of Palo Alto and the approval of the Mayor of Palo Alto, California, and Narok, Kenya, it is declared that a "Friendship City Agreement" between the two cities is established for the following purposes: 1. To promote and expand the mutually beneficial cooperation between the people of Palo Alto and Narok, Kenya 2. To promote sustainability and literacy. This Friendship City Agreement is effective when this document has been duly executed by the Mayor of Palo Alto and the government of Narok, Kenya, and shall remain in effect for three years from the effective date. The Agreement may be extended upon mutual agreement of the cities. Greer Stone Mayor, City of Palo Alto California, USA Narok City, Narok County Kenya Dated Item 14: Staff Report Pg. 6 Packet Pg. 148 of 857 Item 14 ttachment A - Friendship City Agreement for Narok, Kenya Item 14: Staff Report Pg. 7 Packet Pg. 149 of 857 Item 14 Attachment B - Information about Narok, Kenya Information on Narok, Kenya (shared by Neighbors Abroad) Narok is the capital city of the Narok County region of Kenya, home to the Maasai Mara in southwest Kenya. The Maasai are an indigenous community who have lived sustainably with nature and wildlife for millennia. They are pastoral and primarily herd cattle. Narok City has a population of approximately 45,000. The wildlife area, Maasai Mara National Reserve, the seat of the annual Great Migration of wildebeests, is not far from Narok City and is managed by the County government, thus the County is the lead for tourism and wildlife conservation. Narok City is also home to Maasai Mara University, known for its conservation, tourism, and wildlife programs. Through the NGO Oliveseed Foundation, members of the Palo Alto community have had a relationship in the Maasai Mara since 2017, working on pillars of literacy, community empowerment and sustainability. The City of Narok formed a committee to explore a Friendship City agreement with Palo Alto in March 2023 and are hopeful to see approval of the relationship. The local head of Oliveseed, Barb Mackraz, has formed a committee here in Palo Alto to work within Neighbors Abroad and facilitate the relationship. Ms. Mackraz has joined the Board of Neighbors Abroad and will co- chair the Narok committee with Barbara Newton, an existing member of the Neighbors Abroad Board. Ms. Mackraz is the Founder & CEO of the Oliveseed Foundation (based in Palo Alto); Co- founder, Oliveseed Kenya Trust; Longtime Palo Altan and member of Neighbors Abroad. Narok, through Oliveseed, is already in the planning stages of student exchanges through Hidden Villa, which Neighbors Abroad could support without bearing the burden of running. The areas in which Narok wishes to connect with Palo Alto are sustainability and literacy. Regarding sustainability, Narok looks forward to joining the connection already established and running between Palo Alto and its 8 Sister Cities and Sibling City in promoting and sharing knowledge regarding sustainability practices. A representative of their government joined the first SustainCity Summit with Palo Alto's other Sister Cities in October 2023. Regarding literacy, Narok envisions extending its current youth writing projects to Palo Alto youth and perhaps beyond into the youth of our other Sister Cities and the Sibling City, with cross-cultural essay and story projects. On the next page, there are two images of posters celebrating the people of Narok and a photo of children at a school and priorities carried forward through Oliveseed. Such a relationship will comport with Neighbors Abroad's mission of fostering Palo Alto's domestic and international engagement throughout the world, creating the first relationship with a city in the continent of Africa as well as the country of Kenya. Different from a Sister City relationship, a Friendship City Agreement would be limited to three years, subject to Council renewal. The Agreement allows for a test of time, and if the relationship waivers, the agreement would not be renewed. Page 1 Item 14: Staff Report Pg. 8 Packet Pg. 150 of 857 Indigenous Story Project MAASAI MARA. KENYA Capturing the stories of Maasai elders before they are lost, and publishing them in print and ebook anthologies in English and Maa OLIVESEED KENYA TRUST WWW.OLIVESEED.ORG I AMOS@ & BARB@ Aitong Primary School Library, 2023 'I { � s j 6 ly. r• "I LJI 'J Olcvemed Wom&i . Woirk Centeu Imarti, llaasai Mara Item 14 Attachment B - Information about Narok, Kenya Center for Sustainability Maasai Mara Public Library Purified Water Knowledge access for all. story Borehole, filtration, bottling projects, school support. research _ Certified water for communities Special collections: Maasai culture. & businesses: sales sustain the conservation. climate. African • 4 center's operations literature, children's books Meeting Hall Maker Space Tools library & hands-on Literacy classes. business training in practical skills: & vocational trainings. `OJ Q e.g.. carpentry, plumbing. mentoring. conferences. youth programs. hosting Culture, beadwork, beehives. solar cookers. briquettes. sewing: students & researchers apprenticeships from around the world Conservation, Climate IT Center Nursery & Gardens Access to computers & IS Cultural arboretum of native internet, digital & printing trees, demo of water -efficient services, trainings in web vertical gardening, tree nursery. development & graphics Mti Yetu tree program, best practices on climate & ecology ■ Exhibits Gallery ■, Visual & audio exhibits on Outdoor Gathering Hub local culture. history. wildlife. Knowledge sharing by elders, oral geology & environment: relief story telling. fireside gatherings. map of the Mara video screenings Guest Services IORNYA LIVESEED Cafe. shop. cottages TRUST Aitong, Kenya Map of the Narok Region: ;-- N a r o k�� C o; u n t '— — u N.,.Nth i oia.nvo R, m, `' ✓. •. J°. j Masai I any, - a.J►.y ti, a. t r '- ' ••� Nevi ii�.• • �' �� ' t' ,'�•.•• r� O . Maki Molo J.1i 4I4Legend °I .,on.u,. ` r wra. Net .. T' .� •'�'%' •� - ooe�auonai eonsehances QR,ameaeonser.n��e, Sans : Mona. Mar, Ne4onai Rmnva Yf �•� N, 4,r, . .. - 1.., \•.•+ Mare Ecosystem Rnuneary � � I ; A.rkMl f I rNWp Rar,cn BOYndBlY •• .. µ / Page 3 Item 14: Staff Report Pg. 10 Packet Pg. 152 of 857 Item 15 Item 15 Staff Report City Council Staff Report CITY OF PALO ALTO From: City Manager Report Type: CONSENT CALENDAR Lead Department: Transportation Meeting Date: June 17, 2024 Report #:2404-2861 TITLE Approval of a Funding Agreement with Federal Railroad Administration to Receive $6 Million for the Preliminary Engineering and Environmental Documentation Phase for the Grade Separation Projects at Churchill Avenue, Meadow Drive, and Charleston Road crossings. CEQA status — statutorily exempt per CEQA section 15262; this funding agreement will partially fund CEQA/NEPA review of the grade separation projects. RECOMMENDATION The Rail Committee and Staff recommends that the City Council approve the funding agreement with the Federal Railroad Administration (FRA) under its Rail Crossing Elimination program to provide the City with $6 Million towards Preliminary Engineering and Environmental Documentation Phase to be completed by June 2027 for Grade Separation Projects at Churchill Avenue, Meadow Drive, and Charleston Road crossings and authorize the City Manager or his designee to execute the funding agreement. The remaining $14 Million in funding is anticipated from non-federal funding sources of the Santa Clara County 2016 Measure B Grade Separation funding. EXECUTIVE SUMMARY The Connecting Palo Alto Rail Grade Separation Project involves grade separation at four at -grade crossings; however, the city has been diligently working actively at the three crossings of Churchill Avenue, Meadow Drive, and Charleston Road. The Office of Transportation Staff submitted an application requesting a $6.0 Million Federal Grant from the Rail Crossing Elimination Program for a contribution towards Preliminary Engineering and Environmental Documentation preparation in October 2022, with the remaining $14.0 Million required from the non-federal funding and is currently anticipated from the Santa Clara County Measure B Grade Separation Fund. This phase is planned to be completed in three years ending in June 2027. On May 23, 2024, the Rail Committee reviewed and unanimously recommended the proposed draft of FRA funding Agreement for approval to the City Council. However, FRA has yet to finalize this agreement. Therefore, staff will provide the FRA agreement as a supplemental report. Staff Item 15: Staff Report Pg. 1 Packet Pg. 153 of 857 Item 15 Item 15 Staff Report recommends that the City Council approve the Funding Agreement with the Federal Railroad Administration and authorize the City manager or their designee to execute the agreement. BACKGROUND & ANALYSIS The Caltrain commuter train service owned and operated by Peninsula Corridor Joints Powers Board (PCJPB) runs north -south along Alma Street in Palo Alto. There are currently seven major throughfares where people and vehicles cross along this corridor in Palo Alto. Three of these crossings are already grade -separated, however, the other four (Palo Alto Avenue, Churchill Avenue, Meadow Drive, and Charleston Road) cross the tracks at the same level. Alma Street runs parallel to the rail corridor thereby creating intersections that are controlled by traffic signals adjacent to the train tracks at these crossings. Caltrain plans to run electric trains on a more frequent schedule and implement its 2040 Business Plan. Therefore, traffic congestion is expected to increase at these existing at -grade locations and adjacent intersections. In the event, that the City does not pursue safety and mobility improvements, a total gate downtime of 9 minutes during peak hours is expected with electrification, which is 15% of the peak hour time. These queues will only get longer with the implementation of Caltrain's 2040 plan and will create congestion and safety issues. Therefore, the City has initiated the Connecting Palo Alto Project and is actively pursuing the conceptual design for the grade separations at Churchill Avenue, Meadow Drive, and Charleston Road crossings. Over the past two years, the Rail Committee has provided a significant review and direction to staff in review of the conceptual design that includes the refinements to underpass alternatives, preliminary geotechnical analysis, traffic and circulation studies, noise and vibration analysis, four tracking segments, the Council Adopted Criteria, and Caltrain staff comments, and proposing possible solutions, etc. On April 16, 2024, the Rail Committee (Staff Report 2402-26751), after reviewing the work completed to date, the project will include Partial Underpass Alternative as preferred alternative for Churchill Avenue crossing and Hybrid and Underpass Alternative to continue for Meadow Drive and Charleston Road for advancing grade separation alternatives into the Preliminary Engineering and Environmental Documentation Phase. The Rail Committee in its recommendations included review of components such as optimizing bicycle pedestrian crossings and minimizing right of way impacts during the early stages of the Preliminary Engineering phase. The Connecting Palo Alto Grade Separation Project is a significant infrastructure project with project costs expected to be well above $500 Million for the three crossings at Churchill Avenue, Meadow Drive, and Charleston Road. Therefore, City Staff continuously strive to seek grant funding from various federal and state programs. In October 2022, staff applied for Federal 1 Rail Committee, April 16, 2024; Agenda Item 1, SR# 2402-2675 https://cityofpaloaIto.primegov.com/Portal/Meeting?meetingTemplate Id=14249 Item 15: Staff Report Pg. 2 Packet Pg. 154 of 857 Item 15 Item 15 Staff Report Funding under the Rail Crossing Elimination Program that was developed by the Federal Railroad Administration under the Infrastructure Investment and Jobs Act (IIJA). The project was selected for $6.0 Million in Federal assistance towards the Preliminary Engineering and Environmental Phase. The remaining contribution of funding of $14 Million is supplemented by the voters - approved 2016 Santa Clara County Measure B Funding dedicated for Grade Separations in Santa Clara County which includes the project crossings. This phase is planned to be completed in three years ending in June 2027. The Measure B Grade Separation funding is managed by the Santa Clara Valley Transportation Agency (VTA). ANALYSIS Office of Transportation staff has been working with Federal Railroad Administration and Caltrain Staff in developing the Funding Agreement. Following the City Council Study Session on April 29, 2024, (Staff Report 2402-25932) the Rail Committee on May 23, 2024 unanimously recommended approval of the proposed funding agreement with Federal Railroad Administration (Staff Report 2404-29523). However, FRA has yet to finalize this agreement. Therefore, staff will provide the FRA agreement as a supplemental report to the City Council. The staff report presents the proposed Funding Agreement with the Federal Railroad Administration for the City Council Approval. The major terms of the agreement are as follows: Project Scope: Preliminary Engineering and Environmental Documentation for Churchill Avenue, Meadow Drive, and Charleston Road Grade Separation Federal Railroad Contribution (30%) - up to $ 6.0 Million Non -Federal Fund Contribution (70%) - up to $14.0 Million Expected Date of Execution - July 2024 Expected Completion Date - June 30, 2027 The corridor serves the Caltrain passenger commuter trains, the Union Pacific Railroad freight service, and plans to serve the future California High -Speed Rail services. The railroad right of way is maintained and operated by the Peninsula Corridor Joints Power Board (PCJPB) and has operating and maintenance agreements with other existing and planned service operators. Therefore, PCJPB will serve as the lead implementing agency and will play a major role in the design and construction of this grade separation project. 2 City Council, April 29, 2024: Agenda Item 2, SR# 2402-2593 https://cityofpaloaIto.primegov.com/Portal/Meeting?meetingTemplate Id=14249 3 Rail Committee, May 23, 2024, Agenda Item 1, SR# 2404-2952 https://cityofpaloaIto.primegov.com/Portal/viewer?id=0&type=7&uid=5c311e03-48fa-423e-8eda-b96d0809d0dc Item 15: Staff Report Pg. 3 Packet Pg. 155 of 857 Item 15 Item 15 Staff Report Depending upon the City Council selection of the preferred alternatives, the early work on the conceptual plans will be performed to refine these alternatives that will also include developing alternatives at 15% level of engineering design for the selection of preferred design to move forward into the development of 35% design for the Preliminary Engineering phase and complete the environmental documentation and seek environmental clearance under California Environmental and Quality Act (CEQA) and National Environmental Protection Act (NEPA). Staff is also working with the three agencies that are Santa Clara County Valley Transportation Authority (VIA), Peninsula Corridor Joints Powers Board (PCJPB) also known as Caltrain, and the City of Palo Alto to develop a three -party cooperative agreement. This agreement will formalize the roles of each agency for the preparation of Preliminary Engineering and Environmental documentation and funding from the Measure B Grade Separation funding. Staff will bring this agreement for the rail committee review and approval of the City Council in near future. FISCAL/RESOURCE IMPACT Funding for this agreement is programmed in the 2024-2028 Capital Improvement Plan in the Meadow Drive and Charleston Road (PL -24000) and Churchill Avenue (PL -24001) Rail Grade Separation and Safety Improvements projects. The total anticipated cost for the Preliminary Engineering and Environmental Documentation Phase is estimated at $20 Million. The Federal Railroad Administration will fund 30% of the cost up to $6.0 Million and the remaining $14 Million is expected to be funded through Santa Clara County Measure B Grade Separation funding through a separate agreement with Santa Clara Valley Transportation Agency. Funding for possible amendments to the agreement and/or future agreements as discussed in the Discussion section will be requested through budget amendments as needed or appropriated through the annual budget process. STAKEHOLDER ENGAGEMENT The Rail Committee and the City Council meetings are open to the public, offering community members opportunities to provide comments and feedback. The Rail Committee meetings are regularly conducted, and their information is posted on the City Calendar. Residents who have subscribed to City Meetings notifications receive notifications about the Rail Committee meetings. Additionally, notifications about the Rail Committee and the City Council meetings are disseminated through the City's YouTube Channel. The Transportation Department also provides updates on City projects, including Rail Grade Separation projects, in the Transportation Connect Newsletter and, on the project's, ConnectingPaloAlto.com website. As part of the next steps, staff sent postcards to the community including all frontage residents in the project boundaries for outreach and public information sharing in advance of the City Council Study Session on April 29, and the May 23 Rail Committee and June 10 Council meetings. City also issued a rail blog "Stay on the Track" providing the latest rail news and details about the project updates. This rail blog is hosted on the City's main webpage and is communicated through various city channels. Item 15: Staff Report Pg. 4 Packet Pg. 156 of 857 Item 15 Item 15 Staff Report IaZWI T910I&I IV1U►IYAIATJ� The proposed action is part of a planning study for a possible future action, which has not been approved, adopted, or funded and is therefore exempt from the California Environmental Quality Act (CEQA) in accordance with CEQA Guidelines Section 15262. The future decision to approve the construction of any one of the identified potential alternatives would be subject to CEQA and require the preparation of an environmental analysis. The project plans to enter the Preliminary Engineering and Environmental Documentation Phase and will conduct an environmental review pursuant to CEQA and NEPA requirements. ATTACHMENTS None (Funding Agreement will be provided through a supplemental report) APPROVED BY: Philip Kamhi, Chief Transportation Official Item 15: Staff Report Pg. 5 Packet Pg. 157 of 857 Item 16 Item 16 Staff Report City Council Staff Report Report Type: CONSENT CALENDAR CITY O F Lead Department: City Manager PALO ALTO Meeting Date: June 17, 2024 Report #:2405-3093 TITLE Adopt a Resolution to Allow Consumption of Alcohol under PAMC section 9.04.010 through December 31, 2024 in Conjunction with the 3rd Thursday Event on California Avenue; CEQA status - categorically exempt. RECOMMENDATION Staff recommends that the City Council Adopt a Resolution to Allow Consumption of Alcohol under PAMC section 9.04.010 on California Avenue in Conjunction with the 3rd Thursday Event for a pilot period through December 31, 2024. BACKGROUND Following the success of events like the Art and Wine Festival Ave and as proposed by 3rd Thursday, the City Council expressed interest in exploring the opportunities to allow open containers of alcohol (open container) on the car -free street portion of California Avenue during the 3rd Thursday event. Staff has researched options for how this could be implemented and consulted with stakeholders including the State of California's Department of Alcoholic Beverage Control (ABC). Through research and conversations with stakeholders, staff has identified two main options for how Council's interest to allow open containers during 3rd Thursday could be addressed. 1) A special event permit (such as that obtained by the Palo Alto Art and Wine Festival) 2) A resolution to allow open containers passed by the City Council At this time, the 3rd Thursday organizers are able to assemble the bands and a themed element for each month but are unable to organize a more structured special event on a monthly basis. A monthly event like the art and wine festival would involve hiring their own security, ID check(s) for wristbands, and other elements necessary for ABC compliance. The alternative discussed with ABC was a resolution from the City Council to allow open containers during specified dates and times. A resolution to allow open containers on during the 3rd Thursday event (the 3rd Thursday of each month from June 2024 to December 2024) on the car -free street portion of California Avenue from El Camino Real to Birch is attached for Council adoption. The resolution goes into Item 16: Staff Report Pg. 1 Packet Pg. 158 of 857 Item 16 Item 16 Staff Report effect immediately, and would only allow open containers on the days of 3rd Thursday events, only from 4 PM —10 PM, and only on the car -free street portion of California Avenue from El Camino Real to Birch. The resolution does not replace any requirements imposed by ABC for the sale of alcohol and all vendors must still comply with the terms of their ABC permits. Through conversation with ABC, they emphasized: • "Cocktails to go" are only permitted when done so in conjunction with meals. Licensees must actually serve bona fide, legitimate meals to consumers removing alcoholic beverages from the premises under the "cocktails to go" provision. Minimal food service that appears intended to circumvent this requirement are prohibited. This also means that only businesses licensed as restaurants ("bona fide eating places") may exercise this privilege. Bars (or those licensed as "public premises") are not authorized. • Only distilled spirits and wine are authorized under the "cocktails to go" provision. Beer is not authorized to be sold "to go" other than in manufacturer sealed containers. It should be noted that while the Resolution addresses enforcement of alcoholic beverage consumption within a defined geographic location and timeframe, it does not address alcohol sales or transport. As such, the City will not regulate the source of any alcohol consumed within the defined boundaries. Staff will monitor the status of this effort through its implementation and will assess any additional program needs or alterations for future discussion with the City Council. FISCAL/RESOURCE IMPACT No additional resources are necessary if the resolution is adopted. STAKEHOLDER ENGAGEMENT Staff has discussed this with representatives of California's ABC, businesses along California Avenue, and 3rd Thursday event representatives. ENVIRONMENTAL REVIEW 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). ATTACHMENTS Attachment A: Resolution Authorizing Consumption of Alcoholic Beverages under PAMC 9.04.010 for Third Thursdays for a Pilot Period APPROVED BY: Ed Shikada Item 16: Staff Report Pg. 2 Packet Pg. 159 of 857 NOT YET APPROVED Resolution No. Resolution of the Council of the City of Palo Alto to Auth Consumption of Alcoholic Beverages under PAMC 9.04.010 Thursdays on California Avenue RECITALS Item 16 Attachment A - Resolution Authorizing onsumption of Alcoholic Beverages under PAMC 9.04.010 for Third Thursdays for a Pilot Period 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 in conjunction with the Third Thursday street festival event on the section of California Avenue currently 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 (the 'designated area') between the hours of 4:00 pm to 10:00 pm on the following days in 2024: 6/20 7/18 8/15 9/19 10/17 11/21 12/19. 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 9.04.010. It does not curtail or supersede any other applicable law, 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. 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. 1 Item 16: Staff Report Pg. 3 Packet Pg. 160 of 857 Item 16 Attachment A - NOT YET APPROVED Resolution Authorizing Consumption of Alcoholic SECTION 4. Environmental Review. The Council finds that this Res Beverages underPAMC ally exempt under CEQA Guidelines Sections 15301 (existing facilities); 15304 9.04.010 for Third ary Thursdays for a Pilot use of land having negligible or no permanent effects on the environ nor Period alterations in land use limitations); and 15323 (normal operations o IdLIIIUS 1O1 p blic gatherings). SECTION 5. Effective Date and Sunset. This Resolution shall be effective immediately upon adoption and shall automatically sunset on the earlier of: (1) December 20, 2024 or (2) as to any section of the designated area that becomes or is open to vehicular traffic. INTRODUCED AND PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: City Clerk Mayor APPROVED AS TO FORM: APPROVED: Assistant City Attorney City Manager 2 Item 16: Staff Report Pg. 4 Packet Pg. 161 of 857 Item 17 Item 17 Staff Report City Council Staff Report From: City Manager CITY O F Report Type: CONSENT CALENDAR PALO Lead Department: Public Works ALTO Meeting Date: June 17, 2024 Report #:2404-2929 TITLE Approval of 1) Increase of Construction Contingency for Contract No. C21178123B with Swinerton Builders in the Amount of $1,000,000; 2) Contract Amendment No. 4 for Contract No. S20176170 with Romig Engineers, Inc. in the Amount of $21,786 and to Extend the Contract Term; 3) Increase of Contingency for Purchase Order with Pivot Interiors Inc. in the Amount of $23,440; and 4) Authorization for the City Manager to Execute a General Services Contract for Moving Services in an Amount of up to $250,000 for the New Public Safety Building Capital Project (PE -15001); CEQA - Environmental Impact Report for the New Public Safety Building and New California Avenue Area Parking Garage (Resolution No. 9772) RECOMMENDATION Staff recommends that Council: 1. Approve an increase of construction contingency for Contract No. C21178123B with Swinerton Builders in an amount not to exceed $1,000,000 for a total contract contingency amount not to exceed $9,395,300; 2. Approve and authorize the City Manager or their designee to execute Contract Amendment No. 4 to Contract No. S20176170 with Romig Engineers Inc. to provide geotechnical services in the amount of $21,786 and a contract extension through September 30, 2024; 3. Approve an increase to the contingency for the Purchase Order with Pivot Interiors Inc. in the amount of $23,440; and 4. Authorize the City Manager or their designee to execute a future general services contract in an amount of up to $250,000 for moving services for the Public Safety Building project. BACKGROUND The New Public Safety Building (PSB) (PE -15001) and New California Avenue Area Parking Garage (PE -18000) are among ten key projects included in the 2014 Council Infrastructure Plan. The PSB was identified as the plan's highest priority project and is tied together with the parking garage project with respect to California Environmental Quality Act (CEQA). The parking garage opened in December 2020. On February 1, 2021, Council approved the award of the construction contract for the PSB to Swinerton Builders and authorized execution and delivery Item 17: Staff Report Pg. 1 Packet Pg. 162 of 857 Item 17 Item 17 Staff Report of one series of Certificates of Participation in an amount not to exceed $120 million to finance the PSB construction.' The PSB construction is anticipated to be substantially completed in July 2024. Romig Engineers' services for the PSB project include evaluation of subsurface materials at the site to provide information for design and construction of excavation shoring and the seepage cut-off wall, preconstruction geotechnical services, and construction geotechnical services. Romig Engineers contract S201761702 began on November 8, 2019. The contract term was through November 7, 2022 and was extended by Amendment No. 2 through May 18, 2023. Amendment No. 33 was approved by Council on May 8, 2023 to extend for time only through April 30, 2024. On June 19, 2023, Council approved a Purchase Order with Pivot Interiors in the Amount of $756,021 to provide cubicle and office furniture for the new PSB.4 ANALYSIS The PSB is one of the most complex projects that the City has constructed to date. Given its complexity, since the PSB construction contract was awarded in early 2021, there have been numerous change orders addressing issues of unforeseen site conditions, owner requested changes, design clarifications, and required changes due to authorities having jurisdiction, which are agencies that are responsible for enforcing codes and regulations. In addition, since change order costs are based on current construction costs rather than bid amounts, the significant escalation of construction costs over the past several years has impacted the project and the use of the contingency. As of April 2024, the project has used 94% of the Council - approved contingency of $8,392,800. Due to the multiple issues and clarifications, the contingency usage is anticipated to go beyond the City's typical "10% of the construction contract amount" contingency authorization. A reallocation of $1 million from the project's non -construction budget to the construction contingency is recommended to provide enough contingency authorization to continue to evaluate and process valid change orders as the project nears completion. Due to the length of time it has taken to construct the PSB, additional funding is needed for existing contracts. 1 City Council, February 1, 2021; Agenda Item #4, SR #11752, https://www.cityofpaloalto.org/files/assets/public/v/3/agendas-minutes-reports/reports/city-manager-reports- c m rs/yea r -a rc h ive/2021/i d-11752. pdf 2 Romig Engineers Inc., Geotechnical services for Public Safety Building, S20176170, https://www.cityofpaloalto.org/files/assets/public/v/1/public-works/engineering-services/cip-contracts/romig- engineers-inc.-s20176170 -psb final.pdf 3 City Council, May 8, 2023; Agenda Item #5, SR #2304-1272, https://www.cityofpaloalto.org/files/assets/public/v/1/pu blic-works/engineering-services/cip-contracts/sr2304- 1272-5.8.2023-pe-15001-psb-romig-contract-amendment.pdf 4 City Council, June 19, 2023; Agenda Item #9, SR #2304-1375, https://www.cityofpaloalto.org/files/assets/public/v/1/pu blic-works/engineering-services/cip-contracts/sr2304- 1375-6.19.2023-pivot-one-workplace-purchase-orders. pdf Item 17: Staff Report Pg. 2 Packet Pg. 163 of 857 Item 17 Item 17 Staff Report • For Romig's contract (Attachment A), additional funding of $21,786 is needed for additional geotechnical inspections including observing and testing subgrade, retesting as required, and inspection of unforeseen conditions. The resulting total contract not to exceed amount is $131,478, with the contract ending on September 30, 2024. • For the Purchase Order with Pivot Interiors (Attachment B), the original contract approved by Council on June 19, 2023 included base services of $687,292 and $68,729 for contingency. The existing contingency has been used for storage fees due to the delays in PSB completion. The additional $23,440 in contingency is for prevailing wage increases and additional storage fees until the furniture installation is completed in summer 2024, for a new total not to exceed contract of $779.461. • For the moving general services contract, staff is finalizing the move -in schedule for the PSB and expects to release an invitation for bids in June and award a contract in mid - July to maintain the PSB schedule. Staff is requesting authorization for the City Manager to execute the moving services contract as the contract will need to be in place prior to Council returning from its break in August. FISCAL/RESOURCE IMPACT Funding for the increase in contingencies and the contract amendment recommended in this report is available in the Fiscal Year 2024 Adopted Capital Improvement Program budget for the Public Safety Building project (PE -15001). These actions do not increase the overall PSB project budget approved by Council when the construction contract was approved in 2021, as savings realized in the furniture, fixtures, and equipment budget items are available to cover the increased costs. STAKEHOLDER ENGAGEMENT Staff provides monthly updates on PSB construction through the PSB's project webpage and newsletter. ENVIRONMENTAL REVIEW An Environmental Impact Report for the PSB and the New California Avenue Area Parking Garage was prepared and was certified by Council on June 11, 2018, by adoption of Resolution No. 97725 ATTACHMENTS Attachment A: Romig Contract S20176170, Amendment No.4 Attachment B: Purchase Order with Pivot Interiors, Inc. APPROVED BY: Brad Eggleston, Director Public Works/City Engineer 5 Resolution 9772, https://www.cityofpaloaIto.org/files/assets/public/v/1/city-clerk/resolutions/reso- 9772.pdf?t=40475.53 Item 17: Staff Report Pg. 3 Packet Pg. 164 of 857 DocuSign Envelope ID: 032E3D48-D3AD-4A7D-A44A-929C20F72AF0 Item 17 Attachment A - Romig Contract S20176170, Amendment No.4 AMENDMENT NO.4 TO CONTRACT NO. S20176170 BETWEEN THE CITY OF PALO ALTO AND ROMIG ENGINEERS, INC. This Amendment No. 4 (this "Amendment") to Contract No. S20176170 (the "Contract" as defined below) is entered into as of June 10, 2024, by and between the CITY OF PALO ALTO, a California chartered municipal corporation ("CITY"), and ROMIG ENGINEERS, INC., a California corporation, DIR Registration #1000056882, located at 1390 El Camino Real, 2nd Floor, San Carlos, CA 94070 ("CONSULTANT"). CITY and CONSULTANT are referred to collectively herein as the "Parties". RFrITAI c A. The Contract (as defined below) was entered into by and between the Parties hereto for the provision of professional geotechnical services for a new Public Safety Building (PSB), as detailed therein. B. The Parties entered into Amendment No. 1 to update the Schedule of Rates Exhibit C-1, as detailed therein. C. The Parties entered into Amendment No. 2 to extend the contract term for six (6) months through May 18, 2023, at no additional cost payable by the City, as detailed therein. D. The Parties entered into Amendment No. 3 to extend the contract term for eleven (11) months through April 30, 2024, at no additional cost payable by the City, as detailed herein. E. The Parties now wish to amend the Contract in order to retroactively extend the contract term for five (5) months through September 30, 2024, update the Scope of Services and increase the compensation by twenty-one thousand seven hundred eighty-six dollars ($21,786) from one hundred nine thousand six hundred ninety-two dollars ($109,692) to a new total not - to -exceed compensation amount of one hundred thirty-one thousand four hundred seventy- eight dollars ($131,478), 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" shall mean Contract No. S20176170 between CONSULTANT and CITY, dated November 8, 2019, as amended by: Amendment No. 1, dated November 2, 2021 Amendment No. 2, dated November 9, 2022 Vers.: Aug. 5, 2019 Page 1 of 11 Item 17: Staff Report Pg. 4 Packet Pg. 165 of 857 DocuSign Envelope ID: 032E3D48-D3AD-4A7D-A44A-929C20F72AF0 Item 17 Attachment A - Romig Contract S20176170, Amendment No.4 Amendment No. 3, dated May 8, 2023 Other Terms. Capitalized terms used and not defined in this Amendment shall have the meanings assigned to such terms in the Contract. SECTION 2. Term. Section 2 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 completion of the services in accordance with the Schedule of Performance attached at Exhibit "B," but in no event later than September 30, 2024, unless terminated earlier pursuant to Section 19 of this Agreement." SECTION 3. Section 4 "NOT TO EXCEED COMPENSATION" of the Contract is hereby amended to read as follows: "The compensation to be paid to CONSULTANT for performance of the Services described in Exhibit "A" (also referred to herein as the "Basic Services"), and any reimbursable expenses specified in Exhibit "C", shall not exceed Twenty -Two Thousand Four Hundred Forty -Eight Dollars ($22,448) for contract year 1 (from full execution through October 23, 2020) and Ninety -One Thousand One Hundred Eighty -Two Dollars ($91,182) for contract year 2 and contract year 3 combined (October 24, 2020 through September 30, 2024), for a total not to exceed amount for Basic Services and any specified reimbursable expenses of One Hundred Thirteen Thousand Six Hundred Thirty Dollars ($113,630) for all three contract years plus contract time extensions. CONSULTANT agrees to complete all Basic Services, including and specified reimbursable expenses, within this amount. In the event Additional Services (defined below in this Section) are authorized, the total compensation for Additional Services and Optional Additional Services (defined in Exhibit "C") shall not exceed Two Thousand Two Hundred Forty -Four Dollars ($2,244) for contract year 1 (defined above in this Section) and Fifteen Thousand Six Hundred and Four Dollars ($15,604) for contract year 2 and contract year 3 (defined above in this Section) combined, for a not to exceed amount for Additional Services and Optional Additional Services of Seventeen Thousand Eight Hundred Forty -Eight Dollars ($17,848) for all three contract years. The total compensation for Basic Services, any reimbursable expenses specified in Exhibit "C", Additional Services and Optional Additional Services shall not exceed ($24,692) for contract year 1 and One Hundred Six Thousand Seven Hundred Eighty -Six Dollars ($106,786) for contract year 2 and contract year 3 combined, for a total not to exceed amount of One Hundred Thirty One Thousand Four Hundred Seventy -Eight Dollars ($131,478) for all three contract years plus contract time extensions. The applicable rates and schedule of payment are set out at Exhibit "C-1", entitled "SCHEDULE OF RATES," which is attached to and made a part of this Agreement. Any work performed or expenses incurred for which payment would result in a total exceeding the maximum amount of compensation set forth herein shall be at no cost to the CITY. Additional Services and Optional Additional Services, if any, shall be authorized in accordance with and subject to the provisions of Exhibit "C". CONSULTANT shall not receive any compensation for Additional Services or Optional Additional Services performed without the Vers.: Aug. 5, 2019 Page 2 of 11 Item 17: Staff Report Pg. 5 Packet Pg. 166 of 857 DocuSign Envelope ID: 032E3D48-D3AD-4A7D-A44A-929C20F72AF0 Item 17 Attachment A - Romig Contract S20176170, Amendment No.4 prior written authorization of CITY. "Additional Services" shall mean any work that is determined by CITY to be necessary for the proper completion of the Project, but which is not included within the Scope of Services described at Exhibit "A". "Optional Additional Services" is defined in Exhibit 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 "A" entitled "SCOPE OF SERVICES, AMENDMENT NO. 4", AMENDED, REPLACES PREVIOUS. b. Exhibit "B" entitled "SCHEDULE OF PERFORMANCE, AMENDMENT NO. 4", AMENDED, REPLACES PREVIOUS. c. Exhibit "C" entitled "COMPENSATION, AMENDMENT NO. 4", 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.) Vers.: Aug. 5, 2019 Page 3 of 11 Item 17: Staff Report Pg. 6 Packet Pg. 167 of 857 DocuSign Envelope ID: 032E3D48-D3AD-4A7D-A44A-929C20F72AF0 Item 17 Attachment A - Romig Contract S20176170, Amendment No.4 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 City Manager APPROVED AS TO FORM: City Attorney or Designee Attachments: ROMIG ENGINEERS, INC. Officer 1 DocuSigned by: (,alas (S -o�o) CW uu#i�a, (9�ict v By: acnc2nA4mcs4Aa Lucas ottoboni, Chief Executive Officer Name: President Title: Officer 2 DocuSigned by: (,W fr < By• F425911 D40124A5 Coleman Ng, Chief Financial Officer Name: Title: Principal Engineer Exhibit "A": "SCOPE OF SERVICES, AMENDMENT NO. 4," AMENDED, REPLACES PREVIOUS Exhibit "B": "SCHEDULE OF PERFORMANCE, AMENDMENT NO. 4," AMENDED, REPLACES PREVIOUS Exhibit "C": "COMPENSATION, AMENDMENT NO. 4," AMENDED, REPLACES PREVIOUS Vers.: Aug. 5, 2019 Page 4 of 11 Item 17: Staff Report Pg. 7 Packet Pg. 168 of 857 DocuSign Envelope ID: 032E3D48-D3AD-4A7D-A44A-929C20F72AF0 Item 17 Attachment A - Romig Contract S20176170, Amendment No.4 EXHIBIT "A" SCOPE OF SERVICES, AMENDMENT NO. 4 AMENDED, REPLACES PREVIOUS Romig Engineers, Inc. (CONSULTANT) scope of services for supplemental exploration and testing of City of Palo Alto Parking Lot C-6, preconstruction services, and construction services for the Public Safety Building, consists of the following Basic Services: 1) SUPPLEMENTAL SUBSURFACE EXPLORATION AND TESTING Prepare and submit a proposed supplemental subsurface exploration plan to the City for their review and approval. The locations of cone penetration tests (CPTs) shall be proposed by Consultant subject to approval by the City. Locations should correspond with the proposed cut-off wall location. Care should be taken to avoid trees, underground utilities, and other site features. The approved exploration plan will help the City and Nova Partners notify the public regarding the subsurface exploration schedule and access restrictions to the parking lot during performance of the work. b. Prepare and submit a drilling application and permit fees to the Santa Clara Valley Water District at least 10 days prior to subsurface exploration. c. Mark the approved boring and CPT locations on -site and notify Underground Service Alert of our intent to perform subsurface exploration. d. Perform subsurface exploration consisting of six CPT probes to a depth of about 70 feet, or until refusal conditions are encountered, whichever occurs at a shallower depth. The CPTs will be backfilled with grout and capped with concrete or asphalt concrete cold patch. The estimated cost must be based on prevailing wage rates. Note: 72 hours notification must be provided prior to closing parking spaces. The City of Palo Alto will provide signs that Consultant must post at each stall. Consultant will be responsible for posting the 72 hour notification, and barricading off the portions of the parking lot. e. Preparation of a brief report presenting the results of the supplemental subsurface exploration and laboratory testing described above. Any significant differences between the original geotechnical report and subsurface conditions discovered by the supplemental exploration will be identified in this report. Data from the CPT probes will be shared electronically with the City and Nova Partners. Report must be submitted by six weeks after Notice to Proceed. Include one meeting to present/discuss findings with Nova Partners, City of Palo Alto and Design Consultants. Vers.: Aug. 5, 2019 Page 5 of 11 Item 17: Staff Report Pg. 8 Packet Pg. 169 of 857 DocuSign Envelope ID: 032E3D48-D3AD-4A7D-A44A-929C20F72AF0 Item 17 Attachment A - Romig Contract S20176170, Amendment No.4 2) PRECONSTRUCTION SERVICES a. Review 60% Construction Documents. Summarize comments in a letter. Assume at least 1 meeting to review Geotechnical comments. Estimated timeframe November 2019. b. Review 90% Permit Set. Summarize comments in a letter. Assume at least 1 meeting to review Geotechnical comments. Estimated Timeframe January 2020. c. Respond to any bidder requests for information (RFIs) related to geotechnical questions about the PSB. 3) CONSTRUCTION GEOTECHNICAL SERVICES a. It is anticipated the following tasks will be required during the Construction Administration phase of the project: i. Review Design -build shoring plans; summarize results in letter ii. Observe construction of cut-off wall. Assume 20 visits, 4 hours per visit. iii. Observe installation of soldier beams in cut-off wall. Assume 8 visits, 4 hours per visit. iv. Review and respond to RFIs from Contractor. Assume 10 RFIs. v. Observe installation and grouting of tie -backs. Assume 20 visits, 4 hours per visit. vi. Witness load -testing of tie -backs. Assume 10 load tests. vii. Review contractor installation and load -testing records 1. Prepare summary letter regarding tie -back installation and load -testing viii. Observe and test lower -level mat subgrade. Assume 4 visits, 4 hours per visit. ix. Observe and test miscellaneous structural fill and backfill. Assume 6 visits, 4 hours per visit. x. Observe and test utility trench backfill. Assume 12 visits, 4 hours per visit. xi. Observe and test foundation subgrade for at -grade improvements. Assume 6 visits. 4 hours per visit. Vers.: Aug. 5, 2019 Page 6 of 11 Item 17: Staff Report Pg. 9 Packet Pg. 170 of 857 DocuSign Envelope ID: 032E3D48-D3AD-4A7D-A44A-929C20F72AF0 Item 17 Attachment A - Romig Contract S20176170, Amendment No.4 xii. Observe and test subgrade and AB for on -site and off -site pavements. Assume 10 visits. 4 hours per visit. xiii. Miscellaneous consultation requested by City and/or project team. Assume 20 hours. xiv. Prepare construction observation summary letter at completion. 4) EXTENDED CONSTRUCTION GEOTECHNICAL SERVICES a. It is anticipated the following remaining tasks will be required during the Construction Administration phase of the project, estimated 19 visits: i. Observe and test subgrade at areas to receive deep plug. ii. Observe and test subgrade and aggregate base at Jacaranda east. iii. Observe and test subgrade and aggregate base at Jacaranda west. iv. Observe and test subgrade and aggregate base at Jacaranda bulb out curve v. Observe and test aggregate base at FO 473 sidewalk vi. Observe and test aggregate base at ASI 88 sidewalk vii. Retest compaction around curb/gutter and sidewalk per FO 443. viii. Six (6) additional visits for non-compliant/unexpected items. Vers.: Aug. 5, 2019 Page 7 of 11 Item 17: Staff Report Pg. 10 Packet Pg. 171 of 857 DocuSign Envelope ID: 032E3D48-D3AD-4A7D-A44A-929C20F72AF0 Item 17 Attachment A - Romig Contract S20176170, Amendment No.4 EXHIBIT "B" SCHEDULE OF PERFORMANCE, AMENDMENT NO. 4, AMENDED, REPLACES PREVIOUS 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 Completion No. of Weeks from NTP 1 Supplemental Exploration, Testing, and Report 6 weeks 2 Preconstruction Services 44 weeks 3 Construction Geotechnical Services 254 weeks Vers.: Aug. 5, 2019 Page 8 of 11 Item 17: Staff Report Pg. 11 Packet Pg. 172 of 857 DocuSign Envelope ID: 032E3D48-D3AD-4A7D-A44A-929C20F72AF0 Item 17 Attachment A - Romig Contract S20176170, Amendment No.4 EXHIBIT "C" COMPENSATION, AMENDMENT NO. 4 AMENDED, REPLACES PREVIOUS The CITY agrees to compensate the 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 hourly rate schedule attached as Exhibit C-1 up to the not to exceed budget amount for each task set forth below. CONSULTANT shall perform the tasks and categories of work as outlined and budgeted below. The CITY's Project Manager may approve in writing the transfer of budget amounts between any of the tasks or categories listed below provided the total compensation for Basic Services, including any specified reimbursable expenses, and the total compensation for Additional Services and Optional Additional Services do not exceed the amounts set forth in Section 4 of this Agreement. BUDGET SCHEDULE NOT TO EXCEED AMOUNT Task 1: Supplemental Exploration and Testing Prep/Coordination Exploration Plan $774 Permitting and Permit Fees $1,200 Mark CPTs/Install Signage and Barricades $2,304 Subsurface Exploration (6 CPTs) $7,400 Prepare Supplemental Report $4,000 Post Report Meeting/Discussion $820 Subtotal Not to Exceed for Task 1 $16,498 Task 2: Preconstruction Services Review 60% Construction Documents $2,100 Review 90% Permit Set $2,100 Respond to Bidding RFIs $1,750 Subtotal Not to Exceed for Task 2 $5,950 Subtotal Task 1 and 2 Basic Services $22,448 Additional Services (per Section 4 of this Agreement) for Task 1 and Task 2 (Not to Exceed) $2,244 Subtotal Task 1 and Task 2 Basic Services & Additional Services Not To Exceed $24,692 Vers.: Aug. 5, 2019 Page 9 of 11 Item 17: Staff Report Pg. 12 Packet Pg. 173 of 857 DocuSign Envelope ID: 032E3D48-D3AD-4A7D-A44A-929C20F72AF0 Item 17 Attachment A - Romig Contract S20176170, Amendment No.4 Task 3: Construction Geotechnical Services Review Shoring Plans $1,230 Observe Cut-off Wall $12,720 Observe Soldier Beams $5,088 Review and Respond to RFls $1,750 Observe Tie -back Grouting $12,720 Tie -back Load Testing $4,770 Tie -back Summary Letter $1,050 Observe Mat Subgrade $2,544 Test Fill and Backfill $3,816 Test Trench and Backfill $7,632 Observe Foundation Excavation $3,816 Pavement Subgrade and AB $6,360 Miscellaneous Consultation $4,100 Construction Summary Letter $1,050 Subtotal Task 3 Basic Services $68,646 Reimbursable Expenses for Task 3 $750 Subtotal Not to Exceed for Task 3 Basic Services and Reimbursable Expenses $69,396 Optional Additional Services shall mean: Additional Services (per Section 4 of this Agreement) $6,864 Miscellaneous Consultation/Senior Project Engineer $2,100 Miscellaneous Consultation/Principal Engineer $1,640 Site Specific Response Analysis (Post Software Update) $5,000 Subtotal Optional Additional Services $15,604 Subtotal for Task 3 Basic Services & Optional Additional Services Not to Exceed $85,000 Task 4: Extended Construction Geotechnical Services Subtotal Task 4 Extended Services $21,786 Maximum Total Compensation Not To Exceed $131,478 Vers.: Aug. 5, 2019 Page 10 of 11 Item 17: Staff Report Pg. 13 Packet Pg. 174 of 857 DocuSign Envelope ID: 032E3D48-D3AD-4A7D-A44A-929C20F72AF0 Item 17 Attachment A - Romig Contract S20176170, Amendment No.4 REIMBURSABLE EXPENSES The administrative, overhead, secretarial time or secretarial overtime, word processing, photocopying, in-house printing, insurance and other ordinary business expenses are included within the scope of payment for services and are not reimbursable expenses. CITY shall reimburse CONSULTANT for the following reimbursable expenses at cost. Expenses for which CONSULTANT shall be reimbursed are: A. Travel outside the San Francisco Bay area, including transportation and meals, will be reimbursed at actual cost subject to the City of Palo Alto's policy for reimbursement of travel and meal expenses for City of Palo Alto employees. B. Long distance telephone service charges, cellular phone service charges, facsimile transmission and postage charges are reimbursable at actual cost. All requests for payment of expenses shall be accompanied by appropriate backup information. Any expense anticipated to be more than $200 shall be approved in advance by the CITY's project manager. CONSULTANT shall be reimbursed for specified expenses up to an amount not to exceed Seven Hundred Fifty Dollars ($750). ADDITIONAL SERVICES AND OPTIONAL ADDITIONAL SERVICES The CONSULTANT shall provide Additional Services (defined in Section 4 of this Agreement) and Optional Additional Services only by advanced, written authorization from the CITY. If any Additional Services or Optional Additional Services are contemplated, the CONSULTANT, at the CITY's Project Manager's request, shall submit a detailed written proposal including a proposed description of the scope of services, schedule, and maximum compensation, including any reimbursable expenses, for such services based on the rates set forth in Exhibit C-1. The proposed Additional Services or Optional Additional Services scope, schedule and maximum compensation shall be negotiated and agreed to in writing by the CITY's Project Manager and CONSULTANT prior to commencement of such services. Performance of any payment for Additional Services and Optional Additional Services is subject to all requirements and restrictions in this Agreement Vers.: Aug. 5, 2019 Page 11 of 11 Item 17: Staff Report Pg. 14 Packet Pg. 175 of 857 Vendor Address City of Palo Alto Purchasing and Contract Administration P.O.Box 10250 Palo Alto CA 94303 Tel:(650)329-2271 Fax:(650)329-2468 PIVOT INTERIORS INC. 3355 SCOTT BLVD STE 110 Santa Clara CA 95054-3138 Tel: 408-432-5600 Fax: 408-432-5601 Shop Tn. Public Works Engineering City of Palo Alto 250 Hamilton Ave., 6th Floor Palo Alto CA 94301 Rill Tn. Community Services Department City of Palo Alto 1305 Middlefield Road. Palo Alto CA 94303 Item 17 Attachment B - Purchase Order with Pivot Interiors, Inc. Purchase Order P.O. NUMBER MUST APPEAR ON ALL INVOICES, PACKAGES, SHIPPING PAPERS AND CORRESPONDENCE PERTAINING TO THIS ORDER PO Number 4523000432 Date 05/30/2023 Vendor No. 100165 Payment Terms Payment Due 30 days FOB Point F.O.B Destination Ship via Vendor to ship best method Required Date 03/11/2024 Buyer/Phone Saira Cardoza / 650-329-2327 Email Saira.Cardoza@CityofPaloAlto.org DELIVERIES ACCEPTED ONLY BETWEEN 7:00 AM & 3:00 PM UNLESS OTHER ARRANGEMENTS ARE INDICATED HEREIN Item Material/Description Quantity UM Net Price Net Amount "This Amended and Restated Purchase Order with Pivot Interiors, Inc., effective as of 06/10/2024, hereby amends and restates the Amended and Restated Purchase Order No. 4523000432 dated 06/30/2023 with Pivot Interiors, Inc. This Amended and Restated Purchase Order hereby supersedes that Purchase Order dated 06/30/2023." This City of Palo Alto (City) Purchase Order agreement (PO) with Pivot Interiors pursuant and subject to Omnia agreement Contract 202000062 PH485, Sourcewell Contract no. 19Z08621 and Omnia agreement Contract R191819 & R191806 with Pivot Interiors for the procurement of Herman Miller Office furniture, project management, procurement of equipment and assembly services as detailed in this PO. Pivot Interiors, Inc. is an authorized dealer and sub -contractor of Herman Miller, Inc. All the furniture is fabricated specifically for the PSB. Installation is part of the original PO. However, due to delays in the completion of the Public Safety Building, Contractor has not been able to deliver any furniture in accordance with the PO and has been storing the furniture. Storage costs were not covered under the original PO. In addition, due to the delay in completing the PSB, there is a labor surcharge due to an increase in prevailing wages from the previous quote for the PO in 2023. Pivot Interiors, Inc. Department of Industrial Relation Registration Number is 1000018735. This Project is subject to prevailing wages and related requirements as a (MA Chief Procurement Officer THIS P.O. IS SUBJECT TO THE TERMS AND CONDITIONS STATED BELOW AND ON THE LAST PAGE SPECIFICATIONS - Any specification and /or drawings referred to and/or attached hereto are expressly made a part of this Purchase Order. DELIVERY - Please notify the City promptly if delivery cannot be made on or before the date specified. If partial shipment is authorized, so indicate on all documents. Complete packing lists must accompany each shipment. INVOICE - A separate invoice is required for each order. Send to address indicated above. Item 17: Staff Report Pg. 15 l Packet Pg. 176 of 857 City of Palo Alto Purchasing and Contract Administration P.O.Box 10250 Palo Alto CA 94303 LIFOR�1 Tel:(650)329-2271 Fax:(650)329-2468 Vendor Address PIVOT INTERIORS INC. 3355 SCOTT BLVD STE 110 Santa Clara CA 95054-3138 Tel: 408-432-5600 Fax: 408-432-5601 Ship Tn. Public Works Engineering City of Palo Alto 250 Hamilton Ave., 6th Floor Palo Alto CA 94301 Rill Tn. Community Services DE City of Palo Alto 1305 Middlefield Road. Palo Alto CA 94303 Item 17 Attachment B - Purchase Order with Pivot Interiors, Inc. Purchase Order P.O. NUMBER MUST APPEAR ON ALL INVOICES, PACKAGES, SHIPPING PAPERS AND CORRESPONDENCE PERTAINING TO THIS ORDER PO Number Date Vendor No. Payment Terms FOB Point Ship via Required Date Buyer/Phone Email 4523000432 05/30/2023 100165 Payment Due 30 days F.O.B Destination Vendor to ship best method 03/11/2024 Saira Cardoza / 650-329-2327 Saira.Cardoza aa)CitvofPaloAlto. DELIVERIES ACCEPTED ONLY BETWEEN 7:00 AM & 3:00 PM UNLESS OTHER ARRANGEMENTS ARE INDICATED HEREIN Page 2 of 7 Item Material/Description Quantity UM Net Price Net Amount "public works" under California Labor Code Sections 1720 et seq. and related regulations. Contractor is required to pay general prevailing wages as defined in California Labor Code Section 1773.1 and Subchapter 3, Title 8 of the California Code of Regulations Section 16000 et seq., as amended from time to time. Pursuant to Labor Code Section 1773, the City has obtained the general prevailing rate of per diem wages and the general rate for holiday and overtime work in this locality for each craft, classification, or type of worker needed to execute the contract for this Project from the State of California Department of Industrial Relations ("DIR"). Copies of these rates may be obtained at the City's Purchasing Department office. The general prevailing wage rates are also available at the DIR, Division of Labor Statistics and Research, website (see e.g. http://www.dir.ca.gov/DLSR/PWD/index.htm) as amended from time to time. Contractor shall post a copy of the general prevailing wage rates at all Project job sites and shall pay the adopted prevailing wage rates as a minimum. Contractor shall comply with all applicable provisions of Division 2, Part 7, Chapter 1 of the California Labor Code (Labor Code Section 1720 et seq.), including, but not limited to, Sections 1720, 1725.5, 1771, 1771.1, 1771.4, 1773.2, 1774, 1775, 1776, 1777.5, 1782, 1810, 1813 and 1815, and all applicable implementing regulations, including but not limited to Subchapter 3, Title 8 of the California Code of Regulations Section 16000 et seq. (8 CCR Section 16000 et seq.), as amended from time to time. DIR Registration and Other Requirements. General Notice to Contractor. Chief Procurement Officer THIS P.O. IS SUBJECT TO THE TERMS AND CONDITIONS STATED BELOW AND ON THE LAST PAGE SPECIFICATIONS - Any specification and /or drawings referred to and/or attached hereto are expressly made a part of this Purchase Order. DELIVERY - Please notify the City promptly if delivery cannot be made on or before the date specified. If partial shipment is authorized, so indicate on all documents. Complete packing lists must accompany each shipment. INVOICE - A separate invoice is required for each order. Send to address indicated above. Item 17: Staff Report Pg. 16 l Packet Pg. 177 of 857 City of Palo Alto Purchasing and Contract Administration P.O.Box 10250 Palo Alto CA 94303 LIFOR�1 Tel:(650)329-2271 Fax:(650)329-2468 Vendor Address PIVOT INTERIORS INC. 3355 SCOTT BLVD STE 110 Santa Clara CA 95054-3138 Tel: 408-432-5600 Fax: 408-432-5601 Ship Tn. Public Works Engineering City of Palo Alto 250 Hamilton Ave., 6th Floor Palo Alto CA 94301 Rill Tn. Community Services DE City of Palo Alto 1305 Middlefield Road. Palo Alto CA 94303 Item 17 Attachment B - Purchase Order with Pivot Interiors, Inc. Purchase Order P.O. NUMBER MUST APPEAR ON ALL INVOICES, PACKAGES, SHIPPING PAPERS AND CORRESPONDENCE PERTAINING TO THIS ORDER PO Number Date Vendor No. Payment Terms FOB Point Ship via Required Date Buyer/Phone Email 4523000432 05/30/2023 100165 Payment Due 30 days F.O.B Destination Vendor to ship best method 03/11/2024 Saira Cardoza / 650-329-2327 Saira.Cardoza aa)CitvofPaloAlto. DELIVERIES ACCEPTED ONLY BETWEEN 7:00 AM & 3:00 PM UNLESS OTHER ARRANGEMENTS ARE INDICATED HEREIN Page 3 of 7 Item Material/Description Quantity UM Net Price Net Amount City requires Contractor and its Subcontractors to comply with all applicable requirements of the California Labor Code including but not limited to Labor Code Sections 1720 through 1861, and all applicable related regulations, including but not limited to Subchapter 3, Title 8 of the California Code of Regulations Section 16000 et seq., as amended from time to time. Additional information regarding public works and prevailing wage requirements is available on the DIR website (see e.g. http://www.dir.ca.gov) as amended from time to time. Labor Code section 1771.1(a). City provides notice to Contractor of the requirements of California Labor Code section 1771.1(a), which reads: "A contractor or subcontractor shall not be qualified to bid on, be listed in a bid proposal, subject to the requirements of Section 4104 of the Public Contract Code, or engage in the performance of any contract for public work, as defined in this chapter, unless currently registered and qualified to perform public work pursuant to Section 1725.5. It is not a violation of this section for an unregistered contractor to submit a bid that is authorized by Section 7029.1 of the Business and Professions Code or Section 10164 or 20103.5 of the Public Contract Code, provided the contactor is registered to perform public work pursuant to Section 1725.5 at the time the contract is awarded." DIR Registration Required. City will not accept a bid proposal from or enter into this Construction Chief Procurement Officer THIS P.O. IS SUBJECT TO THE TERMS AND CONDITIONS STATED BELOW AND ON THE LAST PAGE SPECIFICATIONS - Any specification and /or drawings referred to and/or attached hereto are expressly made a part of this Purchase Order. DELIVERY - Please notify the City promptly if delivery cannot be made on or before the date specified. If partial shipment is authorized, so indicate on all documents. Complete packing lists must accompany each shipment. INVOICE - A separate invoice is required for each order. Send to address indicated above. Item 17: Staff Report Pg. 17 l Packet Pg. 178 of 857 City of Palo Alto Purchasing and Contract Administration P.O.Box 10250 Palo Alto CA 94303 Lf> oR�1 Tel:(650)329-2271 Fax:(650)329-2468 Vendor Address PIVOT INTERIORS INC. 3355 SCOTT BLVD STE 110 Santa Clara CA 95054-3138 Tel: 408-432-5600 Fax: 408-432-5601 Ship Tn. Public Works Engineering City of Palo Alto 250 Hamilton Ave., 6th Floor Palo Alto CA 94301 Rill Tn. Community Services DE City of Palo Alto 1305 Middlefield Road. Palo Alto CA 94303 Item 17 Attachment B - Purchase Order with Pivot Interiors, Inc. Purchase Order P.O. NUMBER MUST APPEAR ON ALL INVOICES, PACKAGES, SHIPPING PAPERS AND CORRESPONDENCE PERTAINING TO THIS ORDER PO Number Date Vendor No. Payment Terms FOB Point Ship via Required Date Buyer/Phone Email 4523000432 05/30/2023 100165 Payment Due 30 days F.O.B Destination Vendor to ship best method 03/11/2024 Saira Cardoza / 650-329-2327 Saira.Cardoza aa)CitvofPaloAlto. DELIVERIES ACCEPTED ONLY BETWEEN 7:00 AM & 3:00 PM UNLESS OTHER ARRANGEMENTS ARE INDICATED HEREIN Page 4 of 7 Item Material/Description Quantity UM Net Price Net Amount Contract with Contractor without proof that Contractor and its Subcontractors are registered with the California Department of Industrial Relations ("DIR") to perform public work, subject to limited exceptions. Posting of Job Site Notices; Compliance Monitoring. City gives notice to Contractor and its Subcontractors that Contractor i required to post all job site notices prescribed by law or regulation and Contractor is subject to compliance monitoring and enforcement by DIR. Certified Payroll. Contractor shall furnish certified payroll records directly to the Labor Commissioner (DIR) in accordance with Subchapter 3, Title 8 of the California Code of Regulations Section 16461 (8 CCR Section 16461). City requires Contractor and its Subcontractors to comply with the requirements of Labor Code section 1776, including but not limited to: (i) Keep accurate payroll records, showing the name, address, social security number, work classification, straight time and overtime hours worked each day and week, and the actual per diem wages paid to each journeyman, apprentice, worker, or other employee employed by, respectively, Contractor and its Subcontractors, in connection with the Project. Chief Procurement Officer THIS P.O. IS SUBJECT TO THE TERMS AND CONDITIONS STATED BELOW AND ON THE LAST PAGE SPECIFICATIONS - Any specification and /or drawings referred to and/or attached hereto are expressly made a part of this Purchase Order. DELIVERY - Please notify the City promptly if delivery cannot be made on or before the date specified. If partial shipment is authorized, so indicate on all documents. Complete packing lists must accompany each shipment. INVOICE - A separate invoice is required for each order. Send to address indicated above. Item 17: Staff Report Pg. 18 l Packet Pg. 179 of 857 City of Palo Alto Purchasing and Contract Administration P.O.Box 10250 Palo Alto CA 94303 LIFOR�1 Tel:(650)329-2271 Fax:(650)329-2468 Vendor Address PIVOT INTERIORS INC. 3355 SCOTT BLVD STE 110 Santa Clara CA 95054-3138 Tel: 408-432-5600 Fax: 408-432-5601 Ship Tn. Public Works Engineering City of Palo Alto 250 Hamilton Ave., 6th Floor Palo Alto CA 94301 Rill Tn. Community Services DE City of Palo Alto 1305 Middlefield Road. Palo Alto CA 94303 Item 17 Attachment B - Purchase Order with Pivot Interiors, Inc. Purchase Order P.O. NUMBER MUST APPEAR ON ALL INVOICES, PACKAGES, SHIPPING PAPERS AND CORRESPONDENCE PERTAINING TO THIS ORDER PO Number Date Vendor No. Payment Terms FOB Point Ship via Required Date Buyer/Phone Email 4523000432 05/30/2023 100165 Payment Due 30 days F.O.B Destination Vendor to ship best method 03/11/2024 Saira Cardoza / 650-329-2327 Saira.Cardoza aa)CitvofPaloAlto. DELIVERIES ACCEPTED ONLY BETWEEN 7:00 AM & 3:00 PM UNLESS OTHER ARRANGEMENTS ARE INDICATED HEREIN Page 5 of 7 Item Material/Description Quantity UM Net Price Net Amount (ii) The payroll records shall be verified as true and correct and shall be certified and made available for inspection at all reasonable hours at the principal office of Contractor and its Subcontractors, respectively. (iii) At the request of City, acting by its Project Manager, Contractor and its Subcontractors shall make the certified payroll records available for inspection or furnished upon request to the City's Project Manager within ten (10) days of receipt of City's request. 0 City requests Contractor and its Subcontractors to submit the certified payroll records to the City's Project Manager at the end of each week during the Project. (iv) If the certified payroll records are not provided as required within the 10 -day period, then Contractor and its Subcontractors shall be subject to a penalty of one hundred dollars ($100.00) per calendar day, or portion thereof, for each worker, and City shall withhold the sum total of penalties from the progress payment(s) then due and payable to Contractor. This provision supplements the provisions of Section 15 hereof. (v) Inform the City's Project Manager of the location of Contractor's and its Subcontractors' payroll records (street address, city and county) at the commencement of the Project, and also provide notice to the City's Project Manager within five (5) business days of any change of location of those payroll records. This PO is governed by California law without regard to conflict of law Chief Procurement Officer THIS P.O. IS SUBJECT TO THE TERMS AND CONDITIONS STATED BELOW AND ON THE LAST PAGE SPECIFICATIONS - Any specification and /or drawings referred to and/or attached hereto are expressly made a part of this Purchase Order. DELIVERY - Please notify the City promptly if delivery cannot be made on or before the date specified. If partial shipment is authorized, so indicate on all documents. Complete packing lists must accompany each shipment. INVOICE - A separate invoice is required for each order. Send to address indicated above. Item 17: Staff Report Pg. 19 l Packet Pg. 180 of 857 City of Palo Alto Purchasing and Contract Administration P.O.Box 10250 Palo Alto CA 94303 Lf> oR�1 Tel:(650)329-2271 Fax:(650)329-2468 Vendor Address PIVOT INTERIORS INC. 3355 SCOTT BLVD STE 110 Santa Clara CA 95054-3138 Tel: 408-432-5600 Fax: 408-432-5601 Ship Tn. Public Works Engineering City of Palo Alto 250 Hamilton Ave., 6th Floor Palo Alto CA 94301 Hill Tn. City of Palo Alto Account Payable P.O.Box 10250 Palo Alto, CA 94303 Item 17 Attachment B - Purchase Order with Pivot Interiors, Inc. Purchase Order P.O. NUMBER MUST APPEAR ON ALL INVOICES, PACKAGES, SHIPPING PAPERS AND CORRESPONDENCE PERTAINING TO THIS ORDER PO Number Date Vendor No. Payment Terms FOB Point Ship via Required Date Buyer/Phone Email 4523000432 05/30/2023 100165 Payment Due 30 days F.O.B Destination Vendor to ship best method 03/11/2024 Saira Cardoza / 650-329-2327 Saira.Cardoza aa)CitvofPaloAlto. DELIVERIES ACCEPTED ONLY BETWEEN 7:00 AM & 3:00 PM UNLESS OTHER ARRANGEMENTS ARE INDICATED HEREIN Page 6 of 7 Item Material/Description Quantity UM Net Price Net Amount principles. The venue for any dispute under this PO is Santa Clara County, California. This PO by reference incorporates the following contract documents into this PO by reference as though fully set forth herein: 1. Omnia agreement Contract 202000062 PH485 2. Omnia agreement Contract R191819 & R191806 3. Sourcewell Contract 19Z08621 4. Pivot Interiors Quote 411901-01, 411901-02, 411901-03, 411901-04, 411901-05 and 411901-06 5. City of Palo Alto Purchase Order Terms and Conditions 0010 PIVOT Project Management PSB 39,073 USE 1.00 39,073.30 0020 PIVOT Freight & Install PSB 1 USE 121,956.77 121,956.77 0030 PIVOT Materials PSB 526,261 USE 1.00 526,261.33 0040 PIVOT Contingency 68,729 USE 1.00 68,729.14 0050 Addtl Strg Fees & PrvIng Wage 21,480 USE 1.00 21,480.00 Sub-Total ------------------------- 777,500.54 Sales Tax 1,960.05 Chief Procurement Officer THIS P.O. IS SUBJECT TO THE TERMS AND CONDITIONS STATED BELOW AND ON THE LAST PAGE SPECIFICATIONS - Any specification and /or drawings referred to and/or attached hereto are expressly made a part of this Purchase Order. DELIVERY - Please notify the City promptly if delivery cannot be made on or before the date specified. If partial shipment is authorized, so indicate on all documents. Complete packing lists must accompany each shipment. INVOICE - A separate invoice is required for each order. Send to address indicated above. Item 17: Staff Report Pg. 20 l Packet Pg. 181 of 857 City of Palo Alto Purchasing and Contract Administration P.O.Box 10250 Palo Alto CA 94303 Lf> oR�1 Tel:(650)329-2271 Fax:(650)329-2468 Vendor Address PIVOT INTERIORS INC. 3355 SCOTT BLVD STE 110 Santa Clara CA 95054-3138 Tel: 408-432-5600 Fax: 408-432-5601 Ship Tn. Public Works Engineering City of Palo Alto 250 Hamilton Ave., 6th Floor Palo Alto CA 94301 Hill Tn. City of Palo Alto Account Payable P.O.Box 10250 Palo Alto, CA 94303 Item 17 Attachment B - Purchase Order with Pivot Interiors, Inc. Purchase Order P.O. NUMBER MUST APPEAR ON ALL INVOICES, PACKAGES, SHIPPING PAPERS AND CORRESPONDENCE PERTAINING TO THIS ORDER PO Number Date Vendor No. Payment Terms FOB Point Ship via Required Date Buyer/Phone Email 4523000432 05/30/2023 100165 Payment Due 30 days F.O.B Destination Vendor to ship best method 03/11/2024 Saira Cardoza / 650-329-2327 Saira.Cardoza aa)CitvofPaloAlto. DELIVERIES ACCEPTED ONLY BETWEEN 7:00 AM & 3:00 PM UNLESS OTHER ARRANGEMENTS ARE INDICATED HEREIN Page 7 of 7 Item Material/Description Quantity UM Net Price Net Amount * * * ORDERING VIA EMAIL * * * * * * PRICE HAS BEEN QUOTED * * * * 1I,iilMA Al AAAIA A Total 779,460.59 vVL�NW • ' Wv f'W1 V4� Chief Procurement Officer THIS P.O. IS SUBJECT TO THE TERMS AND CONDITIONS STATED BELOW AND ON THE LAST PAGE SPECIFICATIONS - Any specification and /or drawings referred to and/or attached hereto are expressly made a part of this Purchase Order. DELIVERY - Please notify the City promptly if delivery cannot be made on or before the date specified. If partial shipment is authorized, so indicate on all documents. Complete packing lists must accompany each shipment. INVOICE - A separate invoice is required for each order. Send to address indicated above. Item 17: Staff Report Pg. 21 1 Packet Pg. 182 of 857 TERMS AND CONDITIONS OF PURCHASE Item 17 Attachment B - Purchase ACCEPTANCE/AGREEMENT: City of Palo Alto (City) reserves the right to reject any and all quotations, to waive any informalities, and, unless otherwise specified by Seller, to accept any item in a quotation. By accepting or filing this Purchase Order (P.O.), Seller agrees to the terms and conditions herein which shall prevail over any inconsistent provision in any form or other paper submitted by Seller. All shipments or services performed shall be deemed to have been made pursuant hereto. No other terms are acceptable. This P.O., including all specifications and drawings, shall constitute the entire agreement between the parties unless modified in writing by City. CITY'S PROPERTY: Seller agrees that the information, tools, jigs, dies, or materials, and drawings, patterns, and specification supplied or paid for by City shall be and remain City property and shall be held by Seller for City unless directed otherwise. Seller shall account for such items and keep them protected, insured, and in good working conditions without expense to City. DELIVERY: The terms of delivery are as stated on the reverse side hereof. The obligation of Seller to meet the delivery dates, specifications, and quantities set forth herein is of the essence of this P.O. No boxing, packing, or cartage charge will be allowed unless authorized by this P.O. Deliveries are to be made both in quantities and at times specified herein or, if not, such quantities and times are specified pursuant to City's written instruction. Items not delivered may be canceled without penalty to City. Shipments in greater or lesser quantity that ordered may be returned at Seller's expense unless written authorization is issued by City. PRICES: The price which Seller charges in filling this P.O. shall not be higher than Seller's most recent quote or charge to City for such materials, supplies, services and/or installations unless City expressly agrees otherwise in writing. Notwithstanding the prices set forth the P.O. City shall receive the benefit of any general reduction in the price of any item(s) listed herein which may be made by Seller at any time prior to the last delivery of goods or services covered by this P.O. TERMINATION: City shall have the right to terminate this P.O. or any part thereof upon ten (10) days notice in writing to Seller. (1) Withnnt cap wa City may terminate all or any part of this P.O. without cause. Any claim by Seller for damages due to termination without cause must be submitted to City within thirty (30) days after effective date of termination. (2) For rage If Seller fails to make any delivery in accordance with the agreed delivery date, delivery schedule, or otherwise fails to observe or comply with any of the other instructions, terms, conditions or warranties applicable to this P.O., City may, in addition to any other right or remedy provided by this P.O. or by law, terminate all or any part of this P.O. in writing without any liability of City with respect to Seller at any time during the term of this P.O. In the event of termination for cause, City may purchase supplies or services elsewhere on such terms or in such manner as City may deem appropriate and Seller shall be liable to City for any cost and other expenses incurred by City, which is charged to City. CHANGES: City shall have the right at any time by written notice via P.O. Change Order to Seller to make changes in the specifications, the quantity of items called for, delivery schedules, and requirements covering testing, packaging, or destination. Any claim by Seller for adjustment under this clause shall be deemed waived unless made in writing with then (10) days after receipt by Seller of notice of such change. Price increases or extensions of time for delivery shall not be binding on City unless evidenced by a P.O. Change Order issued by City's Purchasing Manager. INSPECTION: City shall have the right to inspect and approve or reject any materials, supplies, services and/or installations upon arrival of notice of completion prior to payment without regard to the manner of shipment, completion, or any shipping or price terms contained in this P.O. All materials, supplies, services and/or installations must be furnished as specified. (1) Defective, damaged, and nonconforming materials and/or supplies may be returned for credit or refund, at Seller's expense. City may charge Seller for all expenses of unpacking, examining, repacking and reshipping of such materials and/or supplies. (2) Defective, incorrect and nonconforming services and/or installations may be returned for credit or refund, at Seller's expense. All of the ahnva nntwith_ctandin jprior paymant by WARRANTY: Seller expressly warrants that all /or Order with Pivot Interiors, installations covered by this P.O. shall: (1) conform to the specifications, drawing Inc. s specified by City or if none are so specified, to Seller's standard specification or the standards of the ASTM or ANSI or other national standard organizations; (2) be new and unless specified to the contrary on the face hereof, will be free from defects in material and workmanship and will be free of all liens and encumbrances and will conform to any affirmation of facts made on the container or label; (3) be adequately contained, packaged, marked, labeled and/or provided in compliance with all applicable federal and state laws and regulations (including materials deemed hazardous); (4) be performed within the rules and regulations of the Occupational Safety and Health Act of 1970 (as amended); (5) be produced or transferred or disposed of as required by federal and state laws and regulation under the conditions of the Toxic Substances Control Act; the Hazardous Materials Control and Hazardous Waste Regulations; and other toxic laws and programs. Seller further expressly agrees to protect, indemnify, and hold harmless City, its employees and agents for any loss, damage, fine, liability, fee (including reasonable charges and fees) or expense arising in connection with or resulting from Seller's failure to furnish materials or supplies or perform services that conform with any warranty contained herein. (6) have good marketable title. GOVERNING LAW: This P.O. shall be governed by the laws of the State of California. INDEPENDENT CONTRACTOR, INSURANCE: Seller certifies, by acceptance, that he/she is an independent contractor. Seller shall protect, defend, and indemnify and hold City harmless against all damages, liability, claims, losses and expenses (including attorney's fees) arising out of , or resulting in any way from Seller's negligence in providing the goods or services purchased hereunder or from any act or omission of Seller, its agents, employees, or subcontractors, Seller shall maintain such public liability insurance, including contractual liability, automobile and general public liability, (including non -owned automobile liability) Worker's Compensation, and employer's liability insurance as well adequately protect City against such damage, liabilities, claims, losses, and expenses (including attorney's fees). Seller agrees to submit certificates of insurance, evidencing its insurance coverage when requested by City. EQUAL OPPORTUNITY CLAUSE: By acceptance of this P.O., Seller certifies it is in compliance with the Equal Opportunity Clause required by Executive Order 11246, as amended, and the Palo Alto Municipal Code, as amended, including Affirmative Action Compliance Programs for Veterans; Handicapped; and Minority Business, and other equal opportunity programs. FORCE MAJEURE: City may delay delivery or acceptance occasioned by causes beyond its control. Seller shall hold such materials, supplies, services and or installations at the direction of City and shall deliver them when the cause affecting the delay has been removed. City shall be responsible only for Seller's direct additional costs in holding the goods or delaying performance of this P.O. and City's request. Seller shall also be excused if delivery is delayed by unforeseen events beyond its reasonable control, provided Seller notifies City as soon as they occur. City may cancel this P.O. if such delay exceeds thirty (30) days from the original delivery date. Seller shall use its best efforts to grant preference to this P.O. over those of other customers, which were placed after this P.O. AUTHORITY OF AGENT OR FACTOR: Seller represents that, whenever it executes this P.O. on behalf of a third party as an agent or factor, it shall disclose the existence of the agency or factor relationship to City. Seller shall be deemed to have the legal authority to enter into this P.O. with City on behalf of the third party. INTERPRETATION OF CONTRACT DOCUMENTS: In the event of a conflict between the terms of this P.O. and the attached specification with respect to any obligation of Seller, the provision which impose the greater obligations upon Seller shall prevail. CITY OF PALO ALTO PAGE 1 OF 3 GDS Rev. 06/22/2016 Item 17: Staff Report Pg. 22 Packet Pg. 183 of 857 TERMS AND CONDITIONS OF PURCHASE Item 17 Attachment B - Purchase ENVIRONMENTALLY PREFERRED PURCHASING REQUIREMENTS: Seller agrees to comply with the City's Environmentally Preferred Purchasing Requirements. (1) Hazardnus Waste Seller shall take -back all spent or otherwise discarded hazardous products sold to the City by the Seller if the spent or discarded products are classified as hazardous or universal wastes by State or Federal regulations. Seller shall provide convenient collection and recycling services (or disposal services if recycling technology is unavailable) for all universal wastes, which originate from the Vendor. Hazardous waste manifests or bills of lading must be provided to City staff upon request. Recycling and reuse of hazardous wastes must occur within the United States. Universal waste lists and information are available www.dtsc.ca.gov/HazardousWaste/UniversalWaste/. A hazardous waste list is available at http://www.calrecycle.ca.gov/LEA/Training/wasteclass/yep.htm. Additional information can be obtained by contacting the City of Palo Alto Hazardous Waste Department at (650) 496-6980. (2) Torn Wsste and Pnnnfinn Pra,,Anrine Per Palo Alto City Council policy, the City is targeting to achieve Zero Waste by 2021. The City must also meet Municipal Regional Stormwater Permit requirements requiring no visible impact from litter via stormdrains by 2022. To that end the vendor, manufacturer and or contractor must individually or collaboratively comply with the waste reduction, reuse and recycling requirements of the City's Zero Waste and Pollution Prevention Programs. Seller acknowledges and agrees that if Seller fails to fully and satisfactorily comply with these requirements, the City will suffer, as a result of Seller's failure, substantial damages which are both extremely difficult and impracticable to ascertain. Therefore, the Seller agrees that in addition to all other damages to which the City may be entitled, in the event Seller fails to comply with the below requirements Seller shall pay City as liquidated damages the amounts specified below. The liquidated damage amount is not a penalty but considered to be a reasonable estimate of the amount of damages City will suffer as a result of such non-compliance. • Sellers shall adhere to the standard that all printed materials provided to the City that are generated from a personal computer and printer including, proposals, quotes, invoices, reports, and public education materials shall be double -sided, printed on a minimum of 30% post -consumer content paper or greater unless otherwise approved by the City's Environmental Services Division (650) 329-2117. Materials printed by a professional printing company shall be a minimum of 30% post -consumer material or greater and printed with vegetable based inks. Liquidated damages of $30 per document will be assessed by City for failure to adhere to this requirement. • All paper packaging must be Forest Stewardship Council (FSC) Certified. • All primary, secondary and shipping (tertiary) packaging be minimized to the maximum extent feasible while protecting the product being shipped. • All primary, secondary and shipping packaging shall be recyclable in the City's recycling program. A complete list of items accepted for recycling are found at www.zerowastepaloalto.org or by calling (650) 496-5910. If any portion is received that does not meet this requirement, liquidated damages of $235 or a minimum of $50 if the combined product and shipping cost is $235 or less will be assessed by City for failure to adhere to this requirement. • Expanded foam plastics (e.g., foam or cushion blocks, trays, packing 'peanuts'), such as but not limited to polystyrene (aka Styrofoam[tm]), polypropylene, or polyurethane shall not be used as primary, secondary or tertiary/shipping packaging with the following exceptions: o Primary packaging made from these materials may be used if the vendor, manufacturer, contractor individually or collaboratively does one of the following: (a) takes the material back at the City's convenience and at no cost to the City, or (b) pays the City of Palo Alto's disposal costs via payment of liquidated damages of $235, or a minimum of $50 if the combined product and shipping cost is $235 or less. o Bioplastics that meet ASTM D6400 standards for compostability may be accepted with approval from the City's Environmental Services Division subject to local municipal compost facility requirements. o If approved by the City's Environmental Services Division, a packaging requirement may be waived if no other viable packaging alternative exists. • Reusable/returnable pallets shall be used an additional Order with Pivot InterIors,I cost to the City. Seller shall provide documental In of pallets and/or recycling of broken pallets. Liquidated da Inc' of $50 if the combined product and shipping cost is $262 or less will be assessed by City for failure to adhere to this requirement. (3) Fnarny and Water Fffiniennv Seller shall provide products with an ENERGY STAR, Water Sense or State of California standard rating, whichever is more efficient, when ratings exist for those products. A life cycle cost analysis shall be provided to the City upon request and shall at minimum include: first cost, operating costs, maintenance costs, and disposal costs. Contacts for additional information about City of Palo Alto Hazardous Waste, Zero Waste and Utilities programs: Hazardous Waste Program (Public Works) (650) 496-6980 Zero Waste Program (Public Works) (650) 496-5910 Watershed Protection (650) 329-2117 Energy Efficiency (650) 496-2244 (4)i^n,adatad non Seller agrees that failure to comply with the City's Environmentally Preferred Purchasing Requirements will result in Liquidated Damages, according to the table marked Liquidated Damages on page 3 of this P.O. CITY OF PALO ALTO PAGE 2 OF 3 GDS Rev. 06/22/2016 Item 17: Staff Report Pg. 23 Packet Pg. 184 of 857 TERMS AND CONDITIONS OF PURCHASE NONCOMPLIANCE WITH ENVIRONMENTALLY PREFERRED PURCHASING REQUIREMENTS, LIQUIDATED DAMAGES: The following table lists the events that constitute breaches of the Agreement's standard of performance warranting the imposition of liquidated the amount of liquidated damages for failure to meet the contractually required standards of performance. Item 17 Attachment B - Purchase )rder with Pivot Interiors, Inc. level, and Event of Non -Performance Acceptable Performance Level Liquidated Damage Amount (Allowed events per Fiscal Year) Recycled Paper Use Failure to use 30% recycled content paper 1 $30 per each document Recyclable Packaging Materials Failure of Seller to use secondary and shipping packaging that is recyclable in 1 $235 or a minimum of $50 if the combined product the City's recycling program. and shipping cost is $250 or less will be incurred if this is not adhered to. Expanded Foam Plastics Unapproved use of expanded foam plastics for secondary or shipping 0 $235 or a minimum of $50 if the combined product packaging and shipping cost is $235 or less Pallet Use 1 $262 or a minimum of $50 if the combined product Failure of Seller to take -back and reuse pallets, recycling only broken pallets, and shipping cost is $2 or less at no additional cost to the City. CITY OF PALO ALTO PAGE 3 OF 3 GDS Rev. 06/22/2016 Item 17: Staff Report Pg. 24 Packet Pg. 185 of 857 Item 18 Item 18 Staff Report CITY OF PALO ALTO City Council Staff Report From: City Manager Report Type: CONSENT CALENDAR Lead Department: Administrative Services Meeting Date: June 17, 2024 Report #:2404-2845 TITLE Approval of Contracts with US Bank and its Wholly Owned Subsidiary Elavon for General Banking, Safekeeping (Custodial), and Merchant Services for a Period of Five Years; and Approval of Contract with Wells Fargo for Lockbox Services for a Period of One Year; CEQA Status: Not a Project. RECOMMENDATION Staff recommends that the City Council approve and authorize the City Manager or designee to execute: 1) The following contracts for five-year terms, ending June 30, 2030: a) Contract (Attachment A) with US Bank to provide General Banking Services, b) Contract (Attachment B) with Elavon, a wholly owned subsidiary of US Bank, to provide Merchant Services, c) Contract (Attachment C) with US Bank for investment Safekeeping (Custodial) Service, and 2) The following contact for a one-year, ending June 30, 2025: a) Contract (Attachment D) with Wells Fargo for Utility Lockbox Services. EXECUTIVE SUMMARY Approval of four banking services contracts and related services, will enable the City to continue operations with critical contractual services supporting the City's financial transactions. Administrative Services Department (ASD) issued a request for proposal (RFP) for these services in October 2023. Proposals received through the RFP indicated that the City's current banking service fees are in alignment with the market. Considering this and after evaluating both hard costs and soft costs for potential operational transitions between providers in ASD, Utilities, and IT Departments; staff recommends that new contracts be Item 18: Staff Report Pg. 1 Packet Pg. 186 of 857 Item 18 Item 18 Staff Report executed with the City's current service providers. The US Bank and Elavon contract will be for five years. The contract with Wells Fargo will be for one-year. City staff plan to negotiate and execute an agreement with Wells Fargo for up to four additional years so that staff and Wells Fargo can explore customer service improvements and system efficiencies. In FY 2025, staff and Wells Fargo will evaluate whether it is feasible to implement these enhancements; staff will seek to extend Lockbox services with Wells Fargo up to an additional four years, based on performance of these enhancements. If successful, staff will return for City Council approval of this extension. BACKGROUND Staff last conducted a competitive solicitation for banking and related services in 2014. Details for the RFP process is discussed in staff's report to Council on June 23, 20141. Council awarded contracts to the following financial institutions: 1) US Bank and Elavon for banking and merchant services, 2) Wells Fargo for lockbox service, 3) Commerce Bank for a new and innovative Accounts Payable bill payment service, 4) Union Bank for investment safekeeping (custodial) service, and 5) JP Morgan Chase Banks for purchase card (P -Card) service. The Commerce Bank's Accounts Payable bill payment implementation was halted and then discontinued as the service was unable to meet the City's needs as was originally expected as part of their proposal. This was a cutting -edge ambitious Accounts Payable service offering, if delivered as proposed, it would have been an Accounts Payable service enhancement and improved operational efficiency. There wasn't an alternative service provider offering this service, so the project was permanently cancelled. On September 21, 20202, the contracts extended for to two- or three-year extension for banking services contracts and related services, extending the contracts to a total term of eight or nine years. Union Bank was acquired by US Bank in August 2021; therefore, a two-year extension was done. Once the acquisition was complete, US Bank honored the full three-year and beyond extension under the original Union Bank's existing terms (Attachment C). An RFP was issued in October 2023 for general banking, lockbox, and investment safekeeping services. To ensure continuity of service, while the RFP was in process, on January 16, 2024, the 1 City Council, June 23, 2014, Staff Report ID #4905: https://www.cityofpaloalto.org/files/assets/public/v/1/agendas-minutes-reports/reports/city-manager-reports- cmrs/year-archive/2014/4905. pdf 2 City Council, September 21, 2020, Staff Report ID #11402: https://www.cityofpaloalto.org/files/assets/public/v/1/agendas-minutes-reports/reports/city-manager-reports- c m rs/year-archive/2020-2/i d-11402. pd f Item 18: Staff Report Pg. 2 Packet Pg. 187 of 857 Item 18 Item 18 Staff Report City Council approved amendments to extend the contracts for general banking, lockbox, and investment safekeeping services3 through June 30, 2024. ANALYSIS Due to the embedded nature of banking services in day-to-day financial transactions of City business, it is not uncommon to see longer term contracts up to 8-10 years to ensure continuity of service and necessary strategic deployment of resources for major projects, such as Automatic Clearing House (ACH) services, auto -draft payments for utility customers, internal control or fraud features (i.e., positive pay), remote desktop (check) deposits and integrations with the City's enterprise resource planning system, SAP. An RFP was issued in October 2023 and three responsive proposals were received: US Bank, Wells Fargo, and JP Morgan Chase. Evaluation of the proposals was completed by ASD and Utilities and when looking at the scores of each provider, scores for general banking services had a narrow margin of 2.4 point or less than 0.4% difference. In reviewing these proposals and resulting scores, staff gained affirmation of the competitiveness of the City's current providers, and gained insight on new or upcoming features within services providers that can assist staff in operation day -to -days. As a result, it is recommended the City maintain current services providers with the approval of these contracts and instead better leverage the systems for enhancements and new features versus administrative overhead. JP Morgan Chase Bank contract for purchase card (P -card) services was not part of the RFP issued in October 2023. P - Card services remain with JP Morgan Chase. This is a revenue (rebate) contract where there are no service fees. Staff will review the P -card services contract in the future to evaluate the potential of other service providers. Table 1 summarizes the proposed agreements and include a comparison of fees for the new contracts compared to fees in paid in FY 2023. These contracts are structured based on service and activity level; the City essentially controls costs via a fixed payment per service or percentage basis for merchant (credit card) services during the duration of the contracts. It is important to note that the majority of the credit card fees are attributable to the credit card (brand) networks (e.g., VISA, MasterCard, etc.). Network fees are not negotiable and the same for all service providers, so they were not included in this evaluation. Only bank fees, which are for the portal to the card networks, were evaluated. The structure of the contract terms does not include a "not -to -exceed" limit, as cost is dictated by transaction volume which can vary over time based on the City's service needs. Staff continually monitors costs on a routine basis and in total, gross annual costs in FY 2023 for these contracts have remained at or below $95,000 annually with net costs which includes the General Banking and Lockbox bank accounts earnings offsetting or reducing the $95,000 fees by around $18,400 in FY 2023. 3 City Council, January 16, 2024, Staff Report ID # 2310-2132: https://recordsportal.paloalto.gov/Weblink/DocView.aspx?id=82634 4 Banking, Lockbox, Merchant, Investment Safekeeping (Custodial) and Related Services, RFP 189279: https://procurement.opengov.com/portal/palo-alto-ca/protects/62858/document?section=549951 Item 18: Staff Report Pg. 3 Packet Pg. 188 of 857 Item 18 Item 18 Staff Report % Chg. Est. Fees for 5 - FY 2023 New Agreement Over FY Years Contract Bank and Service Actual Fees Est. Annual Fee 2023 Term US Bank: General Banking $41,700 $25,775 (38.2%) $128,900 Elavon Processing Fee: 0.10% of Merchant Services Transaction (excludes VISA and 10 cents per Amount or $54,500 MasterCard network or transaction based on FY 2023 interchange fees) or $17,600 * activity 209.7% N/A Wells Fargo: Lockbox Services $24,854 $22,850 (8.1%) $114,250 US Bank: Investment (Custodial) Safekeeping $28,123 $30,000 6.7% $150,000 * Note: in the existing contract Elavon's pricing was not typical in that it was not priced as a percentage of credit card charges instead of a fixed fee per transaction. The ongoing costs for these services do not reflect the cost to implement new banking services providers. Banking costs to transition banks are estimated to be between $35,000 and $80,000 though a substantial portion of this is offset by the banks. In addition, transition costs for staff and interface changes between the bank and SAP are complex and involve multiple departments and divisions (ASD Treasury, Revenue Collections, and Accounting; Utilities Customer Service and Billing, and IT Department staff) over six months to one year. Staff recommendation to maintain services with the current bank would avoid these additional one- time costs, while allowing focus on further service improvements and enhancing customer experience. FISCAL/RESOURCE IMPACT The FY 2025 proposed budget, subject to City Council adoption scheduled on June 17, 2024, includes sufficient funding for these contracts in FY 2025. Future year funding is subject to Council appropriation during the annual budget process. A not -to -exceed limit is not assigned to these contracts due to the structure and netting of fees against interest earnings; fees are negotiated per unit fixed pricing and percentage basis for merchant services, based on specific services, with volume or amount (for merchant services) controlled by the City. STAKEHOLDER ENGAGEMENT Administrative Services staff coordinates with departments that are involved with daily banking transactions, primarily the Utilities Department, whose feedback on the service level provided by US Bank and Wells Fargo is satisfactory. Item 18: Staff Report Pg. 4 Packet Pg. 189 of 857 Item 18 Item 18 Staff Report ENVIRONMENTAL REVIEW Council action on this item is not a project under the California Environmental Quality Act (CEQA) because the contract amendments for general banking and merchant services and lockbox services are a continuing administrative or maintenance activity. CEQA Guidelines section 15378(b)(2). ATTACHMENTS Attachment A: US Bank for General Banking Services Attachment B: Elavon Master Services Agreement for Merchant Services Attachment C: US Bank Agreement for Investment Safekeeping (Custodial) Services Attachment D: Wells Fargo Agreement for Lockbox and Related Services APPROVED BY: Lauren Lai, Administrative Services Director Item 18: Staff Report Pg. 5 Packet Pg. 190 of 857 Item 18 SECOND AMENDMENT TO AGREEMENT FOR Attachment A - US Bank for General Banking BANKING AND MERCHANT SERVICES Services This SECOND AMENDMENT TO AGREEMENT FOR BANKING AND MERCHANT SERVICES (the "Second Amendment"), dated as of July 1, 2024 (the "Effective Date"), is by and between the CITY OF PALO ALTO, CALIFORNIA ("City") and U.S. BANK NATIONAL ASSOCIATION, a national banking association ("Bank"). WHEREAS, City and Bank entered into that certain Agreement for Banking and Merchant Services dated July 1, 2020 (the "Existing Agreement"), which had an original expiration date of June 30, 2023; WHEREAS, City and Bank entered into the Amendment to Agreement for Banking and Merchant Services dated July 1, 2023 (the "First Amendment"), which extended Existing Agreement to June 30, 2024, subject the terms described in the First Amendment; WHEREAS, City and Bank have agreed to extend the Existing Agreement with respect to certain banking and treasury management services through June 30, 2029, subject to the terms and conditions set forth herein. NOW THEREFORE, in consideration of the foregoing premises and for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto covenant and agree to be bound as follows: Section 1. Capitalized Terms. All capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to them in the Existing Agreement or the First Amendment. Section 2. Extension of the Agreement for Banking Services. The Agreement shall be extended until June 30, 2029, but only for the general banking services listed in the attached Exhibit A, 2024 U.S. Bank Proposal for the City of Palo Alto General Banking Services ("the Banking Services"). The fees for the Banking Services shall be as stated in Exhibit A. Section 3. Effect of Amendment. Bank and City agree that after this Amendment becomes effective, the Existing Agreement, as hereby amended, shall remain in full force and effect with respect to the Banking Services. Section 4. Incorporation of Existing Agreement and Other Agreements by Reference: Ratification of Existing Agreement. Except as expressly modified under this Second Amendment, all of the terms, conditions, provisions, agreements, requirements, promises, obligations, duties, covenants and representations of City and Bank under the Existing Agreement related to the Banking Services and any and all other documents and agreements entered into with respect to the rights, duties and obligations under the Existing Agreement related to the Banking Services are incorporated herein by reference and are hereby ratified and affirmed in all respects by City and Bank. All references in the Existing Agreement to "this Agreement," "herein," "hereof," and similar references, and all references in any way related to the "Existing Agreement," shall be deemed to refer to the Existing Agreement, as amended by this Second Amendment. Section 5. Merger and Integration. Superseding Effect. This Second Amendment, from and after the date hereof, embodies the entire agreement and understanding between the parties hereto with respect to the subject matter hereof and supersedes and has merged into it all prior oral and written agreements on the same subjects by and between the parties hereto with the effect that this Second Amendment shall control. Section 6. Counterparts. This Second Amendment and any waiver or amendment hereto may be executed in counterparts and by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all of which shall together constitute one and the same instrument. This Second Amendment may be executed and delivered by pdf format via email transmission or by facsimile transmission, all with the same force and effect as if the same were a fully executed and delivered original manual counterpart. IN WITNESS WHEREOF, City and Bank, through their respective duly authorized and acting representatives, have executed and delivered this Second Amendment. CITY OF PALO ALTO, CALIFORNIA By: Name: Title: Date: U.S. BANK NATIONAL ASSOCIATION By: Name: Title: Date: Second Amendment to Agreement for Banking and Merchant Services Item 18: Staff Report Pg. 6 Page 1 of 1 Packet Pg. 191 of 857 Item 18 Attachment A - US Bank for General Banking Services 2024 US Bank Proposal for the City of Palo Alto General Banking Services from 07/01/2024 to 06/30/2029 Description of Services Proposed US Bank Fee Per Unit City Estimated Annual Unit Volume Total Estimated Annual Cost Total Estimated Five Years Cost General Banking Services Miscellaneous VP Monthly Maint per Acct $ 12 $ Data Normalization per Item $ 13,646 $ Subtotal: Branch Coin/Currency Services General Account Services SP Current Day Per Acct $ 5.000 12 $60.00 $300.00 SP Current Day Per Item $ 0.010 14,505 $145.05 $725.25 SP Current Da ACH Addenda $ 20.000 12 $240.00 $1,200.00 SP Previous Day Per Acct $ 2.500 48 $120.00 $600.00 SP Previous Day Per Item $ 0.005 39,883 $199.42 $997.10 SP Previous Da ACH Addenda $ 20.000 12 $240.00 $1,200.00 Account Analysis Report PDF $ 12 $- Monthly DDA Statement PDF $ 48 $- _____________ ACH Return and NOC Report $ 1.000 36 $36.00 $180.00 ARP Deposit Recon Report $ 10.000 13 $130.00 $650.00 SP Token Monthly Maintenance $ 1.000 296 $296.00 $1,480.00 SP Book Transfer Mo Maint $ 5.000 12 $60.00 $300.00 SP Stop Payments Mo Maint $ 5.000 48 $240.00 $1,200.00 SP Stop Payments -per Stop $ 4.500 48 $216.00 $1,080.00 SP Stop Payments -per Revoke $ 4.000 1 $4.00 $20.00 SP Sto /In uir ARP er item $ 0.100 120 $12.00 $60.00 SP ACH Origination Mo Maint $ 5.000 39 $195.00 $975.00 SP ACH Positive Pay Mo Maint $ 5.000 12 $60.00 $300.00 SP Wires Monthly Maintenance $ 5.000 12 $60.00 $300.00 SP ACH POS Pay er Paid Item $ 0.025 25 $0.63 $3.15 SP Account Recon Monthly Maint $ 21 - SP Positive Pay Monthly Maint $ 48 $- SP Issue Maint Mo Maintenance $ 5.000 38 $190.00 $950.00 SP Image Access Mo Maint $ 5.000 30 $150.00 $750.00 SP External Message Mo Maint (per Customer - per Month) $ 5.000 314 $60.00 $300.00 Subtotal: General Account Services $2,714.10 $13,570.50 Depository Services Paper Account Analysis Statement $ 12 $- Account Maintenance $ 2.500 48 $120.00 $600.00 Paper Credits $ 0.200 1,120 $224.00 $1,120.00 Electronic Credits $ 0.020 7,804 $156.08 $780.40 Paper Debits $ 0.050 10,939 $546.95 $2,734.75 Electronic Debits $ 0.020 1,856 $37.12 $185.60 Reject Checks Paid (First 50 per month free; $0.60 per item for over 50 per Account $ - 317 $- Deposited Item $ 0.005 11,727 $58.64 $293.20 Returned Deposited Items $ 1.500 31 $46.50 $232.50 Returned Item Special Instruction $ 0.500 12 $6.00 $30.00 Redeposited Returned Item $ 2.500 15 $37.50 $187.50 Returned Item Fax Notification $ 5.500 33 $181.50 $907.50 Returned Item Image Copies $ 1.500 25 $37.50 $187.50 Item 18: Staff Report Pg. 7 Packet Pg. 192 of 857 3 Item 18 Attachment A - US Bank for General Banking Description of Services Proposed US Bank Fee Per Unit City Estimated Annual Unit Volume Services Total Estimated Total Estimated Annual Cost Five Years Cost Returned Item Image Viewed $ 0.500 14 $7.00 $35.00 Returned Item Image Advice View $ 1.000 3 $3.00 $15.00 Deposit Coverage $ 0.129 39,733 $5,125.56 $25,627.80 Account Inquiry $ 7.000 1 $7.00 $35.00 Subtotal: Depository Services $6,594.35 $32.971.75 Account Reconcilement Services Full/Positive Pay Maint $ 15.000 48 $720.00 $3,600.00 Full/Positive Pay per Item $ 0.030 10,929 $327.87 $1,639.35 SP Checks Returned $ 20.000 17 $340.00 $1,700.00 SP Issue/Cancel Input $ 0.100 99 $9.90 $49.50 SP Positive Pay Exceptions $ 0.700 113 $79.10 $395.50 SP Issue Maintenance Upload - per File (First 6 Files per Account $10 per Month; $0 for over 6 $ - 124 $480.00 $2,400.00 SP ARP Recon Report -per Item $ 0.010 34,944 $349.44 $1,747.20 SP ARP Recon Reports Maint $ 4.000 48 $192.00 $960.00 SP ARP Recon Outstanding Maint $ 10.000 48 $480.00 $2,400.00 SP ARP Recon Outstanding Item $ 0.010 6,283 $62.83 $314.15 SP ARP Daily Paid Monthly Main $ 10.000 48 $480.00 $2,400.00 SP ARP Daily Paid per Item $ 0.020 11,300 $226.00 $1,130.00 SP ARP Daily Outstanding Maint $ 10.000 48 $480.00 $2,400.00 SP ARP Daily Outstanding Item $ 0.010 128,769 $1,287.69 $6,438.45 Transmission Input (Maximum $40 per Account per Month) $ 5.000 247 $1,235.00 $6,175.00 Payee Positive Pay Maintenance $ 5.000 48 $240.00 $1,200.00 Payee Positive Pay -per Item $ 0.010 10,929 $109.29 $546.45 SP Payee Pos Pay Exceptions $ 0.500 431 $215.50 $1,077.50 File Level Encryption Mo Maint $ 25.000 12 $300.00 $1,500.00 Stale Date Maintenance $ 2.500 48 $120.00 $600.00 Subtotal: Account Reconcilement Services $7,734.62 $38,673.10 ACH Services ACH Originated Addenda Item $ 0.010 981 $9.81 $49.05 Federal / State ACH Item $ 0.020 56 $1.12 $5.60 ACH Received Item $ 0.020 5,998 $119.96 $599.80 ACH Received Addenda Item $ 0.010 10,922 $109.22 $546.10 ACH Block Mthly Maint -per Acct $ 1.000 24 $24.00 $120.00 ACH Return/NOC Faxed $ 5.000 478 $2,390.00 $11 950.00 ACH Batch Ad'ustment Request $ 7.500 2 $15.00 $75.00 SP ACH On -US Item $ 0.020 1,847 $36.94 $184.70 SP ACH Transit Item $ 0.020 161,989 $3,239.78 $16,198.90 SP ACH Process Run $ 5.000 332 $1,660.00 $8,300.00 SP ACH Return Item $ 1.000 333 $333.00 $1,665.00 SP Unauthorized ACH Ret per Item $ 7.000 20 $140.00 $700.00 SP ACH NOC Item $ 1.000 130 $130.00 $650.00 TOTAL GENERAL ACH SERVICES $8,208.83 $41,044.15 Wire Transfers Internal Wire Credit $ 3.000 111 $333.00 $1,665.00 Incoming Fedwire Ct $ 4.500 188 $846.00 $4,230.00 Wire Transfer Special Handling $ 10.000 3 $30.00 $150.00 SP Fedwire Non -Repetitive $ 4.000 69 $276.00 $1,380.00 SP Internal $ 3.500 208 $728.00 $3,640.00 Cancelled Outgoing Wire $ 4.000 1 $4.00 $20.00 Item 18: Staff Report Pg. 8 Packet Pg. 193 of 857 4 Item 18 Attachment A - US Bank for General Banking Description of Services Proposed US Bank Fee Per Unit City Estimated Annual Unit Volume Services Total Estimated Total Estimated Annual Cost Five Years Cost Subtotal: Wire Transfers $2,217.00 $11,085.00 Zero Balance Accounts Internal Wire Credit $ 3.000 25 $75.00 $375.00 Incoming Fedwire Ctp $ 4.500 22 $99.00 $495.00 SP Fedwire Non -Repetitive $ 4.000 5 $20.00 $100.00 SP Internal $ 3.500 6 $21.00 $105.00 ZBA Lead $ 2.000 7 $14.00 $70.00 ZBASubsidiary $ 1.000 21 $21.00 $105.00 Subtotal: Zero Balance Accounts $250.00 $1,250.00 Image Services SP Checks Pd per item Stored $ 0.035 7,292 $255.22 $1,276.10 Image Access Image Retrieved $ 257 $- SP Short Term Image Retrieved $ 0.050 13 $0.65 $3.25 Subtotal: Image Services $255.87 $1,279.35 Tax Services Tax Web Tax Payment $ 1.000 56 $56.00 $280.00 Subtotal: Tax Services $56.00 $280.00 Branch Coin/Currency Services Cash Deposited -per $100 $ 0.050 1 $0.05 $0.25 Branch Deposit Processing Fee $ 2.750 1 $2.75 $13.75 Subtotal: Branch Coin/Currency Services $2.80 $14.00 CVS Coin/Currency Cash Dep-per 100 -Extended $ 0.150 2,857 $428.55 $2,142.75 Cash Vault Deposit -Extended $ 1.250 1,037 $1,296.25 $6,481.25 Cash Dep Ad'ustment-Extended $ 8.250 2 $16.50 $82.50 Subtotal: CVS Coin/Currency $1,741.30 $8,706.50 Total $29.774.87 $148.874.35 Miscellaneous Information Earnings Credit Rate or Rate Methodology (%) (Bank Managed Rate 2.50% Negative Collected Rate % PRIME +4% Reserve Ad'ustment Rate S - Settlement Frequency (e.g., monthly, quarterly, etc.) The Cit determines the Settlement VARIES Loyalty Bonus (to be used within the first 12 months of contract) 20,000 E-Lockbox Recoupment Monthly (Deposit Coverage) $ 0.13 6.109 $788.06 $3,940.30 Account Maintenance $ 2.50 12 $30.00 $150.00 Debits Posted (Electronic Debit) $ 0.05 186 $9.30 $46.50 Lockbox Transmission Base ($150 per month 1st $ 150.00 12 $1,800.00 $9,000.00 Item 18: Staff Report Pg. 9 Packet Pg. 194 of 857 5 Item 18 Attachment A - US Bank for General Banking Description of Services Proposed US Bank Fee Per Unit City Estimated Annual Unit Volume Services Total Estimated Total Estimated Annual Cost Five Years Cost Lockbox Weekend Service Base (N/A) $ 12 $0.00 Lockbox Wholesale Base $ 50.00 12 $600.00 $3,000.00 Lockbox Remit Processed Express Mail (US Mail - $ 0.15 62 $252.00 $1,260.00 Lockbox Correspondence or Re'ects $ 0.25 133 $33.25 $166.25 Lockbox Standard Check Processed (Image) $ 0.02 5,516 $110.32 $551.60 Lockbox Document Scanned $ 0.10 78,758 $7,875.80 $39,379.00 Lockbox 7 Year Image Archive $ 0.10 79,758 $7,975.80 $39,879.00 Lockbox Value Added Keying $ 0.01 262,351 $2,098.8 10 494.05 Lockbox Pkg US Mail Delivery (Package Preparation - $ 85.00 122 $1,020.00 $5,100.00 Lockbox Online Report Per Item (SP Lockbox Detail $ 60.00 13 $720.00 $3,600.00 Wholetail Base (LBX Web Decisioning per Month) $ 100.00 12 $1,200.00 $6,000.00 WT Checks (Lbx OCR Item) $ 0.20 30,926 $6,185.20 $30,926.00 Total Payment Processed (Lbx OCR Item) $ 0.20 35,528 $7,105.60 $35,528.00 STD Item Processed Non Scan (Lbx per Item) $ 0.25 132 $33.00 $165.00 WT Multiple Payment $ 0.15 6,261 $939.15 $4,695.75 Partial Payment (Lbx per Item) $ 0.25 2.869 $717.25 $3,586.25 WT OCR Scanline Re'ects (Lbx Correspondent Only) $ 0.25 3,307 $826.75 $4,133.75 WT Mark Sense or Address Change (N/A - we do $ 35,528 $0.00 WT Transmission per Item (N/A part of per LBX $ 35,660 $0.00 Information Services On-line Search $ 1 $0.00 Previous Day Reporting $ 2.50 12 - Previous Day Reporting Items $ 0.01 1.341 $6.71 $33.55 Intraday Reporting Subscription $ 5.00 12 $60.00 $300.00 Intraday Reporting Items Reported $ 0.01 2,523 $25.23 $126.15 Alert Service - Email (Included above - External $ 135 $0.00 Subtotal: E-Lockbox (Service Group 2) $40,412.23 $202,061.15 TOTAL COSTS (SERVICE GROUP 1 AND 2 $70,187.10 $350,935.50 Item 18: Staff Report Pg. 10 Packet Pg. 195 of 857 6 Item 18 Attachment A - US Bank for General Banking Services Your Deposit Account Agreement General Terms & Conditions Electronic Transfers Funds Availability Effective May 10, 2021 Member FDIC bank® Item 18: Staff Report Pg. 11 Packet Pg. 196 of 857 7 Item 18 Frequently Asked Questions to Manage Your Account: Attachment A - US Bank for General Banking What common terms should I be aware of? Services Defmitions ........................................................................................................................................................................................................................................................4 What happens if my account becomes overdrawn? Liabilityfor Charges and Overdrafts.................................................................................................................................................................................................................6 TransactionPosting Order................................................................................................................................................................................................................................6 InsufficientFunds and Overdrafts.....................................................................................................................................................................................................................9 OverdraftHandling.........................................................................................................................................................................................................................................10 OverdraftProtection Plans..............................................................................................................................................................................................................................10 Will this Deposit Account Agreement ever change? Changesto Our Agreement with You.............................................................................................................................................................................................................17 How do I close my account? ClosingYour Account.....................................................................................................................................................................................................................................17 How can I expect to receive statements and other account communications? Statementsand Notices...................................................................................................................................................................................................................................17 How soon can I use my funds after making a deposit? Funds Availability: Your Ability to Withdraw Funds — All Accounts Determining the Availability of a Deposit — All Accounts...............................................................................................................................................................................23 ImmediateAvailability — All Accounts............................................................................................................................................................................................................23 LongerDelays May Apply..............................................................................................................................................................................................................................23 Retail Consumer, Business andCommercial Accounts........................................................................................................................................................................................................................23 WealthManagement Accounts........................................................................................................................................................................................................................23 Deposits at Automated Teller Machines — Retail Consumer, Business and Commercial Accounts.................................................................................................................24 Special Rules for New Accounts — Retail Consumer and Business Accounts.................................................................................................................................................24 CashingChecks..............................................................................................................................................................................................................................................24 OtherAccounts...............................................................................................................................................................................................................................................24 Item 18: Staff Report Pg. 12 Packet Pg. 197 of 857 1 8 Item 18 Table of Contents Attachment A - US Bank Terms Applicable to all Accounts for General Banking This is an Agreement...................................................................................................................................................................... Services ............................ 4 t. Definitions............................................................................................................................................................................................................................................................. 4 CellularPhone Contact Policy............................................................................................................................................................................................................................... 4 Monitoringand Recording Communications......................................................................................................................................................................................................... 4 Waiversand Precedents......................................................................................................................................................................................................................................... 4 ApplicableLaw...................................................................................................................................................................................................................................................... 4 Customer Identification Program Notice (USA PATRIOT Act)............................................................................................................................................................................. 5 Owner's Authority ................................................................................................................................................................................................................................................. 5 AuthorizedAccess and Power of Attorney............................................................................................................................................................................................................. 5 YouCannot Transfer an Account........................................................................................................................................................................................................................... 5 Changein Authorized Signers............................................................................................................................................................................................................................... 5 Adjustments........................................................................................................................................................................................................................................................... 6 Retentionof Documents........................................................................................................................................................................................................................................ 6 Liabilityfor Charges and Overdrafts...................................................................................................................................................................................................................... 6 TransactionPosting Order..................................................................................................................................................................................................................................... 6 Deposits................................................................................................................................................................................................................................................................. 6 ReturnedDeposited and Cashed Items.................................................................................................................................................................................................................. 7 Check21................................................................................................................................................................................................................................................................ 7 SubstituteChecks and Your Rights........................................................................................................................................................................................................................ 7 Copiesof Documents............................................................................................................................................................................................................................................. 7 NightDepository................................................................................................................................................................................................................................................... 7 Checks................................................................................................................................................................................................................................................................... 8 EndorsementStandards.......................................................................................................................................................................................................................................... 8 InsufficientFunds and Overdrafts.......................................................................................................................................................................................................................... 9 OverdraftHandling.............................................................................................................................................................................................................................................. 10 OverdraftProtection Plans................................................................................................................................................................................................................................... 10 RefusingPayment on Your Checks...................................................................................................................................................................................................................... 12 FundsTransfers................................................................................................................................................................................................................................................... 12 Withdrawal Rights, Ownership of Account, and Beneficiary Designation........................................................................................................................................................... 12 Pledges and Security Interests in Favor of Others................................................................................................................................................................................................ 14 Accrualof Interest............................................................................................................................................................................................................................................... 14 StopPayments..................................................................................................................................................................................................................................................... 15 DormantAccounts and Escheat........................................................................................................................................................................................................................... 15 SpecialProvisions for Third -Party Accounts....................................................................................................................................................................................................... 15 ConsumerElectronic Check Representment........................................................................................................................................................................................................ 16 CheckingAccounts and"Subaccounts................................................................................................................................................................................................................. 16 TelephoneTransfers............................................................................................................................................................................................................................................. 16 Real -Time Payments/Prohibition on Foreign Payments...................................................................................................................................................................................... 16 RequiredSignatures............................................................................................................................................................................................................................................. 17 Changesto Our Agreement with You.................................................................................................................................................................................................................. 17 ClosingYour Account.......................................................................................................................................................................................................................................... 17 Statementsand Notices........................................................................................................................................................................................................................................ 17 Returnof Cancelled Checks................................................................................................................................................................................................................................ 18 Checks, Checking Accounts and Savings Accounts with Draft Access................................................................................................................................................................ 18 SavingsAccounts................................................................................................................................................................................................................................................. 18 S.T.A.R.T. Program Agreement........................................................................................................................................................................................................................... 19 TimeDeposits...................................................................................................................................................................................................................................................... 20 Limitof Liability................................................................................................................................................................................................................................................. 20 ElectronicMessages and Agreements.................................................................................................................................................................................................................. 20 Levies, Garnishments and Other Legal Process................................................................................................................................................................................................... 20 ResolvingAccount Disputes and Adverse Claims............................................................................................................................................................................................... 21 IncreasedCosts to Maintain Your Account.......................................................................................................................................................................................................... 21 ConsumerReport Disputes.................................................................................................................................................................................................................................. 21 AccountInformation............................................................................................................................................................................................................................................ 21 Setoff................................................................................................................................................................................................................................................................... 21 SecurityInterest in Accounts............................................................................................................................................................................................................................... 21 Security................................................................................................................................................................................................................................................................ 21 Resolutionof Disputes by Arbitration.................................................................................................................................................................................................................. 22 Attorney's Fees.................................................................................................................................................................................................................................................... 22 Item 18: Staff Report Pg. 13 l Packet Pg. 198 of 857j 2 9 Item 18 Funds Availability: Your Ability to Withdraw Funds — All Accounts Attachment A - US Bank Determining the Availability of a Deposit — All Accounts.............................................................................................................. ...........................23 for General Banking ImmediateAvailability — All Accounts............................................................................................................................................ ...........................23 LongerDelays May Apply................................................................................................................................................................ Services ...........................23 Retail Consumer, Business andCommercial Accounts..............................................................................................................................................................................................................................23 WealthManagement Accounts..............................................................................................................................................................................................................................23 Deposits at Automated Teller Machines — Retail Consumer, Business and Commercial Accounts.......................................................................................................................24 Special Rules for New Accounts — Retail Consumer and Business Accounts.......................................................................................................................................................24 CashingChecks....................................................................................................................................................................................................................................................24 OtherAccounts.....................................................................................................................................................................................................................................................24 Electronic Banking Agreement for Consumer Customers Typesof Transactions...........................................................................................................................................................................................................................................25 Limitson Transfers...............................................................................................................................................................................................................................................26 Fees......................................................................................................................................................................................................................................................................27 Using Your Card for International Transactions....................................................................................................................................................................................................27 AdvisoryAgainst Illegal Use................................................................................................................................................................................................................................27 Documentation......................................................................................................................................................................................................................................................27 PreauthorizedPayments........................................................................................................................................................................................................................................27 OurLiability.........................................................................................................................................................................................................................................................27 Unauthorized Transactions and Lost or Stolen Cards...........................................................................................................................................................................................28 Consumer Liability for Unauthorized Transfers....................................................................................................................................................................................................28 MinnesotaLiability Disclosure.............................................................................................................................................................................................................................28 BusinessDays.......................................................................................................................................................................................................................................................28 Confidentiality......................................................................................................................................................................................................................................................28 ErrorResolution Notice........................................................................................................................................................................................................................................28 Notice of ATM/Night Deposit Facility User Precautions......................................................................................................................................................................................29 Electronic Banking Agreement for Business Customers AccountAccess....................................................................................................................................................................................................................................................29 Limitson Transfers...............................................................................................................................................................................................................................................29 Fees......................................................................................................................................................................................................................................................................30 Using Your Card for International Transactions....................................................................................................................................................................................................30 BalanceRequirements..........................................................................................................................................................................................................................................31 Unauthorized Transactions and Lost or Stolen Cards and Security .......................................................................................................................................................................31 Item 18: Staff Report Pg. 14 Packet Pg. 199 of 857 3 10 Item 18 TERMS APPLICABLE TO ALL ACCOUNTS Attachment A - US Bank THIS IS AN AGREEMENT for General Banking Welcome to U.S. Bank and thank you for opening an account with us. This Agreement provides the general rules that app! Services ve with U.S. Bank ("us") described herein. Additional rules will be provided in: 1. disclosures we give you when you open your account for example our Consumer Pricing Information and Business Pricing Information disclosure(s) and other fee disclosures (Both can be obtained by stopping in a U.S. Bank branch or for the Consumer Pricing Information only, call 800.872.2657 to request a copy); 2. disclosures that are applicable to additional products and services (for example the Digital Services Agreement); 3. periodic statements; 4. user guides; 5. Consumer Privacy Pledge brochure; 6. any appropriate means such as direct mail and notices on or with your statement, including any statements or notices delivered electronically; and 7. disclosures we give you about ATM and Debit Card Overdraft Coverage (applicable to certain consumer accounts, refer to the Insufficient Funds and Overdrafts section on page 9 for details). These things, together, are an agreement between you and U.S. Bank. Please read this carefully and retain it for future reference. This brochure is revised periodically, so it may include changes from earlier versions. By providing a written or electronic signature on a signature card or other agreement or contract, opening, or continuing to hold an account with us, you agree to the most recent version of this Agreement, which is available to you at your local U.S. Bank branch, at www.usbank.com, or by calling U.S. Bank 24 -Hour Banking at a number listed on the last page of this booklet. This Agreement represents the sole and exclusive agreement between you and us regarding the subject matter described herein and supersedes all previous and contemporaneous oral agreements and understandings. If any terms of your signature card, resolution, or certificate of authority are inconsistent with the terms of this Agreement, the terms of this Agreement will control. Any other variations to this Agreement must be acknowledged by us in writing. If you have any questions, please call us. Our most commonly used phone numbers are printed on the back of this booklet. DEFINITIONS The following definitions apply in this Agreement except to the extent any term is separately defined for purposes of a specific section. • The words "we," "our," and "us" mean U.S. Bank National Association ("U.S. Bank"). We are a national bank. We are owned by U.S. Bancorp. • U.S. Bancorp and U.S. Bank own or control other companies, directly and indirectly. The members of this family of companies are our "affiliates." The words "you" and "your" mean each account owner and anyone else with authority to deposit, withdraw, or exercise control over an account. If there is more than one owner, then these words mean each account owner separately, and all account owners jointly. • The term "account" means any savings, transaction (for example, checking, NOW Account), and time deposit (for example, certificate of deposit or CD) account or other type of account you have with us, wherever held or maintained. • An "owner" is one who has the power to deal with an account in his, her or its own name. An "agent," in contrast, is one whose power to withdraw from an account comes from, or is on behalf of, the owners. Authorized signers, designated corporate officers, trustees, attorneys -in -fact, and convenience signers are examples of agents. • Entities such as corporations, limited liability companies, partnerships, estates, conservatorships, and trusts are not natural persons, and can only act through agents. In such cases, it is the "entity" that is the owner. • "Personal accounts" are consumer accounts in the names of natural persons (individuals). They are to be distinguished from "non -personal accounts" which are accounts in the name of businesses, partnerships, trusts and other entities. • An "account cycle" or "statement cycle" represents the period of time when your statement starts and ends. It's approximately 30 days long but doesn't necessarily align with the beginning and end of the month and won't end on a weekend or holiday. Except where it is clearly inappropriate, words and phrases used in this document should be interpreted so the singular includes the plural and the plural includes the singular. CELLULAR PHONE CONTACT POLICY By providing us with a telephone number for a cellular phone or other wireless device, including a number that you later convert to a cellular number, you are expressly consenting to receiving communications —including but not limited to prerecorded or artificial voice message calls, text messages, and calls made by an automatic telephone dialing system —from us and our affiliates and agents at that number. This express consent applies to each such telephone number that you provide to us now or in the future and permits such calls for non -marketing purposes. Calls and messages may incur access fees from your cellular provider. MONITORING AND RECORDING COMMUNICATIONS You acknowledge and agree that we, or anyone acting on our behalf, may monitor and/or record any communication between you and us, or anyone acting on our behalf, for quality control and other purposes. You also acknowledge and agree that this monitoring or recording may be done without any further notice to you. The communication that may be monitored or recorded includes telephone calls, cellular or mobile phone calls, electronic mail messages, text messages, instant or live chat, or any other communications in any form. WAIVERS AND PRECEDENTS Our Agreement with you gives us rights and duties. If we don't take advantage of all our rights all the time that does not mean we lose them. For example: • If we make funds available to you for withdrawal ahead of schedule, that does not mean we have to do it again. • If we pay a check that is more than your account balance, that does not mean we have to do it again. APPLICABLE LAW Unless otherwise stated herein, your account and this Agreement will be governed by federal law and, unless superseded by federal law, by the law of the state in which your account is located. If you opened your account in person, it is located in the state in which you opened it. If you opened your account online, in the U.S. Bank Mobile App or by telephone and you reside in a state in which we have a branch at that time (or reside within 50 miles of a branch), it is located in the state in which the branch is located. If you reside anywhere else, then your Account is located in Minnesota. Item 18: Staff Report Pg. 15 Packet Pg. 200 of 857 4 11 Item 18 CUSTOMER IDENTIFICATION PROGRAM NOTICE (USA PATRIOT ACT) Attachment A - US Bank To help the government fight the funding of terrorism and money laundering activities, federal law requires all financial ify, and record information that identifies each person who opens an account. for General Banking What this means for you Services When you open an account, we will ask for your name, address, date of birth, and other information that will allow us to identify you. We may also ask to see other identifying documents like a driver's license or documents showing your existence as a legal entity. Existing customers Even if you have been a customer of ours for many years, we may ask you to provide this kind of information and documentation because we may not have collected it from you in the past or we may need to update our records. Failure to Provide Information If, for any reason, any owner is unable to provide the information necessary to verify their identity, their account(s) may be blocked or closed, which may result in additional fees assessed to the account(s). OWNER'S AUTHORITY Each owner of a personal account, or an agent for a non -personal account, acting alone, has the power to perform all the transactions available to the account. For example, each owner or agent can: 1. make withdrawals by whatever means are available for the account; 2. make deposits by whatever means are allowed for the account; 3. obtain and release information about the account; 4. sign or authenticate any document in connection with the account (for example, an owner can endorse a check payable to a co-owner for deposit to a joint account); 5. give rights to others to access the account (for example, any owner could grant a power of attorney to have access to the account); and 6. close the account. In addition, if you share ownership of an account with someone else (for example, you have a joint or multi -party account), then each of you can endorse items for deposit to the account on behalf of another owner. If there is shared ownership of an account, it is the intention of all owners that each of you has complete and separate access and withdrawal rights to all the funds in the account irrespective of who had deposited the funds in the account. AUTHORIZED ACCESS AND POWER OF ATTORNEY Each owner of your account is independently permitted to authorize someone else to access your account. For example, the following persons will have access to your account: 1. Any person listed on a signature card, resolution, or certificate of authority as being authorized to make withdrawals or transfers, by check or otherwise, from your account; 2. Any person that you authorize to make withdrawals or transfers from the account by whatever means the account allows (for example, pre -authorized withdrawals, wire transfers, ATM card, or debit card transactions); 3. Any person you give rights to act on your behalf, such as a power of attorney; 4. Any person to whom you make your checkbook or your checking account number available for purposes of transacting business on the account. We discourage this type of "authorization" because it is possible that we will detect such transactions and treat them as unauthorized. If you give any such person "authority," we are not responsible whether we honor the transactions or dishonor them; and 5. Any person to whom you make your ATM card or debit card personal identification number (PIN) available. Although we discourage this practice, by allowing this type of "authorization," the person to whom you make your personal identification number (PIN) available may be able to access all of your accounts held with us by using the telephone, ATM, online or other banking access channels. If you give any person such "authority," we are not responsible for actions they take with respect to your accounts. We will use the word "agent" to mean any person who you authorize to act on your behalf, whether by following the process we require (for example, by designating an authorized signer on a signature card), or on your own (for example, by creating a power of attorney). If you name such an agent: 1. we may require that you use forms we approve and require each owner to sign the form to be effective; 2. the powers you give to your agent, and any limitations on those powers, are between you and your agent, even if we have express written notice of those powers. You understand and agree that we have no duty or responsibility to monitor the acts of your agent or ensure that the acts of your agent are for your benefit. For example, if you only give your agent authority to pay your bills and your agent exceeds that authority, we are not responsible for that breach of authority; 3. you agree not to hold us responsible for any loss or damage you incur as a result of us following instructions given to us by your agent; 4. the owners of the account are responsible to us for any actions of your agent, regardless of whether those actions exceed the authority given or whether the agent is appointed by all the owners or less than all the owners; 5. the agency will end if the owner dies and we have actual knowledge of that death, or if there is more than one owner, the agency will end after the death of the last owner and we have actual knowledge of that death and, in either case, once we've had reasonable opportunity to act on it; 6. the agency will end after the owner notifies us in writing to end the agency and we have had a reasonable opportunity to act on it; and 7. if you authorize any third person, such as a bookkeeping service, an employee, or agent of yours to retain possession of or prepare items, you agree to assume full responsibility for any errors or wrongdoing performed or caused by such third person or any of its agents or employees if we should pay any such item. YOU CANNOT TRANSFER AN ACCOUNT You may not transfer an account to someone else without our express written permission. This does not limit your right to access your account by any permissible means. CHANGE IN AUTHORIZED SIGNERS Any owner, including one of the owners of a joint account, may add owners or authorized signers to an account; however, we have the right to require the signature of all owners to make the change. Only under special circumstances and subject to prior approval by us may an owner remove another owner or authorized signer from an account. No change in owners or authorized signers is effective -A w. ^e w and act on it. Item 18: Staff Report Pg. 16 Packet Pg. 201 of 857 5 12 ADJUSTMENTS If we (or you, or you and us together) make an error on your account, • the dollar amount of your check is paid for the incorrect amount; • a deposit is added incorrectly; • we apply a deposit to the wrong account; Item 18 we can fix the error without first m fnoti you. F Attachment A - US Bank Y� g for General Banking Services we can fix the error without any special notice to you, though such a correction will normally appear on your statement if the error and the correction occur on different business days. For accounts coded as Consumer and Business accounts, we may not adjust for insignificant errors unless you request it. For all other account types including Corporate and Commercial accounts, we may not adjust for deposit errors of $50.00 or less unless we have agreed with you to a lower adjustment amount. RETENTION OF DOCUMENTS You should retain your copy of deposit receipts and other documents associated with your deposit(s). Should you claim that a deposit was incorrectly credited, we may request a copy of your receipt or other documents associated with your deposits. LIABILITY FOR CHARGES AND OVERDRAFTS All account owner(s) are responsible to repay to us any overdraft amount and any overdraft fees charged to an account, no matter which owner caused it or why. That repayment is due immediately, and we will take it from your next deposit or whenever funds become available in your account. If there is more than one owner, each owner is separately, and all owners are jointly, responsible for an overdraft and any account fees. (This means we can collect the total from any owner(s), on any of the owner(s) accounts, but we won't collect it more than once). For more information on overdrafts please refer to the section titled Insufficient Funds and Overdrafts. We list the charges that you may incur on your account in separate pricing information disclosures or agreements for your account. TRANSACTION POSTING ORDER We reserve the right to decide the order of the items we will pay and which items will be returned (if any). Our posting order may not be the same as the order in which you conducted a transaction and could result in overdraft fees, if you do not have available funds at the time the item is paid. Generally, we post the following three transaction types after the close of each business day in the following order: 1. Deposits we receive before the daily cutoff time will be posted before any withdrawals. (Refer to our Cutoff Time and/or Funds Availability section for cutoff time description.) 2. Your non -check withdrawals will be posted in date/time order, based on the date and time associated with each transaction. A date and time (if one is available) will be assigned to each transaction based on one of the following: (1) when the transaction was preauthorized (for example a debit card or ATM transaction was approved); or (2) when the transaction was processed by U.S. Bank (for example an ACH, or bill pay transaction for which there is no pre -authorization). If a date and time is not available, these transactions are posted to your account after all transactions with a valid date and time or check number are complete, and posted to your account in order of amount, starting with the lowest transaction amount first (frequently referred to as low -to -high). 3. Your checks will be posted in check number order, starting with the lowest number. (For example: on Monday we may receive and post check # 107; on Tuesday we may receive check # 102 and # 105, and those would be posted on Tuesday in the order of lowest check number (e.g., # 102) posting first). DEPOSITS When you make a non -cash deposit to your account, we give you credit for that deposit, but that credit is provisional (temporary). If the deposit needs to be collected from another financial institution, we must be paid before the credit becomes final. After a credit is final it may still be reversed if the funds cannot be collected. See the sections titled Returned Deposited and Cashed Items and Funds Availability. All deposit receipts are issued subject to our count and verification of the items deposited. You should retain your copy of deposit receipts and other documents associated with your deposit(s). Should you claim that a deposit was incorrectly credited, we may request a copy of your receipt or other documents associated with your deposit. Foreign Currency: Deposits received in a foreign currency, whether by check, wire -transfer, or otherwise, must be converted to U.S. dollars prior to being deposited into your account. U.S. Bank will convert your funds at an exchange rate established by U.S. Bank on the business day when such exchange is processed. Currency exchange rates are determined in our sole discretion based on factors such as market conditions and risk, economic and business factors. The exchange rate is an all -in rate which includes our profit, fees, costs, and charges. Currency exchange rates will be applied to these deposits without notice to you. You agree to this procedure and accept our determination of the currency exchange rates. Foreign currency conversions can take time and exchange rates fluctuate at times significantly. You acknowledge and accept all risk that may result from such fluctuations. Your transaction is a retail transaction. Retail foreign exchange conversion rates are different from the wholesale exchange rates for large transactions between two banks as may be reported in The Wall Street Journal or elsewhere. Exchange rates offered by other banks or shown at other sources (including online sources) may be different from our exchange rates. The exchange rate you are offered may be different from, and likely inferior to, the rate paid by U.S. Bank to acquire the underlying currency. The exchange rate may also be different from a rate offered by U.S. Bank to a different customer, at a different time, for a different transaction amount, or in a different payment channel (checks, wire -transfers, etc.). U.S. Bank sometimes relies on other financial institutions in the conversion process. In this event, the conversion will be in accordance with the policies and procedures of that bank and the funds will be converted at the exchange rate determined by that bank. Any fees or charges assessed by that bank will be passed on to you. Your final credit will be adjusted to reflect that final exchange rate less all fees or charges. Foreign Checks: Checks and other items drawn off a foreign financial institution, whether negotiable in a foreign currency or in U.S. dollars may require special funds collection processing by us. As a result, funds availability may be delayed. If you deposit such an item, you agree that we may delay funds availability at our discretion until we are satisfied that we have received final payment of the item. Deposits by Mail: If you make a deposit by mail, we have to receive it and have time to record it before it becomes effective. (See our Funds Availability section.) Cutoff Time: A deposit made after our daily cutoff time on a business day, or on a day we are not open for all forms of business, will be considered deposited on the next full business day. (Refer to our Funds Availability section for cutoff time description.) The cutoff time applies to all accounts (savings, certificate of deposits, payments, etc.), not just checking accounts. Endorsement: If you make a deposit to an account and you fail to endorse the item, we may add an endorsement on any item and you will be responsible for the item as if you endorsed it yourself. We can refuse to accept any item or other type of deposit, for any reason, or no reason, or impose conditions on a deposit. For example, we can treat a deposit as an "inquiry" or take an item for "collection" instead of deposit. We may also decline to accept a large cash deposit or require you to make such a deposit at a location and time of our choosing. Item 18: Staff Report Pg. 17 Packet Pg. 202 of 857 13 Item 18 RETURNED DEPOSITED AND CASHED ITEMS Attachment A - US Bank The funds you deposit to your account are subject to normal collection processes even after we make the funds availab i.e., the check has "cleared"). If we do not collect the funds, or we need to return the funds, your deposit will be reversed and become your for General Banking items are charged back to your account and a Return Item Advice notice is mailed to the primary account address on file. Services For example: • The deposit amount of the check is recorded incorrectly to your account. The person who wrote the check catches the error, and reports it to their bank, who in turn reports it to us. We would reverse the incorrect portion of the deposit and correct the mistake. • A check you deposit has a forged endorsement. The person who wrote the check notices the forgery and reports it to their bank, who reports it to us. We would reverse the deposit and collection of the check would become your responsibility. • This also applies to checks we might cash for you that you don't deposit. For example, if you bring a check to us and take cash back from a deposit, or we simply cash the check and if that check "bounces" (is returned to us unpaid), we can take the money from your account to reimburse us for the check and you will have to collect it through other channels. There will be one fee posted for the sum of all Returned Deposited Item or Cashed Check fees returned within a single transaction as well as applicable overdraft fees if sufficient funds are not in your account to cover your items. CHECK 21 Check processing is getting faster as banks begin to process checks "electronically." We are required by law to provide the notice in the following section ("SUBSTITUTE CHECKS AND YOUR RIGHTS"), which explains the differences between your original check (which might not be returned) and a substitute check, and your rights in the event the substitute check causes a loss that would have been avoided if the original check was still available. SUBSTITUTE CHECKS AND YOUR RIGHTS What is a substitute check? To make check processing faster, federal law permits banks to replace original checks with "substitute checks". These checks are similar in size to original checks with a slightly reduced image of the front and back of the original check. The front of the substitute check states: "This is a legal copy of your check. You can use it the same way you would use the original check." You may use the substitute check as proof of payment just like the original check. Some or all of the checks that are returned to you from us may be substitute checks. This notice describes your rights you have when you receive substitute checks from us. The rights in this notice do not apply to original checks, photocopies of original checks, or to electronic debits to your account. However, you have rights under other laws with respect to those transactions. What are my rights regarding substitute checks? In certain cases, federal law provides a special procedure that allows you to request a refund for losses you suffer if a substitute check is posted to your account (for example, if you think that we withdrew the wrong amount from your account or that we withdrew money from your account more than once for the same check). The losses you may attempt to recover under this procedure may include the amount that was withdrawn from your account and fees that were charged as a result of the withdrawal (for example, overdraft fees). The amount of your refund under this procedure is limited to the amount of your loss or the amount of the substitute check, whichever is less. You are also entitled to interest on the amount of your refund if your account is an interest -bearing account. If your loss exceeds the amount of the substitute check, you may be able to recover additional amounts under other law. If you use this procedure, you may receive up to $2,500.00 of your refund (plus interest, if your account earns interest) within ten business days after we received your claim and the remainder of your refund (plus interest, if your account earns interest) not later than 45 calendar days after we received your claim. We may reverse the refund (including any interest on the refund) if we later are able to demonstrate that the substitute check was correctly posted to your account How do I make a claim for a refund? If you believe that you have suffered a loss relating to a substitute check that you received and that was posted to your account, please call U.S. Bank 24 -Hour Banking (see last page for phone numbers) or write to us at U.S. Bank, 60 Livingston Ave, EP-MN-WS5D, St. Paul, MN 55107. You must contact us within 40 calendar days of the date that we mailed (or otherwise delivered by a means to which you agreed) the substitute check in question or the account statement showing that the substitute check was posted to your account, whichever is later. We will extend this time period if you were not able to make a timely claim because of extenuating circumstances. Your claim must include: 1. a description of why you have suffered a loss (for example, you think the amount withdrawn was incorrect); 2. an estimate of the amount of your loss; 3. an explanation of why the substitute check you received is insufficient to confirm that you suffered a loss; and 4. a copy of the substitute check or identifying information such as the check number and the name of the person to whom you wrote the check. COPIES OF DOCUMENTS We do not typically keep the original paper documents (like deposit slips) associated with your account for a long time. We image most of the documents that end up with us and destroy the paper originals. Electronic images is one type of media that is used, but as technology changes, there are and will be other imaging techniques. You agree that such images will be sufficient for all purposes. See the section titled CHECK 21. To facilitate check imaging and electronic check collection, it is important that you take care with the transactions you create on paper. When completing a check, you must: 1. write clearly; 2. use black or dark blue ink in the date, pay to, amount, and signature fields; and 3. use only the space provided for your part of a transaction. (See the section on ENDORSEMENT STANDARDS.) You agree to reimburse us for any losses and costs we incur as a result of a poor check image caused by a deficiency in the written check, whether due to your failure to follow these guidelines or otherwise. You also agree to reimburse us for any losses and costs we incur as a result of a poor check image caused by a deficiency in the written check that you accepted and deposited as the payee. NIGHT DEPOSITORY If you arrange for night depository services, you must comply with the following two rules and also comply with the rules in any separate night depository agreement. 1. Use of Containers. Each deposit placed in the depository must be contained in a sealed envelope, or in a bag or pouch that has been approved or supplied by us. Deposits are only processed to accounts Item 18: Staff Report Pg. 18 Packet Pg. 203 of 857 7 14 Item 18 2. Care. You must take appropriate care when you put the container in our night depository or other facility to mak hived by us. Attachment A - US Bank Our responsibility for the security of the container and the drawer or facility is to use reasonable care. This m rally liable for just any loss, only for losses that result from our own negligence, only to the extent we caused a loss, and reduced for General Banking any loss. In legal terms, we are a "bailee" until the point: Services • when we open the container and inventory its contents (if that is what we are asked to do); or • when you sign the receipt for or take custody of the container (if we do not open the container). CHECKS Post -Dated Checks. We are not responsible to you if we pay a check before its date, even if we have noticed that it is post-dated. If we, at our option, refuse to pay a check because it is presented before its date, you will have to pay, if applicable, the fee we charge for an overdraft. If you want to be sure we do not cash it before its date, you must stop its payment by following our rules for stop payments in the STOP PAYMENTS section of this Agreement and follow our procedures for revoking a stop payment request. Stale -Dated Checks. A "stale -dated" check is one that is brought to us for payment more than six months after its date. We may pay, or refuse to pay, a check brought to us ("presented") more than six months after its date. (The general rule is we will pay the check or may return the check for insufficient funds.) In addition, the check would be subject to an overdraft. If you do not want us to pay a stale -dated check, you must place a stop payment order on the check. Check Legends. We are not required to honor any legends or memos you put on your checks, even if we are aware of them. By a "legend" or "memo" we mean a message, such as "not valid for more than $50.00" or "do not pay more than ten days after date" or "paid in full". Check Forms. Checks are sorted and copied by high speed equipment. If you don't buy your checks through us, you must get them approved by us or we will not be responsible if your checks do not process correctly. See the section titled COPIES OF DOCUMENTS for additional information on inks and related issues. Deposits of Checks at ATMs We reserve the right to refuse to credit your account for ATM deposits of the following items. If an item is refused the item or a substitute check may be returned via mail to the primary account address. 1. All the check payees are not listed on the account; 2. Checks payable to a business and the business name is not listed on the account. (Checks payable to a business must be deposited into an account that includes the name of the business on the associated account); 3. Improperly endorsed (for example, different endorser than payee); 4. Restrictive wording (on the deposited item); 5. Post-dated (greater than one day after the ATM network business day); 6. No date or incomplete date; 7. Altered in any way; 8. Photocopy of item; 9. Not signed by maker; 10. Traveler's check with different counter signature; 11. Drawn on a foreign bank; 12. Missing the numeric amount and/or the written amount; 13. Numeric amount and written amount do not match; 14. No payee listed; 15. Federal tax refund checks not endorsed by payee or payees; and 16. Any other instrument which is not a check or negotiable instrument. ENDORSEMENT STANDARDS The payee of a check (the person to whom a check is payable) must sign (endorse) the check on the back in the space shown in the picture. If a check is transferred to someone else before it gets deposited or cashed, that person (the transferee) may also be required to sign the check. Every bank that handles a check on its way to the bank that is asked to pay it also has to identify itself on the back of the check. The space for those banks is to the right of the space shown for the payee and other "holders" (see picture below). When you endorse a check, you must: 1. clearly sign your name; 2. use black or dark blue ink if possible; 3. never use a faint color, like red, pink or any pastel, or a gel ink (these do not copy well); 4. sign near the top of the space provided, or just below any other signature in that space; 5. stay out of the area below the space for endorsers (most check forms have a line separating the endorsement area); and 6. keep any stamp within the area set aside for handwritten signatures. The picture on this page shows you the correct endorsement area. YOUR ENDORSEMENT MUST F_ BE WITHIN THIS AREA Name 7654 Address, City, State 20 Pay to the order of $ dollars Bank Name and Location Memo -123456789- 7654 1 1/2" I Keep your endorsement out of this area. FRONT OF CHECK t BACK OF CHECK TRAILING EDGE Item 18: Staff Report Pg. 19 Packet Pg. 204 of 857 15 Item 18 Why is this important? If your endorsement of a check, or the endorsement of someone from whom you took the check, either: Attachment A - US Bank 1. causes a delay in a necessary notice to someone else, or for General Banking 2. prevents someone from being identified quickly enough (and therefore cannot get notice or cannot get it in time). Services You will be responsible for the check and the loss that occurs because it is not paid. It will then be up to you to try and recover from someone else who might be liable. INSUFFICIENT FUNDS AND OVERDRAFTS "Account Balance" means the funds in your account, including deposits and withdrawals made to date. Not all your transactions will be immediately reflected. As a result, only part of this balance may be available for withdrawal. "Available Balance" means the amount of money that can be withdrawn at a point in time. The Available Balance will be less than the Account Balance when there are pending transactions such as: • Funds held from deposits: These funds have been deposited but are not yet fully available for withdrawal or transfer. Once these funds are available, they will be reflected in the Available Balance. • Funds held for debit card authorizations: This reflects merchant -authorized requests for payment, when the final charge has not been submitted by the merchant. Debit card authorizations will be reflected as pending transactions from the time we receive the authorization until the merchant presents the item for payment, a completion message is received, or three business days, whichever occurs first. If the debit card transaction has not been presented for payment after three business days, it will be removed from your pending transactions and your Available Balance will no longer be reduced by the authorization amount. Once the final charges have been received and processed, they will be reflected in the Available Balance. • Any other holds on funds in your account. Note: The Available Balance does not reflect every transaction you have initiated or previously authorized. Items that may not be reflected in your Available Balance include, but are not limited to: • Outstanding checks and authorized automatic withdrawals (such as recurring debit card transactions, transfers, and ACH transactions that we have not received for payment or processing). • The final amount of a debit card purchase. For example, we may authorize a purchase amount from a restaurant or a gas station, but the authorized amount may be different from the final charge. Once a final charge has been received and processed, it will be reflected in the Available Balance. (Please refer to "Debit Card Transactions" subsection for more information about how these situations are handled.) • Scheduled bill payments that have not yet been processed. • Debit card transactions that have been previously authorized but not sent to us for payment from your account where we have released the transaction authorization hold and the transaction is sent for payment from your account at a later date. "Insufficient funds" means you do not have enough available funds in your account to pay the withdrawals you are attempting from that account. Having insufficient funds in your account could lead to returned items, which refers to any withdrawal or transfer that we return because it exceeds your Available Balance on a given day. Examples of withdrawals that could be returned may include any checks, ACH transactions, online or mobile bill payments, or any other debit from your account where we return it because it is for more than the Available Balance you have in your account at the time the transaction is presented to your account. We reserve the right to pay an insufficient funds withdrawal and overdraw your account, which may result in an Overdraft Paid Fee, or return the insufficient funds withdrawal, which may result in an Overdraft Returned Fee. Even if we've paid insufficient funds items before, we are not required to do it in the future. "Overdraft" means a transaction has caused the Available Balance on an account to become a negative number. An overdraft can happen, for example, • by writing a check without enough money in your checking account to pay the check, and we pay the item; • by making a withdrawal from your account that exceeds your Available Balance; • by using your U.S. Bank Debit Card for payment without enough money in your checking account to cover the amount authorized or the amount paid to the merchant. If any debit card transaction results in a negative Available Balance at the time it is presented for payment, even if your Available Balance was positive at the time the debit card transaction was authorized, you may be charged an Overdraft Paid Fee; • by making a deposit, withdrawing money based on the credit received from that deposit, and then having that deposit reversed because the deposited item is later returned to us unpaid; • by withdrawing money from your account and not having enough money left to pay any related charges posted to the account; • when funds are credited to your account in error and you use the funds, and the reversal of the credit results in an overdraft; or • when fees such as monthly maintenance fees are charged, and you do not have sufficient funds to cover. Our Options: You do not have the right to withdraw funds that exceed the Available Balance on your account. When an item of yours overdraws an account, we can either pay or return the item. You cannot choose which items we pay or return, except as identified in your selection of "Overdraft Handling" (as identified later). If we get a batch, or multiple batches, of such items in a day (for example, checks, ATM purchase transactions, and debit card purchase transactions typically come in batches), and if one, some or all of them would overdraw the account if paid, we will post items in accordance with the "Transaction Posting Order" section listed within this Agreement. This may result in processing larger dollar items before smaller dollar items, even though this would have the effect of reducing your Available Balance more quickly. Our Fees: We charge an Overdraft Returned Fee for each withdrawal (e.g., in -person, ATM, automatic payment, or other paper or electronic withdrawal transaction) we return because it exceeds your Available Balance on a given day. We charge an Overdraft Paid Fee for each item or transaction we pay that causes the Available Balance to become negative or occurs while the Available Balance is negative on the checking account. Any Overdraft Returned Fees or Overdraft Paid Fees are deducted from your account on the next business day. We may charge you an Extended Overdraft Fee if your Available Balance remains negative for eight consecutive days; the fee will be charged on that day or the next business day, as applicable. See the current pricing information disclosure for information on fees and how fees will be assessed. The Extended Overdraft Fee may be suspended during a fraud investigation or dispute. Once the investigation or dispute is resolved, an Extended Overdraft Fee may be assessed if the account remains negative. If you want to avoid the inconvenience and extra expense of overdraft fees, refer to the section titled "Overdraft Protection Plans" on page 10 for information. There are some circumstances that can take your account into a negative balance where we will not charge a fee, for example: • If certain fees such as your monthly maintenance fee are the only items that resulted in the negative balance. • If the negative Available Balance is less than our threshold. See your Consumer Pricing or Business Pricing Information disclosure for specific information. (Both can be obtained by stopping in a U.S. Bank branch or for the Consumer Pricing Information only, call 800.872.2657 to request a copy.) Your responsibilities for overdrafts: If you have an overdraft on your account, you must deposit enough money into your account to pay both the overdraft amount and the fees we charge, and you must do so immediately. If you share ownership of your account with someone else, you are responsible to us for the overdraft, whether or not you personally caused the overdraft or benefited from it. Item 18: Staff Report Pg. 20 Packet Pg. 205 of 857 16 Item 18 OVERDRAFT HANDLING Attachment A - US Bank Consumer Checking and Money Market Accounts: Most U.S. Bank Consumer checking and money market accounts come with Standard Overdraft Coverage. Under Standail for General Banking will authorize and pay overdrafts for these types of transactions at our discretion: 1. Services • Checks and other transactions using your checking account number • Automatic bill payments • Recurring debit card transactions, for example setting up your debit card to automatically pay a monthly gym membership. We rely on the merchant to inform us if a debit card transaction is a one-time or a recurring transaction. If we pay these transactions into overdraft, we may charge an Overdraft Paid Fee. If we do not pay these transactions, we may charge an Overdraft Returned Fee. In addition to Standard Overdraft Coverage, you have the following options outlined below. ATM and Debit Card Overdraft Coverage: Upon opening your U.S. Bank Consumer checking OR money market account, you will receive a notice advising you of your choice to say `Yes' or `No' to ATM and Debit Card Overdraft Coverage. If you say 'Yes' If you choose to say `Yes', you allow U.S. Bank to authorize and pay ATM and everyday debit card transactions (purchases made with your debit card on a day-to-day basis) that may cause the Available Balance in your account to become negative. If this happens we may charge an Overdraft Paid Fee. If you say 'No' If you choose to say 'No', you do not allow U.S. Bank to authorize and pay ATM and everyday debit card transactions into a negative Available Balance. If we do not authorize and pay an overdraft your transaction will be declined and you will not be charged a fee. In limited circumstances, your ATM or everyday debit card transaction may be processed, resulting in your Available Balance becoming negative. These situations may include, but are not limited to: • A debit card transaction is processed for more than the preauthorized amount. For example, we may authorize a purchase amount from a restaurant or a gas station, but the authorized amount may differ from the final charge (Please refer to "Debit Card Transactions" subsection for more information about how these situations are handled.); • A debit card transaction that obtained an authorization based on a sufficient Available Balance in your account, but is sent to us for payment later when your Available Balance is no longer sufficient to cover the item; In these situations, if you have chosen 'No' you will not be charged an Overdraft Paid Fee. If you wish to discuss your options or change your account election at any time, contact a local U.S. Bank branch, call U.S. Bank 24 -Hour Banking or visit usbank.com. Please be aware it may take up to three business days to implement your request. Requested Return: You may ask us to place your account in Requested Return status. When you select this option, you are automatically choosing to say 'No' to ATM and Debit Card Overdraft Coverage (refer to If you say 'No' for more details). In addition, we will attempt to return items which would result in an overdraft to your account such as checks, and automatic bill pay transactions. • Note that when you select Requested Return, an Overdraft Returned Fee may be charged for returned items. You may also be charged fees by the merchant or service provider. • Please understand we will not be able to return all items. If we pay an item, for any reason, you will be charged the applicable Overdraft Paid Fee (with the exception of ATM and everyday debit card transactions). These situations include, but are not limited to: recurring debit card transactions when a merchant had obtained an authorization for the first instance, but did not obtain a new authorization for subsequent occurrences (for example, a monthly gym membership); or other transactions/adjustments that may be processed in accordance with our Transaction Posting Order resulting in an insufficient Available Balance (Refer to "Transaction Posting Order" section listed within this Agreement). We rely on the merchant to inform us if a debit card transaction is a one- time or a recurring transaction. If you wish to select Requested Return, contact a local U.S. Bank branch or call U.S. Bank 24 -Hour Banking (see last page for phone numbers). Please be aware it may take up to three business days to implement your request. Business Options for Checking and Money Market Accounts For Business Checking and Business Money Market accounts, we will authorize and pay overdrafts for all types of transactions at our discretion. If we pay these transactions into overdraft, we may charge an Overdraft Paid Fee. If we do not pay these transactions, we may charge an Overdraft Returned Fee. Requested Return You may ask us to place your account in Requested Return status. When choosing this option, we will attempt to return and/or decline items which would result in an overdraft to your account. • Note that when you select Requested Return, an Overdraft Returned Fee may be charged for returned items. You may also be charged fees by the merchant or service provider. • Please understand we will not be able to return all items. If we pay an item, for any reason, you may be charged an Overdraft Paid Fee. If you wish to request Requested Return, contact a local U.S. Bank branch or call U.S. Bank 24 -Hour Banking (see last page for phone numbers). Please be aware it may take up to three business days to implement your request. Other sections: While many other sections of this Agreement relate to these issues, these sections are particularly appropriate: • Setoff (page 21) • Security Interest in Accounts (page 21) • Funds Availability: Your Ability to Withdraw Funds - All Accounts (page 23) • Electronic Banking Agreement for Consumer Customers (page 25) • Limits on Transfers (page 26) • Electronic Banking Agreement for Business Customers (page 29) OVERDRAFT PROTECTION PLANS Consumer Overdraft Protection U.S. Bank offers Overdraft Protection Plans to help you avoid the inconvenience of having a check returned, and/or a debit card purchase rejected, resulting in the expense of overdraft fees. These Overdraft Protection Plans allow an eligible account to be linked to a U.S. Bank Personal Checking Account(s) ("checking Item 18: Staff Report Pg. 21 Packet Pg. 206 of 857 10 17 Item 18 account(s)") to cover overdraft situations when the Available Balance is insufficient to cover checks presented for p I Balance has been reduced due to pending authorized debit card transactions, as specified in subsection "Debit Card Transactions". Attachment A - US Bank for General Banking U.S. Bank lets you choose which eligible accounts are linked to your checking account for Overdraft Protection, and thq ounts are accessed to transfer funds to your checking account. Some eligible accounts (e.g. depository accounts) do not have Overdraft Prot Services f you have deposit and credit accounts linked for Overdraft Protection, the first Overdraft Protection Account determines whether a fee is charged (if any). You can choose to link up to three eligible U.S. Bank accounts to your personal checking account for Overdraft Protection. Owner(s) who are signers on the checking account must also be signers on the account(s) linked for Overdraft Protection. Eligible accounts include: • U.S. Bank Savings Account or Money Market Account • U.S. Bank Reserve Line of Credit • U.S. Bank Credit Card • A secondary U.S. Bank Personal Checking Account • U.S. Bank Personal Line of Credit • U.S. Bank Home Equity Line of Credit • Other U.S. Bank Lines of Credit If you have linked eligible accounts, and the Available Balance in your checking account is or would be overdrawn by $5.01 or more, the advance amount will transfer in multiples of $50.00 and an Overdraft Protection Transfer Fee may be charged (fee waived for transfers from a depository account). If, however, the Available Balance is or would be overdrawn by $5.00 or less, the amount advanced will be $5.00 and the Overdraft Protection Transfer Fee will be waived. If the negative Available Balance in your checking account is caused by monthly fees, such as a maintenance fee or statement/image fee only, overdraft protection will not advance. (For example, the account is overdrawn due to a Monthly Maintenance Fee, overdraft protection will not advance. If additional transactions post, overdraft protection will advance to cover the negative Available Balance amount and an Overdraft Protection Transfer Fee may be charged.) If the account linked for Overdraft Protection does not have enough funds to cover the overdrawn amount, the current Available Balance will still be transferred to reduce the overdrawn amount. If there is more than one account linked for Overdraft Protection and the Available Balance of the first linked account is not enough to cover the overdrawn balance, the next linked account will transfer funds in multiples of $50.00 to cover the remaining overdrawn balance. When multiple accounts are linked as Overdraft Protection, the first account funds are transferred from determines the amount of the Overdraft Protection Transfer Fee (if any). For each day an Overdraft Protection transfer occurs, a Bank fee will be charged to the checking account that received the transfer. (Refer to the Consumer Pricing Information disclosure Overdraft Protection Transfer Fee for fee amount. This disclosure can be obtained by contacting a U.S. Bank branch or calling 800.872.2657.) While no fee will be charged to your U.S. Bank savings account or secondary checking account, U.S. Bank Reserve Line of Credit, U.S. Bank Credit Card, U.S. Bank Personal Line of Credit, or U.S. Bank Home Equity Line of Credit, for any automated advance to cover an overdraft to your associated deposit account, you will incur an interest charge according to the terms of your agreement governing your credit account. Advances on a U.S. Bank Credit Card Overdraft Protection Plan account are subject to the standard cash advance interest rate, as well as the current cash advance fee. Please refer to your U.S. Bank Reserve Line of Credit, U.S. Bank Credit Card, U.S. Bank Personal Line of Credit or U.S. Bank Home Equity Line of Credit for information regarding interest charges. When the Bank accesses funds from an eligible line of credit or credit card, these types of transfers may be subject to additional charges such as annual fees. In addition, you may be subject to interest that will accrue on the amounts advanced in accordance with your line of credit or cardmember agreement. Business Banking Overdraft Protection U.S. Bank offers Overdraft Protection Plans to help you avoid the inconvenience of having a check returned, and/or a debit card purchase rejected, resulting in the expense of overdraft fees. These Overdraft Protection Plans allow an eligible account to be linked to a U.S. Bank Business Checking Account(s) ("checking account(s)") to cover overdraft situations when the Available Balance is insufficient to cover checks presented for payment and/or Available Balance has been reduced due to pending authorized debit card transactions, as specified in subsection "Debit Card Transactions". U.S. Bank lets you choose which eligible accounts are linked to your checking account for overdraft protection. Only one deposit product and one credit product may link to a business checking account. If the checking account has both a credit product and a deposit product linked as overdraft protection, the system will always advance first from the credit product. Funds only draw from the deposit product if the credit product has insufficient available funds. The name of the business on the business checking account must match the name of the business on the business credit overdraft protection plan account. The name(s) of the account signer(s) on the business checking account may also be required to match the account signer(s) on the business Overdraft Protection Plan account. Eligible accounts include: • U.S. Bank Business Savings or Money Market Account • A secondary U.S. Bank Business Checking Account • U.S. Bank Business Reserve Line of Credit • U.S. Bank Business Credit Cards • U.S. Bank Cash Flow Manager or Advantage Line • If you have a U.S. Bank Business Savings, Business Money Market account, or secondary U.S. Bank Business Checking account linked as Overdraft Protection, any automatic advances will be in $200.00 increments made to cover the overdraft. Automated transfers from a U.S. Bank deposit account are not assessed Overdraft Protection Transfer Fees. If you have a U.S. Bank Business Reserve Line of Credit linked as overdraft protection, any automatic advances will be in $200.00 increments made to cover the overdraft. Please refer to your U.S. Bank Business Reserve Line Agreement for information regarding interest charges. U.S. Bank Business Credit Card linked as overdraft protection, any automatic advances will be in $25.00 increments made to cover the overdraft. Advances on a U.S. Bank Business Credit Card Overdraft Protection Plan account are subject to the standard cash advance interest rate, as well as the current cash advance fee. When the Bank accesses funds from an eligible line of credit or credit card, these types of transfers may be subject to additional charges such as annual fees. In addition, you may be subject to interest that will accrue on the amounts advanced in accordance with your line of credit or Cardmember Agreement. Please refer to your Cardmember Agreement for information regarding charges and fees. Each time an overdraft protection transfer from a Business Reserve Line or a U.S. Bank Business Credit Card automatically transfers funds to the checking account, an Overdraft Protection Transfer Fee (daily fee) applies. The transfer fee amount posts as a separate transaction to the checking account. Refer to the Business Pricing Information brochure for current fees. This brochure can be obtained by stopping in a U.S. Bank branch. If you have a U.S. Bank Cash Flow Manager linked as overdraft protection, any automatic advances will be in $100.00 increments made to cover the overdraft. While no Overdraft Protection Transfer Fee is charged ated ndvnnce t cover iti ivertlmft th vcii associated deposit Item 18: Staff Report Pg. 22 J Packet Pg. 207 of 857 11 18 Item 18 account, you will incur an interest charge according to the terms of your agreement governing your credit account. Please I lash Flow Manager agreement for information regarding interest charges. Attachment A - US Bank for General Banking If the negative Available Balance is caused by a monthly maintenance fee, service fee or statement/image fee only, not advance. (For example, the account is overdrawn due to a Monthly Maintenance fee, overdraft protection will not advance. If addition&ServicesJraft protection will advance to cover the negative Available Balance amount and an Overdraft Protection Transfer Fee may be charged.) Business Overdraft Protection Agreements U.S. Bank also offers certain business customers overdraft protection through separate written agreement. The terms of such agreement shall govern those Business Overdraft Protection Plans. REFUSING PAYMENT ON YOUR CHECKS You must fill in an amount (in words and numbers) correctly and clearly, and sign your name on checks you write. You should fill in the date and name a payee on your checks. If you don't name a payee, anyone can cash the check. If you fail to follow these rules, we may refuse to honor your checks. When a check you write is presented to us by another bank for payment, we will generally accept the endorsements on the check, because if an endorsement is missing or forged, we have rights against the other bank that protect us. When a check of yours comes to us other than through another bank, we might not cash it if we are not comfortable with the endorsements on it or the identity of the person who presents it. This is especially true with an endorsement in the name of a business entity. We may require anyone who presents a check for payment in person (other than an account owner presenting a check on his or her own account) to: • pay a fee to cash the check if applicable; and • give a fingerprint or thumbprint, and identification, as a condition of cashing a check. If the presenter of the check refuses to comply with these requirements, or complies but later asserts that these requirements infringed on their legal rights, you understand and agree that imposing these requirements will not be considered a "wrongful dishonor" of your checks. FUNDS TRANSFERS Unless we have entered into a specific written agreement with you that provides otherwise, payment orders you give to us for the transfer of funds out of the account by wire transfer or otherwise, and payment orders we receive for the transfer of funds into the account, will be governed by this paragraph. In addition, your rights and obligations with respect to a payment order, and our rights and obligations, will be governed by (a) any separate written agreement with us; then (b) this section; and then, to the extent not specified in a separate written agreement or this Agreement; (c) by Article 4A of the Uniform Commercial Code ("UCC4A") as enacted in the state in which you have your account with us. We reserve the right to refuse to accept any payment order. Payment orders are accepted when they are executed by us. We may process any payment order request (as well as any amendment or cancellation request concerning a payment order) that we believe is transmitted or authorized by you if we act in compliance with a security procedure agreed upon by you and us. Such payment orders will be deemed effective as if made by you, and you will be obligated to pay us in the amount of such orders, even though they are not transmitted or authorized by you. Unless we agree on another security procedure, you agree that we may confirm the authenticity and content of a payment order (among other ways) by placing a telephone call to you. If we cannot reach you, or if the payment order is not confirmed or approved in the manner we require, we may refuse to execute the payment order. YOU AGREE THAT IF A PAYMENT ORDER OR CANCELLATION THEREOF IDENTIFIES THE BENEFICIARY BY BOTH NAME AND AN IDENTIFYING NUMBER, AND THE NAME AND NUMBER IDENTIFY DIFFERENT PERSONS OR ACCOUNT HOLDERS, EXECUTION AND PAYMENT TO THE BENEFICIARY OR CANCELLATION MAY BE MADE SOLELY ON THE BASIS OF THE IDENTIFYING NUMBER. YOU ALSO AGREE THAT IF A PAYMENT ORDER IDENTIFIES AN INTERMEDIARY BANK OR THE BENEFICIARY'S BANK BY BOTH NAME AND AN IDENTIFYING NUMBER AND THE NAME AND NUMBER IDENTIFY DIFFERENT PERSONS, EXECUTION OF THE PAYMENT ORDER BY ANY BANK MAY BE MADE SOLELY ON THE BASIS OF THE IDENTIFYING NUMBER. If we receive a funds transfer into any account you have with us, we are not required to give you any notice of the receipt of the funds transfer. The funds transfer will appear on your next periodic statement. To confirm the completion of funds transfers, please contact us through U.S. Bank 24 -Hour Banking (see last page for phone numbers), usbank.com or the U.S. Bank Mobile App. Prior to the acceptance of an outgoing payment order, the outgoing payment order may be cancelled, but may not be amended or modified, if the beneficiary's bank is located within the United States of America and the outgoing payment order is to be paid in U.S. dollars. Other outgoing payment orders may not be cancelled, amended or modified. We must receive your cancellation in a reasonable time prior to the time we execute the outgoing payment order. Payment orders sent by Fedwire will be subject to the Federal Reserve's Regulation J, and payment orders sent via other payment systems will be subject to the rules of those systems. You agree that we may record all telephone conversations and data transmissions received from, made for or made on behalf of you pursuant to or in connection with a payment order. YOU AGREE THAT IF A PAYMENT ORDER, OR ANY CANCELLATION OR AUTHORIZATION RELATING THERETO, BUT FOR THE APPLICABILITY OF THE ELECTRONIC FUND TRANSFERS ACT OF 1978 (AS IN EFFECT FROM TIME TO TIME), CONSTITUTES A PORTION OF A FUNDS TRANSFER AS DEFINED IN UCC4A, ALL ACTIONS AND DISPUTES CONCERNING SUCH PAYMENT ORDER, CANCELLATION OR AUTHORIZATION SHALL BE DETERMINED PURSUANT TO UCC4A AND THIS AGREEMENT TO THE FULL EXTENT PERMITTED BY LAW. If an outgoing payment order in a foreign currency cannot be completed, the exchange rate that will apply to any refund due you will be the exchange rate in effect at the time on the day the refund is made. Additional fees may be deducted from a payment order amount by other banks involved in the funds transfer process. We may route payment at our own discretion for each outgoing wire transfer. A wire transfer is irrevocable once payment has been transmitted to the beneficiary's bank. At your request, we may request that the beneficiary's bank return funds previously transferred. However, you acknowledge that the beneficiary's bank is under no obligation to comply with this request. WITHDRAWAL RIGHTS, OWNERSHIP OF ACCOUNT, AND BENEFICIARY DESIGNATION The following rules govern the ownership and withdrawal rights of deposit accounts with the various titles given to them. There are two primary issues that these rules control. The first is "withdrawal rights" and the second is "ownership." By "withdrawal rights" we mean who has access to the funds in the account for all purposes. These withdrawal rights will control, for example, whose instructions we must follow, whose checks we must pay, and whose withdrawal requests we must honor. These withdrawal rights do not control who actually owns the funds, as between multiple parties to an account. By "ownership" we generally mean who owns the funds in the account. In particular, by selecting a particular ownership, you are expressing your intention of how and to whom your interest in the funds in the account should pass in the event of your death. If you create a type of account, you retain the right to change or close the account to the extent of the withdrawal rights you retain in your own name. Item 18: Staff Report Pg. 23 Packet Pg. 208 of 857 12 19 Item 18 We make no representations as to the appropriateness or effectiveness of any particular ownership or beneficiary desig ibility is to permit access to the account as provided by the withdrawal rights. You must consult with your own attorney or financial adviso Attachment A - US Bank effect any change in actual ownership of funds in the account. for General Banking Individual Account. This is an account in the name of one person. Such an account is also referred to as a "single owne Services Withdrawal Rights. The holder of such an account is the only person who has the right to withdraw from the account, unless we permit the holder to designate an agent or attorney -in -fact to the account. Ownership. The holder of such an account is presumed to be the owner. Holding such an account, by itself, creates no additional ownership rights nor survivorship rights (nor does such type of ownership create or extinguish any community property rights). In almost all instances this type of account will pass, on the death of the owner, through the estate of the owner. (You must consult your own estate planner to be sure.) Agents and "Attorneys -in -Fact." The owner of this type of account can nominate an authorized signer or attorney -in -fact. Joint Account - With Survivorship. If your account is opened as a joint account, we will treat it as a joint account with right of survivorship unless our account records demonstrate a different type of ownership. This is an account in the names of two or more natural persons, with the following features: Withdrawal Rights. Each joint tenant has complete and separate access to the funds and withdrawal rights, and each authorizes the other(s) to endorse for deposit any item payable to the joint tenant. Upon the death of any joint tenant, any surviving joint tenant will have complete withdrawal rights to the balance of the account. If there is more than one surviving joint tenant, such survivors remain as joint tenants with right of survivorship with the same withdrawal rights provided in this section. Each joint tenant reserves the right to change the ownership of the account to the extent of that owner's withdrawal rights. Ownership. Each joint tenant is presumed to "own" the funds in proportion to that person's net contribution to the account. Each joint tenant intends upon his or her death that the funds owned by such person will be owned by the survivor. If there is more than one survivor, the "ownership" of the decedent's funds will be shared equally with such survivors. Other Titles. In some states, it is advisable to add either "not as tenancy in common" or "not as a tenancy by the entirety" or both to insure the intention described above. Agents and "Attorneys -in -Fact." Any joint tenant can nominate an authorized signer or attorney -in -fact who can hold all the same withdrawal and deposit rights as the authorizing owner, except the authorized signer or attorney -in -fact will not be an owner (a joint tenant). Joint Account with Survivorship - Arizona. A Joint Account with Survivorship in Arizona has a unique feature that will change the "ownership" rights on the death of one of the joint owners if there is more than one surviving joint tenant and one of the surviving joint tenants is the surviving spouse of the deceased joint tenant. Withdrawal Rights. This rule will not change the withdrawal rights to the account on the death of a joint tenant; it only affects the actual ownership of the account balance, which will only affect the survivors, and will not affect our responsibilities under the account. Ownership. If two or more parties survive and one is the surviving spouse of the deceased party, the amount to which the deceased party, immediately before death, was beneficially entitled by law belongs to the surviving spouse. If two or more parties survive and none is the spouse of the decedent, the amount to which the deceased party, immediately before death, was beneficially entitled by law belongs to the surviving parties in equal shares, and augments the proportion to which each surviving party, immediately before the deceased party's death, was beneficially entitled under law, and the right of survivorship continues between the surviving parties. Tenancy in Common Accounts. A Tenancy in Common account is another form of joint account without the survivorship feature. A Tenancy in Common account is also in the name of two or more individual owners. Withdrawal Rights. Each joint tenant has complete and separate access to the funds and withdrawal rights, and each authorizes the other(s) to endorse for deposit any item payable to the joint tenant. Until we receive notice of the death of any joint tenant, any tenant in common will have complete withdrawal rights to the entire account balance. If more than one tenant in common survives the death of another tenant in common, such survivors remain as tenants in common between them. Each tenant in common reserves the right to change the ownership of the account to the extent of that owner's withdrawal rights. Ownership. Each tenant in common is presumed to "own" the funds in proportion to that person's net contribution to the account. However, because of the extreme difficulty in determining such proportions over time, you agree that upon the death of one tenant in common, the balance in the account at the time immediately before the death of the tenant in common will be deemed to be owned in equal shares between all tenants in common. After death and our receipt of notice of such death, the decedent's share will be set aside for the estate of the decedent, and the survivor's share in the account balance will be at the disposal of the surviving tenant in common. Other Titles. In some states this account is referred to as Joint Tenancy WITHOUT Right of Survivorship. Agents and "Attorneys -in -Fact." Any tenant in common can nominate an authorized signer or attorney -in -fact who can hold all the same withdrawal and deposit rights as the authorizing owner, except the authorized signer or attorney -in -fact will not be an owner (a tenant in common). Marital Account (Wisconsin). This account is an account established by two persons in Wisconsin who claim to be husband and wife. This account is, for such persons, the same as the Tenancy in Common account described above. Marital Account with P.O.D. Beneficiaries (Wisconsin). This account is, first, the same as a Wisconsin Marital Account (which is, in turn, the same as a Tenancy in Common account described above). Withdrawal Rights. During the lives of both parties to the marriage, the withdrawal rights will be the same as for the Marital Account. The beneficiaries have no withdrawal rights until the death of one of the marriage partners. Ownership. Upon the death of one of the spouses, the surviving spouse owns 50% of the funds on deposit, and the P.O.D. beneficiary named by the deceased party (if that beneficiary is then surviving) owns the other 50%. Each spouse can name his or her own beneficiary. If there is more than one beneficiary who is named by a party who survives, the shares of those beneficiaries will be equal. On the death of one of the marriage partners, the account will have to be retitled and beneficiary shares will have to be redeposited or withdrawn. Pay -on -Death Account. This is an account where one or more persons create the account and name one or more living persons as beneficiaries. Frequently the account title is A.B. Pay -on -Death to C.D. beneficiary. Item 18: Staff Report Pg. 24 Packet Pg. 209 of 857 13 20 Item 18 Withdrawal Rights. The person who creates this type of account retains complete withdrawal rights in such an accd time and for his or her own benefit. The named beneficiary has no withdrawal rights to the account during the lifetime of the creator of Attachment A - US Bank an change or close the account, and change beneficiaries at any time. for General Banking On the death of the creator of the account, the beneficiary (on proof of death of the creator and proof of the identity Services , can withdraw the entire account balance. If there is more than one beneficiary who is named and survives the creator, the surviving beneficiaries acquire and can withdraw an equal share with the other surviving beneficiaries, without survivorship rights between beneficiaries. If a beneficiary dies before the creator, neither the beneficiary's estate nor heirs acquire anything on the death of the owner. If more than one person creates such an account, then such creators have complete and separate withdrawal rights between them during their joint lives, and the survivor of them will have complete withdrawal rights upon the death of the other creator. Named beneficiaries can withdraw a share of the account balance only upon the death of the last creator and only if such beneficiaries are then alive (and upon proof of the deaths of the creators and their own identity as the named beneficiaries). In effect, if more than one person creates this type of account, with one or more beneficiaries, the account has first all the incidents of a "Joint Account with Survivorship" and only after there is but one joint tenant does the account have the incidents of a "Pay -on -Death" account. Ownership. The creator of this type of account is presumed to own the funds during his or her lifetime and intends that ownership to pass to the beneficiary only upon his or her death and only if the named beneficiary survives him or her. If there is more than one creator, the ownership between such creators is the same as that between joint tenants with right of survivorship, with the same incidents upon the death of a joint tenant. If there is more than one beneficiary who is named and survives the creator(s), the creators intend his, her or their ownership rights to pass to the then surviving beneficiaries in equal shares, with no survivorship rights between them. Other Titles. This type of account has other names such as "Tentative Trust," "Totten Trust," "In Trust For" and "Revocable Trust." In states where one of these trust accounts is recognized, the creators of such accounts will be referred to as a "settlor" or "grantor." Nevertheless, all the incidents of such an account, the rights of the grantor(s) and beneficiaries are exactly the same as described for "Pay -on -Death" accounts above. Only the names have been changed. Revocable Trust or Pay -on -Death Account (not subject to the Nonprobate Transfers Law of Missouri) In Missouri, a Revocable Trust or Pay -on -Death account may include an appendage to its title "not subject to the Nonprobate Transfers Law of Missouri." This appendage does not change the features of the account as described above for Pay -on -Death accounts. Registration in Beneficiary Form - Missouri Adding the acronym LDPS (which stands for lineal descendants, per stirpes) to a Revocable Trust or Pay -on -Death account in Missouri, changes the rights of beneficiaries of such accounts. LDPS designation means that if a named beneficiary of such an account dies before the account owner, then the unnamed lineal descendants of that deceased beneficiary will acquire the share of the deceased beneficiary on the death of the owner per stirpes. UTMA (Uniform Transfers to Minors Act) Account This is an account in the name of an adult custodian (or possibly a corporate custodian) for the benefit of a person who is a minor at the time the account is created. Withdrawal Rights. During the minority of the child (as defined under applicable UTMA laws), the custodian has all withdrawal rights, but is required by law to exercise those rights solely for the benefit of the child. We, however, have no duty or agreement whatsoever to monitor or insure that the acts of the custodian are for the child's benefit. The custodian is required to turn over the account balance when the child reaches the age of majority. The custodian authorizes us, at our discretion, to exercise the custodian's duty to transfer funds to the child at the child's request upon reaching the age of majority. Ownership. The child/beneficiary is at all times the owner of the funds in the account. UGMA (Uniform Gifts to Minors Act) Account A few states have not adopted the Uniform Transfers to Minors Act. These few states have, for our purposes, an equivalent statute known as the Uniform Gifts to Minors Act, which has the same incidents as those described above for the UTMA account. Fiduciary Account A fiduciary account is an account opened by or taken over by an executor, administrator, personal representative, guardian, conservator, trustee, or other fiduciary in such capacity. Any fiduciary named as a signer on a fiduciary account shall be solely responsible for acting in accordance with the terms of the applicable laws, will, court order or trust instrument establishing and covering the fiduciary relationship, and we are not responsible for examining, or insuring compliance with the provisions of any such law or instrument. Corporate, Partnership, Limited Liability Company and other Organizational Accounts These are accounts opened by any business organization or association. We reserve the right to require the account holder(s) to furnish us with such resolutions, agreements or documents as we may reasonably request to evidence the authority of individuals to act on behalf of the account holder(s). We will honor such an authorization until we receive written notice of change from the governing body of the organization. It is mutually agreed that the power and authority of each person named as authorized to take action with respect to the account shall continue in full force and effect until we receive actual written notice of revocation, whether the same be brought about by dissolution of the account holder or otherwise. PLEDGES AND SECURITY INTERESTS IN FAVOR OF OTHERS You cannot give a security interest or pledge your account to someone other than us without first getting our express written consent. We are not required to give consent to a security interest or pledge to someone else. Unless we agree in a separate writing otherwise a security interest or pledge to someone else must be satisfied or released before any right to withdraw from the account can be exercised, including any right that arises by surviving the death of an owner (for example, a surviving joint tenant or beneficiary of a pay -on -death account). ACCRUAL OF INTEREST We will begin to accrue interest on deposits drawn from other banks at the time we get credit for the deposit in the collection process, which is not necessarily the same time as the time we make funds available for withdrawal. If your account (for example a savings account) earns a variable rate of interest, we can change that rate at any time without notice to you, except as specifically provided in writing in the account disclosure or agreement. If the interest rate for your account(s) or the index or other referenced rate upon which the interest rate for your account(s) is based, is at any time less than zero percent, you agree to pay all amounts of the negative interest or fees which we impose as compensation for the negative interest rate. You can find out our current rates on accounts that earn interest in our branches, from U.S. Bank 24 -Hour Banking, or at usbank.com. The telephone number is at the end of this booklet. Item 18: Staff Report Pg. 25 Packet Pg. 210 of 857 14 21 Item 18 STOP PAYMENTS IAttachment A - US Bank Unless otherwise provided, the rules in this section cover stopping payment of items such as checks and drafts drawn on pping payment on other types oftransfers of funds, such as consumer electronic fund transfers, are covered elsewhere in the Electronic Ban for General Banking umer Customers section. Services Here is what you must do to stop a payment: ACH Check Conversion An ACH Check Conversion is a transaction that starts as a paper check that you give to a merchant. The merchant converts the check, using the information on the paper, to send an electronic message to a bank to immediately take the money from your account. The merchant is required to post a notice about ACH Check Conversion in a prominent and conspicuous location at the time of the transaction. You can stop payment on an ACH Check Conversion only if it has not yet been presented by the merchant. Electronic Fund Transfers You can stop payment of certain types of electronic transactions. Please refer to the Electronic Banking Agreement section for details. Checks and drafts If you want to stop payment of a check, you must stop by a U.S. Bank branch or call U.S. Bank 24 -Hour Banking (see last page for phone numbers). Writing to us will take too much time and we will not have time to act on your request before the check is paid. We will need the following information: 1. the account number the check is written on; 2. the check number; 3. the dollar amount; 4. the date; and 5. the name of the person you wanted to pay. This information must be exact and correct. If it is not, we will not be responsible if the item is paid. Who can stop a payment and for how long? 1. Any owner can stop payment of any check on the account whether that owner wrote the check or not (and assuming the item can still be stopped). 2. A stop payment order is effective for 24 months or longer, as determined at the time the stop payment order is placed. You must renew it prior to the expiration of the stop payment effective period or the item could get paid. We will not notify you when the stop payment effective period ends. Fees may be assessed for placing a stop payment order. 3. Only the owner who made the stop payment order can release it. 4. You must give us sufficient notice so that we have a reasonable period of time to act upon your request and verify that the item has not been paid. Effect of a stop payment When you stop payment of a check, you may still be obligated to the payee, and the payee may still have the right to collect on the check or the underlying transaction. If we have to defend ourselves for letting you stop payment on a check, you have to protect us by paying our expenses, including our reasonable attorney's fees. What if we don't stop payment? We cannot stop payment of a check that has already been paid. If you ask us to stop payment of a check and we pay it anyway, we gain whatever rights the payee has against you. This means, if the check should have been paid, or the payee has the right to collect from you anyway, we can collect from you. Therefore, if we pay an item that should have been stopped, before we recredit your account, you will have to prove to us that by our payment you have suffered a loss and the cause is our failure to stop the payment. What kinds of checks does this NOT apply to? This section does not apply to items not drawn on your account, such as teller's checks, official (cashier's) checks, and accepted checks (e.g., certified checks). We have no responsibility to honor your request to stop payment of items not drawn on your account. If we agree to stop payment on these items, we may require you to provide us with additional security (for example, a bond or collateral) and you agree to indemnify us for any damages and costs we incur as a result of stopping payment of such items. Fee To stop a payment you must pay our fee, the amount of which is disclosed in the pricing information disclosure or agreement for your account. DORMANT ACCOUNTS AND ESCHEAT A dormant account is an account that has been inactive. Generally, subject to state law, "inactive" means there has been no deposit, withdrawal or other communication from you about the account for the period of time as follows: 1. after 11 months for a checking account; 2. after 23 months for a savings account including those that offer limited (no more than six per month) check writing options. For security reasons, we may refuse a withdrawal or transfer from an account we internally classify as inactive if we cannot reach you in a timely fashion to confirm the transaction's authorization. We charge a dormant account fee, unless excluded by account type or prohibited or restricted by state law. The dollar amount and frequency is disclosed in our pricing information disclosure. If your account has a zero balance, we reserve the right to close it. Any accounts linked as overdraft protection will be de -linked as part of the closure process. Refer to CLOSING YOUR ACCOUNT for additional information. Escheat is the term that is used to describe the process of transferring an account balance to the state government after an account has been dormant and if our attempts to contact you fail. The time period after which funds must escheat to the state varies from state to state. Once the funds are transferred to the state, you may be able to recover the funds from the state itself, but not from us. As permitted by the state, we may deduct the cost of required due diligence from the balance of your account. This due diligence may include first class and certified mailings or public notices about your account's pending escheatment, as required by state law. SPECIAL PROVISIONS FOR THIRD -PARTY ACCOUNTS If you have opened a deposit account on behalf of the beneficial owner(s) of the funds in the account (for example as an agent, nominee, guardian, executor, custodian or funds held in some other capacity for the benefit of others), those beneficial owners may be eligible for "pass -through" insurance from the FDIC. This means Item 18: Staff Report Pg. 26 Packet Pg. 211 of 857 15 22 Item 18 the account could qualify for more than the standard maximum deposit insurance amount (currently $250,000 per depol lip capacity). If the account has transactional features (such as check writing capabilities or the use of debit cards), as defined in 12 C.F.R. 37 Attachment A - US Bank older must be able to provide a record of the interests of the beneficial owner(s) in accordance with 12 C.F.R. 370.5(a) and with the FDIC'I for General Banking l below. The FDIC has published a Deposit Broker's Processing Guide that describes the process to follow and the informatiork.. Services in the event U.S. Bank fails. That information can be accessed on the FDIC's website at https://www.fdic.gov/deposit/depositsibrokers/ In addition, the FDIC published an Addendum to the Deposit Broker's Processing Guide, section VIII, which is a good resource to understand the FDIC's alternative recordkeeping requirements for pass -through insurance and is accessible at the website above. The Addendum sets forth the expectations of the FDIC for pass -through insurance coverage of any deposit accounts, including those with transactional features. The Addendum will provide information regarding the records you keep on the beneficial owners of the funds, identifying information for those owners, and the format in which to provide the records to the FDIC upon failure of U.S. Bank. You must be able to provide this information in a timely manner in order to receive payment for the insured amount of pass -through deposit insurance coverage as soon as possible. You have an opportunity to validate the capability to deliver the required information in the appropriate format so that a timely calculation of deposit insurance coverage can be made. Please contact your account representative for details on the validation process. You agree to cooperate fully with us and the FDIC in connection with determining the insured status of funds in such accounts at any time. In the event of failure of U.S. Bank, you agree to provide the FDIC with the information described above in the required format within 24 hours of the failure of U.S. Bank. As soon as the FDIC is appointed, a hold may be placed on your account so that the FDIC can conduct the deposit insurance determination; that hold will not be released until the FDIC obtains the necessary data to enable the FDIC to calculate the deposit insurance. You understand and agree that your failure to provide the necessary data to the FDIC may result in a delay in receipt of insured funds and legal claims against you from the beneficial owners of the funds in the account. If you do not provide the required data, your account may be held or frozen until the information is received, which could delay when the beneficial owners could receive funds. Notwithstanding other provisions in this Agreement, this section survives after a receiver is appointed for us, and the FDIC is considered a third -party beneficiary of this section. CONSUMER ELECTRONIC CHECK REPRESENTMENT If you write a check on a personal account that we return unpaid because of insufficient or uncollected funds, the depositor of the check or the depositor's bank may resend ("represent") the check to us electronically. That is, the depositor or the depositor's bank may send us an electronic instruction ("electronic represented check") to charge your account in the amount of the check. Our Handling of Electronic Represented Checks. If we receive an electronic represented check from the depositor or the depositor's bank, we will pay or return the electronic represented check as if the original paper check were being represented to us. The section titled "Electronic Fund Transfers" will not apply to any electronic represented check. Ineligible or Unauthorized Electronic Represented Checks. For an electronic represented check to be charged to your account, all of the following must be true: • the electronic represented check must relate to a paper check drawn on a personal account that we returned unpaid because of insufficient or uncollected funds; • the paper check must not have contained an unauthorized signature or an alteration and must not have been a counterfeit; • you must not have placed a stop payment on the paper check after we returned it unpaid but before it was collected electronically; • the paper check must have been less than $2500.00 in amount; • the paper check must have been dated 180 days or less before the date on which the electronic represented check is sent to us; • the electronic represented check must be for the face amount of the paper check only and may not include any collection fee charged by the depositor, the depositor's bank, or a collection agency; • the payee of the paper check must have given you notice that, if we returned the paper check unpaid because of insufficient or uncollected funds, the fee could be collected electronically; and • the electronic represented check must have been sent to us no more than twice after the first time we returned the paper check, or no more than once after the second time we returned the paper check. You may have the right to reverse any ineligible or unauthorized electronic represented check that we charged to your account. If you want to reverse an electronic represented check because you placed a stop payment on the paper check to which the electronic represented check relates after we returned the paper check unpaid but before it was collected electronically, you must notify us within 15 days after we send or make available to you the periodic statement that reflects payment of that electronic represented check. If you want to reverse an electronic represented check for any other reason, you must give us an ACH Claim Form within 15 days after we send or make available to you the periodic statement that reflects payment of that electronic represented check. An ACH Claim Form may be obtained by contacting U.S. Bank 24 -Hour Banking or a local U.S. Bank branch. In your claim form, you must declare and swear under oath that the electronic represented check was ineligible or unauthorized. If we receive your notice or claim form within the 15 -day period, we will recredit your account with the amount of the charge but will not be responsible for any other damages associated with the transaction. Stop Payment. If you wish to stop payment of any electronic represented check, you must follow the procedures contained in the rules for stopping payment of checks, not the procedures contained in the rules for stopping payment on electronic loan or bill payments. CHECKING ACCOUNTS AND "SUBACCOUNTS" For regulatory accounting purposes we may designate two sub -accounts for a checking account; one sub -account is a savings (non -transaction) account and the other is a checking account. Checks and other third -party transfers are paid from the checking (transaction) account. As necessary, we transfer funds from the savings sub - account to the checking sub -account automatically. You cannot access the savings sub -account directly. This accounting device does not affect either the appearance or the operation of your checking account in any way. TELEPHONE TRANSFERS If you have more than one account with us, including a credit card or open-end loan account, you can transfer funds between your accounts by telephone. You will need to have a PIN, and enter your account numbers, and other qualifications, but if you meet them, 1. you can transfer funds between your accounts by calling our 24 -hour phone banking (see last page of this booklet for phone numbers), and 2. telephone transfers may be made by the same account owners/signers and usually under the same conditions as generally applicable to withdrawals made in writing or by other means. A transfer made by telephone is not immediately completed. It may take as long as one business day for us to verify the transaction and make the transfer. Consumer customers are assigned or can choose a PIN when requesting a ATM or Debit Card. Consumer customers without a debit card or ATM card can request a PIN by speaking to a 24 -Hour Banking representative at 800.872.2657. A form is sent by 24 -Hour Banking to the customer for completion and must be mailed back to the address on the form. A confirmation letter is mailed to the customer once the PIN has been established. REAL-TIME PAYMENTS / PROHIBITION ON FOREIGN PAYMENTS Real -Time Payments ("RTP") is an electronic payment system which permits payment senders to send funds in real-time to payment receivers for deposit into the payment receiver's account(s). This means that a payment receiver will have near immediate availability of funds sent using an RTP system. The RTP system is intended for domestic payments only. It prohibits payments which involve either a sender or receiver located outside the United States. You agree that to the extent you Item 18: Staff Report Pg. 27 I l Packet Pg. 212 of 857 J 16 23 Item 18 either send or receive payments through an RTP system, you will not use your accounts to do so on behalf of a person wh ident or otherwise domiciled in the United States and that you will comply with all regulations of the Office of Foreign Assets Control. Attachment A - US Bank for General Banking REQUIRED SIGNATURES IServices Signature Comparison. We process certain items mechanically, based on information encoded on checks and other trI1duu1I iLciii, dilu w are not required to examine items and debits drawn on your account. We collect your signature to obtain your agreement to the rules we establish for your account, but this does not create any responsibility on our part to verify signatures on items and other charges to your account. Number of Signatures. You agree that if you 1. require the signatures of two or more persons to open an account; 2. have an account in which more than one signature is required to complete a transaction; 3. authorize someone to transact some but not all transactions on your account; 4. authorize someone to transact business on your account for limited purposes and no others; or 5. use checks that require two or more signatures, such arrangements are strictly between you and the other person(s) you authorize, whether we have notice of your arrangement (including in a form we provide you) or not. You cannot assert a claim against us for permitting a transaction so long as any one of the owners or authorized persons sign or initiate the transaction, even if a person exercises more authority than you have given. CHANGES TO OUR AGREEMENT WITH YOU We may change any term of this Agreement. We will give you reasonable notice in writing or by any other method permitted by law. You agree that in any event 30 days written notice is reasonable. If we notify you that the terms of your account have changed, and you continue to have your account after the effective date of the change, you have agreed to the new terms. For consumer customers, rules governing changes in interest rates are provided for separately in the Truth -in -Savings disclosure(s) or in another document. CLOSING YOUR ACCOUNT This section does not apply to an active time deposit (or certificate of deposit) account. If you intend to close your account: If you intend to close your account with us, you should tell us; simply transferring all the money in your account and reducing your account balance to $0.00 is insufficient notice and may result in additional fees charged to your account. If you close your account, 1. you are still responsible for transactions you arranged for, including those that arrive after the account is closed; 2. you should pay special attention to pre -authorized electronic deposits to your account and payments from that account; you should reroute the deposits to another account and make other arrangements for the payments, with us and the other institutions involved; 3. you should not close your account until all the transactions you arranged for have been cleared, and you should leave enough funds to clear them and the fees that might be due; and 4. if it is an interest -bearing account, accrued interest will not be paid. If your account is closed and you have a debit or ATM card associated with the account, you will need to either: 1. close the associated card; or 2. select a new account to be linked to your card. If you do not designate a new account, the bank will automatically assign your ATM/debit card to a new account from any eligible account where you are an owner/joint owner. If there are no eligible accounts the card will be closed. We can close your account: We can close your account, ATM and debit card for any reason or for no reason at all. If we close your account, we will send you notice within ten days after closing and/or indicate the closure on your next account statement. We will send the collected account balance to you at your last known address as reflected in our account records. At our sole discretion we may, but are not required to, withhold a sufficient sum to cover any outstanding items and likely fees. If we withhold any money for such contingencies, we will refund that to you after we are satisfied that no further withholding is necessary. If your account is closed for any reason, you authorize us to re -open your account to process any transactions authorized prior to account closure, or for other purposes consistent with applicable law. As part of the account closure, any accounts linked to the Checking Account as overdraft protection will be de -linked. If a U.S. Bank Reserve Line of Credit is linked as overdraft protection to a Checking Account that is closed for any reason, the Reserve Line will also be closed, and you must repay any remaining balance according to the monthly payment coupon included in your future periodic statements. STATEMENTS AND NOTICES Statements. We will periodically make available to you a paper or eStatement of your checking or savings account. These statements show the transactions that occurred in the time period covered by the statement. If you elect not to receive or review your statement, you are still responsible for having access to the information provided in the statement. At our option, a statement will not be produced in any statement period in which service charges, fees, reversals, refunds or interest are the only transactions on the account. When other activity exists, such as a deposit or withdrawal, a statement will be available to you and will include all transactions which have occurred since the last statement (this includes any service charges, fees, reversals, refunds or interest that occurred since the last available statement). At a minimum, all accounts will receive an annual statement. Regardless of how frequently a statement is made available, monthly service charges and other account fees will continue to be deducted from the account. In addition, applicable interest will continue to accrue and be paid periodically as disclosed in the product pricing information disclosure. Combined Statements. If you have multiple accounts with us, we may at any time automatically combine your accounts on a single, easy -to -read monthly statement. We will only combine statements for accounts that have common ownership (meaning at least one owner is common across multiple accounts) and the same address and Social Security Number. If you prefer to continue receiving separate statements, please contact U.S. Bank within 30 days of receiving your combined statement. You may reach us by calling one of the numbers listed on the back of this brochure, sending a letter to U.S. Bank, 60 Livingston Ave, EP-MN-WS5D, St. Paul, MN 55107, or sending a secured email by logging on to usbank.com and selecting "Contact Us". Please include the following information in your correspondence: your name, account number(s) and the reference code "CMBSTMN." Item 18: Staff Report Pg. 28 Packet Pg. 213 of 857 17 24 Item 18 Your address. You must give us your correct address, and if you move or change your address, you must keep us athi for messages and statements we send to the most recent address you have given us. We may also update your address in our records withoul Attachment A - US Bank receive an address change notice from the U.S. Postal Service or if we receive updated address information from our mail services vendor. for General Banking If you agree to accept mail electronically, you must give us your accurate email address and keep us up to date with any k Services ou are responsible for keeping your email functioning properly, or advising us if it does not work. Multiple owners. Periodic statements and notices that we make available to one owner or agent/signer of an account will be the same as providing statements and notices to all owners of an account. You agree to designate the primary address for purposes of receiving statements and other account correspondence. Each account owner agrees that we may send any legal notice or legal process affecting any owner or the account to the primary address designated on the account. Each account owner agrees to notify the other owners of any legal notice received at that address pertaining to such other account owner or to the account. Your Duty to Examine Your Statement. As used in this section, the term "problem" means any error, alteration, counterfeit check, or unauthorized transaction (including, but not limited to, forged or missing signatures and excluding consumer electronic banking transactions) related to your account. Because you are in the best position to discover any problem, you agree to promptly examine your statement and report to us any problem on or related to your statement within 30 calendar days after we mail the statement (or make the statement available) to you. You agree that we will not be responsible for: 1. any problem that you do not report to us in writing within a reasonable time not to exceed 30 calendar days after we mail the statement (or make the statement available) to you; 2. subsequent problems or fraudulent items occurring after 30 days of the first occurrence; if you fail to report the problem within 30 days of the first occurrence reported on your statement; 3. results from a forgery, counterfeit or alteration so clever that a reasonable person cannot detect it (for example, unauthorized checks made with your facsimile or other mechanical signature device or that look to an average person as if they contain an authorized signature); or 4. as otherwise provided by law or regulation. You agree to waive any rights to recovery you may have against us if you do not provide notice to us in the manner and within the time required by this Agreement. You may not start a legal action against us because of any problem unless: (a) you have given us the above notice and (b) the legal action begins within one year after we send or make your statement available to you. You agree that if the problem is the result of a series of events (for example, multiple forgeries over a period of time) then the date the first event occurred is the date from which the period to bring a legal action will begin to run. If you make a claim against us in connection with a problem, we reserve the right to conduct a reasonable investigation before re -crediting your account and you agree to fully cooperate in such investigation. Within 30 days of the date of mailing, you agree to complete and return an affidavit of unauthorized paper debit on the form we provide you along with any other information we may request. You further agree to file a police report if we request. If you refuse to sign such an affidavit or fail to return the affidavit and other requested documentation within 30 days of the date we mail it to you, you agree that we may consider the matter resolved and reverse any provisional credit provided. At our sole discretion, we may, but are not obligated to, provisionally credit your account during the investigation for all or a portion of the amount claimed. Any provisional credit to your account may be reversed if you fail to fully cooperate in our investigation or, if as a result of our investigation, we determine that the charge to your account was proper. You agree to pay any fees assessed or accrued against your account during the investigation or that may arise upon reversal of any provisional credit. For problems involving an electronic banking transaction, please refer to the "Electronic Banking Agreement" sections of this brochure. This time period for you to examine your statement and report problems to us are without regard to our level of care or the commercial reasonableness of our practices, and without regard to whether cancelled checks are supplied to you. Contact us if you do not receive your regular statement. If this is a business account, you agree that you will have at least two people review your statements, notices, and returned checks, or in the alternative, the person who reviews these will be someone who does not have authority to transact business on the account. RETURN OF CANCELLED CHECKS For some specific consumer and business checking accounts we currently offer two plans, with respect to the return of cancelled checks: 1. Check Safekeeping: paid checks that are not returned - your statement will show the check number, the amount, and the date it is paid; or 2. Image Checks on Statement: paid checks that are not returned - your statement will include a reduced image of the front of the check or front and back of a check in addition to the number, amount and date the check is paid as part of the statement; (See the CHECK 21 section; the images sent with your statement are not substitute checks themselves, but some may be images of substitute checks.). Option 1 is what you will get unless you specifically ask for option 2. The checking accounts for which these options are available vary. The products and our fee structures for each option are disclosed in the Consumer Pricing Information or Business Pricing Information disclosure or agreement for your account. (Both can be obtained by stopping in a U.S. Bank branch or for the Consumer Pricing Information only, call 800.872.2657 to request a copy.) If you take option 1 or 2, and you have need for a specific paper check, we can provide a substitute copy to you upon request. CHECKS, CHECKING ACCOUNTS AND SAVINGS ACCOUNTS WITH DRAFT ACCESS NOW Accounts: Transaction accounts are NOW Accounts on which you can write negotiable orders of withdrawal. Negotiable orders of withdrawal look and function like checks, and the rules governing checks also apply to them. Depending on account features, NOW Accounts may or may not bear interest. Although we have no intention of exercising this right, federal regulations require that we reserve the right to require at least seven days' written notice prior to withdrawal or transfer of any funds on your NOW Account. SAVINGS ACCOUNTS By the term "savings" account we mean an account that earns interest but has no specific maturity date or required notice period. (A maturity date or a required notice period is a characteristic of a time deposit or certificate of deposit.) We will provide you with a periodic (quarterly, monthly, annually based on your account type and account activity) statement for your savings account and you must examine your statement for errors or forgeries just as you should for your checking account. Savings Account Transaction Policy We reserve the right to require seven days' notice before any withdrawal from any savings account, though it is very unlikely we will require such notice and, if we do, we will require it for all savings accounts. Item 18: Staff Report Pg. 29 Packet Pg. 214 of 857 18 25 Item 18 S.T.A.R.T. PROGRAM AGREEMENT Attachment A - US Bank (New enrollment discontinued as of November 15, 2015) Savings Today And Rewards Tomorrow® for General Banking S.T.A.R.T. is a program offered by U.S. Bank to help you achieve and maintain your savings goals. The following infoi Services of the S.T.A.R.T. Program (the "Program"), the details you need to know to enroll in and manage your savings plan, as well as the terms for earning rewards un er the Program. We may change these terms at any time, in which case we will provide you notice of those changes. Please read these terms carefully and contact us if you have any questions. By enrolling in the Program, you agree to these terms. Enrollment Process and Eligibility To be eligible for the Program, you must meet, and continue to meet, the following three requirements: 1. Open and/or maintain an active U.S. Bank Package, including: • A Silver, Gold or Platinum Package Checking account AND • A Package Money Market Savings account Note: Account ownership must be identical for both the package checking and package money market savings accounts. 2. Enroll in the Program. 3. Schedule and maintain a qualifying transfer from your Package Checking account to your Package Money Market Savings account. Qualifying Transfers Options A qualifying transfer must occur at least once per month from your Package Checking account ("checking account") to your Package Money Market Savings account ("savings account'). Three transfer options are available for you to choose. You are required to set up at least one option but can utilize all three choices. Note: Qualifying transfers may not be processed if your checking account has a negative Available Balance or if your balance would become negative as a result of the transfer. 1. Scheduled Transfer option: A recurring regularly scheduled transfer based on a specific amount transferred from the Package Checking to the Package Money Market Savings on a specific date(s) you select. • Transfers can occur daily, weekly, every other week, or can be based on a specified date(s) or day(s) during the month. One-time or same -day transfers do not qualify. • Example: Schedule a transfer of $10.00 from your checking account to your savings account on the 1st of each month. 2. Transfers Based on Debit Card Purchases: A recurring transfer from the Package Checking account to the Package Money Market Savings account based on each number of U.S. Bank Debit Card purchases you make, transferred on the business day after the transaction is posted. • Select a dollar amount between $.25 and $5.00 to transfer for each purchase transaction. • The total number of debit card purchase transactions posted to your checking account each day will be multiplied by the per transaction dollar amount selected. That amount will be transferred from your Package Checking account to your Package Money Market Savings account. • The debit card must be associated with the enrolled checking account. For joint checking accounts, more than one debit card can be designated and a separate transfer will occur for the activity of each card. • Example: You have selected a transfer amount of $.50. If five debit card purchases post on Tuesday, a transfer of $2.50 will occur on Wednesday (from your checking account to your savings account). 3. Transfers Based on Credit Card Purchases: A recurring transfer based on the number of U.S. Bank Credit Card purchases you make, transferred on the business day after the transaction is posted. • Select a dollar amount between $.25 and $5.00 to transfer from the Package Checking account to the Package Money Market Savings account for each credit card purchase transaction. • The total number of credit card purchase transactions posted to your credit card each day will be multiplied by the dollar amount selected. That amount will be transferred from your Package Checking account to your Package Money Market Savings account. • The credit card owner's name must also be an owner on the enrolled S.T.A.R.T. checking account. For joint checking accounts, more than one credit card can be designated, and a separate transfer will occur for the activity of each card. • All U.S. Bank -branded, co -branded or affinity credit cards are eligible. • If more than one credit card is enrolled in S.T.A.R.T. for this transfer option, separate transfers will occur for the total purchases posted to each card. • Example: You have selected a transfer amount of $3.00. If two credit card purchases post on Monday, a transfer of $6.00 will occur on Tuesday (from your checking account to your savings account). S.T.A.R.T. Goals and Rewards The Program offers two rewards that can be earned by achieving and maintaining a specific account balance — called your Goal Balance — in your savings account. Your Goal Balance is the account balance of your Package Money Market Savings account at time of enrollment, plus $1, 000.00. You must reach Goal 1 before you become eligible for Goal 2. S.T.A.R.T. Goal 1: When you reach the Goal 1 Balance in your Package Money Market Savings account AND a qualifying transfer occurs within 35 days of meeting the Goal 1 Balance, you will earn a $50.00 U.S. Bank Rewards Card. S.T.A.R.T. Goal 2: When you maintain the Goal Balance in your Package Money Market Savings account for 12 consecutive months from the date of meeting Goal 1, you will earn a $50.00 U.S. Bank Rewards Card. Note: Reward(s) will be sent to the primary savings accountholder within 30 days of goal verification. Rewards will be reported as interest earned on IRS Form 1099-INT. The accountholder is responsible for any applicable taxes. If your savings account is subject to State or Federal tax withholding, the amount of your U.S. Bank Rewards Card will have taxes withheld. A customer is eligible to earn only one of each goal type, for a maximum reward of $100.00. Rewards Cards cannot be reloaded with additional funds, nor can they be used at an ATM. No cash access. Terms and conditions, including fees, apply. Rewards Cards are issued by U.S. Bank National Association pursuant to a license from Visa U.S.A. Inc. © 2021 U.S. Bank. Monitor and Make Changes to your S.T.A.R.T. Selections You can make changes to any transfer option, add or delete transfer selections, and monitor your goal progress: by accessing your account via online banking, speaking with a banker at a participating branch, or calling U.S. Bank 24 -Hour Banking (see last page for phone numbers). Additionally, S.T.A.R.T. mobile or email alerts can be set up through online banking, and your monthly statements will provide S.T.A.R.T. progress information. Item 18: Staff Report Pg. 30 Packet Pg. 215 of 857 19 26 Item 18 Program Termination Your participation in S.T.A.R.T. will end if: I Attachment A - US Bank • You notify your banker that you no longer wish to participate in the Program. for General Banking • Your Package Checking account or Package Money Market Savings account is closed, is transferred to another p Services nership does not match on both the checking and savings accounts. • A qualifying transfer is not scheduled for six consecutive months when working towards Goal 1 achievement. TIME DEPOSITS A time deposit is more commonly known as a certificate of deposit or CD. With a time deposit, you agree to keep your deposit with us for a specified period of time, or agree to give a required advance notice prior to withdrawal, and we agree to pay you interest at an agreed upon rate, or an agreed formula for a rate, for that period of time. We are not required to permit an early withdrawal from a time deposit, and if we do, it will be on condition that you pay an early withdrawal fee and penalty. The amount of that penalty will be disclosed to you when you open such an account. All the features of your time deposit will be disclosed to you when you open the account. You can call 24 -Hour Banking, visit a local U.S. Bank branch, or go to usbank.com to find out what CD products and terms we offer. If your time deposit, including single maturity, automatically renewable or Individual Retirement Account CDs, remains inactive for a pre -determined period of time, as required by state, and our attempts to contact you fail we may transfer or escheat your funds to the state as required. Escheat is the term that is used to describe the process of transferring an account balance to the state government after an account has been dormant for a pre- determined period of time, as required by state, and if our attempts to contact you fail. The time period after which funds must escheat to the state varies from state to state. Once the funds are transferred to the state, you may be able to recover the funds from the state itself, but not from us. As permitted by the state, we may deduct the cost of required due diligence from the balance of your account. This due diligence may include first class and certified mailings or public notices about your account's pending escheatment, as required by state law. LIMIT OF LIABILITY We process millions of transactions every day, with the help of complicated technology and other companies. If we make a mistake and charged you more than we should have, or failed to give you credit you were due, we will correct the error, so long as you give us sufficient and timely notice and an opportunity to fix it. See the section above titled Statements and Notices, for your duty to pay attention to your statement and report any errors. You agree — to the extent allowed by law — to waive any indirect, incidental, special, consequential and punitive damages for errors or mistakes we make in good faith. This includes damages that might otherwise be available in a tort or contract action, and whether the consequences are foreseeable or not. ELECTRONIC MESSAGES AND AGREEMENTS Many customers use the Internet and email as their primary form of communication with us. If you provide us with an email address, you agree that we may communicate with you via email and you further agree to notify us of any changes to your email address. You agree that we may make agreements with you by electronic means. Your authorization and consent to such an agreement, or your delivery of instructions, may be made by use of certain numbers, codes, marks, signs, personal identification numbers (PINs), public or private keys or other means, acceptable to you and to us, to establish your identity and acceptance of the electronic communications. All electronic communications that meet these requirements will be deemed to be valid and authentic and you intend and agree that those electronic communications will be given the same legal effect as written paper communications signed by you. You agree that electronic copies of communications are valid and you will not contest the validity of the originals or copies, absent proof of altered data or tampering. You are not required to accept electronic communications; we want you to be aware that this is an option for you to accept. We will never ask you for sensitive account information, such as, passwords, PINs, Social Security numbers or account numbers via email. If you receive an email that appears to be from U.S. Bank asking for this type of information, immediately forward the email in its entirety (not as an attachment) to fraud_help@usbank.com. LEVIES, GARNISHMENTS AND OTHER LEGAL PROCESS We are a national bank with many locations. You agree that for purposes of this part, we may treat your funds as existing at any and all locations where legal process can be served upon us or on an appointed agent of ours on our behalf. You understand and agree that a creditor or governmental agency may attach your account by service of legal process on any of our locations, at any site designated by us for acceptance of service of process, on any appointed agent of ours, or any other method authorized by law, court rule, or regulation. We may accept and comply with legal process served by any means, whether in person, by mail, facsimile, electronic transmission, or other means. You agree that we may not contest such legal process. If we are served with a garnishment, levy, execution, or other legal process of apparent validity (together referred to as "legal process"), you understand and agree that we will pay all amounts in the account, or release information about your account, in satisfaction of the legal process and in compliance with our understanding of applicable law. If your account is a joint account, for purposes of responding to legal process, we will consider each joint owner to have an undivided interest in the entire account. Therefore, you agree we may pay all amounts in the account in satisfaction of any legal process, even if it attaches to the interest of fewer than all the account owners. You agree that we may process a levy, garnishment, or other legal process served on us even if we do not process it on the same day it was received. If you believe your funds are exempt from legal process, or otherwise should not be subject to the legal process (for example, if you own funds and the legal process applies to another joint owner, you believe the court, garnishor, or levying authority lacks jurisdiction over you or the property, or you believe the garnishment or levy names the wrong party as garnishee), you agree that it is your responsibility to raise any defense to the legal process against the party who originated the legal process or seek reimbursement from a joint owner, and you agree that we have no obligation to do so. If we are served with any legal process that tries to attach or in some way prevent you from freely using your funds, you give us the right, but we have no obligation, to hold any portion of the funds during any time necessary to determine to our satisfaction who has the legal right to the funds. If we are not able to determine whether the funds are subject to the legal process, you agree that we may deposit the funds with any court which we deem to have jurisdiction over us or the property in your account and ask that court to determine to whom the funds belong. You consent to the jurisdiction of such court to determine the legal right to the property in your account and agree to reimburse us for our expenses, including attorney's fees and expenses, arising out of the service of the legal process on us and our response to it. If the legal process requires us to release information about one or more accounts for which combined statements are provided, we may release the entire combined statement even if other accounts on the statement are not covered by the legal process. All legal process is subject to our rights of setoff and our security interest in your account. We will assess a service fee against your account for any legal process served on us regardless of whether the process is subsequently revoked, vacated, or released. Unless expressly prohibited by law, we will set off or enforce our security interest against your account for such fee prior to our honoring the legal process. We will not be liable to you if an attachment, a hold, or the payment of our fee from Item 18: Staff Report Pg. 31 Packet Pg. 216 of 857 20 27 Item 18 your account leaves insufficient funds to cover outstanding items. You agree to hold us harmless from any claim relati we handle legal process pursuant to this part. Attachment A - US Bank for General Banking RESOLVING ACCOUNT DISPUTES AND ADVERSE CLAIMS Services If a dispute arises concerning your account (including, for example, a dispute over who is an authorized signer or owne ave a claim against you or we have or receive a claim by a third party (including our affiliates) to all or a portion of the property (including money, certificates of deposit, securities and other investment property, financial assets, etc.) in your account, or if we have concerns regarding your account or the use of your account, we have the right to hold any portion of the property in your account until the dispute, claim, or concern is resolved to our satisfaction. We will not be liable to you if the hold we place on your account leaves insufficient funds to cover outstanding items. For purposes of this section, "account" includes any account you have with us or any of our affiliates (including, without limitation, agency, custody, safekeeping, brokerage, and revocable trust accounts). If the dispute, claim or concern remains unresolved, you agree that we may at our option deposit the property in your account with a court and ask the court to determine to whom the property belongs. If we deposit your property with a court, you agree that we may charge your account for our costs, including attorney's fees and expenses. INCREASED COSTS TO MAINTAIN YOUR ACCOUNT If your account becomes subject to a receivership, court order or bankruptcy, and we are required to implement changes as to your account that increase our costs to maintain your account (for example, a requirement for us to pledge property to secure your account above the amount of any deposit insurance on your account), you agree to reimburse us for the additional costs and any expenses incurred by us (including legal fees) to implement such required changes as to your account. CONSUMER REPORT DISPUTES We may report information about your deposit accounts to Consumer Reporting Agencies (CRA). As a result, this may prevent you from obtaining services at other financial institutions. If you believe we have inaccurately reported information to a CRA, you may submit a dispute by calling 844.624.8230 or by writing to: U.S. Bank Attn: CBDH Management, P. O. Box 3447, Oshkosh, WI 54903-3447. In order for us to assist you with your dispute, you must provide: your name, address and phone number; the account number; the specific information you are disputing; the explanation of why it is incorrect; and any supporting documentation (e.g., affidavit of identity theft), if applicable. ACCOUNT INFORMATION Our Privacy Pledge discloses the information we share with other entities for marketing purposes. We also may be required to provide information about you and your account when and as required or permitted by law for other purposes, such as, for example: 1. reporting of interest you earn to federal and state tax authorities; 2. reporting of cash transactions that are at reportable limits; 3. investigating and reporting of transactions that we reasonably determine to be suspicious; and 4. responding to subpoenas, court orders, or government investigations. SETOFF We have the right under the law to set off amounts you owe us against your accounts with us. For purposes of this section, "account" includes any account you have with us or any of our divisions, departments, and affiliates (including, without limitation, agency, custody, safekeeping, securities, investment, brokerage, and revocable trust accounts) and "you" includes, without limitation, your revocable trust, any partnership in which you are a general partner, any prior or successor entity by way of an entity conversion, and any other series of your series limited liability company (as applicable). In addition to this legal right, you give us and our affiliates the contractual right to apply, without demand or prior notice, all or part of the property (including money, certificates of deposit, securities and other investment property, financial assets, etc.) in your accounts, against any debt any one or more of you owe us or our affiliates. If your account is a joint account, you agree we may consider each joint owner to have an undivided interest in the entire account, so we may exercise our contractual right of setoff against the entire account. This includes, for example, debts that now exist and debts that you may incur later, your obligations under a guaranty, and also includes all fees you owe us or our affiliates. We will not be liable to you if enforcing our rights of setoff against your account(s) leaves insufficient funds to cover outstanding items or other obligations. You agree to hold us harmless from any claim arising as the result of our enforcement of our rights of setoff in, or enforcement of our rights of setoff against, your account(s). Our contractual right of setoff does not apply: 1. to an account that is an IRA or other tax -deferred retirement account; 2. to a debt that is created by a consumer credit transaction under a credit card plan (but this does not affect our rights under any consensual security interest); or if our records demonstrate to our satisfaction that the right of withdrawal that a depositor/debtor has with us only arises in a representative capacity (for example, only as an authorized signer, attorney -in -fact or a fiduciary) for someone else. This right of setoff is in addition to any security interest that we or an affiliate of ours might have in your deposit account. SECURITY INTEREST IN ACCOUNTS You grant to us and our affiliates, a security interest in all your accounts with us, and all property in your accounts (including money, certificates of deposit, securities and other investment property, financial assets, etc.), to secure any amount you owe us or our divisions, department, and affiliates, now or in the future. This includes, for example, debts that now exist and debts that you may incur later, your obligations under a guaranty, and also includes all fees you owe us or our affiliates. For purposes of this section, "account" includes any account you have with us or any of our affiliates (including, without limitation, agency, custody, safekeeping, securities, investment, brokerage, and revocable trust accounts) and "you" includes, without limitation, your revocable trust, any partnership in which you are a general partner, any prior or successor entity by way of an entity conversion, and any other series of your series limited liability company (as applicable). In order to provide us and our affiliates with control over your account and all property in your account for purposes of perfecting the security interest granted above, you agree that we shall comply with any and all order, notices, requests and instructions originated by us or any of our affiliates directing disposition of the funds in your account without any further consent from you, even if such instructions are contrary to your instructions or demands or result in our dishonoring items which are presented for payment. If your account is a joint account, you agree we may consider each joint owner to have an undivided interest in the entire account, so we may exercise our security interest against the entire account. We may enforce our security interest without demand or prior notice to you. You agree, for purposes of this security interest, that our affiliates may comply with any instructions we give them regarding your accounts held with them, without further consent. You also agree that we may comply with any instructions regarding your accounts that we receive from our affiliates pursuant to a security interest they have in your accounts with us. We will not be liable to you if enforcing our security interest against your account(s) leaves insufficient funds to cover outstanding items or other obligations. You agree to hold us harmless from any claim arising as the result of our security interest in, or enforcement of our security interest against, your account(s). SECURITY It is your responsibility to protect the account numbers, including card numbers and electronic access devices (e.g., an ATM card, debit card, username and password or PIN) we provide to you for your account(s). Do not discuss, compare, or share information about your account number(s) with anyone unless you are willing to Item 18: Staff Report Pg. 32 Packet Pg. 217 of 857 21 28 Item 18 give him or her full use of your money. An account number can be used by thieves to encode your number on a false ci like and functions like an authorized check. Attachment A - US Bank If you furnish your access device and grant actual authority to make transfers to another person (a family member, co for General Banking xample) who then exceeds that authority, you are liable for the transfers unless we have been notified that transfers by that person are no to Services Your account number can also be used to electronically remove money from your account. If you provide your account number in response to a telephone solicitation for the purpose of making a transfer (to purchase a service or merchandise, for example), payment can be made from your account even though you did not contact us directly and order the payment. You must also take precaution in safeguarding your blank checks. Notify us at once if you believe your checks have been lost or stolen. As between you and us, if you are negligent in safeguarding your checks, you must bear the loss entirely yourself or share the loss with us (we may have to share some of the loss if we failed to use ordinary care and if we substantially contributed to the loss). We reserve the right to place a hold on your account if we suspect irregular, fraudulent, unlawful or other unauthorized activity involved with your account. We may attempt to notify you of such a hold, but we are not required to provide notice prior to placing the hold. You agree that we may maintain such a hold until all claims against you or us to the funds held in your account, whether civil or criminal in nature, have been resolved fully in our sole satisfaction. RESOLUTION OF DISPUTES BY ARBITRATION PLEASE READ THIS PROVISION CAREFULLY. UNDER THIS PROVISION, YOU WAIVE YOUR RIGHTS TO TRY ANY COVERED CLAIM IN COURT BEFORE A JUDGE OR JURY AND TO BRING OR PARTICIPATE IN ANY CLASS OR OTHER REPRESENTATIVE ACTION. The following provision applies to any claim, cause of action, proceeding, or any other dispute between you, on the one hand, and us, our respective parents, subsidiaries, affiliates, agents, employees, predecessors -in -interest, personal representatives, heirs and/or successors, and assigns, on the other hand (each a "Claim" as further defined under the heading "Claims Covered by Arbitration"), including all questions of law or fact related thereto. Agreement to Arbitrate: Either you or we may elect in writing, and without the consent of the other, to arbitrate all Claims covered by this provision. Claims Covered By Arbitration: Claims subject to our agreement to arbitrate shall include all of the following: (1) Claims related to or arising out of this account Agreement, or any prior or later versions of this account Agreement as well as any changes to the terms of this account Agreement; (2) Claims related to or arising out of any aspect of any relationship between us that is governed by this account Agreement, whether based in contract, tort, statute, regulation, or any other legal theory; and (3) Claims that relate to the construction, scope, applicability, or enforceability of this arbitration provision. Claims include Claims that arose before we entered into this account Agreement (such as Claims related to advertising) and after termination of this account Agreement. Claims Not Covered By Arbitration: Claims subject to our agreement to arbitrate shall not include any Claim you file in a small claims court, so long as the Claim remains in such court and advances only an individual claim for relief. Commencing an Arbitration: The party initiating arbitration must choose one of the following arbitration forums to administer the arbitration: • The American Arbitration Association ("AAA") under AAA's Consumer Arbitration Rules, except as modified by this account Agreement. AAA's Rules may be obtained from www.adr.org or 1-800-778-7879 (toll -free). • JAMS/Endispute ("JAMS") under JAMS' Comprehensive Arbitration Rules & Procedures or Streamlined Arbitration Rules & Procedures, including JAMS' Consumer Minimum Standards, except as modified by this account Agreement. JAMS' Class Action Procedures shall not apply. JAMS' rules may be obtained from www.jamsadr.com or 1-800-352-5267 (toll -free). If the chosen arbitration forum is for any reason unable to serve, then the parties may agree to a comparable substitute organization. If the parties are unable to agree, then a court of competent jurisdiction shall appoint a substitute organization. Arbitration Procedure: The arbitration shall be decided by a single neutral arbitrator selected in accordance with AAA's or JAMS' rules, as applicable. The arbitrator will decide the dispute in accordance with the terms of our account Agreement and applicable substantive law, including the Federal Arbitration Act and applicable statutes of limitation. The arbitrator shall honor claims of privilege recognized at law. The arbitrator may award damages or other relief (including injunctive relief) available to the individual claimant under applicable law. The arbitrator will not have the authority to award relief to, or against, any person or entity who is not a party to the arbitration. The arbitrator will take reasonable steps to protect customer account information and other proprietary or confidential information. Any arbitration hearing shall take place in the federal judicial district that includes your home address, unless you and we agree in writing to a different location or the arbitrator so orders. If all Claims are for $10,000 or less, you may choose whether the arbitration will be conducted solely on the basis of documents submitted to the arbitrator, through a telephonic hearing, or by an in -person hearing in accordance with AAA's or JAMS' rules. At your or our request, the arbitrator will issue a reasoned written decision sufficient to explain the essential findings and conclusions on which the award is based. The arbitrator's award shall be final and binding, subject to judicial review only to the extent allowed under the Federal Arbitration Act. You or we may seek to have the award vacated or confirmed and entered as a judgment in any court having jurisdiction. No Class Action or Joinder of Parties: You and we agree that no class action, private attorney general, or other representative claims may be pursued in arbitration, nor may such action be pursued in court if either you or we elect arbitration. Unless mutually agreed to by you and us, Claims of two or more persons may not be joined, consolidated, or otherwise brought together in the same arbitration (unless those persons are joint account owners or beneficiaries on your account and/or related accounts, or parties to a single transaction or related transaction). If this specific paragraph is determined by the arbitrator to be unenforceable, then this entire provision shall be null and void. Arbitration Costs: Unless the applicable arbitration rules at the time of filing a Claim are more favorable to you, we will advance (i) all arbitration costs in an arbitration that we commence, and (il) the first $2,500 in arbitration filing, administration, and arbitrator's fees in an arbitration that you commence. To the extent allowed by applicable law and our agreements, the arbitrator may award arbitration costs and attorneys' fees to the prevailing party. Applicable Law: You and we agree that you and we are participating in transactions that involve interstate commerce and that this provision and any resulting arbitration are governed by the Federal Arbitration Act. To the extent state law applies, the laws of the state governing your account relationship apply. No state statute pertaining to arbitration shall apply. Severability: Except as this provision otherwise provides, if any part of this provision is deemed to be invalid or unenforceable by the arbitrator, that part will be severed from the remainder of this provision and the remainder of this provision will be enforced. ATTORNEY'S FEES Where used, "attorney's fees" includes our attorney's fees, court costs, collection costs, and all related costs and expenses. Notwithstanding any provision in this Agreement to the contrary, any provision for attorney's fees in this Agreement shall not be enforceable in any dispute governed by the laws of California or Oregon. Item 18: Staff Report Pg. 33 Packet Pg. 218 of 857 22 29 Item 18 FUNDS AVAILABILITY: YOUR ABILITY TO WITHDRAW FUNDS - ALL ACCOI.J Attachment A - US Bank This funds availability policy applies to deposits into a checking or savings account made at a branch or ATM. This polil bits made remotely through a mobile or other electronic device. for General Banking Some sections of this disclosure apply to all accounts and all customers. There are special sections for New Accounts, Services ealth Management Accounts and Retail Consumer and Business Accounts. We will make that clear in the section headings. Funds "availability" means your ability to withdraw funds from your account, whether those withdrawals are to be in cash, by check, automatic payment, or any other method we offer you for access to your account. If deposited funds are not "available" to you on a given day, you may not withdraw the funds in cash and we may not use the funds to pay items that you have written or honor other withdrawals you request. If we pay items that you have written or honor other withdrawals before funds are available to you, we may charge a fee for this. Please review the product pricing information disclosure for information regarding overdraft fees associated with your accounts. Please remember that even after the item has "cleared," we have made funds available to you, and you have withdrawn the funds, you are still responsible for items you deposit that are returned to us unpaid and for any other problems involving your deposit. See our Returned Deposited and Cashed Items section. DETERMINING THE AVAILABILITY OF A DEPOSIT - ALL ACCOUNTS The day funds become available is determined by counting business days from the day of your deposit. Every day is a business day except Saturdays, Sundays, and federal holidays. If you make a deposit in person before our "cutoff time" on a business day we are open, we will consider that day to be the day of your deposit for purposes of calculating when your funds will become available. However, if you make a deposit after the cutoff time, or on a day we are not open, we will consider that the deposit was made on the next business day we are open. Our cutoff times vary from branch to branch. The earliest cutoff time at any of our branches is 2:00 p.m. (local time at the branch). If a deposit is made after 8:00 p.m. (local time at the ATM location) or on a day we are not open, we will consider the deposit to be made on the next business day we are open. Deposits you send by mail are considered deposited on the business day it arrives if it arrives by the cutoff time at the branch of deposit. In all cases, availability of any deposit assumes that a requested withdrawal will not overdraw the account. IMMEDIATE AVAILABILITY — ALL ACCOUNTS The following types of deposits will usually be available for withdrawal immediately under normal circumstances: • Cash (if deposited in person to an employee of ours); • Electronic direct deposits; • Wire transfers; and • The first $225.00 from the total of all other deposits made on any given day. Cash and wire transfer deposits are subject to the Special Rules for New Accounts and the $225.00 availability is subject to the rule in the section titled Longer Delays May Apply. LONGER DELAYS MAY APPLY Government Checks, Cashier's Checks, and Other Types of Special Checks. If you make a deposit of one of the following items in person to one of our employees, our policy is to make the funds from those deposits available no later than the first business day after the day of deposit: • State and local government checks that are payable to you; • Cashier's, certified, and teller's checks that are payable to you; and • Federal Reserve Checks, Federal Home Loan Checks, and U.S. Postal Money orders that are payable to you. If you do not make your deposit in person to an employee of the bank (for example, if you mail us the deposit), funds from these deposits may be available no later than the second business day after the day of deposit. However, we may delay funds for a longer period of time, see section titled Longer Delays May Apply — Safeguard Exceptions. Case -by -Case Delays. In some cases, we will not make all of the funds that you deposit available to you as provided above. Depending on the type of check that you deposit, funds may not be available until the second business day after the day of your deposit. The first $225.00 of your deposit, however, will be available no later than the first business day after the day of deposit, and usually immediately. If we are not going to make all of the funds from your deposit available on the first business day, we will notify you at the time you make your deposit. We will also tell you when the funds will be available. If your deposit is not made directly to one of our employees (including a deposit made at an ATM) or if we decide to take this action after you have left the premises, we will mail you the notice by the day after we receive your deposit. If you will need the funds from a deposit right away, you should ask us when the funds will be available. Safeguard Exceptions. In addition, funds you deposit by check may be delayed for a longer period under the following circumstances: • We believe a check you deposit will not be paid. • You deposit checks totaling more than $5,525.00 on any one day. • You redeposit a check that has been returned unpaid. • You have overdrawn your account repeatedly in the last six months. • There is an emergency, such as failure of computer or communications equipment. We will notify you if we delay your ability to withdraw funds for any of these reasons, and we will tell you when the funds will be available. They will generally be available no later than the seventh business day after the day of your deposit. RETAIL CONSUMER, BUSINESS AND COMMERCIAL ACCOUNTS Our general availability policy for these accounts is to make funds available to you on the first business day after the day of deposit. We generally make some portion of a day's deposits available for withdrawal immediately. See the previous section for the types and amounts of deposits that are available immediately. WEALTH MANAGEMENT ACCOUNTS Our general availability policy for Private Client Accounts is to make funds you deposit available to you immediately. This immediate availability policy includes all deposits at any ATM. The section above titled Longer Delays May Apply also applies to your accounts. If we impose a delay as provided in that section, then the sections titled Cashing Checks and Other Accounts may also apply. Item 18: Staff Report Pg. 34 Packet Pg. 219 of 857 23 30 Item 18 DEPOSITS AT AUTOMATED TELLER MACHINES - RETAIL CONSUMER, BUSINESS AN1 Attachment A - US Bank CCOUNTS Our Machines. If you make a deposit at a deposit -accepting ATM identified as ours with the U.S. Bank name, your d ailable on the first for General Banking business day after the day of deposit. However, in certain circumstances, and at U.S. Bank's discretion, the funds may n cond business day after the day of deposit. t. Services Partner ATMs. U.S. Bank has established alliances to expand ATM convenience. These partner ATMs display the U.S. Bank logo and are included in the definition of a U.S. Bank ATM. However, these ATMs generally do not accept deposits. If we permit a deposit at a partner ATM, your deposit will not be available until the fifth business day after the day of deposit. Other Machines. Generally, deposits at an ATM that is not identified as ours with the U.S. Bank name are not permitted. If we permit a deposit at an ATM that is not identified as ours with the U.S. Bank name, your deposit will not be available until the fifth business day after the day of deposit. SPECIAL RULES FOR NEW ACCOUNTS - RETAIL CONSUMER AND BUSINESS ACCOUNTS If you are a new customer, the following special rules will apply during the first 30 days your account is open. Funds from electronic direct deposits and deposits of cash and wire transfers to your account will be available on the day we receive the deposit. The first $5,525.00 of a day's total deposits of cashier's, certified, teller's, traveler's, on -us checks (checks drawn on U.S. Bank), and federal, state and local government checks will be available on the first business day after the day of your deposit if the deposit meets certain conditions. For example, the checks must be payable to you (and you may have to use a special deposit slip). The excess amount over $5,525.00 will be available on the fifth business day after the day of your deposit. If your deposit of these checks (other than a U.S. Treasury check) is not made in person to one of our employees, the first $5,525.00 will not be available until the second business day after the day of your deposit. Funds from all other check deposits will generally be available on the fifth business day after the day of your deposit. In certain instances, we may hold funds from other check deposits for longer than five business days. For example, if we receive a check that falls within the Safeguard Exception description above, we may delay funds for up to seven business days. If we do so, we will provide you with a hold notice at the time of deposit or when we learn that we will hold the funds from the deposit. CASHING CHECKS If we cash a check for you that is drawn on another bank, we may withhold the availability of a corresponding amount of funds that are already in your account. Those funds will be available at the time funds from the check we cashed would have been available if you had deposited it. OTHER ACCOUNTS If we accept for deposit a check that is drawn on another bank, we may make funds from the deposit available for withdrawal immediately but delay your availability to withdraw a corresponding amount of funds that you have on deposit in another account with us. The funds in the other account would then not be available for withdrawal until the day the deposited item would have been available, which will usually be the first business day after the day of deposit. ADDITIONAL TERMS FOR BUSINESS ACCOUNTS All other sections of this Agreement apply to consumer and business accounts alike, (except when a rule specifically says it will apply to consumers). The following sections apply to accounts used primarily for business purposes. UNLAWFUL INTERNET GAMBLING AND OTHER ILLEGAL TRANSACTIONS You agree that you, or anyone acting on your behalf, will not use your account, access device or banking relationship with us to facilitate illegal transactions such as those prohibited by the Unlawful Internet Gambling Act of 2006, or otherwise violate any law, rule or regulation applicable to you. If we identify a suspected illegal transaction, we may block such transactions, and further we may close your account or terminate our banking relationship with you. DEPOSIT OF PRE -AUTHORIZED DRAFTS A pre -authorized draft is an arrangement whereby you get authority from a person (a customer, usually) to access a deposit account owned by that person to pay a debt that person owes you. You deposit these "drafts" into a deposit account with us, and we collect them from your customers, who may have accounts with us or other banks. (These "drafts" are checks you create based on information your customer provides you, such as the customer's name and account number, and the express permission your customer gave you to draw on his account.) When you deposit these pre -authorized drafts, you make the following agreements and warranties: 1. You have express, verifiable and binding authorization from your customer to access his, her or its account for the amount you ask us to collect; 2. You will keep the proof of your authorization in retrievable form for not less than two years from: (a) the date of the authorization of a one-time draft; or (b) from the date of revocation of the authorization of recurring drafts. You agree to provide us with such proof upon our request; 3. We may reverse any credit given to you for any draft deposited to your account and returned to us regardless of when it is returned or the reason for the return. We may take funds in your account to pay the amount you owe us, and if there are insufficient funds in your account, you will still owe us the remaining balance. EARNINGS CREDIT Fees for services used by you may be assessed in full to your accounts or may be offset through account analysis by applying earnings credit to your service charges to determine a single monthly net service charge. Your earnings credit rate is established by us and will change from time to time. For business accounts, the variable earnings credit rate may be zero or a negative rate. If the earnings credit rate for any of your account(s) or the index or other referenced rate upon which the earnings credit rate for your account(s) is based is at any time less than zero percent, you agree to pay all amounts of the negative earnings credit or fees which we impose as compensation for the negative earnings credit rate. Your net service charge could be zero if your earnings credit equals or exceeds your total charges in a given month. If your earnings credit is not sufficient to offset the amount due hereunder, you agree to pay such amounts to us upon demand. WAIVER OF NOTIFICATION OF REDEPOSITED CHECKS When you deposit checks to your account, you have a right to be notified whenever a check you deposit is returned unpaid. We offer a plan (to businesses who elect it) whereby we will automatically redeposit checks returned unpaid due to insufficient funds. To simplify collection of these items, you give up this right to notification for those items we redeposit. If these items are returned unpaid a second time, you will receive standard notification. We may withhold the availability of funds represented by a redeposited check. We will notify you of such delay FACSIMILE SIGNATURES You may wish to use a facsimile signature stamp or other mechanical signature device to sign checks or other orders relating to your accounts. If you do, we will, without contacting you, debit your account for items bearing an imprint that looks substantially like your authorized mechanical signature, whether or not such items bear the actual facsimile signature stamp. You agree to notify us and give us a sample imprint if you plan to use such a device. If you do not give us a sample, this Item 18: Staff Report Pg. 35 l Packet Pg. 220 of 857 J 24 31 Item 18 section still applies to your use of the device. You are responsible for the security of any mechanical signature device.I le for payment of unauthorized items bearing an imprint from, or similar to, your authorized mechanical signature. i Attachment A - US Bank for General Banking DEPOSITS Services Truncation, Substitute Checks, and Other Check Images: If you truncate an original check and create a substitute che'r oi ulucl ipiu document, or other paper or electronic image of the original check, you warrant that no one will be asked to make payment on the original check, a substitute check or any other electronic or paper image, if the payment obligation relating to the original check has already been paid. You also warrant that any substitute check(s) you create conforms to the legal requirements and generally accepted specifications for substitute checks. You agree to retain the original check in conformance with the time requirements as outlined in your remote deposit capture agreement with us. You agree to indemnify us for any loss we may incur as a result of any truncated check transaction you initiate. We can refuse to accept substitute checks that have not previously been warranted by a bank or other financial institution in conformance with the Check 21 Act. Unless specifically stated in a separate agreement between you and us, we do not have to accept any other electronic or paper image of an original check. Deposit Preparation, Sorting, and Endorsements: You agree to properly prepare, sort, and endorse all deposits according to requirements specified in any applicable user guides and Federal Regulation CC. We require that you include the external processing code of "6" in Position 44 of the MICR line for all remotely created checks, and we reserve the right to dishonor any remotely created check that does not meet the requirement. You agree to indemnify us for any loss we incur that results from your failure to comply with these requirements. Requalification: If you elect to have another bank or entity receive and process all of your returned checks, such other bank's endorsement may be obscured by our depository bank endorsement. You understand and agree that any other endorsement placed on your checks that identify another bank as the depository bank or the bank to which checks should be returned may result in illegible or double endorsements, which may delay the return of your checks. You agree we shall not be liable for any such delays. FRAUD PREVENTION MEASURES We offer certain products and services, such as "positive pay," and account blocks and filters that are designed to detect or deter fraud. Failure to use such services could substantially increase the likelihood of fraud. If you fail to implement any of these products or services, or if you fail to follow these or other precautions reasonable for your type of account or circumstances, you agree that you will be precluded from asserting any claims against us for paying any unauthorized, altered, counterfeit or other fraudulent item that such product, service or precaution was designed to detect or deter, and we will not be required to re -credit your account or otherwise have any liability for paying such items. CUSTOMER SEGREGATED ACCOUNTS. Notwithstanding anything to the contrary in this Agreement or any other agreement, we will maintain all money designated as client money by broker -dealers, future commission merchants, or derivatives clearing organizations —in customer segregated accounts in accordance with acknowledgement letters required by applicable SEC and CFTC rules and regulations. ELECTRONIC BANKING AGREEMENT FOR CONSUMER CUSTOMERS This section applies to payment orders and funds transfers governed by the Electronic Fund Transfer Act. When you enroll in online and mobile banking we will provide you with the U.S. Bank Digital Services Agreement that governs the use of all online and mobile services ("Digital Services"). If you have any questions regarding electronic banking transactions or believe that an unauthorized transaction has occurred, please call U.S. Bank 24 -Hour Banking (see last page for phone numbers), visit a local U.S. Bank branch or write to: U.S. Bank 24 -Hour Banking EP-MN-WS5D 60 Livingston Ave. St. Paul, MN 55107 Please read this disclosure carefully because it tells you your rights and obligations for the transactions listed. You should keep this notice for future reference. TYPES OF TRANSACTIONS These are the types of Electronic Fund Transfers that you can accomplish with us (assuming you make arrangements to do so). Electronic Fund Transfers Initiated by Third Parties. You may authorize a third party to initiate electronic fund transfers between your account and the third party's account. These transfers to make or receive payment may be one-time occurrences or may recur as directed by you. These transfers may use the Automated Clearing House (ACH) or other payments network. Your authorization to the third party to make these transfers can occur in a number of ways. In all cases, these third -party transfers will require you to provide the third party with your account number and bank information. Thus, you should only provide your bank and account number information (whether over the phone, the Internet, or via some other method) to trusted third parties whom you have authorized to initiate these electronic fund transfers. Examples of these transfers include, but are not limited to: Direct Deposits. You can arrange for direct deposits to your checking or savings account(s). Preauthorized Payments. You can arrange to pay certain recurring bills from your checking or savings account(s). Electronic check conversion. You may authorize a merchant or other payee to make a one-time electronic payment from your checking account using information from your check to pay for purchases or pay bills. Electronic returned check charge. You may authorize a merchant or other payee to initiate an electronic fund transfer to collect a charge in the event a check is returned for insufficient funds. Expanded Account Access What it is. Any card or PIN (personal identification number) can be used to access up to five checking, savings, line of credit and credit card account(s) held in the same name at U.S. Bank or any of its bank affiliates; and any account you open with us and our affiliates may be accessed by your card or PIN. "Access" means use of a card or account number and PIN to conduct a transaction or obtain information at ATMs, over the telephone, through personal computer banking, or any other available method. If the card or PIN is for a joint account, that card or PIN can be used to access all the accounts linked to the card or PIN account, whether joint or individual. Expanded Account Access is also applicable to your Digital Services. The "cards" that can get Expanded Account Access. All U.S. Bank Debit Cards and ATM cards (excluding prepaid cards), and all U.S. Bank -issued Credit Cards (including, but not limited to, co -branded credit cards, and all credit lines issued through U.S. Bank and U.S. Bank affiliates). Fees and Charges for Expanded Account Access. There are no additional fees or charges just for Expanded Account Access, but fees applicable to each applicable account will continue to apply in accordance with the terms of the applicable account agreements. The fees and terms for each of your accounts will be as disclosed in the Consumer Pricing Information disclosure. (This document can be obtained by contacting a U.S. Bank branch or calling 800.872.2657.) The fees and terms for your personal credit cards and lines of credit are disclosed in the applicable cardmember agreement. Item 18: Staff Report Pg. 36 Packet Pg. 221 of 857 25 32 Item 18 How to Cancel. You can visit a branch or call the U.S. Bank 24 -Hour Banking number at any time to cancel Expandd Ii cancel Expanded Account Access for any account, that account will not be accessible by any card or PIN other than the card or PIN specilj Attachment A - US Bank account. for General Banking Account Access at Automated Teller Machines You can access up to five checking, five savings, and five line(s) of credit or credit card accounts at U.S. Bank ATMs t Services in the same name (excluding prepaid cards). You may perform the following transactions at ATMs: • Make cash withdrawals from your checking and savings accounts associated with your card. Cash denominations vary by ATM. • Get cash advances from your credit card account using your U.S. Bank Debit Card or ATM card. (Refer to your cardmember agreement for any cash advance fees and finance charges that may apply.) • Deposit funds to checking and savings accounts associated with your card. Deposit up to 30 checks and 50 bills in a single transaction. Instant availability for cash deposits if deposited before 6:00 p.m. local time in a non -envelope deposit ATM. • Transfer funds from your account(s) associated with your card. • Make payments to credit card or line of credit accounts from a deposit account associated with your card. • Check the current balance of your checking, savings, credit card and line of credit accounts associated with your card. • Request a statement showing your most recent deposit account transactions. (Refer to the Consumer Pricing Information disclosure regarding any fees for purchasing statements at ATMs. This disclosure can be obtained by contacting a U.S. Bank branch or calling 800.872.2657.) • Change your ATM or debit card PIN. • Make certain charitable contributions from a deposit account associated with your card. • You may access your Home Equity Line of Credit or Personal Line of Credit for balance inquiries and making a payment to the respective line of credit at the ATM. Some of these transactions are not available at all ATMs. For customers with a Debit or ATM card that have accessed a Home Equity Line of Credit or a Personal Line of Credit through the expanded card access feature, cash withdrawals/advances and transferring from the Home Equity Line of Credit or Personal Line of Credit is not allowed. Purchases at Merchants You may use any of your U.S. Bank Debit Cards to make purchases at merchants that accept Visa® debit cards. You may use your U.S. Bank ATM Card and any of your U.S. Bank Debit Cards to make purchases by entering your PIN at participating merchants. You may also get cash from a merchant, if the merchant permits. Purchases made with your card will result in debits to your "primary" checking account. These transactions will be itemized on your monthly statement, including the merchant name, location, the date of purchase and the amount of the purchase. Partial Debit Card Transactions Some merchants may be enrolled in Visa's Partial Authorization service. This means that if you chose 'No' to ATM and Debit Card Overdraft Coverage, your transaction may be approved for only part of your total purchase amount. This occurs when you do not have a sufficient Available Balance, necessary to pay for the entire transaction, at the time of the purchase. Additionally, funds from your designated account(s) linked for Overdraft Protection (if applicable) may be considered when determining the amount that is authorized. For example, if you attempt a $30.00 transaction when your account has an Available Balance of $20.00, your purchase may be approved for $20.00 instead of the entire transaction being declined. Other Electronic Transactions In addition to transactions initiated by using your U.S. Bank Debit Card, there are other electronic banking transactions that you may arrange through your account. These include: • Telephone/personal computer activated transfers of funds from your accounts with us to other accounts with us or to third parties. These include but are not limited to transfers made by telephone, text, online and mobile banking. • Automatic transfer of funds between checking and savings accounts. • Automatic periodic payments to third parties or us from checking or savings accounts (for example, monthly mortgage payments, installment loan payments, insurance payments, utility payments). • Direct deposit to checking or savings accounts (for example, payroll checks, social security payments). • Electronic check conversions from your checking account using a blank, partial or fully completed personal check at merchant locations. • Payments made to your account through your U.S. Bank Debit Card. • You can also use any of your U.S. Bank Debit Cards to obtain a cash advance from your checking account at any Visa® member bank anywhere in the world. LIMITS ON TRANSFERS New Accounts Generally, you cannot make deposits at a non-U.S. Bank ATM. If we permit a deposit at an ATM that is not identified as ours with the U.S. Bank name, your deposit will not be available until the fifth business day after the day of deposit. Security For security reasons, there are limitations on the transactions that you may perform with any of your U.S. Bank Debit Cards or U.S. Bank ATM Cards per day. There are limitations on the number of transactions that can be performed per day and the limits may vary. For security reasons we do not disclose these limits. There are limitations on the dollar amount of cash withdrawals at ATMs and/or cash that you receive from merchants over the amount of your purchase. There are also limitations on the total dollar amount of purchases at merchants and/or cash advances at Visa® member banks you may perform during each 24 -hour period beginning at 4:30 p.m. Central Time. Our standard transaction limits for ATM cards are $300.00 per day for cash withdrawals and $1,000.00 per day for purchases. Our standard transaction limits for debit cards are $500.00 per day for cash withdrawals and $1,000.00 per day for purchases and/or cash advances at banks. Our standard transaction limits for receiving money through your U.S. Bank Debit Card are $3,000.00 per transaction and $10,000.00 per day. We may change these limitations based on periodic risk assessments and we reserve the right to make such changes without notice to you. Transfer limits are also subject to temporary reductions to protect the security of customer accounts or transfer systems. Debit Card Transactions When you use your U.S. Bank Debit Card (Debit Card) for payment, the merchant requests U.S. Bank to authorize the transaction amount. We rely on the merchant to inform us if a debit card transaction is a one-time or a recurring transaction. At the time of the request, we authorize (promise to pay) or decline the merchant's request. If we authorize (promise to pay) we will reduce your Available Balance by the amount of the merchant's authorization request. Some merchants (e.g., hotels, restaurants, gas stations, car rental agencies) request an authorization that is an estimated amount of the anticipated purchase instead of the full purchase amount. As a result, the reduction of your Available Balance may be less or greater than the final debit card transaction amount presented for payment. It is important to note that your Available Balance may change between the time debit card transaction is allthori7ed and when tie debit card trnsaction is nresenterl for ayment. Item 18: Staff Report Pg. 37 Packet Pg. 222 of 857 26 33 Item 18 Debit card authorizations will be reflected as pending transactions from the time we receive the authorization until the thd lem for payment, a completion message is received, or three business days, whichever occurs first. If the debit card authorization has not be Attachment A - US Bank fter three business days, it will be removed from your pending transactions and your Available Balance will no longer be reduced by the autl for General Banking Iprior authorization (promise to pay), if the debit card transaction is presented for payment at a later date we will pay the item regardless of Services If any debit card transaction results in a negative Available Balance at the time it is presented for payment —even if your Available Balance was positive at the time the debit card transaction was authorized you may be charged an Overdraft Paid Fee. For more information on Available Balance please see the section titled INSUFFICIENT FUNDS AND OVERDRAFTS. Please know, it is your responsibility to ensure your account has a sufficient Available Balance to cover all transactions you conduct. We recommend keeping a record of your balance and deducting every transaction at the time you initiate it. FEES We will charge you fees for electronic fund transfers in accordance with the information found in our Consumer Pricing Information disclosure. (This disclosure can be obtained by contacting a U.S. Bank branch or calling 800.872.2657.) The fees may be changed at any time, subject to our giving you any notice required by law. ATM Surcharges. When you use an ATM that is not identified as ours with the U.S. Bank name, and the ATM does not participate in the MoneyPass® Network, you may be charged a fee by the ATM operator or any network used to complete the transfer. To find MoneyPass ATM locations, please visit www.moneypass.com. USING YOUR CARD FOR INTERNATIONAL TRANSACTIONS You may use your U.S. Bank Debit Card or ATM card for retail purchases with international merchants, for international cash advances and all transactions performed at international ATMs that bear any of the network logos found on your card. Refer to our Consumer Pricing Information disclosure for fee information. (This disclosure can be obtained by contacting a U.S. Bank branch or calling 800.872.2657.) We may block transactions in certain foreign countries. Call us at 800.872.2657 for more information. Some merchant and ATM transactions, even if you and/or the merchant or ATM are located in the United States, are considered international transactions under the applicable network rules, in which case we will add International Processing Fees to those transactions. U.S. Bank does not control how these merchants, ATMs and transactions are classified for this purpose. If the transaction requires a currency conversion, the exchange rate in effect when processed may differ from the rate in effect on the date of the transaction or the date of the posting to your Account. Transactions processed through the Visa® system will be converted according to the applicable rules established by Visa®. The foreign currency transaction will be converted to U.S. Dollars by multiplying the amount of the foreign currency times (a) a rate selected by Visa® from the range of rates available in wholesale currency markets for the applicable central processing date, which rate may vary from the rate Visa® itself receives, or (b) the government -mandated rate in effect for the applicable central processing date. For transactions processed through other networks, the international currency transaction will be converted by that network in accordance with their rules. Additional fees may apply. If you need to contact us about your card while outside of the United States, call us collect at 503.401.9991. ADVISORY AGAINST ILLEGAL USE You agree not to use your card(s) for illegal gambling or any other illegal purpose. Display of a payment card logo by, for example, an online merchant does not necessarily mean that transactions are lawful in all jurisdictions in which you may be located; therefore, we reserve the right to decline all online (Internet) gambling transactions. DOCUMENTATION Terminal transfers. You can get a receipt at the time you make any transfer to or from your account using automated teller machines or point -of -sale terminals, However, you may not get a receipt if the amount of the transfer is $15.00 or less. Pre -authorized credits. If you have arranged to have direct deposits made to your account at least once every 60 days from the same person or company, you can call U.S. Bank 24 -Hour Banking, log in to the U.S. Bank Mobile App or visit our online banking site at usbank.com to find out whether or not the deposit has been made. Periodic statements. You will get a monthly account statement unless there are no transfers in a particular month. In any case, you will get the statement at least quarterly for an account to or from which you have arranged for electronic access. In the event your account has become inactive as defined in the section titled Dormant Accounts and Escheat (refer to page 15) and you have had no electronic activity, you will receive an annual statement. PREAUTHORIZED PAYMENTS If you have arranged for automatic periodic payments to be deducted from your checking or savings account and these payments vary in amount, you will be notified by the person you are going to pay ten calendar days prior to the payment date of the amount to be deducted. If the date upon which your payment is scheduled to be deducted changes, the person you are going to pay will notify you seven calendar days prior to the new scheduled date. To confirm the completion of automatic transfers, payments and/or direct deposits, please contact U.S. Bank 24 -Hour Banking, log in to the U.S. Bank Mobile App or visit our online banking site at usbank. com. Right to Stop Payment of Preauthorized Transfers To stop a preauthorized electronic payment or transfer, please call U.S. Bank 24 -Hour Banking (see last page for phone numbers). You must call in time for us to receive your request and to be able to act upon it, which in the case of these electronic payments, is at least three business days before the transfer is scheduled to occur. We may also require you to put your request in writing and forward it to us within 14 days after you call. If you order us to stop one of these payments at least 3 business days before the transfer is scheduled, and we do not do so, we will be liable for your losses or damages. OUR LIABILITY Liability for failure to make transfers. If we do not complete a transfer to or from your account on time or in the correct amount according to our agreement with you, we will be liable for your losses or damages. However, there are some exceptions. We will not be liable, for instance: 1. If, through no fault of ours, you do not have enough money in your account to make the transfer. 2. If you have an overdraft line and the transfer would go over the credit limit. 3. If the automated teller machine where you are making the transfer does not have enough cash. 4. If the terminal or system was not working properly and you knew about the breakdown when you started the transfer. 5. If circumstances beyond our control (such as fire or flood) prevent the transfer, despite reasonable precautions that we have taken. 6. There may be other rules/limitations stated in our agreement(s) with you that excuse our failure to make a requested transfer (for example, the monthly limit on certain transfers out of non -transaction savings accounts; refer to Savings Accounts, Withdrawal section on page 18 for additional details). Item 18: Staff Report Pg. 38 Packet Pg. 223 of 857 27 34 Item 18 Authorized Transactions We assume that all transactions performed with your U.S. Bank ATM Card or any of your U.S. Bank Debit Cards and/or y Attachment A - US Bank number (PIN) are authorized unless you promptly notify us to the contrary. If you intentionally provide another person with the means to p for General Banking transactions using your account, any resulting transactions will be treated as if they were performed and authorized by you. Such treatment Services U.S. Bank Fraud Liaison Center (see page 31) that the other person is no longer authorized to use your card and/or PIN (in which case the to be deactivated). UNAUTHORIZED TRANSACTIONS AND LOST OR STOLEN CARDS An unauthorized transaction is one that another person conducts without your permission and from which you receive no benefit. In order to avoid unauthorized transactions, please observe the following basic precautions: • Do not keep your U.S. Bank ATM Card or U.S. Bank Debit Card and personal identification number (PIN) together. Do not write your PIN on your card. • Do not provide your card or reveal your PIN to another person. If you do so, you authorize that person to conduct transactions using your card or PIN. You are liable for that person's transactions until you notify U.S. Bank Fraud Liaison Center (see below) that the person is no longer authorized to use your card or PIN. • Notify U.S. Bank Fraud Liaison Center or any U.S. Bank branch of the loss, theft or unauthorized use of your card or PIN. • Notify U.S. Bank Fraud Liaison Center or any U.S. Bank branch if you think an electronic banking transaction is incorrectly reported on a receipt or statement. Failure to promptly notify U.S. Bank Fraud Liaison Center or any U.S. Bank branch of the loss, theft, or unauthorized use of your card or PIN will result in inconvenience to you and will hinder the efficient operation of your account. U.S. Bank Fraud Liaison Center 877.595.6256 We reserve the right to cancel, block, and not renew your access device for any reason, with or without prior notice. Reasons for suspension of access may include, for example: • Detection of suspicious or fraudulent activity; • Lack of usage; • Misuse; or • Access devices returned as undeliverable by postal service. CONSUMER LIABILITY FOR UNAUTHORIZED TRANSFERS Zero Liability for All Transactions. Except as provided in the next paragraph, you are generally protected from all liability for unauthorized use of any of your U.S. Bank Debit Cards, the associated account numbers printed on them (including purchases made over the phone, online or in the U.S. Bank Mobile App) and your ATM card or its associated personal identification number (PIN). You still need to report the loss or theft of these cards, PINs, and any unauthorized transactions to us as soon as you can. This is necessary so you can get any unauthorized transactions reversed, prevent further unauthorized transactions, and avoid liability for subsequent purchases we could have prevented had you given us notice. This policy also protects you from liability for other types of electronic fund transfers. Please follow the section entitled Error Resolution Notice to report any unauthorized activity on your account. After 60 Days from Statement Notice. If you fail to give us notice of an unauthorized electronic fund transfer within 60 days of when we first deliver a statement to you that discloses that unauthorized transaction, you will be liable for all unauthorized electronic fund transfers that occur after that 60 -day period expires if we could have prevented such transaction had you reported it to us within the 60 -day period. This rule applies to all forms of electronic fund transfers (including but not limited to ATM transactions, preauthorized withdrawals, online or mobile transactions, and purchases with any of your U.S. Bank Debit Cards, etc.) that occur after the 60 -day period following the first statement notice. If a good reason (such as a long trip or hospital stay) kept you from telling us, we may extend this time period. MINNESOTA LIABILITY DISCLOSURE If our records assign your account to a branch located in the State of Minnesota, you may bring a civil action against any person violating the consumer privacy and unauthorized withdrawal provisions of Minnesota Statutes § 47.69, and may recover, in addition to actual damages or $500.00, whichever is greater, punitive damages when applicable, and the court costs and reasonable attorney's fees incurred. BUSINESS DAYS Bank "business days" are Monday through Friday. Federal holidays are not included. CONFIDENTIALITY We will disclose information to third parties about your account as permitted by law or the transfers you make: 1. where it is necessary for completing transfers; or 2. in order to verify the existence and condition of your account for a third party, such as a credit bureau or merchant; or 3. in order to comply with government agency or court orders; or 4. if you give us your written permission; or 5. according to our privacy pledge, which generally permits us to share information with companies that perform marketing or other services on our behalf. ERROR RESOLUTION NOTICE In case of errors or questions about your electronic transfers, call U.S. Bank 24 -Hour Banking at a number on the last page, visit any U.S. Bank branch or write us at the address listed below, as soon as you can, if you think your statement or receipt is wrong or if you need more information about a transfer listed on the statement or receipt. We must hear from you no later than 60 days after we sent the FIRST statement on which the problem or error appeared. 1. Tell us your name and account number (if any). 2. Describe the error or the transfer you are unsure about and explain as clearly as you can why you believe it is an error or why you need more information. 3. Tell us the dollar amount of the suspected error. If you tell us orally, we may require that you send us your dispute or question in writing within ten business days. We will determine whether an error occurred within ten business days after we hear from you and will correct any error promptly. If we need more time, however, we may take up to 45 days to investigate your dispute or question. If we decide to do this, we will credit your account within ten business days for the amount you think is in error, so that you will have the use of the money during the time it takes us to complete our investigation. If we ask you to put your dispute or question in writing and we do not receive it within ten business days, we might not provisionally credit your account. For errors involving new accounts, point -of -sale, or foreign -initiated transactions, we may take up to 90 days to investigate your dispute or question. For new accounts, we may take up to 20 business days to credit your account for the amount you think is in error. We will tell you the results within three business days after completing our investigation. If we decide that there was no error, we will send you a written explanation. Item 18: Staff Report Pg. 39 Packet Pg. 224 of 857 28 35 Item 18 You may ask for copies of the documents that we used in our investigation. Write to us at: U.S. Bank Attachment A - US Bank EP-MN-WS5D for General Banking 60 Livingston Ave. Services St. Paul, NIN 55107 Error resolution and contact information with respect to online and mobile banking services is provided in our Digital Services Agreement. The online banking site may be accessed by going to the U.S. Bank web site at usbank.com and following the directions to log in to online and mobile banking. More detailed information is available on request. NOTICE OF ATM/NIGHT DEPOSIT FACILITY USER PRECAUTIONS As with all financial transactions, please exercise discretion when using an automated teller machine (ATM) or night deposit facility. For your own safety, be careful. The following suggestions may be helpful: 1. Prepare for your transactions at home (for instance, by filling out a deposit slip) to minimize your time at the ATM or night deposit facility. 2. Mark each transaction in your account record, but not while at the ATM or night deposit facility. Always save your ATM receipts. Do not leave them at the ATM or night deposit facility because they may contain important account information. 3. Compare your records with the account statements you receive. 4. Do not lend your ATM card to anyone. 5. Remember, do not leave your card at the ATM. Do not leave any documents at a night deposit facility. 6. Protect the secrecy of your Personal Identification Number (PIN). Protect your ATM card as though it were cash. Don't tell anyone your PIN. Don't give anyone information regarding your ATM card or PIN over the telephone. Never enter your PIN in any ATM that does not look genuine, has been modified, has a suspicious device attached, or is operating in a suspicious manner. Don't write your PIN where it can be discovered. For example, don't keep a note of your PIN in your wallet or purse. 7. Prevent others from seeing you enter your PIN by using your body to shield their view. 8. If you lose your ATM card or if it is stolen, promptly notify us. You should consult the other disclosures you have received about electronic fund transfers for additional information about what to do if your card is lost or stolen. 9. When you make a transaction, be aware of your surroundings. Look out for suspicious activity near the ATM or night deposit facility, particularly if it is after sunset. At night, be sure that the facility (including the parking area and walkways) is well lighted. Consider having someone accompany you when you use the facility, especially after sunset. If you observe any problem, go to another ATM or night deposit facility. 10. Do not accept assistance from anyone you do not know when using an ATM or night deposit facility. 11. If you notice anything suspicious or if any other problem arises after you have begun an ATM transaction, you may want to cancel the transaction, pocket your card and leave. You might consider using another ATM or coming back later. 12. Do not display your cash; pocket it as soon as the ATM transaction is completed and count the cash later when you are in the safety of your own car, home, or other secure surrounding. 13. At a drive -up facility, make sure all the car doors are locked and all of the windows are rolled up, except the driver's window. Keep the engine running and remain alert to your surroundings. 14. We want the ATM and night deposit facility to be safe and convenient for you. Therefore, please tell us if you know of any problem with a facility. For instance, let us know if a light is not working or there is any damage to a facility. Please report any suspicious activity or crimes to both the operator of the facility and local law enforcement officials immediately. ELECTRONIC BANKING AGREEMENT FOR BUSINESS CUSTOMERS This section governs transactions initiated by you or your employees using a U.S. Bank Business Debit Card or ATM Card, or other U.S. Bank card products offered to business customers from time to time by U.S. Bank ("Business Debit Card(s)"). Your use of business debit cards is subject to the fees and terms of your checking and savings accounts as set forth elsewhere in this Agreement and in related brochures and fee schedules, which are available at any branch in your state. Some ATM networks impose an additional transaction fee unrelated to our fees and charges and may be assessed to your account. Other electronic transactions against your account, whether or not initiated or authorized by you will be governed by the specific Agreement between us related to such transactions and/ or all applicable rules and regulations governing such transactions, including without limitation, the rules of the National Automated Clearing House Association (NACHA) as may be amended from time to time. Under NACHA rules we cannot return an unauthorized electronic transaction (ACH debit) unless you notify us no later than 5:00 p.m. Central Time on the business day following the settlement date of the transaction. Otherwise, your sole recourse is to the originator of the transaction. ACCOUNT ACCESS Any business debit card or personal identification number (PIN) issued to or selected by you, except sole proprietors who choose to have a sole proprietor business debit card, may access only related business checking or business savings accounts (for example, accounts with the same name or tax identification number). Sole proprietor business debit cards, however, can access up to five checking accounts, five savings accounts, and five line of credit or credit card accounts through Expanded Account Access. Sole proprietor cards may access business and personal accounts. For more information on Expanded Account Access, see the Consumer Electronic Banking Agreement. Access methods will differ depending on the business debit card selected by you and approved by us. All business debit card services may not be available depending on the access method selected. LIMITS ON TRANSFERS New Accounts Generally, you cannot make deposits at a non-U.S. Bank ATM. If we permit a deposit at an ATM that is not identified as ours with the U.S. Bank name, your deposit will not be available until the fifth business day after the day of deposit. Security For security reasons, there are limitations on the transactions that you may perform with any of your U.S. Bank Business Debit Cards or U.S. Bank Business ATM Cards, per day. There are limitations on the number of transactions that can be performed per day and the limits may vary. For security reasons we do not disclose these limits. There are limitations on the dollar amount of cash withdrawals at ATMs and/or cash that you receive from merchants over the amount of your purchase. There are also limitations on the total dollar amount of purchases at merchants and/or cash advances at Visa® member banks you may perform during each 24 -hour period beginning at 4:30 p.m. Central Time. Our standard transaction limits for business ATM cards are $500.00 per day for cash withdrawals and $2,500.00 per day for purchases. Our standard transaction limits for business debit cards are $500.00 per day for cash withdrawals and $10,000.00 per day for purchases and/or cash advances at banks. Our standard transaction limits for receiving money through your U.S. Bank Debit Card are $3,000.00 per transaction and $10,000.00 per day. We may change these limitations based on periodic risk assessments and we reserve the right to make such changes without notice to you. Transfer limits are also subject to temporary reductions to protect the security of customer accounts or transfer systems. Item 18: Staff Report Pg. 40 l Packet Pg. 225 of 857 J 29 36 Item 18 Debit Card Transactions When you use your U.S. Bank Business Debit Card (Debit Card) for payment, the merchant requests U.S. Bank to au Attachment A - US Bank ount. We rely on the merchant to inform us if a debit card transaction is a one-time or a recurring transaction. At the time of the request, for General Banking ay) or decline the merchant's request. If we authorize (promise to pay) we will reduce your Available Balance by the amount of the merchk Services t. Some merchants (e.g., hotels, restaurants, gas stations, car rental agencies) request an authorization that is an estimated amount of the antic of the full purchase amount. As a result, the reduction of your Available Balance may be less or greater than the final debit card transaction amount presented for payment. It is important to note that your Available Balance may change between the time a debit card transaction is authorized and when the debit card transaction is presented for payment. Debit card authorizations will be reflected as pending transactions from the time we receive the authorization until the merchant presents the item for payment, a completion message is received, or three business days, whichever occurs first. If the debit card authorization has not been presented for payment after three business days, it will be removed from your pending transactions and your Available Balance will no longer be reduced by the authorization amount. Due to prior authorization (promise to pay), if the debit card transaction is presented for payment at a later date we will pay the item regardless of your Available Balance. If any debit card transaction results in a negative Available Balance at the time it is presented for payment —even if your Available Balance was positive at the time the debit card transaction was authorized —you may be charged an Overdraft Paid Fee. For more information on Available Balance please see the section titled INSUFFICIENT FUNDS AND OVERDRAFTS. Please know, it is your responsibility to ensure your account has a sufficient Available Balance to cover all transactions you conduct. We recommend keeping a record of your balance and deducting every transaction at the time you initiate it. Account Access at Automated Teller Machines You may use any of your Business Debit Cards (except as noted below in Employee Debit Cards and ATM Cards) to make the following transactions at ATMs: • Make cash withdrawals from your checking and savings accounts. Cash denominations vary by ATM. • Get cash advances from your credit card or line of credit account. (Refer to your cardmember agreement for any cash advance fees and finance charges that may apply.) • Deposit funds to checking and savings accounts associated with your card. Deposit up to 30 checks and 50 bills in a single transaction. Instant availability for cash deposits if deposited before 6:00 p.m. local time in a non -envelope deposit ATM. • Transfer funds from your account associated with your card. • Make payments to credit card or line of credit accounts from a deposit account associated with your card. • Check the current balance of your linked checking, savings, credit card and line of credit accounts. • Request a statement showing your most recent deposit account transactions. (Refer to your account fee disclosures regarding any fees for purchasing statements at ATMs.) • Change your ATM or debit card PIN. • Make certain charitable contributions from a deposit account associated with your card. Some of these transactions are not available at all ATMs. Purchases at Merchants You may use any of your Business Debit Cards (except as noted below in Employee Debit Cards and ATM Cards) to make purchases at Visa® merchants that accept debit cards. You may use any of your business debit cards to make purchases by entering your PIN at participating merchants. You may also get cash from a merchant, if the merchant permits. Purchases made with your card will result in debits to your "primary" checking account. These transactions will be itemized on your monthly statement, including the merchant name, location, the date of purchase and the amount of the purchase. Employee Debit Cards and ATM Cards Business debit cards issued to employees only allow ATM deposits at an automated teller machine. They do not allow ATM cash withdrawals. Employee ATM cards do not have purchase access at merchants. Other Electronic Transactions In addition to transactions initiated by using your business debit card, there are other electronic banking transactions that you may arrange through your account. These include: • Telephone/personal computer activated transfers of funds from your accounts with us to other accounts with us or to third parties. These include but are not limited to transfers made by telephone, text, online and mobile banking. • Automatic transfer of funds between checking and savings accounts. • Automatic periodic payments to third parties or us from checking or savings accounts (for example, monthly mortgage payments, installment loan payments, insurance payments, utility payments). • Direct deposit to checking or savings accounts (for example, payroll checks, social security payments). • Electronic check conversions from your checking account using a blank, partial or fully completed personal check at merchant locations. • Payments made to your account through your U.S. Bank Debit Card. • You can also use any of your Business Debit Cards to obtain a cash advance from your checking account at any Visa® member bank anywhere in the world. FEES We will charge you fees for electronic fund transfers in accordance with the information found in our Business Pricing Information brochure. The fees may be changed at any time, subject to our giving you any notice required by law. ATM Surcharges. When you use an ATM that is not identified as ours with the U.S. Bank name, and the ATM does not participate in the MoneyPass® Network, you may be charged a fee by the ATM operator or any network used to complete the transfer. To find MoneyPass ATM locations, please visit www.moneypass.com. USING YOUR CARD FOR INTERNATIONAL TRANSACTIONS You may use your business debit card for retail purchases with international merchants, for international cash advances and all transactions performed at international ATMs that bear any of the network logos found on your card. Refer to our Business Pricing Information brochure for fee information. (This brochure can be obtained by stopping into a U.S. Bank branch. We may block transactions in certain foreign countries. Call us at 800.673.3555 for more information.) Some merchant and ATM transactions, even if you and/or the merchant or ATM are located in the United States, are considered international transactions under the applicable network rules, in which case we will add International Processing Fees to those transactions. U.S. Bank does not control how these merchants, ATMs, and transactions are classified for this purpose. If the transaction requires a currency conversion, the exchange rate in effect when processed may differ from the rate in effect on the date of the transaction or the date of the posting to your Account. Transactions processed through the Visa® system will be converted according to the applicable rules established by Visa®. The foreign currency transaction will be converted to U.S. Dollars by multiplying the amount of the foreign currency times (a) a rate selected by Visa® from the range of rates available in wholesale currency markets for the applicable central processing date, which rate may vary from the rate Visa® itself receives, or (b) the government -mandated rate in effect for the Item 18: Staff Report Pg. 41 Packet Pg. 226 of 857 30 37 Item 18 applicable central processing date. For transactions processed through other networks, the international currency transi by that network in accordance with their rules. Attachment A - US Bank for General Banking Additional fees may apply. If you need to contact us about your card while outside of the United States, call us collect Services BALANCE REQUIREMENTS Transactions using your business debit card will be completed only if sufficient funds are available in the applicable account balance, overdraft protection or other linked credit facility to fully perform the transaction. UNAUTHORIZED TRANSACTIONS AND LOST OR STOLEN CARDS AND SECURITY You are solely responsible for maintaining the security of your business debit cards and PINs and their use by you and your employees and other agents. You shall be liable for the acts of your employees and agents related to your business debit cards, including business debit card applications and other service requests. If you provide another person with the means to perform transactions related to your accounts using your business debit card or PIN, any resulting transactions will be treated as if they were performed and authorized by you. You are generally protected from all liability for unauthorized use of your business debit card. The U.S. Bank Zero Liability policy is subject to certain conditions. If we determine that the unauthorized transaction was caused by your gross negligence or fraud, the U.S. Bank Zero Liability policy will not apply. You still need to report the loss or theft of these cards, PINs, and any unauthorized transactions to us as soon as you can. This is necessary so you can get any unauthorized transactions reversed, prevent further unauthorized transactions, and avoid liability for subsequent purchases we could have prevented had you given us notice. You must report an unauthorized debit card transaction to us within a reasonable time, not to exceed 60 days, from the day we send or make your account statement available to you on which an unauthorized transaction is first reported. If you fail to give us notice of an unauthorized debit card transaction within 60 days of when we first deliver a statement to you that discloses that unauthorized transaction, you will be liable for all debit card transactions that occur after that 60 -day period expires if we could have prevented such transaction had you reported it to us within the 60 -day period. Please be aware that consumer rights governed by the Electronic Fund Transfer Act do not apply to business accounts and we are not liable to reimburse you for unauthorized or erroneous transactions that may occur on your business account via electronic fund transfer. If you believe that an erroneous or unauthorized transaction has occurred using your business debit card, or if your card has been lost or stolen, or if you want to cancel a business debit card issued to you or your employee/agent, or if you want to change your PIN, you must immediately telephone us at: U.S. Bank Fraud Liaison Center 877.595.6256 U.S. Bank 24 -Hour Banking Cincinnati Metro Area: Denver Metro Area: Milwaukee Metro Area: St. Louis Metro Area: Minneapolis/St. Paul Metro Area: Portland Metro Area: All Other Areas: Outside the U.S.: U.S. Bank Business Service Center Monday - Friday: Saturday: Minneapolis/St. Paul Metro Area: All Other Areas within the U.S.: Outside the United States: U.S. Bank Fraud Liaison Center 877.595.6256 U.S. Bank accepts relay calls. © 2021, U.S. Bank National Association 513.632.4141 303.585.8585 414.765.4636 314.425.2000 612.USBANKS (872.2657) 503.USBANKS (872.2657) 800.USBANKS 503.401.9991 (call collect) 8:00 a.m. to 8:00 p.m. CT 8:00 a.m. to 6:30 p.m. CT 651.244.7770 800.673.3555 503.401.9992 40341 © 2021 Wolters Kluwer Financial Services, Inc. All rights reserved. USB-AIB 5/10/2021 Custom 201727155-020 Item 18: Staff Report Pg. 42 Packet Pg. 227 of 857 31 embank U.S. Bank Services Terms and Conditions Item 18 Attachment A - US Bank for General Banking Services Thank you for choosing U.S. Bank Services. This document provides product information, disclosures and descriptions of the Global Treasury Management, Foreign Exchange, Money Center and Safekeeping Services ("Services") available at U.S. Bank. Other documents may become part of our Agreement depending on the Services selected. Please read all documents carefully; they will govern the Services provided to you, the Customer. Customer shall not be bound by the terms and conditions for specific Services to the extent Customer is not using such Service(s). U.S. Bank National Association Member FDIC © 2021 U.S. Bank National Association Item 18: Staff Report Pg. 43 Packet Pg. 228 of 857 39 U.S. Bank Services —Terms and Conditions TABLE OF CONTENTS Item 18 Attachment A - US Bank for General Banking Services I. INTRODUCTION................................................................................................................................................................................1 II. TERMS APPLICABLE TO ALL GLOBAL TREASURY MANAGEMENT, FOREIGN EXCHANGE AND MONEY CENTER AND SAFEKEEPING SERVICES...............................................................................................................................................................2 III. TERMS APPLICABLE TO ALL INTERNET -BASED SERVICES........................................................................................................6 IV. TERMS APPLICABLE TO SPECIFIC GLOBAL TREASURY MANAGEMENT SERVICES.................................................................7 A-1. EBILL SERVICE...............................................................................................................................................................................7 A-2. E -PAYMENT SERVICE.................................................................................................................................................................... 8 B. INFORMATION REPORTING AND TRANSACTION SERVICES.......................................................................................................10 C. ELECTRONIC DEPOSIT SERVICES................................................................................................................................................11 D. ACH SERVICES................................................................................................................................................................................14 E. WIRE TRANSFER SERVICES...........................................................................................................................................................18 F. DATA TRANSLATION SERVICES.....................................................................................................................................................20 G. CASH VAULT SERVICES.................................................................................................................................................................22 H. U.S. BANK EASYTAXSM SERVICES..................................................................................................................................................23 I. PAPER -BASED DISBURSEMENT SERVICES...................................................................................................................................24 J. POSITIVE PAY SERVICES................................................................................................................................................................25 K. LOCKBOX SERVICES....................................................................................................................................................................... 27 L. HEALTHCARE PAYMENT CONSOLIDATOR....................................................................................................................................29 M. COMMERCIAL SWEEP ACCOUNTS - LOAN OPTION....................................................................................................................29 N. COMMERCIAL SWEEP ACCOUNTS - INVESTMENT OPTION.......................................................................................................30 O. MASTER REPURCHASE AGREEMENT(MRA)................................................................................................................................32 P. ZERO BALANCE ACCOUNT (ZBA) SERVICES................................................................................................................................36 Q. SINGLEPOINT® INTERNATIONAL REQUEST FOR TRANSFER SERVICES..................................................................................36 R. SWIFT -RELATED SERVICES...........................................................................................................................................................37 V. TERMS APPLICABLE TO SPECIFIC FOREIGN EXCHANGE SERVICES......................................................................................38 A. ELECTRONIC FOREIGN EXCHANGE SERVICES...........................................................................................................................38 B. FOREIGN CURRENCY ACCOUNTS.................................................................................................................................................40 VI. TERMS APPLICABLE TO SPECIFIC MONEY CENTER AND SAFEKEEPING SERVICES.............................................................41 A. INVESTMENT, DEPOSITORY AND SAFEKEEPING SERVICES......................................................................................................41 B. TERMS AND CONDITIONS OF ELECTRONIC DELIVERY...............................................................................................................45 Item 18: Staff Report Pg. 44 Packet Pg. 229 of 857 40 Item 18 Attachment A - US Bank for General Banking I. INTRODUCTION 1. Definitions. a. "Agent" means any director, officer, employee, representative, affiliate, third -party vendor or any other person or automation acting on behalf of the Customer with the actual, implied or apparent authority of Customer. Bank may rely on any grant of authority until it receives written notice of its revocation and is given a reasonable amount of time to act upon such notice. b. "Bank" means U.S. Bank National Association and each subsidiary or affiliate of U.S. Bank that provides Services to Customer. c. "Business Day" means any day on which a majority of Bank's offices are open to the public for substantially all banking functions. Saturdays, Sundays, federal or state holidays or any day recognized by a Federal Reserve Bank as a holiday shall not be considered a Business Day, even if Bank's offices are open. d. "Customer" means the business entity, and any parent company, subsidiary or affiliate, for whom Bank provides a Service. e. "Service" or "Services" means one or more global treasury management, foreign exchange, or money center and safekeeping services offered by Bank. f. "Written," "writing" and other like terms mean, unless otherwise provided or required by context, both paper and electronic forms of communication such as emails, faxes, digital images and copies, electronic notices capable of being stored and printed, and similar electronic versions. To the extent permitted under applicable law or regulation, signatures may be made and delivered electronically, whether digitally or otherwise, which shall have the same legal validity and enforceability as manually executed signatures and are binding on the parties. The parties may rely on electronic forms of documents subject to any applicable law, regulation, or rule. 2. Other Agreements, Laws and Regulations. These terms and conditions and the Master Services Agreement (or existing Treasury Management Service Agreement or equivalent document executed by Customer) are collectively referred to herein as the "Agreement". The Services are provided to Customer subject to the following other documents, laws and regulations, which are hereby incorporated into and made part of this Agreement: a. the setup materials, user guides, and any supplement thereto required by Bank to implement a specific Service (referred to in the Agreement as the "Implementation Documents"); b. the most current fee and availability schedule and other fee disclosures provided to Customer, including account statements; c. the provisions of the then -current deposit account agreement and accompanying disclosures, which govern deposit accounts and other depository services; d. the Uniform Commercial Code, as enacted in the State of Minnesota; e. any applicable automated clearinghouse operating rules, including, without limitation, the National Automated Clearing House Association Operating Rules and Guidelines (the "NACHA Rules"), the Real -Time Payments Operating Rules, and the rules promulgated by the Electronic Check Clearing House Organization (the "ECCHO Rules") and The Clearing House; and f. federal, state and local laws and regulations applicable to Bank or Customer, including, without limitation, Regulation CC promulgated by the Board of Governors of the Federal Reserve System, 12 CFR Section 229.1, et seq. ("Regulation CC"), all Operating Circulars promulgated by the Board of Governors of the Federal Reserve System, and the regulations overseen by the Office of Foreign Assets Control ("OFAC"). 3. Change of Terms. Bank may change the terms of this Agreement at any time upon reasonable written notice to Customer or by any other method permitted by law. Customer's continued use of the Services after the effective date of any change to the terms shall be deemed Customer's consent to the revised terms. Any other variations to this Agreement must be in writing and executed by Services Jbrmance of the Services in accordance with the terms of this Agreement would result in violation of any present or future statute, regulation, government policy, or relevant clearing or central bank agreements or settlement systems to which Bank is subject, and which governs or affects the transactions contemplated by this Agreement, then this Agreement shall be deemed amended to the extent necessary to comply with such statute, regulation, policy, agreement or systems, and Bank shall incur no liability to Customer as a result of such violation or amendment. No course of dealing between Bank and Customer will constitute a modification of this Agreement or constitute an agreement between the Bank and Customer regardless of whatever practices and procedures Bank and Customer may use. 4. No Third -Party Beneficiaries/Third-Party Claims. Services provided by Bank are for the sole and exclusive benefit of Customer, and no other persons or organizations shall have any of the rights and remedies arising under this Agreement. Customer agrees to indemnify, defend and hold Bank harmless from and against any and all claims, demands, expenses, losses, liabilities and damages of third parties of any nature whatsoever, including, without limitation, reasonable attorney fees and court costs at trial or appeal arising directly or indirectly from any Service delivered to Customer pursuant to this Agreement. 5. Images. Bank may create a microfilm, optical disk, or other electronic image of the Agreement or Implementation Document. Bank may store the electronic image of such Agreement and/or Implementation Document in its electronic form and then destroy the paper original as part of Bank's normal business practices, with the electronic image deemed to be an original. 6. Foreign Account Tax Compliance Act. If a payment made by either party under this Agreement is or could become subject to the U.S. Federal withholding tax imposed by Sections 1471 through 1474 of the Internal Revenue Code of 1986, as amended ("FATCA"), then (i) each party shall provide to the other party such information, and shall disclose to the applicable governmental authorities such information, as may be required in order for such party to comply with all applicable requirements of FATCA and to determine that the other party has complied with FATCA, and (ii) a party that fails to comply with FATCA shall indemnify the other party for all costs, damages, and liabilities arising out of such party's failure to comply with FATCA. Customer is responsible for providing Bank with all necessary documentation to establish that payments to Customer are exempt from FATCA withholding. 7. Disclaimer of Warranties. BANK MAKES NO WARRANTIES, EXPRESS OR IMPLIED, IN LAW OR IN FACT, INCLUDING, WITHOUT LIMITATION, THE IMPLIED WARRANTIES OF FITNESS FOR A PARTICULAR PURPOSE AND OF MERCHANTABILITY, EITHER TO CUSTOMER OR TO ANY OTHER PARTY, WITH RESPECT TO THE SERVICES PROVIDED BY BANK OR ITS AGENTS OR WITH RESPECT TO SOFTWARE PRODUCTS PROVIDED OR MADE AVAILABLE TO THE CUSTOMER FOR ITS USE BY BANK IN CONNECTION WITH THIS AGREEMENT AND ANY SERVICE. Page 1 (Effective 11/01/2021) Item 18: Staff Report Pg. 45 Packet Pg. 230 of 857 41 Item 18 Attachment A - US Bank for General Banking II. TERMS APPLICABLE TO ALL GLOBAL TREASURY MANAGEMENT, FOREIGN EXCHANGE AND MONEY CENTER AND SAFEKEEPING SERVICES 1. Services. Bank may provide Services that are not specifically included in the Services section of this Agreement. By accepting and using any Service, Customer agrees that the Service will be governed by this Agreement and any other conditions communicated to Customer by Bank. Certain Services included in this Agreement may not be available or may not be provided in certain market areas. 2. Proprietary Information. Customer acknowledges that this Agreement, all related documentation and computer programs and systems used in providing Services, and all information related thereto constitute proprietary property of Bank that is of great commercial value. Customer agrees that it shall not acquire any proprietary interest or rights therein as a result of its use of the Services and shall keep all such proprietary information strictly confidential. 3. Representations and Warranties. Customer and Bank each represent and warrant to the other, as of the date this Agreement is entered into and at the time any Service is used or performed, that: (a) it is validly existing and in good standing under the laws of the jurisdiction of its organization; (b) it has all requisite power and authority to execute and deliver, and to perform its obligations under, this Agreement and each Service used or performed by it; (c) this Agreement has been duly authorized and executed by it and constitutes its legal, valid and binding obligation; (d) any consent or authorization of any governmental authority or third party required to be obtained by it in connection with this Agreement or any Service used or performed by it has been obtained; and (e) the Services received are for business use only and are not primarily for personal, family or household use. In addition, Customer represents and warrants to Bank that this Agreement will not violate: (i) any law, rule, regulation, order, writ, judgment, injunction, decree or award binding on Customer; or (ii) the provisions of any agreement to which Customer is a party or is subject, or by which it, or its assets, is bound, or conflict with or constitute a default thereunder. 4. Financial Review. Bank's willingness to provide Services to Customer is dependent on the Customer's financial condition. Customer's financial condition is subject to review by Bank from time to time, and such reviews must be satisfactory to Bank in its sole discretion and opinion. Customer shall, upon request, provide to Bank any such information as Bank may require to perform any such review. Customer's failure to meet such standards or provide such information or assistance when requested shall constitute a breach of this Agreement and shall permit Bank to cease providing Services upon written notice to Customer. 5. Fees. Unless otherwise agreed to by Bank in writing, Customer shall pay Bank the fees, charges and assessments set forth for the Services provided in the most current fee schedules and other fee disclosures provided to Customer (including account statements), plus additional fees and expenses for extraordinary Services. The price schedule for each Service shall be deemed accepted by Customer upon provision of the Service to Customer. In addition, Customer shall pay Bank the amount of any taxes levied or leased on fees charged pursuant to this Agreement, including, without limitation, federal, state, or local privilege excise or sales taxes based on gross revenue, any taxes or amount in lieu thereof paid or payable by Bank, excluding Bank's income taxes and any assessments charged to Bank directly as a result of providing the Services. Bank may change the amount or type of service charges from time to time. Fees for Services used by Customer may be charged in full to Customer's account(s) or may be offset through account analysis by applying earnings credit to Customer's service charges to determine a single monthly net service charge. The applicable earnings credit rate is established by the Bank and will change from time to time without advance notice to Customer. Customer's net service charge could be zero if such earnings credit exceeds total charges in a given month, however excess earnings credits are not refundable as a payment and unused earnings credits shall be forfeited according to a schedule established by Bank or agreed to by the parties. If Customer's earnings credit is insufficient to offset the amount due hereunder, Customer agrees to pay such amount to Bank upon demand. If the earnings credit rate for Customer's account(s), or the index or other referenced rate upon which the earnings credit rate is based, is at any time less than zero percent, Customer agrees to pay all amounts of the negative earning Services kd by Bank as compensation for the negative earnings credit rate. Customer authorizes Bank to debit Customer's account(s) with Bank for any and all fees, expenses or other charges owed by Customer to Bank under this Agreement. 6. Deposit Accounts. Most Services require that Customer maintain one or more deposit accounts with Bank. All checks, wire transfers, ACH payments and other items deposited into such accounts are provisionally credited and taken subject to later verification by Bank and Bank's receipt of final settlement. Deposited items that are deposited and later returned unpaid will be charged against the account without prior notice. Customer agrees to pay Bank for any overdraft or overpayment in any of Customer's accounts. If the interest rate for any of Customer's deposit accounts, or the index or other referenced rate upon which the interest rate for such accounts is based, is at any time less than zero percent, Customer agrees to pay Bank all amounts of the negative interest or fees that Bank imposes as compensation for the less -than -zero interest rate. Customer authorizes Bank to charge any account Customer maintains with Bank for any amount remaining due under this Section. 7. Security Interest. Customer grants to Bank a consensual possessory security interest in Customer's deposit accounts maintained with Bank and the funds held therein to secure payment of all of Customer's obligations under this Agreement. 8. Accuracy and Timeliness of Information. Bank will use reasonable efforts to provide the information requested through the Services in a prompt fashion but shall not be liable for temporary failure to provide timely information. In such event, Customer shall be responsible for carrying out banking business through alternative delivery channels. Bank shall not be liable for any inaccurate or incomplete information with respect to transactions which have not been completely processed or posted to Bank's systems prior to being made available pursuant to the Services. 9. Authorized Signers and Users. Customer shall appoint certain Authorized Signer(s) in the Master Services Agreement or in such other format or document as may be agreed by Bank. Customer agrees that Authorized Signers shall be authorized to act on behalf of Customer in all actions taken under this Agreement and may enter into all transactions contemplated in this Agreement, including, without limitation, selecting Services for the benefit of Customer, appointing initial system administrator(s), and signing additional documentation that may be necessary to implement Services and giving instructions with regard to any Service, including, without limitation, wire transfers, ACH transfers and other electronic or paper transfers from or to any account Customer maintains with Bank. The Authorized Signer(s) or Customer's designated system administrator(s) shall appoint Agents to access or use the Services provided for the benefit of Customer ("Authorized Users"). Authorized Users may act on behalf of Customer for a particular Service in accordance with the relevant Implementation Documents or other document(s) establishing the Authorized Users' responsibilities or in accordance with the authority granted by Customer. Customer may revoke the authority of or change the Authorized Signers at any time upon prior written notice and execution of additional documentation required by Bank. Such change or revocation shall not be binding upon Bank until it has received the required written notice and has had a reasonable opportunity to act thereon. In any event, Bank may act on instructions that it believes in good faith were provided by an Authorized Signer or Authorized User, or anyone purporting to be an Authorized Signer or Authorized User. 10. Forms Approval and Service Implementation. Bank reserves the right to approve the form of Customer's checks, drafts, deposit slips and similar documentation. Prior to initiating a new account or Service, or at any other necessary time, Customer agrees to provide all information and conduct any test that Bank may reasonably request, including, without limitation, completing Implementation Documents and signature cards, providing corporate resolutions and other documents, and assessing test tapes and transmissions. Customer acknowledges that Services will not commence or continue until such time as an approved item or test is provided to Bank and determined by Bank to be satisfactory. Customer shall be responsible for initial product installation, whether or not Bank provides telephone or on -site installation support. Page 2 (Effective 11/01/2021) Item 18: Staff Report Pg. 46 Packet Pg. 231 of 857 42 Item 18 Attachment A - US Bank for General Banking 11. Security Procedures. a. Introduction. Customer agrees that Bank may select, in its sole discretion, security procedures that must be used in connection with certain Service(s). Customer acknowledges and agrees that it has been informed of and understands Bank's security procedures, and that such security procedures are commercially reasonable. Customer agrees that its use of Bank's security procedures constitutes its agreement to such security procedures, regardless of whether Bank has communicated such security procedures to Customer. Customer represents and warrants that it will comply with Bank's security procedures. Customer agrees to be bound by any payment order, transaction or service change order that is acted upon by Bank in accordance with such security procedures. Customer understands that the security procedures are not intended for the purpose of detecting errors in the transmission or content of information controlled by Customer. If Customer selects certain security procedures to use in connection with a Service and those security procedures provide less protection against unauthorized transactions or activity than other security procedures offered by Bank in connection with such Service, the security procedures selected by Customer shall be deemed commercially reasonable to the same extent as the security procedures offered by Bank that provide greater protection. Customer acknowledges that, in order to meet the constantly evolving threat of account fraud, the Bank's security procedures also need to evolve over time. Bank reserves the right, and Customer agrees that Bank shall have the right, in its sole discretion, to issue new security procedures and/or to cancel or change any security procedures by giving verbal or written notice to Customer. The new or changed security procedures shall become effective upon notification unless Bank provides an effective date to Customer. Customer agrees that its use of such new or changed security procedures constitutes its agreement: (i) to use the new or changed security procedures, regardless of whether Bank has communicated the new or changed security procedures to Customer, and (ii) that such new or changed security procedures are commercially reasonable. Bank also reserves the right to periodically audit Customer's security procedures and information technology processes, and to mandate controls or suspend Services until Customer complies with such security procedures. b. Access. Customer shall be solely responsible for designating authorized access to Services. Access to Services may be controlled through the use of user IDs, personal identification numbers, passwords, digital certificates/signatures, biometric authentication, private keys or other security devices ("Codes"). Customer is solely responsible for maintaining its own internal security and agrees to use the utmost care in selecting any company, individual or automation given access to one or more of the Services. Codes that are assigned to individual Authorized Users shall not be shared with any other person, including other Authorized Users and Customer shall not disclose any information regarding the Services that an unauthorized user would find helpful to obtain access to all or part of any Service. Customer assumes all risk of accidental disclosure or inadvertent use of any Codes, whether such disclosure or use arises out of Customer's negligent or deliberate acts or otherwise. If Customer or its Agents has reason to believe that any security procedures or Codes have or may become known by unauthorized persons (whether or not employed by Customer) or if Customer believes its network or computer systems have been compromised or its computers infected, Customer shall immediately notify Bank by telephone and confirm such verbal notification in writing to Bank within 24 hours. Bank will replace the security procedures and/or Codes in accordance with Bank's procedures. Customer shall be solely responsible for funds transfer instructions and other communications or transactions initiated before Bank received Customer's notice and had a reasonable time to act on such notice. Customer agrees to defend, indemnify and hold Bank harmless from and against any claims, losses, damages, costs, expenses, fines and other liabilities arising out of Customer's failure to maintain the security and confidentiality of the Codes or arising out of the unlawful use of any website or portal by Customer or any person or automation that obtains access to a website or portal using the Codes. c. Confidentiality. Customer and Bank represent, warrant and mutually agree that all confidential information concerning the other party or parties that comes into its possession in connection with any of the Services will be maintained in strictest confidence and shall not be used or divulged to any other party except as may d, Services ,,ble for the due performance of any of the Services, as required by applicable law, or as otherwise agreed or consented to by the parties. Bank shall maintain physical, electronic, and procedural safeguards to keep Customer's confidential information secure. Customer's obligation to maintain the confidentiality of all security procedures shall survive the termination of any Service or this Agreement. Customer acknowledges that certain Services may involve the handling of confidential consumer information that may be subject to privacy laws and regulations, including unauthorized access or breach notification regulations. Customer agrees to notify Bank immediately if Customer sends or receives protected health information that requires the execution of a business associate agreement. d. Verbal or Written Instructions. For some Services, Bank may choose to honor Customer's request to give Bank verbal or written instructions regarding the Services. Customer agrees that Bank may in good faith rely on such verbal or written instructions that purport to come from an authorized Agent of the Customer without independent verification by Bank. e. Fraud prevention measures. Bank offers certain products, Services and security procedures, such as Positive Pay, account blocks or filters, and multi -factor authentication, that are designed to detect or deter fraud. Failure to use such products, Services or security procedures could substantially increase the likelihood of fraud. If Customer fails to implement any of these products, Services or security procedures, or if Customer fails to follow these or other precautions reasonable for its particular circumstances, Customer agrees that, except with respect to liability, loss or damage caused by Bank's own lack of good faith or failure to exercise ordinary care: (i) it will be precluded from asserting any claims against Bank for paying any unauthorized, altered, counterfeit or other fraudulent item that such product, Service, security procedure or precaution was designed to detect or deter; (ii) Bank will not be required to re -credit Customer's account or otherwise have any liability for paying such items; and (iii) Customer will pay all costs and expenses incurred by Bank for all efforts undertaken by Bank to recover any losses incurred by Customer. f. Waiver of Security Procedures. Customer, after having been offered Bank's security procedures, may request that payment orders, transactions, or services orders be authenticated using a different security procedure. Bank, in its sole discretion, may elect to permit Customer to use such a security procedure. In such circumstances, Customer agrees that it shall be bound by any payment order, transaction, or service order authenticated by its selected security procedure whether or not such payment order, transaction, or service order is properly authorized. 12. Unsecured Electronic Transmissions and Instructions. Bank shall transmit to Customer information related to Services via secure electronic transmissions. If Customer elects to send or receive instructions or reports from Bank via unsecured electronic means, including, without limitation, facsimile transmission, voice mail, unsecured email, pager or other unsecured electronic or telephonic methods ("Electronic Transmission"), Customer acknowledges that such Electronic Transmissions are inherently insecure communication methods due to the possibility of error, delay and observation or receipt by unauthorized personnel. Bank may rely in good faith on Customer's instructions regarding how and to what number or email address Electronic Transmissions should be sent and may rely on any Electronic Transmission that it reasonably believes to have been initiated by the Customer. Should Customer elect to send or receive unsecured Electronic Transmissions to or from Bank, Customer assumes all risks, and Bank shall not be liable for any loss, that results from the nonreceipt, disclosure, alteration or unauthorized access of any such unsecured Electronic Transmission. 13. Account Blocks and Filters. ACH debit blocks and check blocks prevent ACH debits and checks from posting to Customer's account. ACH filters and check filters enable Customer to set various criteria to authorize certain transactions to post to Customer's account while excluding others. If an ACH debit or check filter is established by Customer, any ACH debit entry or check presented that does not specifically meet the criteria will be dishonored or sent back to the originator of the transaction. Customer acknowledges that the effectiveness of the filters is dependent on the accuracy and timeliness of the information provided by Customer. In addition, Customer acknowledges that payments to Bank and certain Page 3 (Effective 11/01/2021) Item 18: Staff Report Pg. 47 Packet Pg. 232 of 857 43 Item 18 Attachment A - US Bank for General Banking Bank -approved vendors cannot be blocked and that certain ACH transactions such as returns, settlements or adjustments cannot be blocked per NACHA Rules. If Customer desires to modify a block or filter setting, Customer shall notify Bank at least 72 hours in advance of the changes taking effect. 14. Computer Equipment and Software. Many Services require the use of computer hardware and software or other equipment. Customer is responsible for maintaining its computer and equipment (including those provided by or through Bank for use with Services) in good working order. Customer shall ensure that computers and other equipment have the necessary compatibility and format to interface with Bank's systems, including, without limitation, the ability to support the Bank's security procedures. Customer agrees to install upgrades and other system enhancements within a reasonable time after being requested to do so by Bank. License agreements for necessary software shall either be embedded in the software or separately documented. Customer agrees to comply with all applicable software license agreements, whether or not such agreements have been executed by Customer. Customer has no rights or ownership in any software provided by or through Bank and shall not transfer, copy, alter, modify, reverse engineer, reproduce, or convey in any manner, in whole or in part, any such software. Customer shall return all software and user manuals associated with any software upon request. Bank makes no representations or warranties with respect to any equipment or software provided by Bank. 15. Transactions on Non -Business Days/Cutoff Times. Transactions, deposits, payment orders, entries or other requests by Customer received by Bank on a non -Business Day, after established cutoff deadlines, or during a maintenance window may be treated by Bank as received on the next Business Day or may not be processed at all. Bank may change any cutoff time or other deadline at any time. Bank will make a reasonable effort to notify Customer of any changes in advance. 16. Customer -Initiated Transactions and Instructions. Bank will honor Customer's transactions and instructions (including adjustments, amendments and cancellations) only when Customer has complied with this Agreement and related policies and procedures. Bank will be under no obligation to honor, either in whole or in part, and may, in its sole discretion, delay, suspend or reject any transaction or instruction that: a. exceeds Customer's collected or available funds on deposit with Bank; b. Bank has reason to believe may not be authorized by Customer; c. involves funds subject to a hold, dispute or legal process preventing their withdrawal; d. violates any provision of any applicable regulation of the Federal Reserve Bank or any other federal, state or local regulatory authority; e. requires Customer, at Bank's sole discretion, to complete an additional security procedure due to characteristics of such transaction or instruction before processing; f. requires Bank to complete regulatory or legal clearance requirements, such as OFAC screening; or g. Bank has reasonable cause not to honor, for the protection of either Bank or Customer. 17. Inconsistent Name and Account Number. If Customer or third party acting on Customer's instruction initiates a fund transfer instruction or payment order ("Payment Order") to Bank that describes the person to receive the proceeds of such Payment Order (the "Beneficiary"), the Beneficiary's bank, or an intermediary bank by name and an account or other identifying number, Bank and subsequent parties to the Payment Order, including the Beneficiary's bank, may rely on and act solely on the basis of such number, even though the name and number do not agree and even though Bank and subsequent parties know or have reason to know of the inconsistency. Customer's obligation to pay the amount of the Payment Order to Bank is not excused in such circumstances. With respect to incoming Payment Orders that do not include an account number recognizable to Bank, Bank may return the Payment Order to the sending financial institution without incurring any liability to Customer. 18. Intercompany Services/Authority to Transfer or Commingle Funds. In the event that Customer lists entities in an appendix to the Master Services Agreement or Services ,h, or otherwise requests Bank to provide Services to a parent company, subsidiary, affiliate, or other commonly owned company, Customer agrees that it shall be jointly and severally liable for such company's obligations under this Agreement. Customer hereby represents and warrants to Bank that any and all transfers and commingling of funds required or permitted by any Service or requested by Customer, and all other aspects of the performance hereby by Bank and Customer, have been duly authorized by all necessary parties, including, without limitation, the account holder of each account, and that Customer has obtained and shall maintain in its regular business records and make available to Bank upon reasonable demand, for a period of seven (7) years after termination of the Service, adequate documentary evidence of such authorization from the account holder of each account, executed by the duly authorized officer(s) of each such account holder in accordance with that account holder's bylaws and/or board resolutions. Customer further represents and warrants that each transfer or commingling of funds authorized hereunder is not in violation of any agreement, bylaw or board resolution of Customer or any of its affiliates or subsidiaries, nor is it in violation of any applicable federal, state, local law, regulation, of any decree, judgment, order of any judicial or administrative authority. Each representation and warranty contained herein shall be continuing and shall be deemed to be repeated upon Bank's effecting each transfer and commingling of funds authorized hereunder. 19. Customer Records. This Agreement and the performance of Services by Bank shall not relieve Customer of any obligation imposed by law, clearinghouse rules (including the NACHA Rules and ECCHO Rules), or by contract regarding the maintenance of records, or from employing adequate audit, accounting and review practices as are customarily followed by similar businesses. In addition, Customer shall retain and provide to Bank, upon request, all information necessary to remake or reconstruct any deposit, transmission, file or entry for thirty (30) days following receipt by Bank of the deposit, file, entry, transmission or other order affecting an account. 20. Account Communications and Review Period. Customer agrees to regularly and promptly review and verify all statements, reports, check payment records, wire transfer instructions, confirmations, adjustments, charges, and other transactions ("Account Communications"). Customer may receive or access Account Communications electronically, including without limitation, delivery by posting to a password -protected website or database. Customer acknowledges that any Account Communication provided by Bank through electronic delivery is deemed to constitute good and effective delivery when posted by Bank, regardless of whether Customer actually or timely receives or accesses such Account Communication. Unless a different review period is specified elsewhere in this Agreement, Customer shall, within a reasonable time, which in no event shall be greater than thirty (30) calendar days following the day Bank first mails, electronically transmits or otherwise makes data available to Customer ("Review Period"), notify Bank of any error or discrepancy between Customer's records and any Bank notice or statement, or any transaction or transfer Customer believes was not authorized. If Customer fails to notify Bank of such unauthorized transaction within the Review Period, Customer agrees that the failure to report any such errors or unauthorized transactions shall relieve Bank of any liability for the unreported erroneous or unauthorized transaction. In accordance with NACHA Rules, Customer must report an unauthorized ACH debit entry to the Customer's account by the established deadline on the Business Day following the settlement date of the unauthorized entry. Otherwise, Customer's sole recourse is to the originator of the transaction. 21. Monitoring and Recording Communications. Customer acknowledges and agrees that Bank, or anyone acting on Bank's behalf, may monitor and/or record any communication between Customer, or its Agent, and Bank, or anyone acting on Bank's behalf, for quality control, security and other purposes. Customer also acknowledges and agrees that this monitoring or recording may be done without any further notice to Customer or its Agent. The communication that may be monitored or recorded includes telephone calls, cellular or mobile phone calls, electronic mail messages, text messages, instant or live chat, or any other communications in any form. Page 4 (Effective 11/01/2021) Item 18: Staff Report Pg. 48 Packet Pg. 233 of 857 44 22. Limitation of Bank's Liability for Services. Customer acknowledges that Bank's fees for Services are very small in relation to the amounts of transfers initiated through these Services and consequently Bank's willingness to provide such Services is based on the liability limitations contained in this Agreement. In addition to greater limitations on Bank's liability that may be provided elsewhere in this Agreement, Bank's liability related to any Service shall be limited exclusively to actual proven damages arising directly from its own gross negligence or willful misconduct. Bank will not, under any circumstances, be liable for any special, incidental, indirect, consequential, punitive or similar losses or damages, whether or not the likelihood of such losses or damages was known by either party at the time Customer first obtains Services from Bank or at the time any instruction or order is given to Bank pursuant to any Service, and whether such losses or damages arise from tort, contract, loss of investment opportunity, lost or reduced profits, or otherwise. Bank's maximum liability for any loss of interest shall be calculated using a rate equal to the average Federal Funds rate at the Federal Reserve Bank of New York for the period involved. Notwithstanding the foregoing, Bank shall not be liable for any losses or damages caused, in whole or in part, by the action or inaction of Customer, or any Agent or employee of Customer, whether or not such action or inaction constitutes negligence or a breach of this Agreement. Bank shall not be liable for any damage, cost, loss, liability or delay caused by a force majeure event, including but not limited to, accident, strike, labor dispute, fire, flood, war, riot, terrorist act, government restrictions, exchange or market rulings, market volatility, suspension of trading, equipment breakdown, electrical, telephone, Internet or mechanical failures, acts of nature, epidemic, any cause which is attributable to a third party, or any other cause or event that was beyond Bank's reasonable control whether or not reasonably foreseeable. Customer agrees that the fees charged for the performance of the Services shall be deemed to have been established in contemplation of these liability limitations. 23. Dispute Resolution. a. Governing Law. Except as otherwise provided herein, this Agreement shall be governed by the laws of the State of Minnesota, without regard to conflicts of law principles. b. Jury Trial Waiver. To the fullest extent permitted by law, Bank and Customer hereby agree to waive trial by jury in any judicial proceeding involving, directly or indirectly, any matter (whether in tort, contract or otherwise) in any way arising out of, related to or connected with these Services or this Agreement. Bank and Customer represent and warrant to each other that this jury trial waiver is knowingly, willingly and voluntarily given. c. Jurisdiction and Venue. Customer consents to the jurisdiction of the courts of the State of Minnesota, waives any argument that such venue is inconvenient and agrees to bring litigation commenced in connection with this Agreement in either the District Court of Hennepin County or the United States District Court, District of Minnesota, Fourth Division. d. Collection Costs. Should Bank have to undertake any action to recover any amount due under this Agreement for the Services, including, without limitation, fees, overdrafts or overpayment, Customer will be liable to Bank for the cost of such effort, plus reasonable attorney fees. e. Adverse Claims. If Bank receives an adverse claim against any account, and Bank reasonably believes that it will not be protected if the claim is ignored, Customer agrees that Bank may place a hold on the affected account. Any such hold will remain in place only so long as reasonably necessary to resolve the claim or employ legal remedies to allow a court to decide such claim. Assuming compliance with this Section, Bank shall have no liability for dishonored transactions due to the hold, and Customer agrees to reimburse Bank all costs, including reasonable attorney fees, incurred due to such adverse claim. 24. Necessary Third -Party Service Providers. a. Third -Party Networks. Some Services are provided by Bank through access to a third -party network. Such Services are dependent upon the availability of the third -party network on conditions acceptable to Bank. Bank reserves the right to discontinue the Service or provide the Service through an alternative third -party network and shall have no liability should such network become unavailable. Bank does not warrant and shall not Item 18 Attachment A - US Bank for General Banking be responsible for Services receL. Services any third -party network. b. Third -Party Vendors. Customer agrees that Bank may, at its sole discretion and at any time without notice to Customer, engage third -party vendors to provide a Service, or portions thereof, to Customer, or to support Bank in its provision of a Service to Customer. Customer acknowledges that Bank's third -party vendors may perform certain functions offshore. Some Services and/or computer equipment and software are provided to Customer by a third -party vendor selected by Customer who is unaffiliated with Bank. In those cases, the third -party vendor is acting as Customer's Agent rather than an agent of Bank, and Customer agrees to be bound by such third party's acts or omissions. Bank does not warrant and shall not be responsible for Services provided by unaffiliated third -party vendors. Customer authorizes Bank to disclose to any third -party vendor of Customer or Bank information concerning Customer to the extent required to deliver the requested Service. 25. Notices. All written notices to Bank shall be delivered or mailed to the address designated by Bank. Notices, including but not limited to, Account Communications sent to Customer shall be delivered or mailed to Customer's current lead account address or other known address if deemed more appropriate by Bank under the circumstances. Notices may be delivered to some Customers in electronic format, including posting to Bank's website, delivery via facsimile to a number on file, or delivery to an electronic mail address on file or used by an Authorized Signer or Authorized User. 26. Severability. To the extent possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision shall be held to be invalid, illegal or unenforceable, such provision shall be ineffective only to the extent of such invalidity, illegality or unenforceability, without rendering invalid, illegal or unenforceable the remainder of any such provision or the remaining provisions of this Agreement. 27. Waiver. A waiver by Bank or Customer of any term or provision shall not be construed as a waiver of such term or provision at any other time, or of any other term or provision. Bank's waiver of the enforcement of any of the terms of this Agreement with respect to any transaction or series of transactions will not affect Bank's right to enforce any of its rights with respect to other Customers or to enforce any of its rights with respect to later transactions with Customer. 28. Assignment. In addition to Section 24 above, Bank may at any time assign or delegate its rights and duties under this Agreement. Customer may not assign or transfer its rights or obligations hereunder to any other person or entity without Bank's written consent, which consent shall not be unreasonably withheld. 29. Termination. Any Services may be terminated by either party upon 30 days' prior written notice to the other. Bank may also terminate or suspend any Services immediately without notice to Customer if any of the following occurs: (a) Customer becomes insolvent or files, or has filed against it, any bankruptcy or other insolvency, reorganization, liquidation or dissolution proceeding of any kind; (b) a material adverse change occurs in Customer's business or financial condition; (c) Bank has reason to believe that Customer has engaged in fraudulent or illegal activity; (d) Customer fails to maintain balances in accounts sufficient to cover overdrafts; (e) Customer violates, or is in default under, the terms of this Agreement or any other agreement with Bank; (f) Customer fails to comply with security procedures or fails to provide information reasonably requested by Bank; (g) Bank determines it is impractical or illegal to provide any Services because of changes in laws, regulations or rules; (h) Bank, in good faith, is unable to satisfy itself that any Services have been properly authorized by Customer; or (i) Bank, in good faith, deems itself insecure. Notwithstanding any termination, the terms of this Agreement shall apply to all transactions which have been initiated prior to termination. Page 5 (Effective 11/01/2021) Item 18: Staff Report Pg. 49 Packet Pg. 234 of 857 45 III. TERMS APPLICABLE TO ALL INTERNET -BASED SERVICES 1. Introduction. Bank offers a number of Services over the Internet. If requested by Customer and agreed to by Bank, Bank will grant Customer access to one or more of Bank's Internet Services in the manner established by Bank. Customer agrees that its use of Services from time to time offered by Bank via the Internet (collectively, the "Internet Services") shall be governed by: (i) this Section and all other relevant sections of this Agreement, including, without limitation, sections governing the specific Services that are offered online; (ii) the other agreements, laws and regulations described in Section 1.2 of this Agreement; and (iii) the applicable Terms of Use, as defined in Section 111.2 below. 2. Terms of Use. Bank may post terms or rules of use ("Terms of Use") governing Customer's use of the Internet Services on Bank's website(s) for accessing such Services. Such Terms of Use shall supplement and amend the terms set forth in this Section. In the event of a conflict between the Terms of Use and the rules set forth in this Agreement, the Terms of Use shall govern. Customer's initial use of an Internet Service shall constitute an acceptance of the Terms of Use posted on the website. Bank may change the Terms of Use for any Internet Service at any time by posting notice of such change via an alert or message on a broadcast or message page of the website ("Broadcast Message"). All changes shall have an effective date. Customer's use of the Internet Service after the effective date of any such change shall constitute an acceptance of the revised Terms of Use by Customer. Customer is responsible for establishing an internal procedure for reviewing the Broadcast Message page on a regular basis to obtain timely notice of changes to the Terms of Use. In the event that a specific Internet Service does not have Broadcast Message capability, Customer will be notified of any changes in accordance with Section 11.25 hereof. Neither Bank nor Customer will contest the validity, enforceability, or admissibility of hard copy printouts of the Terms of Use for any website or notices of changes to such Terms of Use provided in accordance with this Section. Copies of such Terms of Use or notices, if introduced as evidence in tangible form in any judicial or administrative proceeding, will be admissible to the same extent and under the same conditions as other business records originated and maintained in documentary form. 3. Security Procedures. Customer agrees to use the Internet Services in accordance with the security procedures established by Bank. Bank reserves the right to reject any transaction or Service request that is not made in accordance with such procedures. Customer shall at all times use a Web browser that supports the level of encryption used by Bank as part of its security procedures. Due to emerging technologies and ensuing changes in security practices, Bank reserves the right to supplement or change its security procedures from time to time upon reasonable notice to Customer. Customer acknowledges and agrees that, notwithstanding anything to the contrary set forth in the Agreement, in matters of security, reasonable notice may be less than a day's notice or even, in some cases, notice after the fact. Customer is solely responsible for maintaining a secure work environment to ensure against the use of Internet Services by unauthorized individuals or unauthorized automated access. Security procedures to be followed by Customer include, without limitation, informing Authorized Users that any passwords should not be shared, securing physical access to the terminals used for Internet Services when an Authorized User has logged in to an application or system and, if applicable, identifying secure methods for controlling authorized automated access to an application or system. 4. System Administrator. Customer shall designate one or more System Administrator(s). The System Administrator shall be responsible for setting up Internet Services and for establishing internal security procedures related to such Internet Services, which may be made available through applications or systems offered by Bank, including, without limitation, accepting delivery of software, system -wide configuration of Bank accounts, appointing Authorized Users, establishing authority levels, authorization requirements and payment limits, and distributing and resetting IDs, passwords and other internal security devices related to the Internet Services. Customer represents and Item 18 Attachment A - US Bank for General Banking warrants to Bank that any actionL_ServicesJkdministrator in relation to the Internet Services including, without limitation, the appointment of Authorized Users and the access, automation and privileges granted to such Authorized Users, are duly authorized by Customer. 5. Other Customer Responsibilities. a. Equipment and Software. Customer is responsible for obtaining (from Bank, in some instances), installing and maintaining the computer and communications equipment (including, without limitation, personal computers and modems), software, Web browsers, Internet access and communications services necessary to access and use the Internet Services in accordance with this Agreement. b. Use of Internet Services. Customer shall use its access to Internet Services and websites operated by or on behalf of Bank only to conduct its business through or with Bank and agrees to limit access to those Agents who require access to Internet Services. c. Antivirus Protection. Customer agrees to run antivirus software before transmitting data to or through any website. Customer may use any commercially available, industry recognized antivirus software of the type that detects and disinfects viruses automatically, without the need for the Customer to execute virus scanning for each file manually. Customer shall update its antivirus software on a regular basis and in no event less often than once every week. d. Anti-malware Protection. Bank may offer complimentary anti-malware software for use with certain Services that is designed to detect, deter or destroy different types of malware. Failure to install anti-malware software offered by Bank could substantially increase the likelihood of fraud and other losses. If Customer fails to install software offered by Bank, Customer agrees that, except with respect to losses caused by Bank's own lack of good faith or failure to exercise ordinary care, it will be precluded from asserting claims against Bank for any losses caused by malware which such software would have detected, deterred or destroyed. Bank will not be required to re -credit Customer's account or otherwise have any liability for such losses. e. Network Security. Customer agrees to install and utilize current industry -standard network security for its information technology systems that access Services via the Internet. Network security protection includes, but is not limited to, firewalls and intrusion detection systems. For certain Services, Bank may require Customer maintain specific network security protection in order to access the Services. 6. Disclaimer of Warranties. BANK PROVIDES ALL INTERNET SERVICES ON AN "AS IS," "AS AVAILABLE" BASIS AND MAKES NO REPRESENTATIONS OR WARRANTIES OF ANY KIND WITH RESPECT TO THE INTERNET SERVICES OR THE CONTENT OR SECURITY OF ANY WEBSITE. BANK DISCLAIMS ALL SUCH REPRESENTATIONS AND WARRANTIES, WHETHER EXPRESS, IMPLIED OR STATUTORY, INCLUDING, WITHOUT LIMITATION, ALL WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. WITHOUT LIMITING THE FOREGOING, BANK DOES NOT WARRANT THAT THE OPERATION OF ANY WEBSITE WILL BE UNINTERRUPTED OR ERROR -FREE. CUSTOMER IS RESPONSIBLE FOR TAKING APPROPRIATE PRECAUTIONS AGAINST DAMAGE TO ITS OPERATIONS WHICH COULD BE CAUSED BY INTERRUPTIONS OR MALFUNCTIONS OF ANY WEBSITE AND ASSUMES THE RISK OF SUCH OCCURRENCES. Page 6 (Effective 11/01/2021) Item 18: Staff Report Pg. 50 Packet Pg. 235 of 857 46 Item 18 Attachment A - US Bank for General Banking IV. TERMS APPLICABLE TO SPECIFIC GLOBAL TREASURY MANAGEMENT SERVICES The following are additional terms and conditions applicable to specific Treasury Management Services offered by Bank. Bank may change the number or type of Services offered at any time. Customer shall not be bound by the terms and conditions for the specific Services described in Sections IV, V and VI of this Agreement to the extent Customer is not using such Service(s). A-1. EBILL SERVICE eBill allows Customer's customers ("Payers") to make convenient payments to Customer through multiple channels, including, but not limited to, the Internet, an Interactive Voice Response (IVR) system, text message, chatbots or other forms of social media, or virtual assistants. In addition, Customer may distribute electronic invoices, bills or statements to Payers who can pay such invoices, bills or statements via multiple payment channels accessible through the eBill Service. 1. Internet. a. "Customer Payment Site" means the interactive Internet payment site hosted by U.S. Bank National Association or its third -party vendor (collectively "Bank") where Payers may make payments to Customer over the Internet. Bank will configure, implement, host and support the Customer Payment Site. If Customer provides the content for the Customer Payment Site, Customer agrees to indemnify and hold Bank harmless for any content that violates applicable law or payment network rules. Upon request Bank will provide draft terms and conditions for Customer to provide to its customers on Customer Payment Site. Such terms and conditions are provided as is, without any representations or warranties. Customer shall be solely responsible for determining the suitability of such terms and conditions for Customer's use, as well as the final form and content of any terms and conditions it elects to post (if any). b. Customer License. Bank shall have the right and license to use or sublicense Customer's name, trademarks, service marks, copyrights and logos and other textual information in connection with the Customer Payment Site solely for the purposes contemplated herein. c. "Administrative Payment Center Website" means the interactive Internet site hosted by Bank where Customer may access reports, initiate payments on behalf of Payers, or initiate refunds. Bank will configure, implement, host and support the Administrative Payment Center Website. Customer shall be solely responsible for setting up Authorized Users, access entitlements and internal controls within the Administrative Payment Center Website. d. Links. If applicable, Customer shall provide and maintain a secure link on its website to the Customer Payment Site. Customer shall be responsible for ensuring that the link to the Customer Payment Site takes Payer to the appropriate area within the Customer Payment Site. Customer shall be responsible for providing the agreed -upon data concerning Payer in a manner that meets Bank's encryption or security methods during the exchange. Customer and Bank agree to use industry - standard security procedures and technology to ensure the security of the Customer's website and the Customer Payment Site and to prevent data theft or unauthorized access. e. Payer Authentication. Depending on the applicable payment processing channel, Customer shall be responsible for verifying the identity of each Payer prior to the time Payer is linked to the Customer Payment Site. Customer agrees that Payers shall not be granted access to the Customer Payment Site link until Customer has verified the identity of each Payer using a commercially reasonable fraud detection system. For every Payer that accesses the Customer Payment System, Bank relies on Customer to have completed such verification. 2. Compliance with laws and regulations. Customer agrees to comply with all applicable laws, rules and regulations, including without limitation, those issued by: (i) the National Automated Clearing House Association; (ii) the Real -Time Payments (RTP) System Operating Rules; (iii) the Zelle Network Participation Rules; (iv) any governmental entity, including (without limitation) the requirements contained in the Electronic Fund Transfer Act (including without limitation Section 1005.10, Preauthorized Drafts), the Americans with Disabilities Act, the Health Insurance Portability and Accountability Act, Services Tonic Signatures in Global and National Commerce Act, the Controlling the Assault of Non - Solicited Pornography And Marketing (CAN-SPAM) Act, and the Telephone Consumer Protection Act; and (vi) any other entity or association that issues or sponsors a payment device, including (without limitation) the requirements of the Payment Card Industry (PCI) Data Security Standard and any credit card association, including Visa and Mastercard. Customer further agrees to comply with all payment network regulations for ATM debit networks. 3. Payer Authentication / Authorization. For each payment channel, Bank shall authenticate a Payer's identity in the manner specified by Customer, and agreed to by Bank, in the Implementation Documents. Customer acknowledges and agrees that the authentication of the Payer's identity in such manner shall constitute a commercially reasonable fraud detection system and Bank shall have no liability for all payments so authenticated. Bank is not responsible for errors made by Payer or Customer and may rely on the information submitted or communicated by Payer or Customer. Customer agrees to defend, indemnify and hold Bank harmless from any claims related to Customer's or Payer's submission of inaccurate or incorrect information. 4. Payment Processing. Payments shall be processed in the manner mutually agreed to between Bank and Customer, which may include ACH debit entries, debit cards, credit cards or other payment processing methods. Customer shall at all times be considered the originator of Payer's payment. For ACH WEB debit transactions, upon Customer's request and if agreed to by Bank, Bank will validate receiving account and account status information by use of a commercially reasonable fraud detection system selected by Bank for the first use of new account information or of a change to existing account information. By requesting that Bank perform such validation, Customer consents to Bank disclosing any information necessary to perform such validation to Bank's third -party vendor. Depending on the applicable payment processing channel, payment processing may also be subject to the terms of any other agreement between Bank and Customer and between Customer and the payment transaction processor supported by Bank. Payments may be initiated through a number of channels including, but not limited to, the Customer Payment Site, IVR system text message, chatbots or other forms of social media, or virtual assistants. Bank will notify Customer of the payments that were initiated either through the Administrative Payment Center Website or by delivering a file in the manner set forth in the Implementation Documents. Customer acknowledges that all payments are subject to adjustment, return, reversal and/or chargeback in accordance with the rules governing the applicable payment processing channel. Customer agrees to be liable to Bank for any such adjustment, return, reversal or chargeback. 5. Recurring Payments. The eBill Service provides Customer with the ability to offer Payers the option of making fixed or variable recurring payments. If permitted by applicable regulations, Payers have the ability to initiate a payment that recurs on a fixed schedule selected by the Payer. Payers must be enrolled in eBill in order to initiate variable recurring payments. 6. Fees. In addition to Bank's standard fees, Customer agrees to pay additional fees and expenses for implementation of the eBill Service or other additional Services, if any, as may from time to time be disclosed to Customer by Bank. Customer also agrees to pay the applicable fees and expenses charged by the payment transaction processor supported by Bank, as set forth in Customer's agreement with such processor. 7. Convenience Fee, Service Fee and Surcharge a. If permitted by applicable regulations, the eBill Service offers flexible fee or surcharge options that allow Customer or Bank to define and collect fees or surcharge to be charged to Payers in connection with the payment transaction. Payers are provided with the opportunity to stop the payment process if they do not wish to pay the fee. b. If Customer desires to collect fees, Customer shall be responsible for ensuring that fee and surcharge assessments comply with the relevant laws, rules and regulations. c. If agreed to by Bank and Customer, Bank may collect and retain the fees. In such case, Customer agrees that Bank may, in its sole discretion, set, adjust, manage and collect the fees as a means to wholly or partially Page 7 (Effective 11/01/2021) Item 18: Staff Report Pg. 51 Packet Pg. 236 of 857 47 offset Bank fees that may otherwise have been incurred by Customer. Bank's willingness to collect fees shall be based on Customer's projected payment volume, average ticket, type of transactions, or other considerations such as changes to interchange fees and assessments. Bank may, in its sole discretion, establish or modify payment caps for sums paid by Payers. If the actual payment volume, average ticket, payment types or other considerations fail to meet Customer's stated projections or do not completely offset Bank fees, Customer agrees that Bank may, in its sole discretion, require Customer to wholly or partially reimburse Bank for any resulting shortfall in Bank fees. 8. Transaction Controls. Customer agrees to notify Bank of any material change or anticipated material change in daily dollar activity or type of transaction processing and obtain Bank's consent to such change. Bank may, in its sole discretion, immediately upon written notice to Customer, place a maximum dollar limit on the eBill transactions or require Customer to provide reasonable security for Bank's continued handling of such transactions. 9. Payer Communications. Customer agrees to obtain all consents necessary from Payers for Bank to process the Payers' data and communicate with Payers (e.g., confirmation Short Message Service ("SMS") or email) in the course of performing the eBill Service. 10. Customer Records. This Agreement and the performance of the eBill Service by Bank shall not relieve Customer of any obligation imposed by law, clearinghouse rules, payment card industry rules, or by contract regarding the maintenance of records, or from employing adequate audit, accounting and review practices as are customarily followed by similar businesses. In addition, Customer shall retain and provide to Bank, upon request, all information necessary to remake or reconstruct any transmission, file or entry for thirty (30) days following receipt by Bank of the deposit, file, entry, transmission or other order. 11. Bill Presentment and Distribution Service. If selected by Customer and agreed to by Bank, Customer may distribute invoices, statements, confirmations, regulatory notices, or other electronic communications to Payers via the eBill Distribution Service. Customer represents and warrants that it will not use or include any reference to untruncated credit card, social security, or bank account numbers, or Personal Health Information (as defined in the Health Insurance Portability and Accountability Act of 1996) in any electronic communications exchanged through the eBill Distribution Service. Customer shall indemnify and hold Bank harmless from and against any and all claims, demands, damages, losses, liabilities, penalties and expenses (including, without limitation, reasonable attorney fees and court costs at trial or on appeal) arising directly or indirectly from Customer's breach of the representation or warranty contained in this paragraph. Customer acknowledges and agrees that all electronic communications exchanged through the eBill Distribution Service may be received, processed, managed, and archived by third parties unaffiliated with Bank. Bank makes no representation or warranty, and assumes no responsibility, with respect to any actions or inactions of any unaffiliated third party in connection with Customer's use of the eBill Distribution Service. 12. Third -Party Vendor. Customer agrees that Bank may, at its sole discretion and at any time without notice to Customer, engage a third -party vendor to provide the eBill Service, or portions thereof, to Customer, or to support Bank in its provision of the eBill Service to Customer. Customer acknowledges that Bank's third -party vendor may perform certain functions offshore. Customer authorizes Bank to disclose to any third - party vendor information concerning Customer to the extent required to deliver the eBill Service. 13. Card Updater Service. Bank, or Bank's third -party vendor, participates in card updater programs offered by card issuers which enable Bank to update card information for Payers with expired or expiring cards. If selected by Customer and agreed to by Bank, Bank will provide Customer with updated card information for Payers when such information is available. Customer must be approved by card issuers, or by Bank in accordance with card issuer guidelines, prior to use. Such information will only be available for Payers who have elected recurring payments or for which another legitimate business need exists. Bank is not responsible for the accuracy or completeness of any information provided by the card issuers. Item 18 Attachment A - US Bank for General Banking A-2. E -PAYMENT SERVICE 1.Services Customer may select the E -Payment Service that would allow its customers ("Payers") to make convenient payments to Customer through the Internet, an Integrated Voice Response (IVR) system or a 'live' call center. In addition, Customer may distribute electronic invoices, bills or statements to Payers who can pay such invoices, bills or statements via multiple payment channels accessible through the E -Payment Service. Customer agrees that this Service shall be governed by this Section and all other relevant sections of this Agreement. E -Payment Service is no longer available for new customers. 1. Internet. a. "Customer Payment Site" means the interactive Internet payment site hosted by Bank where Payers may make payments to Customer over the Internet. Bank will configure, implement, host and support the Customer Payment Site. If Customer provides the content for the Customer Payment Site, Customer agrees to indemnify and hold Bank harmless for any content that violates applicable law or payment network rules. b. Customer License. Bank shall have the right and license to use or sublicense Customer's name, trademarks, service marks, copyrights and logos and other textual information in connection with the Customer Payment Site solely for the purposes contemplated herein. c. "Administrative Website" means the interactive Internet site hosted by Bank where Customer may access reports, initiate payments on behalf of Payers, or initiate refunds. Bank will configure, implement, host and support the Administrative Website. Customer shall be solely responsible for setting up Authorized Users, access entitlements and internal controls within the Administrative Website. d. Links. Customer shall provide and maintain a secure link on its website to the Customer Payment Site. Customer shall be responsible for ensuring that the link to the Customer Payment Site takes Payer to the appropriate area within the Customer Payment Site. Customer shall be responsible for providing the agreed -upon data concerning Payer in a manner that meets Bank's encryption or security methods during the exchange. Customer and Bank agree to use industry -standard security procedures and technology to ensure the security of the Customer's website and the Customer Payment Site and to prevent data theft or unauthorized access. e. Payer Authentication. Depending on the applicable payment processing channel, Customer shall be responsible for verifying the identity of each Payer prior to the time Payer is linked to the Customer Payment Site. Customer agrees that Payers shall not be granted access to the Customer Payment Site link until Customer has verified the identity of each Payer using a commercially reasonable fraud detection system. For every Payer that accesses the Customer Payment System, Bank may rely on Customer to have completed such verification. 2. Compliance with laws and regulations. Customer agrees to comply with all applicable laws, rules and regulations, including without limitation, those issued by: (i) the National Automated Clearing House Association; (ii) any governmental entity, including (without limitation) the requirements contained in the Electronic Fund Transfer Act, Regulation E, and the Electronic Signatures in Global and National Commerce Act; (iii) the American with Disabilities Act; and (iv) any other entity or association that issues or sponsors a payment device, including (without limitation) the requirements of the Payment Card Industry (PCI) Data Security Standard and any credit card association, including Visa and Mastercard. Customer further agrees to comply with all payment network regulations for ATM debit networks. 3. Interactive Voice Response (IVR). To make an automated payment via a touch-tone phone, Payers may access the IVR system by calling a toll -free number provided by Bank or Customer. Customer shall have previously submitted Payer registration data ("registration data") to Bank. In order to make a payment via the IVR system, Payers are required to input information that matches their user information submitted in the registration data. Unless otherwise agreed to in writing by Bank, the IVR system will no longer be available after October 31, 2022. Page 8 (Effective 11/01/2021) Item 18: Staff Report Pg. 52 Packet Pg. 237 of 857 Item 18 Attachment A - US Bank for General Banking 4. Call Center. If this option was selected by Customer, Payers may make a payment by phone by calling a 24 -hour call center and speaking to 'live' Bank personnel. Bank shall authenticate a Payer's identity in the manner specified by Customer, and agreed to by Bank, in the Implementation Documents. Customer acknowledges and agrees that the authentication of the Payer's identity in such manner shall constitute a commercially reasonable fraud detection system and Bank shall have no liability for all payments so authenticated. 5. Payer Authorization. If payment is made via the Internet, Payer will be prompted to authorize the payment and print a confirmation once Payer has reviewed the payment data and input the information necessary to complete the payment. If payment is made via the IVR or call center, the confirmation number will be read to Payer. Bank is not responsible for the detection of errors made by Payer or Customer and may rely on the information submitted or communicated by Payer or Customer. 6. Payment Processing. Payments shall be processed in the manner mutually agreed to between Bank and Customer, which may include ACH debit entries, debit cards, credit cards or other payment processing methods. Customer shall at all times be considered the originator of Payer's payment. For ACH WEB debit transactions, upon Customer's request and if agreed to by Bank, Bank will validate receiving account and account status information by use of a commercially reasonable fraud detection system selected by Bank for the first use of new account information or of a change to existing account information. By requesting that Bank perform such validation, Customer consents to Bank disclosing any information necessary to perform such validation to Bank's third -party vendor. Depending on the applicable payment processing channel, payment processing may also be subject to the terms of any other agreement between Bank and Customer and between Customer and the payment transaction processor supported by Bank. Payments may be initiated through the Customer Payment Site, IVR system or Administrative Terminal. Bank will notify Customer of the payments that were initiated either through the Administrative Terminal or by delivering a file in the manner set forth in the Implementation Documents. Customer acknowledges that all payments are subject to adjustment, return, reversal and/or chargeback in accordance with the rules governing the applicable payment processing channel. Customer agrees to be liable to Bank for any such adjustment, return, reversal or chargeback. 7. Recurring Payments. The E -Payment Service provides Customer with the ability to offer Payers the option of making fixed or variable recurring payments. If permitted by applicable regulations, Payers have the ability to initiate a payment that recurs semi-weekly, weekly, semi-monthly, monthly or quarterly. Payers must be pre -registered in order to initiate variable recurring payments. 8. Fees. In addition to Bank's standard fees, Customer agrees to pay additional fees and expenses for implementation of the E -Payment Service or other additional Services, if any, as may from time to time be disclosed to Customer by Bank. Customer also agrees to pay the applicable fees and expenses charged by the payment transaction processor supported by Bank, as set forth in Customer's agreement with such processor. 9. Convenience Fee. a. If permitted by applicable regulations, the E -Payment Service offers a flexible convenience fee option that allows Customer or Bank to define and collect a convenience fee to be charged to Payers in connection with the payment transaction. Payers are provided with the opportunity to stop the payment process if they do not wish to pay the convenience fee. b. If Customer desires to collect the convenience fee, Customer shall be responsible for ensuring that convenience fee assessments comply with the relevant laws, rules and regulations. c. If agreed to by Bank and Customer, Bank may collect and retain the convenience fee. Customer agrees that Bank may, in its sole discretion, set, adjust, manage and collect the convenience fee as a means to wholly or partially offset Bank fees that may otherwise have been incurred by Customer. Bank's willingness to collect the convenience fee shall be based on Customer's projected payment volume, average ticket, type of transactions, or other considerations such as changes to interchange fees and assessments. Bank may, ink Services jblish or modify payment caps for sums paid by Payers. If the actual payment volume, average ticket or other considerations fail to meet Customer's stated projections or do not completely offset Bank fees, Customer agrees that Bank may, in its sole discretion, require Customer to wholly or partially reimburse Bank for any resulting shortfall in Bank fees. 10. Transaction Controls. Customer agrees to notify Bank of any material change or anticipated material change in daily dollar activity or type of transaction processing and obtain Bank's consent to such change. Bank may, in its sole discretion, immediately upon written notice to Customer, place a maximum dollar limit on the E -Payment transactions or require Customer to provide reasonable security for Bank's continued handling of such transactions. 11. Payer Communications. Customer agrees to obtain all consents necessary from Payers for Bank to process the Payers' data and communicate with Payers (e.g., confirmation Short Message Service ("SMS") or email) in the course of performing the E -Payment Service. It is Customer's responsibility to ensure that its use of the E -Payment Service complies with end -user communication laws such as the Telephone Consumer Protection Act ("TCPA") and Controlling the Assault of Non -Solicited Pornography And Marketing ("CAN-SPAM") Act. 12. Transition to eBill Services. E -Payment Services are in the process of being phased out by Bank. Customer agrees to work in good -faith with Bank to complete the transition of Customer from E - Payment Services to eBill Services (Section IV.A-1) in accordance with the schedule agreed upon by Bank and Customer, but in any case by the final termination date (tentatively scheduled for December 31, 2022) as may later be established by Bank. Page 9 (Effective 11/01/2021) Item 18: Staff Report Pg. 53 Packet Pg. 238 of 857 49 B. INFORMATION REPORTING AND TRANSACTION SERVICES Information reporting and transaction Services may be provided by Bank to Customer through SinglePoint®, Global Trade or other applications or systems as may be introduced by Bank ("System(s)"). The System may also be used by Customer to automate many of the Services offered by Bank and also may provide access to other Bank systems that initiate transactions. Customer agrees that such use of the System shall be governed by this Section and all other relevant sections of this Agreement. 1. Introduction. If requested by Customer and agreed to by Bank, Bank will grant access to Bank's System(s) in the manner agreed to by Bank. Customer agrees to be bound by any terms of use and license agreements associated with these Systems. 2. Information Reporting. Bank is authorized to store, process, transmit and make available through Bank's agencies and Systems and through third -party data processing providers ("Providers") information regarding accounts designated by Customer. Bank or Providers will transmit to Customer information regarding its account(s) and/or other financial data through the System on a periodic basis. Customer may elect to receive data through one or more delivery mechanisms, including, without limitation, the Internet, Application Programming Interface (API), facsimile, CD-ROM or secure email or other data transmission options supported by Bank. Section 11.12 shall apply in the event Customer elects to receive facsimile reports via an Electronic Transmission. Balance and related information for Customer's account(s) held at other financial institutions may be made available by these financial institutions or Providers that input information into Bank's System. Bank will use reasonable care in submitting data into the System but assumes no responsibility for the accuracy or timeliness of the account information and other financial data supplied by other financial institutions or Providers. Bank will make every reasonable effort to deliver information by the mutually agreed upon time but does not guarantee a specific delivery time. Accordingly, Bank's responsibility to Customer with respect to the delivery of information shall be to deliver such work as close to the agreed time as may be reasonably practicable. 3. Transaction Services. Customer may use SinglePoint®, Global Trade or other similar System to access treasury management or trade finance transaction Services offered by Bank for which Customer has enrolled. Depending on the type of Service or System feature offered by Bank and selected by Customer, access to the transaction Services may include, but are not limited to, ACH, cash vault, check payables, wire transfer payments, Real -Time Payments (RTP), Zelle disbursements, book transfers, positive pay services, investments, loan services, trust services, letter of credit services, adjustments, returns and exceptions management, receivables management, transaction research and annotation, and system administration. Customer agrees that use of the System for transaction Services shall be governed by this Section IV.B and all other sections of this Agreement that are applicable to the product or Service being accessed. 4. Security Procedures/System Administrator. Customer agrees to operate the System in accordance with Sections 111.3 and 111.4 of this Agreement. 5. Manuals. Bank will provide Customer with a manual in electronic format that will set forth the applicable System's policies and procedures with which Customer agrees to comply. Bank may, without prior notification, make amendments to any manual. Bank owns or has obtained all proprietary rights to the manuals and Customer agrees not to duplicate, distribute or otherwise copy Bank's manuals without Bank's prior written consent. Any manual will at all times remain the property of Bank and Bank reserves the right to request Customer to return all printed copies of such manual within thirty (30) days of termination of this Service. 6. Customer Responsibilities. Customer will purchase (from Bank, in some cases) and provide all equipment and software necessary to use the applicable System in accordance with this Agreement. Bank shall have no responsibility and makes no warranties for such equipment or software. Customer agrees to use the System solely to conduct its business with Bank and agrees to limit access to those Agents who require access to the System. Customer agrees that in addition to other limitations to Bank's Item 18 Attachment A - US Bank for General Banking liability elsewhere in this Agreemd. Services J1e for any loss or damage arising directly or indirectly from the following: a. any inaccuracy or incompleteness in the input of an order or instruction from the Customer; b. any failure by Customer to obtain a confirmation of an order or instruction; or c. any cancellation or attempted cancellation by Customer of an order or instruction. 7. International Information Reporting. If requested by Customer and agreed to by Bank, Bank may provide incoming international information reporting through Providers or via SWIFT, which shall be governed by the terms of this Section IV.B, other applicable sections of this Agreement, and other applicable agreements or law. Bank shall receive the international information reporting data through Providers or via SWIFT from Customer's account -servicing Bank ("Servicing Bank") and shall display such data to Customer using SinglePoint® or other similar System. If Customer makes a request to Bank for an off -schedule international information report from the Servicing Bank, Customer agrees that Bank shall have no liability if the Servicing Bank does not support the off - schedule request or does not respond to the request in a timely manner. Page 10 (Effective 11/01/2021) Item 18: Staff Report Pg. 54 Packet Pg. 239 of 857 50 Item 18 Attachment A - US Bank for General Banking C. ELECTRONIC DEPOSIT SERVICES Electronic Deposit Services provide Customer with the option of making electronic deposits using one or more products offered by Bank. Customer agrees that the Electronic Deposit Services shall be governed by this Section and other relevant sections of this Agreement. 1. Processing Options. Customer shall at all times maintain an account with Bank. Customer captures checks or check information received from its Payor Customers into Check Images and transmits the same to Bank for processing and collection. Bank will seek to collect such Check Images through the check collection system by presenting or exchanging Check Images, or using Check Images to create a Substitute Check, or a Photo - In -Lieu ("PIL") for collection. 2. Definitions. a. "Check Image" means an electronic image of the front and back of an original paper check (including a paper Demand Draft), or an electronic image of a Substitute Check that is created by Customer, Bank or another bank or depository institution in the check collection system. b. "Check Image Metadata" means information about the Check Image, as well as pointers to the actual image data (also known as image tags). c. "Customer System" means the computer hardware and/or software and/or Web -based applications located at Customer's site that is used by Customer to prepare Electronic Deposits and to access the Electronic Deposit Services. d. "Demand Draft" or "Remotely Created Check" means a paper item, other than a Substitute Check or PIL, which (i) is drawn on a Payor Customer account, (ii) does not bear the signature of the Payor Customer, and (iii) is authorized by the Payor Customer to be issued in the amount for which the item is drawn. e. "Electronic Deposit" means electronic information (including Check Images, Check Image Metadata, MICR Data or dollar amount), obtained from capturing information from an original paper check and remittance documentation that is transmitted to Bank for deposit, processing and collection. f. "Electronic Deposit Services" means an array of products and services that allow organizations that receive check payments and/or remittance payments to deposit all payments electronically at Bank, as further described in the applicable User Manual. g. "Electronic Deposit System" means Bank's computer systems or databases that Customer may access in order to obtain Electronic Deposit Services. h. "MICR Data" means information from the Magnetic Ink Character Recognition stylized printing on the bottom of checks comprising of routing, transit, account and check serial numbers. i. "Payor Customers" means clients and/or customers of Customer that submit original paper checks or check information to Customer for payment obligations owed to Customer. j. "Photo -In -Lieu" or "PIL" means a photocopy of the front of an original paper check created from a Check Image. k. "Substitute Check" means a paper check document that meets the definition of a "substitute check" in the Check Collection for the 215 Century Act as implemented by Regulation CC of the Federal Reserve Board. 3. Customer Authorizations and Notifications. Customer shall adhere to any and all applicable laws, regulations and clearinghouse rules, including but not limited to, obtaining all necessary consents and authorizations from, and/or providing all necessary disclosures to its Payor Customers concerning the creation of Demand Drafts. Customer is solely responsible for ascertaining the content, method, and frequency of any required authorizations and notifications. 4. Determination of Items Eligible for Electronic Deposit. Only a paper item, payable on demand, and drawn on or payable through or at an office of a bank, is eligible for deposit as a Check Image. Unless permitted by applicable law, Cush Services Jarrants to Bank that Customer shall not use the Electronic Deposit Services to transmit Electronically Created Items (as defined in Federal Reserve's Regulation CC). Without limiting the generality of the preceding sentence, the following items are not eligible for deposit as Check Images or an Electronic Deposit under the Electronic Deposit Services, and Customer must deposit these original paper items with Bank: (i) checks, including travelers checks, that are drawn on banks located outside of the United States; (ii) checks payable in a medium other than U.S. dollars; (iii) non - cash items (as defined under Section 229.2(u) of Federal Reserve's Regulation CC); (iv) promissory notes and similar obligations, such as savings bonds (unless explicitly permitted as an Electronic Deposit in the applicable User Manual); (v) checks issued by and drawn on Customer or an affiliate of Customer; and (vi) any other class of checks or drafts as identified by Bank to Customer from time to time in the User Manual. 5. Capture of Checks and Check Information. a. For certain Electronic Deposit Services, Customer shall use scanning hardware and/or software that meets Bank's specifications. Depending on the type of Electronic Deposit Service or processing option(s) selected by Customer, in the event the condition of a paper check precludes a complete automated read, Customer shall be responsible for visually inspecting the Check Image. Customer shall be responsible for the repair of any MICR Data (if applicable) and for ensuring that any and all information on the front and back of a paper check is accurately captured and legible in the resulting Check Image, that the resulting Check Image contains an accurate record of all MICR Data required for a substitute check, and that the Check Image otherwise complies with any Check Image or MICR Data quality standards and guidelines that may be established by the American National Standards Institute (ANSI), ECCHO Rules, the Federal Reserve, other applicable regulatory agency or clearinghouse, or which Bank may provide to Customer from time to time. Customer acknowledges that current image technology may not capture all security features (e.g., watermarks) contained in the original paper checks and agrees to assume any and all losses resulting from claims based on security features that do notsurvive the image process. b. Customer further acknowledges that Bank does not verify the accuracy, legibility or quality of the Check Image prior to processing an Electronic Deposit. Bank may, in its sole discretion, reject, repair, alter, amend, re- format or convert the Check Image Metadata or MICR Data submitted in an Electronic Deposit in accordance with general check collection practices and industry presentment standards, but Bank shall have no obligation to reject, repair, alter, amend, re -format or convert the Check Image Metadata or MICR Data. If Bank requires that Customer comply with certain formatting standards or other guidelines outlined in the applicable User Manual when submitting Electronic Deposits (for example, requiring use of the external processing code for identifying Remotely Created Checks) and Customer declines to implement, or comply with, such standards or guidelines, Customer acknowledges that Bank shall not be liable for any error or loss that results from Bank processing such Electronic Deposit or from Bank's re -formatting or conversion of the Electronic Deposit prior to processing. c. Bank shall not be liable to Customer for failure to process an Electronic Deposit, or any error that results in processing or collecting an Electronic Deposit: (i) for which Customer has not provided Bank an accurate, complete and legible image of, or information from, the original paper check; (ii) for which Customer has failed to comply with formatting standards or other guidelines required by Bank; or (iii) which would violate this Agreement, the User Manual or any other agreement between Customer and Bank. d. If Customer desires to make an Electronic Deposit outside of the contiguous United States, Customer shall seek Bank's prior approval. Bank may reject a deposit transaction or terminate the Electronic Deposit Services immediately if Customer fails to obtain Bank's prior approval. If Customer chooses to access Electronic Deposit Services from locations outside the contiguous United States, Customer is responsible for compliance with local laws. Customer agrees not to use the Electronic Deposit Services in any country that is subject to geographically -based restrictions imposed by OFAC. Page 11 (Effective 11/01/2021) Item 18: Staff Report Pg. 55 Packet Pg. 240 of 857 51 Item 18 Attachment A - US Bank for General Banking 6. Upload of Electronic Deposit to Bank. a. Customer shall upload the Electronic Deposit transmission (containing one or more Electronic Deposits) to Bank prior to the daily cut-off time established by Bank from time to time for the receipt of Electronic Deposits. Any Electronic Deposit transmission received by Bank after its daily cut-off time shall be deemed to have been received by Bank at the opening of its next Business Day. Performance of the Electronic Deposit Services may be affected by external factors such as communication network latency. Customer is responsible for the transmission of the Electronic Deposit until the Electronic Deposit System reports a successful acknowledgement of receipt of the transmission. b. An Electronic Deposit is received when the entire Electronic Deposit transmission in which that Electronic Deposit is contained is received by Bank in accordance with Section IV.C.6.a above. If only a portion of that Electronic Deposit transmission is received by Bank for any reason, including without limitation, a failure during the transmission to Bank, the Electronic Deposit transmission is deemed to have been not received by Bank with respect to any Electronic Deposit contained in that Electronic Deposit transmission (including any Check Image contained in the portion of that Electronic Deposit transmission that was received). c. Bank will process Electronic Deposit transmission received from Customer either via Check Image or Substitute Check collection in accordance with the processing options selected by Customer. For each Check Image sent to Bank in an Electronic Deposit transmission, Customer agrees not to deposit or cash the original paper check nor re - deposit the Check Image at Bank or any other financial institution or other business. d. A per item limit, dollar limit, or deposit limit may be established by Bank in its sole discretion and communicated to Customer. If any such limit is established, Bank shall have no obligation to process items or files in excess of the limit. 7. Funds Availability. Customer agrees that the transmission of Check Images using Electronic Deposit Services is not subject to the funds availability requirements of Regulation CC. Bank may, at any time, and in its sole discretion, provide a one-time notification to Customer if Bank intends to delay funds availability beyond ordinary Regulation CC funds availability time frames for items submitted by Customer using Electronic Deposit Services. In such instance, funds deposited will be available for withdrawal 3 business days after electronic transmission to Bank, subject to any holds placed on the account as permitted under this Agreement. Bank may, but is not required to, make such funds available sooner. 8. Collection of Check Images. Notwithstanding anything to the contrary in this Agreement, Bank may in its sole discretion determine the manner in which Bank will seek to collect a Check Image deposited by Customer for check collection. Without limiting the generality of the preceding sentence, Bank may, at its option: (i) present or transfer the Check Image to the paying bank, a Federal Reserve Bank, check clearinghouse, image share/exchange network, or other bank; (ii) create a Substitute Check or a PIL from the Check Image and collect such item, or (iii) request that Customer provide to Bank the original paper check from which the Check Image was created and then collect the original paper check. Depending on the collection method, the Check Image or physical item is subject to the rules of that clearinghouse, Federal Reserve Bank, or image share/exchange network or financial institution agreement. 9. Storage of Check Images. Bank shall store Check Images and other check information on the Electronic Deposit System in accordance with Bank's record retention schedule and shall make such information available to Customer according to the applicable User Manuals and fee schedule. If the Electronic Deposit Services are terminated, Customer may obtain Check Images or check information at the price outlined in the fee schedule. 10. Franking, Endorsement, Retention and Destruction of Original Paper Checks. Depending on the requirements outlined in the applicable User Manual, Bank may require, or strongly recommend, that Customer frank or mark the face of each original check after successfully capturing each Check Image to help ensure that an item is not deposited more than once either as a Check Image or physical check. Bank may require Customer to restrictively endorse Services )capturing each Check Image. Customer shall destroy the original paper check based on guidelines identified in the applicable User Manual and shall employ commercially reasonable methods to securely store the original paper check until destruction. At Bank's request, Customer shall provide the original paper check to Bank if the original paper check has not been destroyed by Customer and Bank needs the original paper check to process a payment or resolve a dispute arising from an Electronic Deposit. 11. Representations and Warranties. With respect to each Check Image or Electronic Deposit that Customer transmits to Bank, Customer is deemed to make any representation or warranty that would have applied had Customer deposited the original paper check, including without limitation, that no party will receive a presentment or otherwise be charged for a paper check, whether presented in paper or electronic form, which Customer has converted to a Check Image such that such party is asked to make payment of a check which has already been paid. In addition Customer is deemed to make to Bank any representation, warranty or indemnification that Bank makes, under applicable law, clearinghouse rule, Federal Reserve Operating Circular, Federal Reserve Regulation (including without limitation Regulation CC), bi-lateral agreement or otherwise, to any person (including without limitation a collecting bank, a Federal Reserve Bank, a Receiving Depository Financial Institution, a paying bank, a returning bank, a depository bank in possession of the original paper check, the drawee, the drawer, any endorser, or any other transferee) when Bank transfers, presents or originates a Check Image, Substitute Check or PIL created from the Electronic Deposit. 12. Customer Responsibility. With respect to each Check Image, Electronic Deposit or other image that Customer transmits to Bank, Customer agrees to defend, indemnify and hold Bank harmless from and against any and all claims, demands, damages, losses, liabilities, penalties and expenses (including, without limitation, reasonable attorney fees and court costs at trial or on appeal) arising directly or indirectly: (a) from Customer's breach of a representation or warranty as set forth in Section IV.C.1 1 above; (b) as a result of any act or omission of Customer in the capturing, creation or transmission of the Check Image or Electronic Deposit, including without limitation, the encoding of the MICR Data from the original paper check; (c) from any duplicate, fraudulent or unauthorized check, Check Image, Substitute Check or PIL; (d) for any loss caused by Bank's acceptance of a Check Image, or creation of a Substitute Check or PIL instead of presentment of the original paper check; (e) out of Customer's deposit of an Electronically Created Item; or (f) from any other act or omission arising out of Bank's action or inaction taken pursuant to any request by Customer or pursuant to this Agreement. This Section IV.C.12 shall survive termination of the Agreement. 13. User Manual. Bank will provide Customer with one or more user guides ("User Manual") in paper or electronic format that will set forth the policies and procedures for the relevant Electronic Deposit Services product with which Customer agrees to comply. Bank may, without prior notification, make amendments to any User Manual. Bank may require that certain employees of Customer attend periodic training as a condition to using the Electronic Deposit Services. 14. Security Procedures and Right to Audit. Customer shall comply with all security procedures for the Electronic Deposit Services that are established by Bank or set forth in the applicable User Manual. Customer is solely responsible for (i) maintaining its own internal security procedures; (ii) safeguarding the security and confidentiality of any information that is obtained from Payor Customers' checks, Check Images and other information that is either printed from, stored on, or downloaded to, the Customer System, Electronic Deposit System, or Customer's other computer/data systems or portable media; and (iii) preventing errors or unauthorized access to the Customer System or the Electronic Deposit System. Bank reserves the right to periodically audit Customer's security procedures and information technology processes and to mandate controls. 15. Mobile Remote Deposit Services ("Mobile Services"). Depending on the type of Electronic Deposit Service selected by Customer, Mobile Services is an optional add-on service that will allow Customer to make remote check deposits and obtain check deposit history made through the Mobile Services using a supported mobile device. If Customer selects Page 12 (Effective 11/01/2021) Item 18: Staff Report Pg. 56 Packet Pg. 241 of 857 52 Mobile Services, Customer will need to download and install a Mobile Service application on compatible and supported mobile phones, tablets or other devices (collectively, "Devices"). a. Description of Mobile Services. Mobile Services allow Customer to use a Device to take photographs of the front and back of the check and to transmit the Check Image to Bank in a secure data encrypted format using Customer's mobile service provider's cellular network or the Internet (collectively, "Network"). Certain Mobile Services may allow Customer to use a Device to enter remittance data and to take photographs of the front and back of remittance and general documents associated with the Check Image for reporting and research purposes. b. Use of Mobile Services. Customer agrees to use Mobile Services in accordance with this Agreement, other user requirements provided in the User Manual and the downloaded mobile application. Bank reserves the right to modify the scope of Mobile Services at any time or change or upgrade Mobile Services from time to time, including the right to cease offering the Service on a previously supported Device. Bank also reserves the right to refuse any Electronic Deposit requested through the Service because a Check Image fails image quality standards, is detected as a duplicate item, or for any other reason in Bank's sole discretion. Customer understands and agrees that Mobile Services may not be accessible at all times due to Network connectivity or may have limited utility over some Networks, such as while roaming. Customer acknowledges and agrees that Bank may use geolocation technology to track that Mobile Services activity occurs within the contiguous United States. Item 18 Attachment A - US Bank for General Banking use of or interaction with Mk..ServicesJr agrees to be solely responsible for all such fees, limitations and restrictions. e. Security. c. Software. Customer agrees not to use Mobile Services or the content or information delivered through Mobile Services in any way that would infringe upon any third -party copyright, patent, trademark, trade secret, or other proprietary rights or rights of publicity or privacy, including any rights in the Mobile Services software. In the event Mobile Services is terminated or Customer's software license is revoked for any reason, Customer agrees to promptly delete the Mobile Services application from its Devices. III. d. Service Limitations. Neither Bank nor Customer's mobile service providers can always foresee or anticipate technical or other difficulties related to Mobile Services, which may result in loss of data, personalization settings or other interruptions. Bank assumes no responsibility for the timeliness of any Mobile Services transmissions or communications, or the loss or failure to store any user data, communications or personalization settings in connection with a Device and Customer's use of Mobile Services. Bank shall not be responsible for the operation, security, functionality or availability of any Device or Network that Customer utilizes to access Mobile Services. Transmission of a Check Image shall not be deemed received unless the Device reports a successful acknowledgement of receipt of the transmission. Customer agrees to exercise caution when utilizing Mobile Services on Devices and to train its Authorized Users to exercise good judgment and discretion when accessing or transmitting information. Information about activity is synchronized between the Mobile Services software and Bank's Electronic Deposit System, however, deposit information available via the Mobile Services application may differ from the information that is available directly through the Electronic Deposit System. Information and features available directly through the Electronic Deposit System may not be available via the Mobile Services application and may be described using different terminology. The method of entering information via the Mobile Services application may also differ from the method of entering instructions through the Electronic Deposit System. Customer agrees that Bank shall not be liable for any errors or delays in the content as a result of Customer's use of the Mobile Services software. iv. Customer acknowledges that its mobile service carrier or provider may provide for fees, limitations and restrictions such as data usage charges or data throttling which may have an impact on Customer's If Customer permits its employees or agents to use their own personal mobile devices to access Mobile Services, Customer assumes any and all risks associated with the use of personal mobile devices, including but not limited to, any risk that compromises the integrity of Customer's corporate network or sensitive business data. Customer is solely responsible for implementing policies that will help mitigate the risk of allowing employees to use personally -owned mobile devices, which may include but are not limited to, requiring that Devices are configured and managed with information assurance controls commensurate with the sensitivity of the underlying data and employing Mobile Device Management (MDM) software or other software that secures, monitors, manages and supports mobile devices deployed across operators, service providers and enterprises. Customer shall ensure that its employees or agents exercise appropriate precautions surrounding the use and safeguarding of the Devices at all times. Customer agrees not to leave Devices unattended when logged into Mobile Services and to log off immediately at the completion of each access. Customer agrees that either a username and password or biometric verification are the agreed -upon security procedures and that such security procedures are commercially reasonable. If these security procedures are used to access Mobile Services, Customer agrees that any transactions using Mobile Services are hereby authorized. If Customer permits other persons to use a Device, login information or any other means to access Mobile Services, Customer will be responsible for the resulting transactions, and Bank shall have no liability for any damages Customer may incur. Devices with internet capabilities are susceptible to viruses. Customer is responsible for ensuring that each Device is protected from and free form viruses, malicious software ("malware") and other harmful components which could result in damage to programs, files, or the Device, or could result in information being intercepted by a third party. Bank shall have no liability for any damages which may result from such viruses, malware or other harmful components. Page 13 (Effective 11/01/2021) Item 18: Staff Report Pg. 57 Packet Pg. 242 of 857 53 D. ACH SERVICES 1. Introduction. If requested by Customer and agreed to by Bank, Customer or its Agent may initiate credit or debit Automated Clearing House ("ACH") transactions ("Entries") for payments ("Credit Entries") and/or collections ("Debit Entries") on Business Days to its accounts or the accounts of others ("Receivers") in accordance with Bank's security procedures and this Agreement. Bank will act as an Originating Depository Financial Institution ("ODFI") with respect to such Entries. Bank may process Entries directly, through one or more clearinghouses, or through the mechanism selected by Bank. Customer's rights and obligations with respect to such Entries are governed by applicable law and the NACHA Rules, as amended from time to time. Customer acknowledges that it shall be bound by the then -current version of the NACHA Rules and agrees not to initiate any Entry in violation of the NACHA Rules or applicable federal, state or international law, regulation or clearinghouse rules, including, without limitation, Regulation E of the Board of Governors of the Federal Reserve System, regulations promulgated by the Office of Foreign Assets Control, FinCEN, rules governing the Canadian, Mexican and European payments systems and Operating Circular 4 of the Federal Reserve Bank (collectively referred to herein as the "Rules"). Customer acknowledges and agrees that Bank shall have the right to examine Customer's books, records and systems to ensure Customer's compliance with the Rules and this Section IV.D and that Bank shall further have the right to suspend Services if Bank determines, in its sole and absolute discretion, that Customer is not complying with the Rules and/or this Section IV.D. Customer acknowledges that a copy of the NACHA Rules is available through NACHA at current NACHA prices. Bank shall have the right, in its sole discretion, to terminate or suspend ACH Services immediately if Bank is legally or contractually required to place a hold on funds or a portion of the funds in Customer's account(s). Bank may also, in its sole discretion, delay, suspend or reject an ACH file or Entry if the Bank has a reasonable basis to suspect the ACH file or Entry may be unauthorized or fraudulent. Capitalized terms not otherwise defined in this Agreement shall have the meanings ascribed to them in the NACHA Rules. 2. Entry Origination/Processing Dates/Deadlines. Customer may initiate Entries in the manner and format agreed to by Bank. ACH files transmitted to Bank shall be in an unbalanced file format unless otherwise agreed to by Bank. Bank has the right to restrict the standard entry class ("SEC") codes utilized by Customer. If notified by Bank of such restriction, Customer must cease use of the SEC code and the underlying transaction type. Customer agrees that all Entries (regardless of SEC Code) that involve the storage, exchange or transmission of banking information via unsecured electronic networks shall be encrypted or transmitted via a secure session, using a commercially reasonable security technology that complies with regulatory guidelines. Bank will establish a deadline for the receipt of Entries from Customer ("Deadline"). Bank may establish different Deadlines for Entries depending on the method of delivery employed by Customer and all such Deadlines are subject to change. Bank must receive Customer's Entries at or prior to the Deadline for the Entries to be processed on the Business Day of receipt. Entries received after the Deadline, Entries that contain an Effective Entry Date that is invalid or stale, or Entries that are ineligible for Same Day ACH, will be processed on the next Deadline, which may be the next Business Day. Entries with settlement dates of more than thirty (30) calendar days from receipt will not be processed unless prior arrangements have been made. If Customer has opted -in for Same Day ACH, Customer acknowledges that any Entry using the current day's date as the Effective Entry Date that is submitted to the ACH Operator prior to the Deadline shall carry the Same Day ACH fee. If Customer has not opted -in for Same Day ACH and submits an Entry prior to the Deadline using the current day's date as the Effective Entry Date, Customer acknowledges that such Entry shall be processed on the next Business Day. 3. Content and Secondary Authorization. In submitting any Entry, Customer shall be responsible for providing all information required by Bank. Customer bears sole and exclusive responsibility to verify that the information set forth in Entries submitted to Bank is authentic, accurate and conforms to the Rules. The Services hereunder are only designed to respond to information provided by Customer. Accordingly, any inaccuracy in any information provided by Customer may result in unintended processing by Bank. Bank bears no responsibility for detecting Item 18 Attachment A - US Bank for General Banking or reporting any error in data sup Services all not be liable to Customer for any information provided by Customer with respect to an Entry which is inaccurate, incomplete or otherwise incorrect. Bank strongly recommends that Customer utilize a second individual to review and approve ACH files prior to submission to Bank. Customer acknowledges and agrees that such a security procedure is commercially reasonable and that Customer's failure to use this procedure substantially increases Customer's risk of an unauthorized ACH file. 4. Entry Limits and Payment. Customer agrees to comply with any applicable per transaction or aggregate Entry limits established by the Rules. Customer shall at all times maintain a settlement account with Bank for the purpose of funding Customer's Entries ("Account"). The total dollar amount of Entries initiated by Customer through Bank under all ACH Services and pending on a given day shall not exceed the lesser of collected or available balances in the Account or an exposure limit should one be established by Bank ("Exposure Limit"). Establishment of an Exposure Limit should not be interpreted or construed by Customer as a commitment or agreement to provide any credit or loans to a Customer and is subject to modification or termination at any time by Bank. Customer shall pay Bank for all Entries and authorizes Bank to charge its Account or any other account with Bank in the amount of such Entries. Bank shall have the right in its sole discretion to reject any or all Entries initiated by Customer without notice if Bank has reason to believe that there will be insufficient available funds on the relevant settlement date, even if Bank may have previously accepted Entries for processing with insufficient available funds in the Account. Customer will receive funds for any Debit Entry on the ACH settlement date. Bank shall credit the Account in any amount payable to the Customer, subject to Bank's right to make adjustments in accordance with this Agreement. Bank may establish, monitor and periodically review Customer's Exposure Limit and Customer's compliance thereof, and may, in Bank's sole discretion, cease processing Entries based on such review. 5. Prenotification. To the extent permitted by the Rules, Customer may elect to send a prenotification that it intends to initiate an Entry to a particular account in accordance with the procedures set forth in the Rules or by Bank. The prenotification can be returned or result in a Notification of Change ("NOC"). If the prenotification is returned, Customer shall research the problem and make any necessary corrections before transmitting another Entry. If the prenotification results in a NOC, Customer shall make the required change prior to initiating another Entry or issue a Refused NOC. Bank offers an optional Service that allows Bank to track Customer's NOC on Customer's behalf. If Customer selects this option, Bank shall only manage the changes to the routing numbers, account numbers and transaction codes. 6. Notification of Change ("NOC"). A NOC is created by the Receiving Depository Financial Institution ("RDFI") to notify Customer (via Bank) that previously valid information contained in a posted Entry is outdated, or information contained in a prenotification or live transaction is erroneous or improperly formatted and should be corrected. Bank offers NOC Manager, which is a Service that allows Bank to track Customer's NOC on Customer's behalf. NOC Manager only manages the changes to routing numbers, account numbers and transaction codes. Bank, in its sole discretion, may require that Customer enroll in NOC Manager as part of ACH Services provided to Customer. 7. Data Breach Notification. Customer may have gathered personal or financial information of its customers for the purpose of initiating ACH transactions. Such information may include, without limitation, the customer's bank account number together with the bank routing number, or the customer's name together with the customer's social security number or tax identification number. Customer agrees to immediately report to Bank any loss, theft or unauthorized access of such information ("data breach") by or from Customer, its Agent, or third -party service provider, if circumstances indicate that the misuse of such information has occurred or is reasonably possible. Customer acknowledges that Bank may have an obligation to report any data breaches to NACHA and other affected parties, and agrees to establish appropriate procedures to prevent, detect, investigate and report data breaches. If applicable to Customer, Customer agrees to render electronically stored account numbers used in the initiation of Entries unreadable in accordance with the requirements and effective dates specified by NACHA. Page 14 (Effective 11/01/2021) Item 18: Staff Report Pg. 58 Packet Pg. 243 of 857 54 8. ACH Secured Funds Entries. Bank may, at any time, and in its sole discretion, require Customer to prefund some or all Credit Entries that Customer desires to initiate. Customer acknowledges and agrees that such funds are held solely for the benefit of Bank and that Customer will not be entitled to earn any interest thereon. Upon initiation of such Credit Entries, Bank is authorized to immediately charge the Account (in the total amount of such Entries). If ACH Secured Funds is used to initiate Debit Entries, funds will be credited to the Account on the settlement date of the transaction. However, such funds shall not be available for withdrawal from the Account for two Business Days, or such other period as determined by Bank, after the settlement date. 9. File Confirmation System. Customer shall at all times comply with applicable file confirmation procedures and any security procedures established by Bank. Such procedures are solely for the purpose of verifying the origination of Entries by Customer or Bank's receipt of the ACH file and/or batch (but not for errors in transmission or content). a. Control Totals. If Customer elects to provide Bank with the total dollar value of Entries and any other necessary information ("Control Totals"), Customer must telephone Bank's Interactive Voice Response system or input Control Totals through SinglePoint each time it originates Entries. After Bank receives Customer's ACH file, Bank will compare the information in the ACH file to the Control Totals. If the information matches the Control Totals, Bank will process the ACH file. Bank will notify Customer if the Control Totals do not match the information in the ACH file, or if Bank receives an ACH file without receiving Control Totals or vice versa. Bank will not process an ACH file unless it receives conforming Control Totals before established Deadlines. b. Confirmation of Receipt. If Customer elects not to provide Bank with Control Totals but elects to receive a confirmation report or file, Bank shall provide Customer with a confirmation that Bank received Customer's ACH file and/or batch. After Customer receives the confirmation report or file, Customer will compare the confirmation information to Customer's ACH transmission information. If the information does not match, Customer shall notify Bank before Bank's established deadline, failing which, Bank shall process Customer's ACH file and/or batch. Customer acknowledges that the confirmation report or file is for the sole purpose of verifying Bank's receipt of the file and does not signify any validation of data. Customer bears sole responsibility for any inaccurate or incomplete information provided to Bank if Customer fails to notify Bank prior to Bank's processing of Customer's file. 10. Rejected and Returned Entries, Unauthorized Entries. Bank may reject any Entry that is not initiated in accordance with this Agreement. In the event that an Entry is rejected, or returned by an ACH processor, for any reason whatsoever, it shall be Customer's responsibility to reinitiate the Entry. Bank will give Customer or its designated Agent notice of any rejected or returned Entry in the manner agreed to by the parties. Bank is authorized to debit/credit the Account for Entries that are returned to Bank. Unless the return is caused by Bank's failure to properly execute an Entry, Bank has no obligation to pay Customer interest on the amount of any returned Entry debited from the Account. A Receiver may, in some cases, have the right to have an unauthorized or erroneous Debit Entry credited to its account. Customer agrees that Bank may deduct the amount owing to the Receiver from Customer's Account upon Bank's receipt of proper notice from the Receiver's bank. Bank may charge back against Customer any Debit Entry that is returned or reversed by the RDFI. Bank may, in its sole discretion, suspend Customer's use of ACH Services due to excessive return activity. 11. ACH Redeposit Service. If requested by Customer and agreed to by Bank, Bank will reinitiate (maximum of two times) each Debit Entry returned for insufficient or uncollected funds. 12. Amendment of Entries. Customer does not have the right to delete, reverse or amend any Entry (each, an "Adjustment Request") after it has been received by Bank. If Customer sends Bank an Adjustment Request via internet, secure email, or fax in accordance with the terms of this Agreement, Bank will make reasonable efforts to act on the Adjustment Request. All Adjustment Requests must be received by Bank prior to the established deadlines, and even if the Adjustment Request is made in a timely manner, Customer acknowledges that an Adjustment Request may Item 18 Attachment A - US Bank for General Banking prove unsuccessful (for example Services RDFI for non - sufficient funds). Customer agrees to indemnify Bank in connection with any Adjustment Request in accordance with applicable law. a. Internet Option. If Customer has selected the Internet Option, Customer may use SinglePoint® to transmit information to Bank for the purpose of amending ACH files. Customer agrees to comply with any applicable software agreement, user guide and any established security procedures. b. Secure Email Option. If Customer has selected the Secure Email Option, Customer may send an Adjustment Request to a designated shared mailbox at Bank. c. Fax Option. If Customer has selected the Fax Option, Customer may transmit an Adjustment Request to Bank via facsimile to a designated facsimile number. Customer acknowledges that the Internet and Secure Email Options are substantially more secure than the Fax Option. Customer agrees to be bound by any instructions submitted via the Fax Option, whether or not authorized, issued in its name and accepted by Bank in accordance with the agreed procedures. 13. Customer Representations/Indemnity. Customer represents and warrants to Bank that each Entry: (i) complies with the terms of this Agreement and the Rules; (ii) does not breach any warranty of Customer or Bank contained in this Agreement and the Rules; (iii) complies with applicable state, federal and international laws and rules, including, without limitation, the Electronic Funds Transfer Act, Regulation E and regulations overseen by the Office of Foreign Assets Control; (iv) is accurate, timely, and authorized; and (v) that any Debit Entry is for a sum that on its settlement date is due and owing from the Receiver to Customer or is a correction of a previously transmitted erroneous Credit Entry. For all WEB Debit transactions, Customer further represents and warrants that it will validate account information by use of a commercially reasonable fraud detection system (i) for the first use of new account information; and (ii) when the Receiver makes a change to its account. With respect to each ACH Entry (regardless of SEC Code), Customer is deemed to make to Bank any representation or warranty that Bank makes, under applicable law and the Rules to any person, RDFI, or any other transferee. Receiver authorizations shall expressly authorize Bank to transmit corrective entries to the Receiver's accounts to correct a prior Entry and shall authorize Customer to release to Bank all information concerning its Receivers that is required by Bank to recover such Entries. Customer shall immediately cease initiating Entries upon receiving actual or constructive notice of the termination or revocation of the Receiver's authorization. Customer will retain each authorization received by Customer for such period of time as may be required by the Rules or applicable law and shall provide Bank with copies of such authorizations upon request. Customer will indemnify, defend and hold Bank harmless from and against any and all claims, demands, expenses, losses, liabilities, and damages, including without limitation, NACHA fines, reasonable attorney fees and court costs at trial or on appeal that arise directly or indirectly out of any Entry initiated by Customer in violation of this Agreement and the Rules. 14. Re -presented Check Entries. NACHA Rules allow Customer to initiate an Entry to collect certain checks that have been returned unpaid for insufficient or uncollected funds ("RCK Entry"). In the event that Customer initiates an RCK Entry to Bank for check collection purposes, Customer agrees that such RCK Entry will comply with all provisions of this Agreement and applicable Rules and makes the following additional representations and warranties regardless of which entity initiates the RCK Entry on its behalf: a. Each check is eligible under NACHA Rules to be collected via an RCK Entry. b. Customer has no knowledge of any insolvency and it has good legal title to the returned item. c. All signatures on the returned item are authentic and authorized, and the returned item is without alteration, not subject to claims or defenses, and will not be presented to the paying bank. d. The RCK Entry accurately reflects the item and any information encoded after issue in magnetic ink is correct. (RCK Entries cannot be used for collection fees.) Page 15 (Effective 11/01/2021) Item 18: Staff Report Pg. 59 Packet Pg. 244 of 857 55 e. Any restrictive endorsement placed on the item is void or ineffective f. Customer has provided clear and conspicuous notice of its electronic check representment policy in advance of receiving the item to which the RCK Entry relates. g. The Customer will provide to Bank immediately upon request a copy of the front and back of the returned item, provided that the request is made within seven (7) years of the settlement date of the RCK Entry. 15. Internet -Initiated Entries. NACHA Rules allow Customer to initiate a Debit Entry to a consumer Receiver's account pursuant to an authorization obtained from the Receiver via the Internet ("WEB Entry"). In the event that Customer initiates a WEB Entry to Bank, Customer agrees that such WEB Entry will comply with all provisions of this Agreement and applicable Rules and makes the following additional representations and warranties regardless of which entity initiates the WEB Entry on its behalf: a. Customer has employed a commercially reasonable fraudulent transaction detection system to screen each WEB Entry. As of the effective date specified by NACHA, a commercially reasonable fraudulent transaction detection system must include, at a minimum, validation of the account number to be debited for each Web Debit Entry. This validation must be completed for the first use of such account number as well as each time there is a change in such account number. b. Customer has employed commercially reasonable methods of authentication to verify the identity of the Receiver. c. Customer has taken commercially reasonable steps to verify that routing numbers are valid. d. Customer has established a commercially reasonable secure Internet session prior to the key entry by the Receiver of any banking information and through the transmission of the data to Customer. If regulatory requirements or technological advancements drive the commercially reasonable standard to change, Customer agrees to comply with the new standard. e. Customer has and will conduct an annual audit to ensure that the financial information that Customer obtains from its Receivers is protected by security practices that include adequate levels of: (1) physical security to protect against theft, tampering, or damage, (2) personnel and access controls to protect against unauthorized access and use, and (3) network security to ensure secure capture, storage and distribution of financial information. Customer will provide proof of Customer's security audits to Bank upon request. Any such information provided to Bank shall be kept confidential except as required to be disclosed by applicable law, rule or regulation. Bank may cease processing Entries for Customer if Bank in its sole discretion determines that Customer's security procedures are inadequate. 16. Telephone -Initiated Entries. NACHA Rules allow Customer to initiate a Debit Entry to a consumer Receiver's account pursuant to the Receiver's oral authorization and banking information obtained via the telephone ("TEL Entry"). In the event that Customer initiates a TEL Entry to Bank, Customer agrees that such TEL Entry will comply with all provisions of this Agreement and applicable Rules and makes the following additional representations and warranties regardless of which entity initiates the TEL Entry on its behalf: a. Receiver Authorization. Customer shall obtain the Receiver's explicit authorization prior to initiating a Debit Entry to the Receiver's account. In the event that Customer obtains the Receiver's authorization verbally, Customer will either tape record the Receiver's oral authorization or provide, in advance of the settlement date of the Entry, written notice to the Receiver that confirms the oral authorization. Customer agrees that, at a minimum, the following specific information is disclosed to, and acknowledged by, the Receiver during the telephone call: the date on or after which the Receiver's account will be debited; (ii) the amount of the Debit Entry to the Receiver's account; (iii) the Receiver's name; (iv) the account to be debited; Item 18 Attachment A - US Bank for General Banking (v) a telephone numberthat i Services and answered during normal business hours for customer inquiries; (vi) the date of the Receiver's oral authorization; (vii) a statement that the authorization obtained from the Receiver will be used to originate an ACH debit to the Receiver's account; (viii) for recurring TEL entries, the amount of recurring transactions; and (ix) for recurring TEL entries, the timing (including the start date), number, and/or frequency of the electronic fund transfers. Customer shall retain either the original or a duplicate tape recording of the Receiver's oral authorization or a copy of the written notice confirming the Receiver's oral authorization for two years from the date of the authorization and shall immediately provide same to Bank upon request. If Customer chooses to provide the Receiver with written notice confirming the Receiver's oral authorization, Customer will disclose to the Receiver during the telephone call the method by which such noticewill be provided. b. Security Procedures. In addition to all other representations and warranties contained in this Agreement and the Rules, Customer also represents and warrants the following each time it delivers a TEL Entry to the Bank that it has (a) utilized a commercially reasonable security procedure to verify the identity of the Receiver, including name, address and telephone number; and (b) further that Customer has established commercially reasonable procedures to verify the accuracy of the RDFI's ABA routing and transit number. 17. Accounts Receivable and Back Office Conversion Entries. NACHA Rules allow Customer to utilize ACH to collect consumer check payments received via U.S. mail or at a dropbox location ("ARC Entry"). NACHA Rules also enable Customer to convert during back office processing checks presented either at the point of purchase or a manned bill payment location ("BOC Entry"). In the event that Customer initiates an ARC or BOC Entry to Bank, Customer agrees that such ARC or BOC Entry will comply with all provisions of this Agreement and applicable Rules and makes the following additional representations and warranties regardless of which entity initiates the ARC or BOC Entry on its behalf: a. Prior to the receipt of each check, Customer has provided clear and conspicuous notice to the Receiver: (i) that receipt of the check is authorization for a payment as a check transaction or for a one-time ACH debit to the Receiver's account; and (ii) of Customer's phone number for inquiries regarding BOC Entries. b. Customer shall provide a copy of the notice to the Receiver at the time of the transaction if the Receiver presents the check in -person. c. Each check is eligible as a source document under NACHA Rules to be collected via an ARC or BOC Entry. d. Customer shall use a reading device to capture the Receiver's routing number, account number, and check serial number from the source document (unless Bank has agreed to do so on Customer's behalf for retail lockbox services). e. The amount of the entry, the routing number, the account number, and the check serial number are in accordance with the source document. f. The source document to which the ARC or BOC Entry relates will not be presented for payment. g. Customer has established policies and procedures to destroy the source document as soon as is reasonable and shall use commercially reasonable methods to securely store the source document until such destruction. h. Customer shall use commercially reasonable methods to securely store all banking information relating to the ARC or BOC Entry. i. Customer shall retain a reproducible and legible image, microfilm or copy of the front of the Receiver's source document for two years from the settlement date of each ARC or BOC Entry, and shall immediately provide same to Bank upon request. Page 16 (Effective 11/01/2021) Item 18: Staff Report Pg. 60 Packet Pg. 245 of 857 56 j. For BOC Entries, Customer has employed commercially reasonable procedures to verify the identity of each Receiver of BOC Entries. k. For BOC Entries, Customer maintains a working telephone number that is answered during Customer's normal business hours for Receiver inquiries regarding BOC transactions. 18. Point of Purchase (POP) Entries. NACHA Rules allow Customer to initiate a Debit Entry to a Receiver's account for in -person purchases made by check at the point -of -purchase ("POP Entry"). In the event that Customer initiates a POP Entry to Bank, Customer agrees that such POP Entry will comply with all provisions of this Agreement and applicable Rules and makes the following additional representations and warranties regardless of which entity initiates the POP Entry on its behalf: a. Customer has posted a notice in a prominent and conspicuous location at the point -of -purchase and provided the Receiver with a written notice of same: (i) that when a check is provided as payment, it is authorization for payment as a check transaction or for a one-time ACH debit to the Receiver's account; and (ii) that funds may be withdrawn from the Receiver's account the same day payment is made. b. Each check is eligible under NACHA Rules to be collected via a POP Entry and the Receiver has not opted out of check conversion c. Customer has used a reading device to capture the Receiver's routing number, account number, and check serial number from the source document. d. Customer has provided a receipt to the Receiver containing the Originator name, telephone number, date of transaction, transaction amount, check serial number of the source document, merchant number, terminal city and state; and Customer has not included the Receiver's complete account number or complete identification number on such receipt. e. Customer has returned the voided source document to the Receiver after capturing the necessary check information and the source document was not previously negotiated, voided, or provided by the Receiver for use in any prior POP Entry. f. Customer has obtained the Receiver's authorization and provided a copy of same to the Receiver, which: (i) is in writing and signed or similarly authenticated by the Receiver; (ii) is readily identifiable as an ACH debit authorization; (iii) clearly and conspicuously states its terms; and (iv) states that the check will not be processed. 19. International ACH Transactions (IAT) Entries. NACHA Rules allow Customer to initiate or receive international payment transactions transmitted via the ACH network. a. In the event any part of an Entry originates from, or is transmitted to, a financial agency office located outside the territorial jurisdiction of the United States that handles the payment transaction ("IAT Entry"), Customer agrees that such IAT Entry will comply with all provisions of this Agreement and applicable Rules. Customer acknowledges that an IAT Entry is ineligible for Same Day ACH. Customer also makes the following additional representations and warranties regardless of which entity initiates the IAT Entry on its behalf: (i) Customer is in compliance with U.S. law, including, but not limited to, Customer's obligations under programs administered by OFAC and FinCEN. (ii) The origination of an outbound IAT Entry is in compliance with the laws and payment system rules of the receiving country. (iii) In the case of an IAT Entry to a non -consumer account, Customer has an agreement with the Receiver whereby the Receiver has agreed to be bound by the Rules. Item 18 Attachment A - US Bank for General Banking canceled or amended Entry to Ba Services plicable foreign currency buy rate. b. Remittance Transfer Provider. If Customer is at any time classified as a Remittance Transfer Provider under Regulation E, Customer represents, warrants and agrees that: (i) Customer shall be responsible for performing and complying with the requirements of 12 CFR Part 1005, including, but not limited to, providing disclosures to the consumer (sender), the error resolution procedures, the provision of any remedies to the consumer, and the cancellation and refund of remittance transfers; (ii) Bank is acting as an agent and not as a Remittance Transfer Provider when performing activities on behalf of Customer; and (iii) Even if Bank is deemed a Remittance Transfer Provider under applicable law, Customer shall take all actions necessary to comply with the obligations of a Remittance Transfer Provider. Customer agrees to indemnify and hold Bank harmless from and against any and all loss, liability, damage, costs and expenses (including attorneys' fees) that Bank may sustain in reliance on Customer's representations and warranties set forth in this Agreement or the Rules. 20. Third -Party Vendors. If Customer initiates Entries through a third - party vendor or processor ("Vendor"), Vendor is the agent of Customer and not of Bank. If Customer uses a Vendor, Customer shall be deemed to have authorized Bank to follow the instructions of such Vendor to the same extent and under the same conditions as would apply if the instructions came direct from Customer and Customer shall be responsible for insuring that such Vendor fully complies with the Rules and this Agreement. Bank is not responsible for the acts or omissions of Vendor and Customer agrees to be liable for and hold Bank harmless from, any losses caused by the acts or omissions of Customer's Vendor. 21. Third -Party Sender. If Customer is transmitting Entries as a third - party vendor or processor on behalf of originators ("Third -Party Sender"), Customer agrees to be bound by the applicable terms provided in this Agreement and the Rules. Customer warrants to Bank that the originator has agreed to assume the responsibilities of an Originator under NACHA Rules and that ACH Entries shall not be initiated in violation of laws of the United States. Customer represents that it has executed an ACH agreement with each Originator and that the agreement binds the Originator to the NACHA Rules. Customer shall provide Bank with the list of Originators, copies of the agreements, and other information deemed reasonably necessary to identify the Originators within two (2) Business Days of Bank's request. Bank reserves the right to review the list of Originators for which Customer is transmitting the Entries and to reject any in Bank's sole discretion. As Third -Party Sender, Customer agrees to indemnify, defend and hold Bank harmless from and against any and all claims, demands, expenses, losses, liabilities, and damages, including reasonable attorney fees and court costs at trial or on appeal that arise directly or indirectly from the failure of the Originator to perform its obligations as an Originator under NACHA Rules. Customer further agrees to assume all applicable responsibilities, warranties and liabilities of the ODFI, as specified in the NACHA Rules. Customer shall cooperate fully and respond within two (2) Business Days to any inquiry from Bank relating to potential NACHA Rule inquiries or violations. 22. Cash Concentration/Deposit Reporting Services. Customer may request Bank to provide deposit reporting Services based on information provided by the Customer or its designated Agent. Information will be delivered to Bank at the time and location established by Bank. Bank has no responsibility for the accuracy of any information provided by Customer. Customer may authorize Bank to initiate Credit or Debit Entries to accounts designated by Customer at other financial institutions. Bank will initiate such Entries in accordance with agreed procedures. Customer agrees to authorize RDFIs to honor such transactions. IAT Entries may be processed by Bank through a correspondent bank. Bank assumes no liability for delays, non -delivery, late returns or other 23. ACH Positive Pay Service. ACH Positive Pay Service assists events resulting from processing delays by the correspondent bank or for Customer in detecting fraud by electronically matching incoming ACH other causes beyond Bank's control. Cancellation or amendment of an transactions to authorizations that Customer can create and manage IAT Entry involving non-U.S. dollar currency is subject to any rate online. If ACH Positive Pay Service is selected by Customer, Customer exchange loss as determined by Bank. Customer agrees to sell any shall designate the account(s) maintained at Bank that are to be used with the ACH Positive Pay Service ("ACH Positive Pay Account"). Customer Page 17 (Effective 11/01/2021) Item 18: Staff Report Pg. 61 Packet Pg. 246 of 857 57 shall create authorizations for incoming ACH Credit and/or Debit Entries that it desires to post to the ACH Positive Pay Account. Customer shall be responsible for the accuracy and completeness of all information provided to Bank. Bank will allow incoming Entries that match Customer's authorizations to post to Customer's ACH Positive Pay Account. Incoming ACH transactions that do not match Customer's authorizations will be treated as exception items, and Customer agrees to monitor, review and make payment decisions on the exception items prior to Bank's established deadline. Bank is authorized to return all exception items unless Customer instructs bank to pay one or more exception items prior to the established deadline. Bank shall have no responsibility for any liability, loss or damage resulting from the return of any exception item to the Originator in accordance with this Section or Customer's failure to meet Bank's established deadlines, except with respect to losses caused by Bank's own lack of good faith or failure to exercise ordinary care. Bank's failure to report a discrepancy will not discharge Customer's obligation with regard to any item and shall not obligate Bank to return any item if it is otherwise authorized. Item 18 Attachment A - US Bank for General Banking E. WIRE TRANSFER SERVICES Services 1. Introduction. a. Governing Law. Bank sends outgoing and receives incoming wire transfers through Fedwire (the funds transfer system owned and operated by the Federal Reserve Banks or other provider in accordance with Section 11.24.A). All funds transfers are governed by this Agreement, Subpart B of Regulation J of the Federal Reserve Board, OFAC regulations, and all other applicable international, federal, state and local laws and regulations. Customer agrees not to initiate or receive a wire transfer payment order in violation of applicable federal, state or local law. b. Authorized Users. Customer will designate to Bank in the form required by Bank those individuals authorized to instruct Bank regarding wire transfer Services including without limitation, individuals authorized to initiate payment orders and select advice methods, confirmation methods, and any or all authorizations and instructions that may be requested by Bank. Bank may rely on any such authorization until it has been revoked in writing by Customer. Bank shall have a reasonable time to process any revocation received pursuant to this Section. 2. Routing/Time Deadlines. Bank may use any means of transmission, funds transfer system, intermediary bank, clearinghouse or route that Bank reasonably believes is suitable for each outgoing wire transfer. Bank will establish from time to time one or more deadlines after which Bank will not accept an incoming payment order to be processed on the day of receipt. Payment orders received after Bank's established deadline, during a maintenance window, or on any non -Business Day, including any Saturday, Sunday, holiday or any day that Bank's wire department is not open will be rejected. Payment orders received during a maintenance window, including the end -of -day maintenance window, will not receive a notice of rejection. 3. Payment Orders. a. Communication. Customer may communicate a payment order to Bank by the means and manner agreed to between the parties. b. Content of Payment Orders. Customer will supply to Bank any information Bank may reasonably request regarding any payment order initiated by Customer, including, without limitation, money amounts, affected accounts, dates of transfer, the beneficiary's name and account number, the name and routing number or bank identifier code of the beneficiary's financial institution, such additional information as Bank may reasonably request and, if necessary, further evidence of any Agent's authority to transfer funds or to do any other act contemplated by this Service. Bank strongly recommends that Customer utilize a second individual to review and approve payment orders prior to submission to Bank. Customer acknowledges that failure to use this commercially reasonable security procedure substantially increases Customer's risk of an unauthorized payment order. c. Execution of Payment Orders. Customer authorizes Bank to execute and charge Customer's account(s) with Bank for payment orders delivered to Bank in accordance with this Agreement. Bank has no obligation to execute a payment order if Customer's account to be charged has insufficient collected and available funds to cover the order. d. Processing Payment Orders. The order in which Bank processes wire transfer payment orders is determined solely by Bank. Customer does not have the right to reverse, adjust or revoke any payment order after it has been received by Bank, provided, however, that Bank will make a reasonable effort to act on such a request by Customer. With respect to a payment order already transmitted to the beneficiary's financial institution, Bank shall, at Customer's request, request the financial institution to return funds previously transferred. Customer understands that the receiving institution is under no legal obligation to comply with this request. e. Rejection of Payment Orders. Bank may reject a payment order from Customer if such payment order is not initiated in accordance with the applicable security procedure, if there is any inconsistency between a payment order and information previously supplied to Bank, if Bank is unable to obtain confirmation of such payment order satisfactory to Bank, if there are insufficient collected funds in Customer's specified account to Page 18 (Effective 11/01/2021) Item 18: Staff Report Pg. 62 Packet Pg. 247 of 857 M fund the payment order, if Bank has a reasonable basis to suspect the payment order may be unauthorized or fraudulent, or if Bank has other reasonable grounds not to honor the payment order. Bank will notify Customer by telephone that it has rejected a payment order. Bank may also reject an incoming payment order if it has reasonable grounds to do so. f. Standing Payment Orders. If requested by Customer and agreed to by Bank, Customer may initiate a standing payment order, which is one where the Customer pre-programs the beneficiary, the beneficiary's financial institution, and the accounts to be debited and credited and such information remains constant for subsequent payment orders. Customer shall provide Bank with the necessary information to execute the standing payment order, including, without limitation, the dollar amount to be transferred or the desired peg balance, the frequency of the order and the day of week or month when the payment order is to be executed. Customer may terminate a standing payment order at any time upon receipt by Bank of a written notice. Bank shall have a reasonable time to act on such notice. g. Batch Wire; Direct Wire Interface. (1) Service Specifications. If requested by Customer and agreed to by Bank, the Batch Wire service and Direct Wire Interface service allows Customer to initiate payment orders from its computer to Bank's computer, subject to the provisions of this Agreement. In addition, the Direct Wire Interface service allows Customer to receive reports of incoming wire activity. Customer will comply with the relevant interface specifications established by Bank for these services, including, without limitation, file formats, means of data transmission, or establishing a secure connection (the "Specifications"). Bank may furnish Customer with modifications to the Specifications and Customer shall implement such modifications as soon as reasonably practicable. (ii) Wire Transfer Software, Confidentiality. Customer or its Agent shall be solely responsible for creating the computer programs to implement the Specifications ("Wire Transfer Software"). Customer shall maintain the confidentiality of the Specifications and the Wire Transfer Software and permit access solely to those responsible for supporting the Wire Transfer Software or authorized to initiate payment orders. Customer shall implement passwords and other security devices commensurate with the highest level of security afforded by Customer to other computer programs and confidential information of Customer. 4. Confirmation of Outgoing Wire Transfers. a. Confirmation Method. Customer and Bank shall agree to the method of confirming payment orders received from Customer. Customer shall designate Authorized Users to confirm payment orders. Bank recommends a minimum of three potential Authorized Users to confirm payment orders and that Authorized Users serve as an initiator or a confirmer, but not both. Notwithstanding Bank's recommendation, if Customer permits an Authorized User to act as both initiator and confirmer, Customer hereby authorizes Bank to process a wire initiated and confirmed by such Authorized User. Customer may add, change or delete the Authorized Users in accordance with Section 11.9 of this Agreement. In the event the designated Authorized Users with authority to confirm are not available to confirm a payment order, Customer agrees that Bank may, at its discretion, elect to process the payment order initiated by an Authorized User. Customer agrees to be bound by any such payment order processed by Bank. b. Waiver of Confirmation. Bank advises Customer not to waive confirmation. If Customer, however, chooses to waive confirmation, Customer agrees to be liable for all outgoing payment orders, except those payment orders where (1) Customer is able to conclusively prove that the unauthorized transfer could not have been prevented by the use of confirmation procedures; (2) Bank is unable to produce any evidence that the unauthorized transfer could have been prevented by the use of confirmation procedures; and (3) Customer is not otherwise liable for the transfer under this Agreement or applicable law. Customer acknowledges that not using confirmation procedures substantially increases Customer's risk of liability for an unauthorized wire transfer. Item 18 Attachment A - US Bank for General Banking c. Confirmation of Wire Transfer Services ePoint®, Batch Wire, or Direct Wire Interface (collectively, the "Customer Initiation Methods"). Customer represents and warrants that the confirmation of payment orders initiated through any of the Customer Initiation Methods shall be verified, initiated and confirmed by Customer prior to receipt by Bank. All payment orders shall be initiated and confirmed in accordance with the security procedures established for the relevant Customer Initiation Method. 5. Advices. a. Advice Method. Customer will select the type of advice it wishes to receive after Bank receives an incoming wire transfer. If Customer selects telephonic advices, Customer may designate person(s) to be contacted and telephone numbers to be used for advice purposes. Bank shall not be required to make more than one attempt to reach Customer's designated location by telephone. If Bank is able to reach the Customer's designated location, but not Customer's designated Agent, Bank may leave a message containing the information to be conveyed. b. Advices by Facsimile. If Customer selects advices by facsimile ("fax"), Customer shall exercise extreme care in maintaining its own security in the receipt of fax advices. Customer acknowledges that the information to be received by fax may include confidential information, including, without limitation, names, amounts, phone numbers, originating account information and the text of incoming wires. Customer further acknowledges that it alone assumes full responsibility for maintenance of its internal security procedures to keep such information confidential. Customer agrees to indemnify, defend and hold Bank harmless against any and all claims, demands, expenses, liabilities and damages, including attorney fees at trial and on any appeal or petition for review, incurred by Bank arising directly or indirectly from the transmission by fax of an incoming wire transfer advice. c. Waiver of Advice. Customer may waive its right under the Uniform Commercial Code to receive advices by so indicating on the applicable Implementation Documents. 6. International Wire Transfers. a. General. Wire Transfers across country borders are customarily done by Bank through a correspondent bank. Outgoing U.S. dollar payment orders may be converted by the correspondent bank or beneficiary bank to the local beneficiary's currency at the applicable rate in effect at any point in the processing chain. Though in some cases Bank may receive compensation from the correspondent bank in accordance with such conversion, the conversion is executed by the correspondent bank in accordance with the policies and procedures of such correspondent bank at an exchange rate set by that correspondent bank in its sole discretion and subject to any applicable regulations. Any fee, commission or charges assessed by Bank, the correspondent bank, any subsequent intermediary bank, or the beneficiary bank may be passed on to the Customer or deducted from the wire transfer amount. Bank assumes no liability for delays, non -delivery, market risk or other events resulting from causes beyond Bank's control. In refunding unexecuted payment orders, Bank shall be liable to Customer only to the extent it receives payment from the correspondent bank processing the transfer. Cancellation or rejection of a transfer involving non-U.S. dollar currency is subject to any rate exchange loss as determined by Bank. Customer agrees to sell any canceled or rejected payment order to Bank at the then -current applicable foreign currency buy rate. b. Remittance Transfer Provider. If Customer is at any time classified as a Remittance Transfer Provider under Regulation E, Customer represents, warrants and agrees that: (1) Customer shall be responsible for performing and complying with the requirements of 12 CFR Part 1005, including, but not limited to, providing disclosures to the consumer (sender), the error resolution procedures, the provision of any remedies to the consumer, and the cancellation and refund of remittance transfers; (ii) Bank is acting as an agent and not as a Remittance Transfer Provider when performing activities on behalf of Customer; and Page 19 (Effective 11/01/2021) Item 18: Staff Report Pg. 63 Packet Pg. 248 of 857 59 (iii) Even if Bank is deemed a Remittance Transfer Provider under applicable law, Customer shall take all actions necessary to comply with the obligations of a Remittance Transfer Provider. Customer agrees to indemnify and hold Bank harmless from and against any and all loss, liability, damage, costs and expenses (including attorneys' fees) that Bank may sustain in reliance on Customer's representations and warranties set forth in this Agreement. 7. Reverse Wire Transfers. a. Authorized Debits. If requested by Customer and agreed to by Bank, Customer authorizes Bank to debit Customer's account(s) with Bank upon receipt of a Fedwire drawdown request, and to send funds to the requesting bank. Each transfer will be done on the Business Day Bank receives the incoming request from the requesting bank if the request is received within a reasonable time to determine whether Customer's Account has sufficient available funds and to obtain access to the Federal Reserve network prior to the close of business. b. Reverse Wire Funding. Customer acknowledges and agrees that Bank may reject any reverse wire request in excess of the collected and available balance. Requesting bank will be notified if the request is rejected by Bank. c. Wire Transfer Numbers. Customer's obligation to pay Bank the amount of the funds transfer in the event that the Fedwire message does not identify the same account or financial institution is not excused in such circumstances. When names and numbers are inconsistent, the numbers shall control. With respect to incoming wire transfers that do not indicate an account number recognizable to Bank, Bank may return the wire transfer to the sending financial institution without incurring any liability. Customer does not have the right to reverse, adjust or revoke any Fedwire message after it is received by Bank; however, Bank will use reasonable efforts to act on such a request by Customer to reverse, adjust or revoke such message before Bank has sent the outgoing wire transfer. With respect to an outgoing wire transfer already transmitted by Bank, Bank shall, at Customer's request, request the receiving financial institution to return funds previously transferred. Customer understands and agrees that the receiving financial institution may or may not comply with any such request. d. Authorizations. Customer's authorization for reverse wire requests shall remain in effect until Customer gives written notice to Bank. Bank will have a reasonable time to act on any written notice received from Customer. e. Limitation on Bank's Liability. In consideration of Bank's compliance with this authorization, Customer agrees that Bank's treatment of any authorized debit, and Bank's rights with respect to it, shall be the same as if the entry were initiated personally by Customer. Bank shall have no liability if any authorized debit is dishonored. 8. Additional Limits on Bank's Liability. Bank is responsible only for performing the Services described in this Section. Bank shall not be responsible for the acts or omission of Customer, any Federal Reserve Bank or other financial institution, any transmission or communication or any other person, and no such person shall be deemed to be Bank's agent under this Agreement. Item 18 Attachment A - US Bank for General Banking F. DATA TRANSLATION SERVI Services 1. Introduction. Bank may provide electronic data integration, custom formatting, or data translation ("Data Translation Services") to electronically streamline the exchange of payments, remittance and other information between Customer and Bank and between Customer and its trading partners. If requested by Customer and agreed to by Bank, Bank will provide Data Translation Services in accordance with this Agreement and other procedures provided to the Customer. Customer agrees that Data Translation Services shall be governed by this Section and all other relevant sections of this Agreement. 2. Scope of Services. Data Translation Services may be used by Customer to initiate and receive payments using multiple payment channels or networks, which may include, but are not limited to, checks, wire transfers, ACH, virtual card, SWIFT, Real -Time Payments (RTP), Zelle, Visa or Mastercard, and to provide and receive business communications such as remittance data, payment data, invoices, confirmations, orders, or other information in Customer's preferred format. In order to obtain Data Translation Services, Customer must maintain an analyzed demand deposit account with Bank. 3. Entry Origination/Processing Dates/Deadlines. Customer may from time to time deliver to Bank requests to format information for payments and/or other data translation via the agreed upon means (collectively, "Data Translation Request(s)"). All Data Translation Requests shall conform to the content, format, deadlines and other specifications that may be established by Bank or a third -party software program approved by Bank for use with the Service. Bank may establish different deadlines for Data Translation Requests depending on the method of delivery employed by Customer and all such deadlines are subject to change. Bank must receive Customer's Data Translation Requests at or prior to the deadline established for processing on the Business Day of receipt. Data Translation Requests received after the deadline will be processed on the next Business Day. Customer will be notified if a Data Translation Request is rejected in accordance with procedures established by Bank. Customer represents and warrants that all information in each Data Translation Request delivered to Bank by Customer shall be accurate, timely, authorized and will otherwise comply with all applicable laws, rules and regulations. 4. Content and Transmission of Information. Data Translation Requests are only designed to respond to information provided by Customer. Accordingly, any inaccuracy in any information provided by Customer may result in unintended processing by Bank. Bank bears no responsibility for detecting or reporting any error in data supplied by Customer and shall not be liable to Customer for any information provided by Customer with respect to a Data Translation Request which is inaccurate, incomplete, duplicative or otherwise incorrect. Customer shall retain data on file adequate to permit Customer to remake each request for at least ten (10) Business Days following the date a file is sent to Bank and shall provide such data to Bank on request. Customer acknowledges that Bank has no obligation to maintain back-up copies of requests or other information delivered by Customer to Bank. Customer acknowledges that Data Translation Services may involve the transmission of confidential consumer information that may be subject to privacy laws and regulations, including breach notification regulations. Customer agrees to notify Bank if Customer sends or receives protected health information as part of Data Translation Services. If Customer is the recipient of misdirected information, Customer shall immediately notify Bank and return the information to Bank. Customer agrees not to retain, use, copy, distribute or otherwise disclose the information in any manner. 5. Payment Requests. Customer agrees that its requests to initiate payments utilizing Data Translation Services shall be governed by this Section, the sections of this Agreement governing the applicable payment mechanism, and all other applicable laws, rules and regulations governing the relevant payment mechanism. Customer authorizes Bank to execute all electronic and check payment requests ("Payment Requests"), and settle to the Customer's account all Payment Requests, delivered to Bank in compliance with the terms of this Agreement, including the security procedures. Customer is solely responsible for initiating the Payment Requests sufficiently in advance to meet Customer's contractual obligations to its vendors and/or its customers. Bank shall not be responsible for any late payment or finance charges that may result from Customer's failure to allow sufficient lead-time. Page 20 (Effective 11/01/2021) Item 18: Staff Report Pg. 64 Packet Pg. 249 of 857 60 Item 18 Attachment A - US Bank for General Banking a. Electronic Payment Requests. Depending on the scope of the Data Translation Services solution offered by Bank, Customer may from time to time request that Bank initiate electronic payments using the ACH, card, SWIFT and Zelle networks, The Clearing House system, the wire transfer system or other electronic funds transfer system ("Electronic Payment Requests"). Except as may be provided elsewhere, Customer may not amend or revoke Electronic Payment Requests after they have been received by Bank. Customer acknowledges that the rules of NACHA and other electronic funds transfer systems may make any credit provisional until the financial institution crediting the account of the beneficiary specified in an Electronic Payment Request receives final settlement and that if the financial institution does not receive final settlement, it is entitled to a refund and Customer shall be deemed not to have paid the beneficiary. Electronic Payment Requests with settlement dates of more than thirty (30) calendar days from receipt will not be processed unless prior arrangements have been made. Customer authorizes Bank to use whatever means Bank, in good faith, deems reasonable under the circumstances to execute each Electronic Payment Request, including selection of a funds transfer system, routing and means of transmission. b. Check Payment Requests. Customer may from time to time request that Bank print checks and related remittance information ("Check Payment Request(s)") and issue and distribute such checks and information. Customer shall designate the account(s) from which Bank is to make payment ("Payment Account") and shall maintain a sufficient balance in the Payment Account to fund its Check Payment Requests. To mitigate against fraud, Bank requires that Customer utilize Bank's Positive Pay Services in conjunction with the Payment Account. Customer agrees that checks drawn in a manner consistent with a Check Payment Request shall be duly authorized to the same extent as a check drawn and signed by Customer and is properly payable by Bank. Customer authorizes Bank to deduct the Payment Account in the amount of the Check Payment Request. If there are insufficient funds in the Payment Account to make a Check Payment Request, Bank may in its sole discretion either refuse to make the payment or make the payment and overdraw the Payment Account. In either event, Customer shall incur fees as disclosed by Bank in the account agreement and related fee schedules and other disclosures. Customer has no right to reverse, adjust or revoke any Check Payment Request after it has been received by Bank. Bank will, however, make reasonable efforts to act on such a request by Customer. If Check Payment Requests relate to printing checks drawn on another financial institution's account ("Off -Us Checks"), Customer acknowledges that Bank shall not be liable for any fraudulent or unauthorized activity that may arise from the use of such Off -Us Checks. If Check Payment Requests relate to printing payroll checks, Customer acknowledges that Bank shall only print payroll checks and shall not be responsible for any other aspect of payroll processing, including, but not limited to, producing IRS Form W - 2s, 1099s or other payroll -related tax documents. In addition, Customer represents and warrants that it shall not include any social security numbers in the Check Payment Requests for payroll checks and agrees to indemnify and hold Bank harmless if the checks or check stubs are printed with social security numbers. 6. Security Procedures. Customer shall comply with all security procedures established by Bank for Data Translation Services. Customer agrees that all Data Translation Requests that involve the exchange or transmission of banking information shall only use secure transmission options supported by Bank. For some Services, such as ACH, Customer and Bank may establish alternative, comparable security procedures for accessing such Services when Data Translation Services are utilized. Customer is solely responsible for maintaining its own internal security procedures to prevent errors or unauthorized access to Customer's computer systems by unauthorized employees, vendors or customers. Bank has no responsibility for the security procedures employed by Customer's trading partners. 7. File Confirmation Procedures. Customer shall at all times comply with the applicable file confirmation procedures established by Bank. File confirmation procedures utilizing Data Translation Services are solely for the purpose of verifying Bank's receipt of the Payment Requests but not for identifying errors in transmission or content. a. Control Totals. Control Totals are an elective option that allows Customer to confirm file totals of Payment Requests transmitted to Bank. If the Control Totals option is selected by Customer, Customer shall call Bank's Audio Response Unit ("ARC Services J Bank providing the total items and dollar value of the Payment Requests and any other necessary information ("Control Totals"). After Bank receives Customer's Payment Requests, Bank will compare the Payment Requests to the Control Totals. If the Control Totals match the Payment Requests, Bank will process the Payment Requests. Bank will not process the Payment Requests if Bank does not receive conforming Control Totals on or before the established delivery deadline. Bank will notify Customer if the Control Totals do not match the Payment Requests, or if Bank receives Payment Requests without receiving Control Totals or vice versa. If the Control Totals option is not selected by Customer, upon Bank's receipt of Customer's electronic payments via a data file, Bank shall send an acknowledgement to Customer confirming receipt and acceptance of Customer's Payment Requests. If Customer identifies errors in the content or transmission of Customer's Payment Requests, or if Customer does not receive an acknowledgement from Bank, Customer agrees to notify Bank immediately. Depending on the payment deadlines, Bank may be able to delete or reverse processing of Payment Requests. b. Payables File Manager. Payables File Manager is an elective Service that allows Customer to confirm that Bank has received Customer's files. Using SinglePoint® or other applications or systems as may be introduced by Bank, Customer may view the status of Data Translation files sent by Customer to Bank. If Customer selects this Service, Customer agrees to promptly and regularly review the status of all files displayed in the Payables File Manager and to notify Bank immediately if any files sent by Customer were not received by Bank. Depending on the payment deadlines, Bank may be able to delete or reverse processing of Payment Requests. Customer bears sole responsibility for any inaccurate or incomplete information sent to Bank if Customer fails to notify Bank prior to Bank's processing of Customer's files. 8. Supplier Prefer Pay. If selected by Customer and agreed to by Bank, the Supplier Prefer Pay Service provides an electronic payment enrollment and storage solution, which also allows use of the stored data for payment origination. Customer's suppliers or trading partners ("Suppliers") may elect to enroll in a program to receive payment from Customer via ACH or alternative payment methods that may include, but are not limited to, virtual cards (account without the issuance of a physical credit card) and checks. As part of this Service, Bank will: (i) provide online enrollment for Suppliers to register to receive payment from Customer, including the option for Supplier to provide a preferred email address to receive remittance information; (ii) contact Suppliers (with contact information provided solely by Customer) via telephone, email or regular mail to describe the supplier enrollment service and solicit their participation; (iii) support Supplier enrollment; and (iv) at Customer's election, securely store Supplier's banking information. Customer will designate one or more System Administrator(s) responsible for establishing internal security procedures, including, without limitation, setting up and maintaining access to the Service. Customer shall be solely responsible for conducting the necessary due diligence to vet Customer's Suppliers and to ensure that only legitimate Suppliers of Customer enroll in the Service. Bank recommends that Customer establish and utilize robust security procedures in accordance with the guidelines provided by Bank in the Implementation Documents. If Customer declines Bank's recommendation, Customer agrees it will be precluded from asserting any claims against Bank for unauthorized payments, except with respect to claims caused by Bank's own lack of good faith or failure to exercise ordinary care. Customer acknowledges and agrees that use of the Service may be affected by external factors beyond Bank's control. Interruption of the Service or performance hereunder for any reason shall not relieve Customer of its obligation to make timely payment to Suppliers, and Bank shall not incur any liability to Customer for Customer's failure to timely make any such payment to Suppliers. Customer agrees to indemnify, defend and hold Bank harmless from and against any and all claims, demands, expenses, losses, liabilities, and damages, including reasonable attorney fees and court costs at trial or on appeal that arise directly or indirectly out of any payments made by Customer using the enrollment information furnished by Customer, Suppliers or any other party on behalf of Supplier. Page 21 (Effective 11/01/2021) Item 18: Staff Report Pg. 65 Packet Pg. 250 of 857 61 G. CASH VAULT SERVICES 1. Introduction. The Terms "cash", "coin" and "currency" as used herein shall refer to coin and currency of the United States and certain foreign currencies accepted by Bank. 2. Foreign currency. Customer shall not deposit any foreign currency unless Customer has obtained Bank's prior approval. Bank reserves the right, in its sole discretion, to impose restrictions on, or discontinue acceptance of, foreign currency deposits. Section IV.G.5 below does not apply to foreign currency processing. Foreign coin shall not be accepted for deposit by Bank under any circumstances. 3. Account. All deposits of coin, currency and checks will be credited to, and all withdrawals of coin, currency and checks will be debited against, Customer's deposit account at Bank (the "Account") which Customer has designated as being covered by the Services described herein. Customer agrees that it shall not deposit any items, instructions or objects other than coin, currency and checks as outlined in this Agreement and agrees to assume any and all risk of loss associated with tendering items not specified herein. 4. Deposits. a. Customer shall supply and maintain tamper -evident disposable plastic bags used for deposits. Plastic bags shall be sealed according to manufacturers' instructions and addressed to the appropriate secured facility specified by Bank. Customer will prepare deposits as follows: (i) currency will be batched separately from checks with each currency and check batch accompanied by a deposit ticket fully completed by Customer; (ii) currency will be banded with 100 notes of the same denomination whenever possible; (iii) deposits will be delivered by Customer's approved carrier to the secured facility specified by Bank; and (iv) to receive same - day credit, deposits must be made prior to the daily deadline established by Bank from time to time, and any deposits received by Bank after its deadline may be considered to have been received on the next Business Day. Foreign currency deposits do not qualify for same -day credit and are subject to Bank's prevailing exchange rates. b. Bank will process Customer's deposits as follows: (i) deposits will be receipted and conditional (subject to verification) credit assigned based on the amount identified on the deposit ticket; (ii) deposit tickets that are missing, blank or do not contain legible "declared balances" are subject to delayed ledger credit of one Business Day; and (iii) coins and currency will be counted and Bank's count will be the valid and controlling count. c. For U.S. currency, if there is a coin and currency variance of more than USD 10 from the declared balance on Customer's deposit ticket, Bank shall adjust Customer's coin and currency deposits through a separate debit or credit to Customer's account. Any such adjustment shall not be reflected on Customer's deposit ticket. Deposit tickets containing a declared total that includes check deposits may require a separate and additional adjustment for any variances to Customer's check deposits. If there is a coin and currency variance of USD 10 or less from the declared balance on Customer's deposit ticket, Bank shall not make any adjustment to Customer's currency and coin deposits and shall credit Customer's account based on Customer's declared balance. Upon request, Bank will provide Customer with any available information that may assist Customer in reconciliation of the difference. d. Deposited items are deemed received on the day of delivery if Bank receives the deposit prior to Bank's established deadlines. Deposits will be processed in accordance with normal Bank procedure and any applicable availability schedules. All deposits made by Customer shall be subject to verification and adjustment by Bank. Bank's verification shall be deemed correct and binding upon Customer for all purposes, absent manifest error. e. If Customer chooses to pre -encode its checks or other items for deposit, Customer agrees to comply with the pre -encoded deposit procedures and specifications as may be established and revised by Bank. Customer shall be responsible for any of its encoding errors. Bank may treat certain deposits as unencoded deposits if there is an unacceptable rate of encoding errors. Item 18 Attachment A - US Bank for General Banking 5. Withdrawals. Services a. Bank may provide Customer with U.S. currency and coin in designated denominations from time to time as requested by Customer through the Bank's automated ordering system ("Cash Orders"). Customer must comply with all of Bank's policies and procedures regarding the placement and delivery of Cash Orders, including, without limitation, the maintenance of a designated password. Customer shall be responsible for maintaining the confidentiality of Customer's password and restricting access to the system to authorized Agents. All Cash Orders will be charged to the account designated by Customer and must be picked up by Customer's Agent or sent by registered mail to a street address. Only approved carriers may pick up Cash Orders directly from a cash vault operated by Bank. Bank may release any Cash Order to any individual that Bank reasonably believes to be Customer's Agent. Customer shall be responsible for any Cash Order after receipt thereof by the Agent. Bank may specify a daily Cash Order limit and Customer agrees that it will not initiate a Cash Order in excess of the designated limit. In no event shall Customer initiate a Cash Order in excess of the immediately available funds in the designated account. b. Customer may order currency and coin from Bank as follows: (i) The preferred order for currency is in standard full strap (100 banknotes) quantities only. (ii) Coin may be ordered in standard full box units (50 rolls), individual rolls or loose standard bags only. (iii) A charge for the face value of the monies ordered will be made to the Account on the day the order is processed by Bank. (iv) Orders for coin and currency must be placed no later than the deadline established by Bank from time to time for release to Customer's Agent on the same or next Business Day. Depending on Customer's location, select cash vault sites may require a multiple -day lead time or more for coin and currency orders. (v) Bank must be notified of any discrepancies pertaining to coin or currency orders within two Business Days of receipt by Customer of such coin or currency. Customer must return documentation to back-up outages such as plastic change order bag, currency strap, coin wrapper and/or box. 6. Processing. Bank will provide processing on all Business Days. Cash Vault Services using third -party applications with time -stamp data are for informational purposes only and may not reflect actual timing of receipt, posting or verification of Customer's deposits by Bank. Bank shall not be liable for any inaccurate or incomplete information with respect to such time -stamp data provided to Customer. 7. Carrier Service. Any carrier service utilized to deliver or obtain coin, currency or other property to or from Bank, including, without limitation, a common carrier, will act as the agent of Customer and not of Bank. Customer and carrier shall agree upon the pickup and delivery days and times. Customer will bear the entire risk of loss of coins, currency, checks or other property of Customer when in the custody or control of Customer's carrier service. 8. Cash Shipping Solution. If this Service is selected by Customer and agreed to by Bank, Bank may rent a caller box at the United States Postal Service (USPS) post office and, on Customer's behalf, engage an armored carrier, each of which. shall be deemed Customer's Agent, to retrieve Customer's deposits from the caller box for delivery to Bank and to deliver Customer's coin and currency orders to the USPS. Customer agrees to implement and properly use any and all security procedures prescribed or recommended by USPS and Bank and agrees to hold Bank harmless from any claims or losses arising from Customer's failure to implement and properly use any such prescribed or recommended security procedures. Bank recommends that Customer limits its deposits and orders to $2500 per mailer, but regardless Customer bears the entire risk of loss of coins, currency, checks or other property of Customer until received at, or upon pick up from, Bank's cash vault. Customer shall be solely responsible for any investigation of a loss suffered prior to delivery to, or after pickup from, Bank's cash vault and Bank shall have no obligation to participate in such investigation. Page 22 (Effective 11/01/2021) Item 18: Staff Report Pg. 66 Packet Pg. 251 of 857 9. Representations. Customer represents and warrants to Bank that (a) all funds deposited with Bank will be the proceeds of, and all funds ordered and withdrawn from Bank will be intended for use in, Customer's lawful activities and (b) all of Customer's transactions hereunder will be conducted solely on Customer's behalf and not on behalf of any other person or entity. 10. Regulatory Compliance. Upon request, Customer shall immediately provide Bank with any information and shall otherwise cooperate with Bank in every way necessary in order to enable Bank to fulfill its obligations with respect to the reporting of transactions in coin and currency or any other regulatory requirement. 11. Use of and Access to Cash Vault Services. Customer acknowledges and agrees that Cash Vault Services are to be used exclusively for its benefit and, absent prior written approval by Bank, Customer will not permit third parties, including non -Customers or other Agents of Customer (excluding approved carriers or agents making cash deposits into a Customer's account at Bank and agents ordering cash on behalf of a Customer), from accessing or otherwise using any Cash Vault Services offered by Bank. Item 18 Attachment A - US Bank for General Banking H. U.S. BANK EASYTAXSM SER Services 1. Authorization; Enrollment. If the EasyTax Service is requested by Customer and agreed to by Bank, Bank will electronically enroll Customer in the Electronic Federal Tax Payment System (EFTPS) if Customer desires to make federal tax payments via EFTPS. Electronic enrollment will allow Bank to process Customer's tax payments in compliance with EFTPS through Bank's tax payment system only. If Customer chooses to pay federal taxes by any other means, payments may not be EFTPS compliant. Customer understands that Bank's EFTPS enrollment form 8655 does not replace the EFTPS form 9779, which is sent to mandated companies by the Internal Revenue Service. Customer may also use the EasyTax Service to make state and/or local municipality tax payments in jurisdictions that support such payments. Customer agrees that the EasyTax Service shall be governed by this Section and all other relevant sections of this Agreement. 2. Submission of Information. Customer shall furnish Bank with complete and accurate master file information which shall enable Bank to file tax deposits via ACH with the appropriate tax authorities in a timely manner. The Service provided by Bank hereunder shall be based solely upon the information furnished by Customer to Bank. Accordingly, any inaccuracy in any information provided by Customer may result in unintended processing by Bank. Customer bears sole and exclusive responsibility to verify that the information provided to Bank is complete and accurate. Bank bears no responsibility for detecting or reporting any error in data supplied by Customer and shall not be liable to Customer for any information provided by Customer with respect to information that is inaccurate, incomplete or otherwise incorrect. The Service provided hereunder does not relieve Customer of any duty imposed on Customer by law to maintain records or from verifying and, if necessary, immediately correcting in writing all data received from Bank relating to the Service. Customer agrees to be bound by any instructions, whether or not authorized, issued in its name and accepted by Bank in accordance with the agreed procedures. Customer shall indemnify and hold Bank harmless from and against all liability, loss and damage (including attorneys' fees and other costs incurred in connection therewith) arising out of the use of information provided by Customer. 3. Requests for Payment. Requests for payment to tax authorities must be made in accordance with instructions which Bank shall provide Customer, which may be amended by Bank from time to time at its discretion, and will be considered complete only if actually received by Bank. All tax deposits must be initiated at least one Business Day in advance of the due date, otherwise deposits may be subject to federal or state penalties. Any request by Customer to make tax deposits hereunder shall be submitted to Bank prior to the daily cut-off time established by Bank from time to time. Any such request received by Bank after its daily cut-off time may be processed on the next Business Day. In the event that an ACH Entry is rejected or returned by an ACH processor for any reason whatsoever, Bank will give Customer notice of any rejected or returned ACH Entry in the usual manner agreed to by the parties. Bank shall have no liability for any delay caused by strikes, telephone failure, equipment or electrical failure, or any other condition beyond the reasonable control of Bank. 4. Receipt of Funds. Funds received by Bank from Customer shall be held as a deposit liability of Bank to Customer until such time as such funds are due and paid to the appropriate tax authorities. Customer is not entitled to interest on such funds and Bank may invest such funds solely for Bank's benefit. 5. Account. Customer shall maintain with Bank a commercial demand deposit account in which Customer shall maintain immediately available funds in an amount sufficient to cover all tax deposits and fees charged by Bank for the Service hereunder. Failure by Customer to maintain such funds shall relieve Bank from providing such Service, notwithstanding any request by Customer to provide the Service. 6. Liability. Bank shall not be liable for any penalties assessed by reason of failure of Customer to make any tax payments. Interruption of the Service or performance hereunder for any reason shall not relieve Customer of its obligation to make any required tax deposits, and Bank shall not incur any liability to Customer for Customer's failure to make any such deposit. If Customer elects to make a tax deposit by any means Page 23 (Effective 11/01/2021) Item 18: Staff Report Pg. 67 Packet Pg. 252 of 857 63 other than through Bank, Bank shall not be liable for any penalties or interest arising from any error in due date or other calculations for deposits made within the period in which such other deposit was made. Bank may choose to provide its EasyTax Service through a third -party vendor. Bank and its third -party vendor's liability to Customer is limited to correcting any error made by the Bank or third -party vendor. The sole and exclusive remedy, at law or in equity, against Bank or third -party vendor is limited to money damages in an amount not to exceed the total amount paid to Bank for EasyTax fees during the twelve (12) months preceding the event giving rise to the liability. Neither Bank nor third -party vendor will be liable for special, incidental, indirect, punitive or consequential damages. Customer acknowledges that the EasyTax Service would not be available or would be available at substantially increased rates without the liability and remedy limitations set forth in this Agreement. 7. Codes. Customer shall keep confidential the access and PIN codes issued to Customer in connection with the Service, and only Customer shall use such codes. If Customer suspects that any such codes have become known or otherwise accessed by unauthorized persons, Customer shall notify Bank immediately and follow up such notice with written confirmation. The occurrence of unauthorized access will not affect any deposits made in good faith by Bank before Bank has received such notification and had a reasonable time to act to prevent any unauthorized deposits. Item 18 Attachment A - US Bank for General Banking I. PAPER -BASED DISBURSEM Services 1. Controlled Disbursement. a. Disbursement Account. If requested by Customer and agreed to by Bank, Customer will open and maintain a demand deposit account ("Disbursement Account") and a primary funding account ("Funding Account") at Bank. The disbursing bank may be a financial institution that is a subsidiary or affiliate of Bank or Bank itself. Customer agrees to use Bank's Positive Pay Services in conjunction with the use of Disbursement Account(s). Should Customer decline to use Bank's Positive Pay Services in conjunction with the use of Disbursement Account(s), Customer agrees that, except with respect to liability, loss or damage caused by Bank's own lack of good faith or failure to exercise ordinary care, it will be precluded from asserting any claims against Bank for paying any unauthorized, altered, counterfeit or other fraudulent item that Bank's Positive Pay Service was designed to detect or deter. Bank also reserves the right to require Customer to execute a separate indemnity agreement related to its use of Disbursement Account(s). Customer hereby authorizes and directs Bank to act on its behalf and as its agent, as Bank in its sole discretion deems necessary or advisable, in performing any of the Controlled Disbursement Services and related Services. b. Funding Procedures. On each Business Day, Bank shall electronically provide Customer with a report of the total aggregate amount of all presented disbursement checks and ACH transactions posted in the early morning ACH window, net of the prior day adjustment and other charges to the Disbursement Account (the "Total Clearings"). Customer agrees to maintain sufficient collected balances in the Funding Account by the established deadline to fund the Total Clearings. Bank is hereby authorized to debit the Funding Account in an amount equal to the actual or estimated Total Clearings and to transfer funds in said amount for credit to the Disbursement Account. Bank reserves the right to convert the Disbursement Account into a standard prepaid checking account at any time upon notice to Customer. c. Adjustments. Bank will compare the report of electronic presentments to the checks presented against the Disbursement Account. If the total dollar amount of checks electronically reported is less than the total dollar amount of checks presented, Bank will credit the Disbursement Account for the difference. Bank will add this difference to Customer's Total Clearings the next Business Day. d. Daily Dollar Limit. A daily dollar limit (the "Dollar Limit") may be established from time to time by Bank with respect to the Disbursement Account in Bank's sole discretion. Bank shall have no obligation to pay disbursement checks and ACH transactions (collectively, "Disbursement Items") in excess of the Dollar Limit. Bank may, at any time, either verbally or in writing (but shall not be deemed obligated to) notify Customer of any change made by Bank in the Dollar Limit. Establishment of the Dollar Limit should not be interpreted or construed by Customer as any commitment or agreement by Bank to provide any credit or loans to Customer, nor as an agreement or commitment to debit the Funding Account when doing so would create a negative balance therein. e. Special Circumstances. Customer acknowledges that Bank, under some circumstances beyond its control, may at times be unable to provide a report of the total amount of its Total Clearings early enough for Customer to make a complete and acceptable funding of the accounts. Customer nevertheless agrees to fund the Funding Account completely by using an estimate of the Total Clearings. f. Action Affecting Accounts. Should Bank receive any process, summons, order, injunction, execution, levy, lien, garnishment, or adverse claim notice (either by a governmental authority or third party) (hereinafter referred to as "Process"), which Bank reasonably believes will adversely affect the Funding Account or the Disbursement Account, Bank may, at its option and without liability, refuse to honor orders to pay or withdraw sums from any Disbursement Account and may either hold the Funding Account balance herein until such Process is disposed of to the satisfaction of Bank or pay the balance over to the source of the Process in accordance with applicable law. g. Return of Disbursement Items Unpaid. Bank reserves the right, in Bank's sole discretion, to return unpaid any or all Disbursement Items presented for payment against the Disbursement Account in the event that: Page 24 (Effective 11/01/2021) Item 18: Staff Report Pg. 68 Packet Pg. 253 of 857 64 (i) there are insufficient collected and available balances on deposit in the Funding Account by the established deadline to fund the Total Clearings; (ii) debits cannot be posted because the Disbursement Account or Funding Account is frozen, blocked, closed or because of any other condition; or (iii) any communications failure or other condition prevents Bank from monitoring Customer's Dollar Limit and/or the Disbursement Items presented for payment. h. Stop Payment Orders. Customer may issue stop payment orders on Disbursement Items drawn on the Disbursement Account in accordance with Bank's procedures. 2. Warrant Services. a. Warrant Account. If requested by Customer and agreed to by Bank, Customer shall open and maintain a demand deposit account upon which warrants shall be drawn and will be charged (the "Warrant Account"). Customer shall maintain on deposit sufficient collected and available balances to cover items drawn on the Warrant Account. b. Warrant Format. All warrants shall contain on the face of the item the words "warrant" and "payable through U.S. Bank." Customer will also encode all warrants in accordance with Bank specifications. Customer agrees to immediately make any changes to the format of the warrants or encoding when requested to do so by Bank and will be solely responsible for its failure or refusal to comply with Bank's specifications. Any warrant drawn by Customer on the Warrant Account shall be treated by Bank as a warrant regardless of what appears on the face of the warrant and Customer shall hold Bank harmless as a result of so handling any such item. c. Presentment and Return. Bank shall make warrants presented to Bank available to Customer via electronic presentment. Bank shall notify Customer by electronic means of the account number, warrant number and dollar amount of all presented warrants and provide Customer with a front and back image of each warrant received by Bank. Bank's delivery of the images shall constitute an electronic presentment under the Uniform Commercial Code, Federal Regulation CC and other applicable laws. Warrant Services are additionally subject to the Reverse Positive Pay terms contained elsewhere in this Agreement. Customer shall notify Bank of each warrant that should be returned in the form agreed to by Bank and Customer. If Customer does not specifically decline payment of a warrant by the deadline established by Bank, such warrant will be finally paid by Bank. Customer acknowledges that warrants payable through Bank are considered to be drawn on Bank for purposes of the expeditious return and notice -of -nonpayment requirements of subpart C of Regulation CC of the Federal Reserve Board. If Bank agrees to return a warrant following Bank's deadline, Customer agrees to be responsible for Bank's failure to return the warrant in an expeditious manner as prescribed in Regulation CC. Bank shall be deemed to have made timely presentment to Customer with respect to any warrants that Bank receives at a time when it is prevented from making presentment to Customer as a result of any force majeure event illustrated in Section 11.22. d. Examination of Warrants. Bank shall have no responsibility to examine warrants prior to presentment to Customer for its payment decision. Bank will take ordinary care to see that the amount of each warrant as drawn is accurately posted to Customer's account. Bank will not make any attempt to verify signatures, endorsements or restrictive clauses on warrants. Bank will not examine the dates on which warrants have been drawn for undated, stale or post-dated items. Bank shall have no responsibility for any liability, loss or damage resulting from (i) a payment in accordance with this Section of any warrant that is altered or unsigned or that bears the forged or unauthorized signature of Customer or (ii) return of any check to the depository bank in accordance with this Section. e. Encashment of Warrants. Unless otherwise instructed by Customer, Bank is authorized to pay warrants issued by Customer that are presented for encashment by payees. Bank will not be liable for the encashment of any warrant which contains, or is purported to contain, a forged signature of a maker or endorser, or any other unauthorized modification, as long as Bank exercises ordinary care in cashing the warrant. Item 18 Attachment A - US Bank for General Banking J. POSITIVE PAY SERVICES 1.Services 1. Introduction. Positive Pay Services are offered by Bank as the most effective way to minimize loss from fraudulent check issuance or payment. If Positive Pay Services are requested by Customer and agreed to by Bank, Customer and Bank agree that in the event of an inconsistency between this Agreement and applicable law, the provisions of this Agreement shall prevail to the extent permitted. Nothing in this Agreement is intended to limit Bank's right to return an item unpaid if there are insufficient available funds in the designated account. 2. Format Specifications. Customer shall comply at all times with Bank's format and data transmission standards for the Positive Pay Service. Customer agrees to issue checks, warrants, drafts or other items (collectively, "Items") in accordance with Bank's specifications and will change the Item format when requested to do so by Bank. Bank shall not be responsible for correcting or resolving processing problems caused by substandard quality magnetic encoding. 3. Positive Pay. a. Customer Responsibilities. Customer shall designate to Bank all account(s) that are to be used with the Positive Pay Service ("Positive Pay Account(s)"). Customer will provide Bank with a file of all outstanding Items prior to activation of this Service. On each day that an Item is written against the Positive Pay Account, Customer shall supply Bank with all required Item issue information prior to the deadline established by Bank. Such information shall include, without limitation, the account number, the issue date, the Item number and the dollar amount. Customer shall be responsible for the accuracy and completeness of all information provided to Bank. Customer agrees to review all Positive Pay Exception Items (as defined below) each Business Day. b. Bank's Responsibilities. In reliance on the information provided by Customer, Bank shall create a master issue file for each designated Positive Pay Account ("Issue File"). If ARP File Confirmation Service is selected by Customer, Bank shall process the Issue File and provide a confirmation to Customer that the Issue File was received and processed. Excluding valid stop payment orders and issue records voided by Customer request, all Items, including those that have been electronically converted, that match by Item number and dollar amount to Bank's Issue File will be deemed properly payable and Bank is authorized to pay all such Items. c. Positive Pay Exceptions. Each Business Day, Bank shall make reasonable efforts to report to Customer any Item that does not match the Issue File (each, a "Positive Pay Exception") and, if requested and available, provide the front and back images of those Items for that day's presentment; provided, however, no images shall be provided in the case of electronically converted Items. Customer agrees to review and make payment decisions on the Positive Pay Exception Items prior to Bank's established deadline each Business Day. If Customer selects the Positive Pay Same Day service for controlled disbursement accounts, Customer shall receive and may make payment decisions on Positive Pay Exception Items prior to the Items posting to the controlled disbursement accounts or defer payment decisions until the established deadline on the next Business Day. As the most effective fraud -protection setup, "return all" shall be the initial default setup for all Positive Pay Exception Items. Under the "return all" setup, Bank is authorized to return any Positive Pay Exception Item unless Customer instructs Bank to pay a Positive Pay Exception Item prior to the established deadline. As an alternative to the "return all" setup, Customer may select "pay all" as its default setup for Positive Pay Exception Items, in which case Bank is authorized to finally pay any Positive Pay Exception Item unless Customer has instructed Bank to return the Positive Pay Exception Item prior to the established deadline. If Customer selects "pay all" as its default setup, Customer agrees to execute any further documentation required by Bank. Customer shall indemnify and hold Bank harmless from and against any and all claims, demands, damages, losses, liabilities, penalties and expenses (including, without limitation, reasonable attorney fees and court costs at trial or on appeal) arising directly or indirectly from Customer's selection of "pay all" as its default setup. Bank may rely on any instructions received from Customer that Bank reasonably believes to be genuine. Except with respect to liability, loss or damage caused by Bank's own lack of good faith Page 25 (Effective 11/01/2021) Item 18: Staff Report Pg. 69 Packet Pg. 254 of 857 65 Item 18 Attachment A - US Bank for General Banking or failure to exercise ordinary care, Bank shall have no responsibility for any liability, loss or damage resulting from: (i) payment in accordance with this Section of any Positive Pay Exception Item that is altered or unsigned or which bears the forged or unauthorized signature of Customer; (ii) the return of any Positive Pay Exception Item to the depository bank in accordance with this Section; or (iii) Customer's failure to meet Bank's established deadlines. Customer may be required to place a stop payment order on any returned Positive Pay Exception Item, which shall be subject to Bank's customary stop payment fee. Bank's failure to report a discrepancy will not discharge Customer's obligation with regard to any Item and shall not obligate Bank to return any Item if it is otherwise properly payable. d. Teller Positive Pay. All Positive Pay Accounts will interface with the Bank's teller system unless requested by Customer. Bank will compare Items presented for cash at a branch of the Bank with Customer's Issue File. Customer acknowledges that under some circumstances issuance information submitted by Customer may not be reflected in Customer's Issue File until the opening of the following Business Day. Customer agrees to follow Bank's established procedures should it need to manually add an Item to the Issue File. Bank will make reasonable efforts to assist Customer, but Customer acknowledges that Bank may be unable to process such requests on a same -day basis. If a special handling process for teller -cashed items is selected by Customer and agreed to by Bank, Bank shall attempt to contact Customer for approval prior to the encashment of any item that does not appear in the Issue File. Customer agrees that Bank, in its sole discretion, may refuse to cash any Positive Pay Exception Item and such refusal will not be deemed to be a wrongful dishonor. In the event of dishonor, Bank will refer the presenter to Customer. In the event that Customer requests Bank not activate or temporarily deactivate Teller Positive Pay, Customer agrees to assume all risk of loss for any Bank teller -cashed Item that would have been identified as a Positive Pay Exception Item prior to acceptance. e. Teller Payee Positive Pay. If Customer selects the Teller Payee Positive Pay service, payee name(s), in addition to the Issue File information, will be verified at Bank's teller lines. Customer shall include in the Issue File the payee name(s) for each Item issued by Customer. Customer shall be responsible for the accuracy and completeness of the payee information provided to Bank. In reliance on the payee information provided by Customer, Bank will compare the payee information on the Item presented for encashment at a Bank teller line with Customer's Issue File. Customer acknowledges that Bank will not be able to validate payee information if payee information is not provided for a particular Item or for electronically converted Items presented to Bank for payment. Customer acknowledges that, under some circumstances, issuance information submitted by Customer may not be reflected in Customer's Issue File until the opening of the following Business Day. Customer agrees to follow Bank's established procedures should it need to manually add an Item to the Issue File. Bank will make reasonable efforts to assist Customer, but Customer acknowledges that Bank may be unable to process such requests on a same -day basis. If a special handling process for teller - cashed items is selected by Customer and agreed to by Bank, Bank shall attempt to contact Customer for approval prior to the encashment of any item that does not appear in the Issue File. Customer agrees that Bank, in its sole discretion, may refuse to cash any Positive Pay Exception Item, including where the payee name is not an exact match and such refusal will not be deemed to be a wrongful dishonor. In the event of dishonor, Bank will refer the presenter to Customer. f. Payee Positive Pay. If Customer selects this option, which is available only through SinglePoint®, Customer's Item stock may first be tested to ensure it meets Bank's payee name readability rate. Customer shall designate to Bank all Positive Pay Accounts that shall use Payee Positive Pay. In addition to the Issue File information provided by Customer for the Positive Pay Service, Customer shall include in the Issue File the payee name(s) for each Item issued by Customer. Customer shall be responsible for the accuracy and completeness of the payee information provided to Bank. In reliance on the payee information provided by Customer, Bank will compare tl% Services ,h the Item with Customer's Issue File for Items presented or deposited at Bank. Customer acknowledges that Bank will not be able to validate payee information for electronically converted Items presented to Bank for payment. Bank may, in its sole discretion, impose variable parameters for which the payee information will not be reviewed for certain Items processed through the back office. If such parameters are imposed, Bank agrees to assume the risk of loss for an Item that would have been identified as a Positive Pay Exception solely on the basis of the payee information. 4. Reverse Positive Pay. a. The Paid File. Customer shall identify all accounts subject to Reverse Positive Pay ("Reverse Positive Pay Account"). When an Item is presented for payment against an identified Reverse Positive Pay Account, Bank shall notify Customer prior to the designated time, and in no case later than the Business Day following the day of presentment, of the Reverse Positive Pay Account number, Item number and amount of the presented Item (the "Paid File") and, if requested and available, shall provide Customer with the front and back images of the Items. By electing Reverse Positive Pay, Customer assumes all fraudulent and other risks associated with teller -cashed Items, except as may be caused by Bank's own lack of good faith or failure to exercise ordinary care, unless Customer provides standing instructions to Bank to disallow encashment at the teller line. b. Payment Instructions. Customer shall compare the information provided by Bank with Customer's Item issuance records. Customer shall notify Bank prior to the deadline established by Bank of Customer's decision on any reported Items that should be dishonored. Bank may rely on any instructions received from Customer that it reasonably believes to be genuine. Bank is authorized to finally pay any Item listed on the Paid File unless the Customer instructs Bank to return the Item prior to the established deadline. Except with respect to liability, loss or damage caused by Bank's own lack of good faith or failure to exercise ordinary care, Bank shall have no responsibility for any liability, loss or damage resulting from (i) a payment in accordance with this Section of any Item that is altered or unsigned or which bears the forged or unauthorized signature of Customer or (ii) return of any Item to the depository bank in accordance with this Section. Bank reserves the right to require Customer to place a stop payment order on any Item to be returned. Any such orders will be subject to Bank's customary stop payment fee. Customer shall notify Bank by the designated deadline if the Paid File has not been received from Bank. Bank will make reasonable efforts to provide the Paid File to Customer and honor Customer's instructions. Bank's failure to provide a Paid File will not discharge Customer's obligation with regard to any Item that was otherwise properly payable at the time of presentment. Page 26 (Effective 11/01/2021) Item 18: Staff Report Pg. 70 Packet Pg. 255 of 857 K. LOCKBOX SERVICES 1. Lockbox Service Requirements. Bank provides wholesale, scannable wholesale and property management Lockbox Services, as well as E-Lockbox Services to assist customers in expediting receipt of their remittances. Customer will have its customers forward their payments to the location designated by Bank ("Lockbox"). Prior to initiation of any Lockbox Service, Customer must maintain a demand deposit account with Bank associated with the Lockbox Service ("Lockbox Account"). 2. Testing; Remittances and Envelopes. Customer shall provide Bank samples of remittances and envelopes for testing and approval prior to using such remittances and envelopes in production. After implementation of Lockbox Services, if there are proposed changes to remittances and envelopes, Customer shall review the proposed changes with Bank and obtain Bank's approval prior to use. Bank may adjust the price for processing Customer's payments if changes are made to Customer's remittances and/or envelopes (including remittance scan line configuration) without such prior approval. Bank may request changes in Customer's remittances or envelopes due to changes in law or regulation, or as reasonably necessary due to equipment or processing improvements. If Customer fails to implement such changes, Bank may adjust the price for payment processing or cease processing Customer's payments as necessary to comply with law or regulation, as reasonably determined by Bank. Customer agrees not to provide any form of prepaid business reply mail envelopes for use with the Lockbox Services. 3. Access to Mail. Customer authorizes Bank or its agent to pick up mail at the appropriate postal facility, to have custody of the keys or combinations and unrestricted and exclusive access to such box, and to collect the mail therein to be processed by Bank as agreed by the parties. Bank shall process remittances in accordance with its standard procedures or in accordance with prior instructions received from Customer and agreed to by Bank. Upon termination of Customer's Lockbox Service, mail received shall be forwarded for ninety (90) days following termination. 4. Proprietary Rights. Bank possesses all proprietary rights to written material, including, without limitation, all computer programs written for Bank's Lockbox processing system, portable media, listings and other documentation originated and prepared by Bank. Customer shall not duplicate, sell or use in any manner such programs or documentation without the prior written consent of Bank. 5. Collections/Availability. Unless otherwise agreed, while Customer receives Lockbox Services, all collected funds held in the Lockbox Account shall be deemed to be Customer's funds for all purposes, including adjustment, attachment, execution, garnishment and other forms of legal process. The crediting and collection of items will be handled under the same agreement as applied to other commercial deposits and shall be subject to Bank's then current funds availability schedule. 6. Transmission of Information. Bank may transmit to Customer remittance information or other information received at the lockbox ("Lockbox Information") via secure electronic transmission. Customer further acknowledges that Bank has a duty to protect Lockbox Information and ensure that it is safely delivered to Customer and that Bank has deemed secure electronic transmissions to be the safest mechanism for delivery. If Customer elects to receive the Lockbox Information using other delivery means including paper remittance forwarding or Internet delivery, Customer acknowledges that such delivery means are inherently more insecure and agrees to assume all risk, and hold Bank harmless from, any obligations, liability or losses that results from the nonreceipt, disclosure, dissemination, alteration or unauthorized access of the Lockbox Information. If Customer is the recipient of misdirected Lockbox Information, Customer shall immediately notify Bank and return the information to Bank. Customer agrees not to retain, use, copy, distribute or otherwise disclose the information in any manner. 7. Image Delivery Services. Bank shall electronically store check images, check information, remittance information or other information received at the Lockbox in accordance with Bank's record retention schedule. Customer may obtain such images or information via Internet access, CDs (physical or virtual), DVDs (physical or virtual) or file Item 18 Attachment A - US Bank for General Banking transmission, if available, at the Services chedule. If the images or information are sent via CD or DVD, Customer agrees to verify the contents of the CD or DVD upon receipt and request a replacement, if necessary, within 10 days of receipt. Customer is solely responsible for safeguarding the security and confidentiality of all images and information that is stored on Customer's computer systems, or printed or downloaded from the Internet, CDs, DVDs, or file transmissions. 8. Credit/Debit Card Processing. If Customer desires to provide its customers with the option of making their payments via credit card or non - PIN based debit card, Customer shall first secure approval from a payment transaction processor that Bank is able to support. Credit/debit card processing shall be subject to applicable laws, rules and regulations, and the terms of any other agreement between Customer and the payment transaction processor. Customer acknowledges that Bank is acting on behalf of Customer to merely initiate the authorization of payments at the Lockbox site, and that Bank shall have no responsibility for chargebacks, processing fees, payment disputes or other matters related to the credit/debit card transaction. Bank shall enter the credit/debit card information using its best efforts and if adjustments are subsequently required, Customer shall be responsible for handling all adjustments. In accordance with the requirements of the Payment Card Industry (PCI) Data Security Standard, Customer shall not request CVV or Card Verification Code or Value information (for example: CID, CVC2, CVV2 or CAV2) on remittance documents. Storage of this information is prohibited by the PCI Data Security Standard. 9. Foreign currency -denominated items and items drawn on foreign banks. If Customer desires to have non-U.S. dollar items processed by Bank, or items denominated in U.S. dollars but drawn on a foreign bank, Bank shall handle the items within parameters established by Bank based on amount, the type of currency and other considerations outlined in the Implementation Documents. If the item does not fall within Bank's parameters for processing, Bank shall return the item unprocessed to Customer or forward the item for handling as a foreign cash letter collection. If Bank provides Customer with credit at the U.S. dollar conversion rate in effect, and if the item is subsequently returned by the drawee Bank, Bank shall charge Customer's account for the prevailing exchange rate in effect at the time of the chargeback. 10. Compliance with Applicable Law. If specific lockbox handling requirements are required in order for Customer to comply with law or regulations applicable to Customer (for example, Regulation Z), Customer agrees to immediately notify Bank of any such requirements. If Bank is unable to accommodate Customer's specific requirements, Bank or Customer may immediately terminate the Lockbox Services. 11. Customer Responsibility. With respect to each item received at the Lockbox, Customer shall indemnify and hold Bank harmless from and against any and all claims, demands, damages, losses, liabilities, penalties and expenses (including, without limitation, reasonable attorney fees and court costs at trial or on appeal) arising directly or indirectly: (i) from Customer's breach of a representation or warranty under applicable law, clearinghouse rule, Federal Reserve Operating Circular, or other similar rules or regulations; or (ii) from any other act or omission arising out of Bank's action or inaction taken pursuant to any request by Customer or pursuant to this Agreement. This Section IV.K.11 shall survive termination of the Agreement. 12. Wholesale Lockbox Processing. Bank offers Wholesale Lockbox Processing services which allows for the processing of primarily business - to -business payments. Bank is authorized to remove and examine the contents of each envelope in accordance with Bank's wholesale lockbox servicing guidelines and shall observe the following guidelines provided in this Section. Bank shall capture, format and send remittance data to Customer via information reporting or data transmission in accordance with the Implementation Documents. a. Check Date. Bank will not examine any checks or other items with respect to check dates. b. Check Amount. If Bank is unable to determine the amount of a check, such check will be forwarded unprocessed to Customer as an exception. Page 27 (Effective 11/01/2021) Item 18: Staff Report Pg. 71 Packet Pg. 256 of 857 67 c. Payee. Checks made payable to the Acceptable Payees listed in the Implementation Documents or any reasonable derivation thereof are acceptable for deposit. Checks made payable to others may be returned by Bank as exceptions. Customer warrants that each Acceptable Payee is either Customer, its affiliate, or an entity that has authorized Customer to act on its behalf for the Services provided herein. If the Acceptable Payee is an affiliate of Customer or an entity which authorized Customer to act on such entity's behalf, Customer represents and warrants that such affiliate or entity has authorized checks payable to it to be credited to the Lockbox Account. Bank may require written authorization from any Acceptable Payee or written evidence that an Acceptable Payee has authorized Customer to act on its behalf. If Customer designates Accept All Payees' in the Implementation Documents and Bank accepts such designation, Bank shall process all checks for credit to the Lockbox Account regardless of the payee name on the check. Such designation may be subject to additional Bank fees. Customer agrees to indemnify and hold Bank harmless for any claims, fines, expenses, and damages that arise out of Bank's processing of checks based on Customer's "Accept All Payees" designation. d. Missing Signature. In the absence of a signature, Bank will process the check. Customer agrees to reimburse Bank if the check is subsequently returned. e. Exceptions. If a check is treated as an exception, it will be forwarded by Bank to Customer with the remittance data, and not deposited or otherwise reflected in the account of Customer. f. Correspondence. Any correspondence, invoices and miscellaneous enclosures which are included with a payment, as well as any envelope that does not contain a check, will be imaged and destroyed unless Customer specifies different instructions in the Implementation Documents. g. Notation. Customer agrees that Bank shall disregard any notation on a check containing "paid in full", "lien waiver" or other restrictive notation, whether preprinted or handwritten, and treat any such check as though such notation did not appear thereon. If Customer instructs Bank not to process checks with restrictive notations and Bank agrees to do so, Bank will use its best efforts to detect checks bearing such notations, but Bank shall not be liable to Customer for failure to detect any such notation. h. Document Order. Bank shall use its best efforts to process documents that are not in logical order, are difficult to identify, or which are received in unorganized large packages. i. Remittance Document Forwarding. If remittance document or correspondence -only document forwarding is requested by the Customer and agreed to by Bank, Bank shall forward all remittance documents stacked in the order processed. If Customer requests forwarding ofcheck photocopies, and Banks agrees to do so, the check photocopies will be stacked in the order processed on top of the remittance documents. Document forwarding has limited availability and is not available for all lockboxes. 13. Lockbox Remote Capture Services. Lockbox Remote Capture Services is an optional add-on service to the Wholesale Lockbox Processing service which provides eligible customers the ability to scan and transmit to Bank lockbox payments received at office locations. If Customer is approved for Lockbox Remote Capture Services, Customer agrees that Bank's Lockbox Remote Capture Services shall be governed by this this Section IV.K (Lockbox Services) and other relevant sections of this Agreement, including but not limited to, the Electronic Deposit Services section. 14. Scannable Wholesale Lockbox Processing/Property Management Lockbox Processing. Bank offers Scannable Wholesale Lockbox Processing services and Property Management Lockbox Processing services which allow for the automated processing of consumer -oriented payments. Bank is authorized to open each envelope and remove the contents, disregarding all notations and other marks on the envelopes. Bank shall not examine checks or other items with respect to payee names, check dates and check signatures. Bank is not required to retain remittance envelopes or forward them to Customer. Bank will disregard any restrictive notation on any check, including but not limited to "paid in Item 18 Attachment A - US Bank for General Banking full", whether preprinted or hand Services such check as though such language did not appear thereon. Bank will process, endorse and deposit remittances in accordance with its standard procedures. If Bank is unable to determine the amount of a check, such check will be forwarded to Customer as unprocessable. Bank will deliver miscellaneous enclosures, unprocessable transactions and remittance data in accordance with the Implementation Documents. 15. E-Lockbox. E-Lockbox provides Customer with the ability to receive consumer payments electronically that are initiated via the consumers' home banking portal or through other payment channels offered by third - party bill consolidators, including consumer credit counseling agencies. a. Network. "Network" means the Mastercard Remote Payment and Presentment Service ("RPPS"), a division of Mastercard International, Inc., or other originators of consumer -initiated bill payments. Bank receives payments and remittance data via the Network. Bank will credit payments to Customer's account and electronically transmit the remittance data in Bank's standard or other mutually acceptable format for loading to Customer's accounts receivable system. b. Customer's Responsibilities. Customer shall provide Bank with all data and specifications necessary for the Network to process payments and for Bank to transmit the remittance data to Customer. Customer agrees to conduct tests that Bank may deem necessary to ensure Customer and Bank are able to process the remittance data. The purchase, installation, testing and maintenance of any and all equipment used to receive and process information from Bank is the responsibility of Customer. As soon as possible, and in any event, no later than 48 hours after Bank transmits the remittance data to Customer, Customer agrees to process all such data and to inform Bank of any incorrect, unidentifiable or unprocessable information (collectively, "Returns"). c. Bank's Responsibilities. Bank shall develop a program to process and transmit remittance data received from the Network in Customer's preferred file format. Bank shall transmit Returns to the Network when Customer provides Bank with the Return information. Bank will credit Customer's account in an amount equal to the payments received and debit Customer's account in an amount equal to any Returns and, if applicable, any Reversals (defined below). d. Reliance on Network. Customer acknowledges that Bank's ability to process payments and remittances are dependent upon the continued use and support of the Network and third -party computers housing the Network and its associated communications network. In the event that access to the Network or its computer communications system is terminated or suspended for any reason, Bank shall not be liable to Customer for any disruptions or failure to provide any part of this Service. Bank assumes no responsibility for the accuracy, timeliness or the completeness of data delivered from the Network to Bank. e. Optional Reversal Transactions. Reversals are Network -initiated debit messages from payment originators informing of the cancellation of previous transactions. Customer may set debit caps on Reversals to limit the daily debit amount a payment originator may send through the Network. If Customer instructs Bank to accept Reversals, Customer hereby authorizes Bank to debit Customer's account for the amount of the Reversals. f. Optional Biller Stop Payment. Biller Stop Payment allows Customer to provide Bank with instructions regarding payments that Customer does not want posted to its account. If Customer instructs Bank to stop a payment from posting to its account, Customer hereby authorizes Bank to return the payment through the Network. Payments that are stopped will not be included in Customer's settlement transaction or the remittance data provided to Customer. Page 28 (Effective 11/01/2021) Item 18: Staff Report Pg. 72 Packet Pg. 257 of 857 L. HEALTHCARE PAYMENT CONSOLIDATOR U.S. Bank Healthcare Payment Consolidator is a Service that enables Customers to electronically receive, post and reconcile healthcare payments and remittances received from health plans and/or other Agents. The Service accepts images of check payments, remittances and correspondence received by Bank or its vendors in paper form via lockbox, as well as electronically via Automated Clearinghouse (ACH). Electronic remittance files are delivered from the Service to Customer at an agreed upon schedule. Images are made available via website or file transmission. Customer agrees that the Service shall be governed by this Section and all other relevant sections of this Agreement. 1. Introduction. If Customer selects the Service, the Service may include, but is not limited to, lockbox, ACH, image viewing, data translation and file transmission services to assist Customer in expediting and automating receipt of their remittances. Prior to implementation of the Service, Customer must maintain a demand deposit account with Bank. 2. Processing, Collections and Availability. The Service is available where hardware and software have been configured by Bank to accommodate processing. Bank is authorized to examine the checks and remittances received at Customer's designated lockbox in accordance with Bank's lockbox servicing terms and guidelines. The crediting and collection of items will be handled in accordance with other commercial deposits processed by Bank and shall be subject to Bank's then current funds availability schedule. 3. Image Viewing and Storage. The Service processes and stores images of paper checks, explanation of benefits statements, correspondence or other enclosures, as well as images of electronic remittance advices and electronic funds transfers. Images are available to Customer for web viewing or via secure transmission as selected by Customer in the Implementation Documents. Original paper documents will be securely destroyed on a periodic basis. 4. File Transmission and Data Reporting. The Service will transmit to Customer remittance data according to the agreed upon schedule. Customer may elect to receive data through one or more delivery mechanisms as specified in the Implementation Documents. If the Service is terminated, Customer may obtain an FTP transmission or other available format of image information processed at the price outlined in the fee schedule. 5. Accuracy and Timeliness of Information. Performance of the Service may be affected by external factors such as communication network latency, mail delays and other factors beyond Bank's control. Information with respect to all transactions is provided solely for Customer's convenience, and Customer shall have no recourse to Bank with respect to the use of such information. 6. Customer Authorizations, Notifications and Responsibility. Customer authorizes Bank to disclose Customer information to Bank's vendors to the extent required to deliver the Service, and to debit or credit Customer's accounts in performance of the Service hereunder. Customer shall provide Bank or its vendors with all data and specifications necessary for processing. Customer shall conduct tests that Bank or its vendors may deem necessary to ensure that files may be exchanged and the Service implemented. Customer shall adhere to any and all applicable clearinghouse, local, state, or federal laws, rules or regulations. 7. Security Procedures. Customer will use the Service in accordance with the procedures established by Bank and its vendors. Customer will designate one or more System Administrator(s) responsible for establishing internal security procedures, including, without limitation, setting up and maintaining access available through the Service. Customer is solely responsible for maintaining a secure work environment to ensure against unauthorized access to the Service. 8. Proprietary Rights. Bank, or its vendors, possess all proprietary rights to written material including without limitation, all computer programs written for the Service, websites and other product documentation provided by Bank or its vendors. Customer shall not duplicate, sell or use in any manner such programs or documentation without the prior written consent of the applicable party. Customer will be bound by any terms of use and any license agreements associated with the Service. Item 18 Attachment A - US Bank for General Banking M. COMMERCIAL SWEEP ACCL Services THIS NOTICE IS GIVEN PURSUANT TO APPLICABLE LAW: IN THE UNLIKELY EVENT OF THE BANK FAILURE, THE FEDERAL DEPOSIT INSURANCE CORPORATION ("FDIC") WILL ALLOW THE LOAN SWEEP TRANSFER OF EXCESS BALANCES IN CUSTOMER'S DEPOSIT ACCOUNT, ABOVE A PRE -ESTABLISHED THRESHOLD, OUT OF THE DEPOSIT ACCOUNT TO PAY DOWN THE LOAN AT BANK ON THE DAY OF FAILURE. THE REMAINING FUNDS IN THE DEPOSIT ACCOUNT WILL BE DEEMED DEPOSITS UNDER FDIC RULES AND WILL BE INSURED UP TO THE APPLICABLE FDIC LIMITS. 1. Definitions. a. "Account" means Customer's deposit account at Bank which Customer has designated as being covered by the Services described herein. b. "Available Funds" means the total of the collected funds in the Account as of the close of business on any Business Day, determined in accordance with the manner in which Bank generally provides credit for deposited checks. c. "Business Day" means any day on which a majority of Bank's offices are open to the public for substantially all banking functions. Saturdays, Sundays, federal or state holidays or any day recognized by a Federal Reserve Bank as a holiday shall not be considered a Business Day, even if Bank's offices are open. d. "Credit" means any loan arrangement which is designated as a line of credit where Bank has agreed will be subject to the Services described herein. e. "Credit Agreement" means any loan agreement, promissory note, guaranty or other agreement, instrument or document which evidences, secures or guarantees the Credit. f. "Deficiency Amount" means the amount by which the Target Balance exceeds the amount of Available Funds as of the close of business on any Business Day. g. "Event of Insolvency" means any of the following: (i) Customer or Guarantor shall die or cease to exist; (ii) any Guarantor shall attempt to revoke its guaranty or other obligation to Bank, or such guaranty or other obligation shall become unenforceable in whole or in part; (iii) any bankruptcy, insolvency or receivership proceeding, or any assignment for the benefit of creditors, shall be commenced under any Federal or state law by or against Customer or any Guarantor; (iv) Customer or any Guarantor shall become the subject of any out -of -court settlement with its creditors; or (v) Customer or any Guarantor is unable or admits in writing its inability to pay its debts as they mature. h. "Excess Funds" means the amount of Available Funds as of the close of business on any Business Day which exceeds the Target Balance. i. "Guarantor" means any guarantor, surety, accommodation party or joint obligor of the obligations of Customer under the Credit. j. "Target Balance" means that amount of funds which Customer desires to maintain in the Account and which is mutually agreeable to Bank and Customer from time to time. k. "Transaction" means either a Loan Transaction or a Repayment Transaction. 2. Initiation of Transactions. a. As of the close of business on each Business Day, Bank will determine the amount of Excess Funds, if any. If Bank determines that there are Excess Funds, Bank will debit the Account and credit the Credit in an amount equal to the lesser of (i) the amount of Excess Funds or (ii) the outstanding principal balance of the Credit plus all interest, fees and charges then outstanding under the Credit (a "Repayment Transaction"); provided, however, that Bank will not be required to initiate any Repayment Transaction in an amount less than a minimum sum mutually agreeable to Bank and Customer. Customer grants Bank a security interest in, and right of set-off to, the Account for purposes of effecting Repayment Transactions. Page 29 (Effective 11/01/2021) Item 18: Staff Report Pg. 73 Packet Pg. 258 of 857 b. As of the close of business on each Business Day, Bank will determine the Deficiency Amount, if any. If Bank determines that there is a Deficiency Amount, Bank will charge the Credit in an amount equal to the lesser of (i) the amount by which such available balance is less than the Target Balance or (ii) the amount which is available to be borrowed under the Credit (the lesser of such amounts being referred to as the "Loan Amount"), plus the amount of any fees and charges under the Credit, and credit the Account in an amount equal to the Loan Amount (a "Loan Transaction"); provided, however, that Bank will not be required to initiate any Loan Transaction in an amount less than a minimum sum established by Bank, and Bank will not be required to initiate any Loan Transaction if any default exists under any Credit Agreement or this Agreement or Bank is otherwise excused or prohibited under any Credit Agreement or applicable law from making an advance to Customer. In addition, Bank will not be required to initiate any Loan Transaction, and the Services hereunder shall immediately and automatically terminate without notice, if: (A) the Credit has matured or been terminated; (B) Customer has cancelled the Credit; (C) an Event of Insolvency has occurred; or (D) Bank has demanded payment under the Credit. c. If Bank has agreed to provide any other service to Customer pursuant to which Bank is authorized to transfer Excess Funds from the Account, (i) this Agreement shall prevail over the terms and conditions of such other service, (ii) Bank may initiate a Repayment Transaction or Loan Transaction under this Agreement in lieu of or prior to initiating the transfer of Excess Funds under such other service, and (iii) Bank shall not be in default as to such other service solely by reason of not initiating the transfer of Excess Funds under such other service. 3. Overdrafts. Bank may debit the Account as set forth in Section IV.M.1.a above, even though, subsequent to such debit, and as a result of additional transfers or withdrawals from the Account, the return of checks unpaid, or any other cause, the Account becomes overdrawn. In such event, Customer will be assessed Bank's then prevailing charges for overdrafts. 4. Ordinary Course. Customer and Bank intend that each Repayment Transaction hereunder be (a) in the ordinary course of business or financial affairs of Customer and Bank, and (b) made according to ordinary business terms. 5. Asset -Based Loan Sweep Advance. For each asset -based loan sweep transfer or loan sweep advance (each an "Asset Based Transfer"), Customer certifies to Bank that (i) the Asset Based Transfer is being made in accordance with the certain agreements between Bank and Customer (the "Asset Based Documents"); (ii) the Asset Based Transfer is not revocable by Customer; (iii) the representations and warranties set forth in the Asset Based Documents are true and correct as of the date of each Asset Based Transfer; and (iv) no default or event of default, however denominated, has occurred or is continuing under the Asset Based Documents or will result following the Asset Based Transfer. 6. Termination. In addition to the termination rights described elsewhere in the Agreement, Bank may terminate this Service immediately without notice to Customer if the index or other referenced rate upon which the interest rate for this Service is based is at any time less than zero percent. Item 18 Attachment A - US Bank for General Banking N. COMMERCIAL SWEEP ACC Services OPTION NOTICE: INVESTMENT PRODUCTS, INCLUDING MONEY MARKET MUTUAL FUNDS, ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED BY BANK OR ANY OF ITS AFFILIATES, NOR ARE THEY INSURED BY THE FDIC, OR ANY OTHER GOVERNMENT AGENCY. THE INVESTMENT OPTIONS OFFERED BY BANK UNDER THE COMMERCIAL SWEEP ACCOUNT ARE SUBJECT TO INVESTMENT RISKS, INCLUDING LOSS OF PRINCIPAL OF THE AMOUNT INVESTED. 1. General Terms Applicable to All Investment Options. a. If a Commercial Sweep Account Investment Option has been requested and agreed to by Bank, Customer authorizes Bank to transfer funds on a manual or automated basis to and from the demand deposit account ("DDA") and Investment Option selected by Customer. Funds will be transferred between the accounts so that: (a) to the extent funds are available in either account, Customer's DDA maintains an average collected balance equal to a pre -established balance ("Peg Balance"); and (b) any collected funds in the DDA that exceed the Peg Balance ("Excess Funds") are invested by Bank as directed by Customer in accordance with this Agreement. Amounts invested in money market mutual funds, including investment income, will be redeemed and credited back to the DDA as needed so that the collected balance of Customer's DDA equals the Peg Balance. Amounts invested in other investment options, including interest or other investment income, will be credited back to the DDA each Business Day upon maturity. Bank may limit the amount of Excess Funds that it will invest on behalf of Customer on any particular Business Day. Bank may also impose a maximum redemption amount to bring the DDA to the Peg Balance on a particular Business Day. If Customer's Investment Option is not available on a given Business Day, then all Excess Funds will remain in the DDA until the next Business Day. b. Bank is authorized to accept verbal instructions, including telephone instructions, from Customer representatives for the transfer of funds between Bank and Customer and between Customer's accounts. Bank may rely on any instructions received from Customer that it reasonably believes to be genuine. c. Bank is authorized to execute as agent for Customer all certificates of ownership and other instruments required by law or by contract. Bank shall not be accountable for errors in judgment but only for gross negligence or willful misconduct. Bank shall not be required to comply with any direction of Customer which in Bank's judgment, may subject it to liability or to defend or prosecute any suit or action unless indemnified in a manner and amount satisfactory to it. d. Customer may, by written instrument executed by Customer and delivered to Bank, terminate this Service and withdraw from the account the principal and accumulated income upon paying all sums due to Bank and indemnifying Bank to its satisfaction against liabilities incurred in the administration of the account. e. Bank will act as agent to invest on the order and for the benefit of Customer. The Services described herein are provided by Bank to Customer solely as bona fide treasury management Services. Bank does not undertake any fiduciary obligation to Customer with respect to these Services. Bank's duties to act for Customer hereunder are solely mechanical and administrative in nature. f. In addition to the termination rights described elsewhere in the Agreement, Bank may terminate this Service immediately without notice to Customer if the index or other referenced rate upon which the interest rate for this Service is based is at any time less than zero percent. 2. Investment Options. a. Repurchase Agreements (i) Terms. If Customer chooses to invest Excess Funds in repurchase agreements, Customer and Bank agree to be bound by the Master Repurchase Agreement with Bank. If Customer's investments in repurchase agreements exceed its typical investment amount by $10 million or more on a given Business Day, Customer agrees to notify Bank by providing sufficient advance notice to allow Bank to adequately collateralize the investments. Bank will exercise reasonable efforts to invest the entire amount but cannot guarantee full investment under these circumstances. If Customer fails to notify Page 30 (Effective 11/01/2021) Item 18: Staff Report Pg. 74 Packet Pg. 259 of 857 70 Bank in advance or if Bank is unable to invest any or all of the additional funds in repurchase agreements, Customer agrees that Bank may be required to withhold or withdraw any interest that may (ii) have been previously paid. (ii) Confirmations. After each repurchase transaction, Bank will deliver to Customer via mail, fax, email, or other electronic means, including without limitation, posting to a password -protected website) a confirmation ("Confirmation") describing any information required by applicable law and any other terms and information which Bank may include at its discretion. The information contained in the Confirmation shall be considered true and correct and conclusively binding unless Customer notifies Bank of any error therein within three (3) Business Days after the date the Confirmation is mailed, faxed, emailed, personally delivered to Customer or sent via other electronic means, including without limitation, posting to a password - protected website. If Customer elects to receive Confirmations electronically, Customer acknowledges and agrees that Customer will no longer receive Confirmations by mail. If Customer desires to discontinue receiving Confirmations electronically, Customer shall provide written notice to Bank, whereupon Bank shall resume delivering mailed Confirmations. b. Eurodollar Investments. (i) Terms. If Customer chooses to invest Excess Funds in Eurodollars, Bank is authorized to sweep Excess Funds from Customer's DDA into overnight Eurodollar time deposits at the Cayman Islands branch of Bank. The minimum amount that may be swept pursuant to this option is $1,000. Excess Funds less than $1,000 on a given Business Day will not be invested. The minimum amount may be increased if requested by Customer and agreed to by Bank. Customer's Eurodollar investments may be registered in the name of Bank's nominee or nominees. Earnings in Eurodollar investments shall be credited to Customer's DDA on a daily basis. CUSTOMER ASSUMES ALL RISK OF LOSS ARISING FROM ANY ACTION TAKEN WITH RESPECT TO THE CAYMAN DEPOSIT BY THE GOVERNMENT OF THE CAYMAN ISLANDS OR ANY SOVEREIGN OR MILITARY POWER (DE FACTO OR DE JURE). (ii) THIS NOTICE IS GIVEN PURSUANT TO APPLICABLE LAW: IN THE UNLIKELY EVENT OF BANK FAILURE, THE BALANCES RESIDING IN CUSTOMER'S EURODOLLAR SWEEP ACCOUNT AT BANK WILL NOT BE DEEMED "DEPOSITS" UNDER RULES PROMULGATED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION ("FDIC") AND WILL NOT BE INSURED BY THE FDIC. IN THE UNLIKELY EVENT OF BANK FAILURE, CUSTOMER'S CLAIM FOR FUNDS THAT WERE SWEPT INTO THE EURODOLLAR SWEEP ACCOUNT WILL BE TREATED AS UNSECURED GENERAL CREDITOR CLAIMS. c. Money Market Mutual Funds ("Money Fund"). (i) Terms. If Customer chooses the Money Fund sweep option, Excess Funds will be invested in the First American Money Market Fund offered for this Service. Excess Funds will be swept from the DDA to a pooled deposit account held in Bank's name. On the next Business Day, the Excess Funds from the pooled Deposit Account will be swept to the Money Fund to purchase shares. Customer's shares in the Money Fund will be held in Bank's name in an omnibus investment account, as agent on behalf of all Bank customers invested in the Money Fund. Customer grants to Bank a consensual possessory security interest in the omnibus investment account and all accounts maintained with Bank to secure payment of all of Customer's obligations under this Service. Customer will accrue dividends beginning on the Business Day the shares are purchased. Dividends accrue daily and are paid monthly on the last Business Day of the month. No dividends will accrue on the Business Day the shares are sold. If, for any reason, Money Fund shares are not available on any given Business Day, all Excess Funds will not be swept to the Money Fund and no dividends will accrue until shares become available for purchase. Funds in the DDA and in the pooled deposit account held at Bank will be treated as deposits and will be insured up to the applicable FDIC insurance limits. The Money Fund sweep option is only available to entities having a presence in the Item 18 Attachment A - US Bank for General Banking United States, which may be Services ailing address and U.S. taxpayer identification number in Bank's records. Customer Acknowledgments. BY ACCEPTING THIS SERVICE, CUSTOMER HEREBY ACKNOWLEDGES THAT IT HAS RECEIVED A COPY OF THE PROSPECTUS OF THE DESIGNATED FUND. THIS PROSPECTUS FORMS PART OF THE IMPLEMENTATION DOCUMENTS AND WILL CONTROL OVER THE IMPLEMENTATION DOCUMENTS WITH RESPECT TO MONEY FUND SHARES. CUSTOMER FURTHER ACKNOWLEDGES THAT BANK IS NOT PROVIDING ANY INVESTMENT ADVICE HEREIN TO CUSTOMER AND MAKES NO REPRESENTATION OR WARRANTY AS TO THE SUITABILITY OR SAFETY OF THE INVESTMENTS IN ANY FUND OFFERED UNDER THIS SERVICE. (iii) Money Fund Disclosures. BANK AFFILIATES SERVE AS INVESTMENT ADVISOR, ADMINISTRATOR, CUSTODIAN, DISTRIBUTOR, TRANSFER AGENT, AND SECURITIES LENDING AGENT AND RECEIVE COMPENSATION FOR SUCH SERVICES AS DISCLOSED IN THE PROSPECTUS FOR THE DESIGNATED FUND. ALTHOUGH MONEY FUNDS SEEK TO PRESERVE THE VALUE OF CUSTOMER'S INVESTMENT AT $1.00 PER SHARE, IT IS POSSIBLE TO LOSE MONEY BY INVESTING IN A MONEY FUND. (iv) THIS NOTICE IS GIVEN PURSUANT TO APPLICABLE LAW: IN THE UNLIKELY EVENT OF BANK FAILURE, CUSTOMER WILL MAINTAIN ITS INTEREST IN THE MONEY FUND SHARES FOLLOWING A COMPLETED MONEY FUND SWEEP. THE VALUE OF THE SHARES IN THE MONEY FUND OMNIBUS INVESTMENT ACCOUNT WILL NOT BE DEEMED "DEPOSITS" UNDER RULES PROMULGATED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION ("FDIC") AND WILL NOT BE INSURED BY THE FDIC. ON THE DAY OF FAILURE, HOWEVER, THE FDIC MAY DISALLOW THAT DAY'S SWEEP TO OCCUR. IF THE SWEEP IS DISALLOWED, ANY EXCESS FUNDS THAT WOULD HAVE NORMALLY SWEPT ON THAT BUSINESS DAY WILL REMAIN IN THE DDA AND WILL BE TREATED AS DEPOSITS. THOSE DEPOSITS WILL BE INSURED UP TO THE APPLICABLE FDIC INSURANCE LIMITS. d. Commercial Paper. (i) Terms. If Customer chooses the Commercial Paper sweep option, Excess Funds shall be invested in an unsecured short-term promissory note issued by U.S. Bank National Association, and held in book entry. At the end of each Business Day, Excess Funds are automatically transferred from Customers' DDA into a sweep account that invests overnight in U.S. Bank National Association Commercial Paper. The minimum amount that may be swept pursuant to this option is $1,000. Excess Funds less than $1,000 on a given Business Day will not be invested. The minimum amount may be increased if requested by Customer and agreed to by Bank. (ii) THIS NOTICE IS GIVEN PURSUANT TO APPLICABLE LAW: IN THE UNLIKELY EVENT OF BANK FAILURE, THE BALANCES RESIDING IN CUSTOMER'S COMMERCIAL PAPER SWEEP ACCOUNT AT BANK WILL NOT BE DEEMED "DEPOSITS" UNDER RULES PROMULGATED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION ("FDIC") AND WILL NOT BE INSURED BY THE FDIC. IN THE UNLIKELY EVENT OF BANK FAILURE, CUSTOMER'S CLAIM FOR FUNDS THAT WERE SWEPT INTO THE COMMERCIAL PAPER SWEEP ACCOUNT WILL BE TREATED AS UNSECURED GENERAL CREDITOR CLAIMS. e. Business Savings Sweep. If Customer chooses the Business Savings Sweep option, collected funds with a minimum of $500 in excess of a Peg Balance shall be swept from Customer's DDA into a Business Savings Sweep Account (the "Savings Account"). The Peg Balance shall be set at a minimum of $10,000 unless otherwise agreed to by Bank. Funds remain in the Savings Account until Customer's DDA reaches a negative balance, whereupon available funds are swept back into Customer's DDA in an amount necessary to return the DDA balance to the Peg Balance. Page 31 (Effective 11/01/2021) Item 18: Staff Report Pg. 75 Packet Pg. 260 of 857 71 Item 18 Attachment A - US Bank for General Banking O. MASTER REPURCHASE AGREEMENT (MRA) THIS NOTICE IS GIVEN PURSUANT TO APPLICABLE LAW: ALL FUNDS IN THE REPURCHASE AGREEMENT SWEEP WILL NOT BE DEEMED "DEPOSITS" AND WILL NOT BE INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION ("FDIC"). IN THE UNLIKELY EVENT OF BANK FAILURE, CUSTOMER WILL MAINTAIN ITS OWNERSHIP OR SECURITY INTEREST IN THE SECURITIES THAT ARE SUBJECT TO THE REPURCHASE AGREEMENT AND, UPON LIQUIDATION, WILL RECEIVE THE VALUE OF THE SECURITIES UP TO THE AMOUNT OF FUNDS SWEPT FROM THE ACCOUNT. 1. Applicability. From time to time the parties hereto may enter into transactions in which one party ("Seller") agrees to transfer to the other ("Buyer") securities or other assets ("Securities") against the transfer of funds by Buyer, with a simultaneous agreement by Buyer to transfer to Seller such Securities at a date certain or on demand, against the transfer of funds by Seller. Each such transaction shall be referred to herein as a "Transaction" and, unless otherwise agreed in writing, shall be governed by this MRA and if applicable, Annex III and the Amendment to Annex III (International Transactions) of the SIFMA Master Repurchase Agreement (1996 version). 2. Definitions. a. "Act of Insolvency", with respect to any party, (i) the commencement by such party as debtor of any case or proceeding under any bankruptcy, insolvency, reorganization, liquidation, moratorium, dissolution, delinquency or similar law, or such party seeking the appointment or election of a receiver, conservator, trustee, custodian or similar official for such party or any substantial part of its property, or the convening of any meeting of creditors for purposes of commencing any such case or proceeding or seeking such an appointment or election, (ii) the commencement of any such case or proceeding against such party, or another seeking such an appointment or election, or the filing against a party of an application for a protective decree under the provisions of the Securities Investor Protection Act of 1970, which (A) is consented to or not timely contested by such party, (B) results in the entry of an order for relief, such an appointment or election, the issuance of such a protective decree or the entry of an order having a similar effect, or (C) is not dismissed within 15 days, (iii) the making by such party of a general assignment for the benefit of creditors, or (iv) the admission in writing by such party of such party's inability to pay such party's debts as they become due; b. "Additional Purchased Securities", Securities provided by Seller to Buyer pursuant to Paragraph 4(a) hereof; c. "Buyer's Margin Amount", with respect to any Transaction as of any date, the amount obtained by application of the Buyer's Margin Percentage to the Repurchase Price for such Transaction as of such date; d. "Buyer's Margin Percentage", with respect to any Transaction as of any date, a percentage (which may be equal to the Seller's Margin Percentage) agreed to by Buyer and Seller or, in the absence of any such agreement, the percentage obtained by dividing the Market Value of the Purchased Securities on the Purchase Date by the Purchase Price on the Purchase Date for such Transaction; e. "Confirmation", the meaning specified in Paragraph 3(b) hereof; f. "Income", with respect to any Security at any time, any principal thereof and all interest, dividends or other distributions thereon; g. "Margin Deficit", the meaning specified in Paragraph 4(a) hereof; h. "Margin Excess", the meaning specified in Paragraph 4(b) hereof; i. "Margin Notice Deadline", the time agreed to by the parties in the relevant Confirmation, or otherwise as the deadline for giving notice requiring same day satisfaction of margin maintenance obligations as provided in Paragraph 4 hereof (or, in the absence of any such agreement, the deadline for such purposes established in accordance with market practice); j. "Market Value", with respect to any Securities as of any date, the price for such Securities on such date obtained from a generally recognized source agreed to by the parties & services )g bid quotation from such a source, plus accrued Income to the extent not included therein (other than any Income credited or transferred to, or applied to the obligations of, Seller pursuant to Paragraph 5 hereof) as of such date (unless contrary to market practice for such Securities); k. "Price Differential", with respect to any Transaction as of any date, the aggregate amount obtained by daily application of the Pricing Rate for such Transaction to the Purchase Price for such Transaction on a 360 - day -per -year basis for the actual number of days during the period commencing on (and including) the Purchase Date for such Transaction and ending on (but excluding) the date of determination (reduced by any amount of such Price Differential previously paid by Seller to Buyer with respect to such Transaction); I. "Pricing Rate", the per annum percentage rate for determination of the Price Differential; m. "Prime Rate", the prime rate of U.S. commercial banks as published in The Wall Street Journal (or, if more than one such rate is published, the average of such rates); n. "Purchase Date", the date on which Purchased Securities are to be transferred by Seller to Buyer; o. "Purchase Price", (i) on the Purchase Date, the price at which Purchased Securities are transferred by Seller to Buyer, and (ii) thereafter, except where Buyer and Seller agree otherwise, such price increased by the amount of any cash transferred by Buyer to Seller pursuant to Paragraph 4(b) hereof and decreased by the amount of any cash transferred by Seller to Buyer pursuant to Paragraph 4(a) hereof or applied to reduce Seller's obligations under clause (ii) of Paragraph 5 hereof; p. "Purchased Securities", the Securities transferred by Seller to Buyer in a Transaction hereunder. The term "Purchased Securities" with respect to any Transaction at any time also shall include Additional Purchased Securities delivered pursuant to Paragraph 4(a) hereof and shall exclude Securities returned pursuant to Paragraph 4(b) hereof; q. "Repurchase Date", the date on which Seller is to repurchase the Purchased Securities from Buyer, including any date determined by application of the provisions of Paragraph 3(c) or 11 hereof; r. "Repurchase Price", the price at which Purchased Securities are to be transferred from Buyer to Seller upon termination of a Transaction, which will be determined in each case (including Transactions terminable upon demand) as the sum of the Purchase Price and the Price Differential as of the date of such determination; s. "Seller's Margin Amount", with respect to any Transaction as of any date, the amount obtained by application of the Seller's Margin Percentage to the Repurchase Price for such Transaction as of such date; t. "Seller's Margin Percentage", with respect to any Transaction as of any date, a percentage (which may be equal to the Buyer's Margin Percentage) agreed to by Buyer and Seller or, in the absence of any such agreement, the percentage obtained by dividing the Market Value of the Purchased Securities on the Purchase Date by the Purchase Price on the Purchase Date for such Transaction. 3. Initiation; Confirmation; Termination. a. An agreement to enter into a Transaction may be made orally or in writing at the initiation of either Buyer or Seller. On the Purchase Date for the Transaction, the Purchased Securities shall be transferred to Buyer or its agent against the transfer of the Purchase Price to an account of Seller. b. Upon agreeing to enter into a Transaction hereunder, Buyer or Seller (or both), as shall be agreed, shall promptly deliver to the other party a written confirmation of each Transaction (a "Confirmation"). The Confirmation shall describe the Purchased Securities (including CUSIP number, if any), identify Buyer and Seller and set forth (i) the Purchase Date, (ii) the Purchase Price, (iii) the Repurchase Date, unless the Transaction is to be terminable on demand, (iv) the Pricing Rate or Repurchase Price applicable to the Transaction, and (v) any additional terms or conditions of the Transaction not inconsistent with this MRA. The Confirmation, together with this MRA, shall constitute conclusive evidence Page 32 (Effective 11/01/2021) Item 18: Staff Report Pg. 76 Packet Pg. 261 of 857 72 Item 18 Attachment A - US Bank for General Banking of the terms agreed between Buyer and Seller with respect to the Transaction to which the Confirmation relates, unless with respect to the Confirmation specific objection is made promptly after receipt thereof. In the event of any conflict between the terms of such Confirmation and this MRA, this MRA shall prevail. c. In the case of Transactions terminable upon demand, such demand shall be made by Buyer or Seller, no later than such time as is customary in accordance with market practice, by telephone or otherwise on or prior to the Business Day on which such termination will be effective. On the date specified in such demand, or on the date fixed for termination in the case of Transactions having a fixed term, termination of the Transaction will be effected by transfer to Seller or its agent of the Purchased Securities and any Income in respect thereof received by Buyer (and not previously credited or transferred to, or applied to the obligations of, Seller pursuant to Paragraph 5 hereof) against the transfer of the Repurchase Price to an account of Buyer. 4. Margin Maintenance. a. If at any time the aggregate Market Value of all Purchased Securities subject to all Transactions in which a particular party hereto is acting as Buyer is less than the aggregate Buyer's Margin Amount for all such Transactions (a "Margin Deficit"), then Buyer may by notice to Seller require Seller in such Transactions, at Seller's option, to transfer to Buyer cash or additional Securities reasonably acceptable to Buyer ("Additional Purchased Securities"), so that the cash and aggregate Market Value of the Purchased Securities, including any such Additional Purchased Securities, will thereupon equal or exceed such aggregate Buyer's Margin Amount (decreased by the amount of any Margin Deficit as of such date arising from any Transactions in which such Buyer is acting as Seller). b. If at any time the aggregate Market Value of all Purchased Securities subject to all Transactions in which a particular party hereto is acting as Seller exceeds the aggregate Seller's Margin Amount for all such Transactions at such time (a "Margin Excess"), then Seller may by notice to Buyer require Buyer in such Transactions, at Buyer's option, to transfer cash or Purchased Securities to Seller, so that the aggregate Market Value of the Purchased Securities, after deduction of any such cash or any Purchased Securities so transferred, will thereupon not exceed such aggregate Seller's Margin Amount (increased by the amount of any Margin Excess as of such date arising from any Transactions in which such Seller is acting as Buyer). c. If any notice is given by Buyer or Seller under subparagraph (a) or (b) of this Paragraph at or before the Margin Notice Deadline on any Business Day, the party receiving such notice shall transfer cash or Additional Purchased Securities as provided in such subparagraph no later than the close of business in the relevant market on such day. If any such notice is given after the Margin Notice Deadline, the party receiving such notice shall transfer such cash or Securities no later than the close of business in the relevant market on the next Business Day following such notice. d. Any cash transferred pursuant to this Paragraph shall be attributed to such Transactions as shall be agreed upon by Buyer and Seller. e. Seller and Buyer may agree, with respect to any or all Transactions hereunder, that the respective rights of Buyer or Seller (or both) under subparagraphs (a) and (b) of this Paragraph may be exercised only where a Margin Deficit or Margin Excess, as the case may be, exceeds a specified dollar amount or a specified percentage of the Repurchase Prices for such Transactions (which amount or percentage shall be agreed to by Buyer and Seller prior to entering into any such Transactions). f. Seller and Buyer may agree, with respect to any or all Transactions hereunder, that the respective rights of Buyer and Seller under subparagraphs (a) and (b) of this Paragraph to require the elimination of a Margin Deficit or a Margin Excess, as the case may be, may be exercised whenever such a Margin Deficit or Margin Excess exists with respect to any single Transaction hereunder (calculated without regard to any other Transaction outstanding under this MRA). 5. Income Payments. Seller shall be entitled to receive an amount equal agree with respect to any Trans'_ Services ,1ce of any such agreement, as Buyer shall reasonably determine in its discretion), on the date such Income is paid or distributed either (i) transfer to or credit to the account of Seller such Income with respect to any Purchased Securities subject to such Transaction or (ii) with respect to Income paid in cash, apply the Income payment or payments to reduce the amount, if any, to be transferred to Buyer by Seller upon termination of such Transaction. Buyer shall not be obligated to take any action pursuant to the preceding sentence (A) to the extent that such action would result in the creation of a Margin Deficit, unless prior thereto or simultaneously therewith Seller transfers to Buyer cash or Additional Purchased Securities sufficient to eliminate such Margin Deficit, or (B) if an Event of Default with respect to Seller has occurred and is then continuing at the time such Income is paid or distributed. 6. Security Interest. Although the parties intend that all Transactions hereunder be sales and purchases and not loans, in the event any such Transactions are deemed to be loans, Seller shall be deemed to have pledged to Buyer as security for the performance by Seller of its obligations under each such Transaction, and shall be deemed to have granted to Buyer a security interest in, all of the Purchased Securities with respect to all Transactions hereunder and all Income thereon and other proceeds thereof. In all Transactions, Seller is acting as agent for Buyer. In the event of Seller's default under the MRA, Buyer has the right to either: (i) direct Seller to sell the Securities or (ii) sell the Securities, and, following any sale pursuant to this sentence, apply the proceeds in satisfaction of Seller's liability hereunder. 7. Payment and Transfer. Unless otherwise mutually agreed, all transfers of funds hereunder shall be in immediately available funds. All Securities transferred by one party hereto to the other party (i) shall be in suitable form for transfer or shall be accompanied by duly executed instruments of transfer or assignment in blank and such other documentation as the party receiving possession may reasonably request, (ii) shall be transferred on the book entry system of a Federal Reserve Bank, or (iii) shall be transferred by any other method mutually acceptable to Seller and Buyer. 8. Segregation of Purchased Securities. To the extent required by applicable law, all Purchased Securities in the possession of Seller shall be segregated from other securities in its possession and shall be identified as subject to this MRA. Segregation may be accomplished by appropriate identification on the books and records of the holder, including a financial or securities intermediary or a clearing corporation. All of Seller's interest in the Purchased Securities shall pass to Buyer on the Purchase Date and, unless otherwise agreed by Buyer and Seller, nothing in this MRA shall preclude Buyer from engaging in repurchase transactions with the Purchased Securities or otherwise selling, transferring, pledging or hypothecating the Purchased Securities, but no such transaction shall relieve Buyer of its obligations to transfer Purchased Securities to Seller pursuant to Paragraph 3, 4 or 11 hereof, or of Buyer's obligation to credit or pay Income to, or apply Income to the obligations of, Seller pursuant to Paragraph 5 hereof. Required Disclosure for Transactions in Which the Seller Retains Custody of the Purchased Securities Seller is not permitted to substitute other securities for those subject to this MRA and therefore must keep Buyer's securities segregated at all times, unless in this MRA Buyer grants Seller the right to substitute other securities. If Buyer grants the right to substitute, this means that Buyer's securities will likely be commingled with Seller's own securities during the trading day. Buyer is advised that, during any trading day that Buyer's securities are commingled with Seller's securities, they may be subject to liens granted by Seller to third parties and may be used by Seller for deliveries on other securities transactions. Whenever the securities are commingled, Seller's ability to re -segregate substitute securities for Buyer will be subject to Seller's ability to satisfy any lien or to obtain substitute securities. 9. Substitution. Seller may not substitute other Securities for any Purchased Securities. to all Income paid or distributed on or in respect of the Securities that is not otherwise received by Seller, to the full extent it would be so entitled if 10. Representations. Each of Buyer and Seller represents and warrants the Securities had not been sold to Buyer. Buyer shall, as the parties may to the other that (i) it is duly authorized to execute and deliver this MRA, Page 33 (Effective 11/01/2021) Item 18: Staff Report Pg. 77 Packet Pg. 262 of 857 73 Item 18 Attachment A - US Bank for General Banking to enter into Transactions contemplated hereunder and to perform its obligations hereunder and has taken all necessary action to authorize such execution, delivery and performance, (ii) it will engage in such Transactions as principal (or, if agreed in writing in advance of any Transaction by the other party hereto, as agent for a disclosed principal), (iii) the person signing this MRA on its behalf is duly authorized to do so on its behalf (or on behalf of any such disclosed principal), (iv) it has obtained all authorizations of any governmental body required in connection with this MRA and the Transactions hereunder and such authorizations are in full force and effect, and (v) the execution, delivery and performance of this MRA and the Transactions hereunder will not violate any law, ordinance, charter, bylaw or rule applicable to it or any agreement by which it is bound or by which any of its assets are affected. On the Purchase Date for any Transaction Buyer and Seller shall each be deemed to repeat all the foregoing representations made by it. 11. Events of Default. In the event that (i) Seller fails to transfer or Buyer fails to purchase Purchased Securities upon the applicable Purchase Date, (ii) Seller fails to repurchase or Buyer fails to transfer Purchased Securities upon the applicable Repurchase Date, (iii) Seller or Buyer fails to comply with Paragraph 4 hereof, (iv) Buyer fails, after one Business Days' notice, to comply with Paragraph 5 hereof, (v) an Act of Insolvency occurs with respect to Seller or Buyer, (vi) any representation made by Seller or Buyer shall have been incorrect or untrue in any material respect when made or repeated or deemed to have been made or repeated, or (vii) Seller or Buyer shall admit to the other its inability to, or its intention not to, perform any of its obligations hereunder (each an "Event of Default"): a. The non -defaulting party may, at its option (which option shall be deemed to have been exercised immediately upon the occurrence of an Act of Insolvency), declare an Event of Default to have occurred hereunder and, upon the exercise or deemed exercise of such option, the Repurchase Date for each Transaction hereunder shall, if it has not already occurred, be deemed immediately to occur (except that, in the event that the Purchase Date for any Transaction has not yet occurred as of the date of such exercise or deemed exercise, such Transaction shall be deemed immediately canceled). The non -defaulting party shall (except upon the occurrence of an Act of Insolvency) give notice to the defaulting party of the exercise of such option as promptly as practicable. b. In all Transactions in which the defaulting party is acting as Seller, if the non -defaulting party exercises or is deemed to have exercised the option referred to in subparagraph (a) of this Paragraph, (i) the defaulting party's obligations in such Transactions to repurchase all Purchased Securities, at the Repurchase Price therefore on the Repurchase Date determined in accordance with subparagraph (a) of this Paragraph, shall thereupon become immediately due and payable, (ii) all Income paid after such exercise or deemed exercise shall be retained by the non -defaulting party and applied to the aggregate unpaid Repurchase Prices and any other amounts owing by the defaulting party hereunder, and (iii) the defaulting party shall immediately deliver to the non -defaulting party any Purchased Securities subject to such Transactions then in the defaulting party's possession or control. c. In all Transactions in which the defaulting party is acting as Buyer, upon tender by the non -defaulting party of payment of the aggregate Repurchase Prices for all such Transactions, all right, title and interest in and entitlement to all Purchased Securities subject to such Transactions shall be deemed transferred to the non -defaulting party, and the defaulting party shall deliver all such Purchased Securities to the non -defaulting party. d. If the non -defaulting party exercises or is deemed to have exercised the option referred to in subparagraph (a) of this Paragraph, the non -defaulting party, without prior notice to the defaulting party, may: (i) as to Transactions in which the defaulting party is acting as Seller, (A) immediately sell, in a recognized market (or otherwise in a commercially reasonable manner) at such price or prices as the non - defaulting party may reasonably deem satisfactory, any or all Purchased Securities subject to such Transactions and apply the proceeds thereof to the aggregate unpaid Repurchase Prices and any other amounts owing by the defaulting party hereunder or (B) in its sole discretion elect, in lieu of selling all or a portion of such Purchased Securities, to give the defaulting party credit for such Pk Services hi amount equal to the price therefore on such date, obtained from a generally recognized source or the most recent closing bid quotation from such a source, against the aggregate unpaid Repurchase Prices and any other amounts owing by the defaulting party hereunder; and (ii) as to Transactions in which the defaulting party is acting as Buyer, (A) immediately purchase, in a recognized market (or otherwise in a commercially reasonable manner) at such price or prices as the non -defaulting party may reasonably deem satisfactory, securities ("Replacement Securities") of the same class and amount as any Purchased Securities that are not delivered by the defaulting party to the non -defaulting party as required hereunder or (B) in its sole discretion elect, in lieu of purchasing Replacement Securities, to be deemed to have purchased Replacement Securities at the price therefore on such date, obtained from a generally recognized source or the most recent closing offer quotation from such a source. The parties acknowledge and agree that (1) the Securities subject to any Transaction hereunder are instruments traded in a recognized market, (2) in the absence of a generally recognized source for prices or bid or offer quotations for any Security, the non -defaulting party may establish the source therefore in its sole discretion, and (3) all prices, bids and offers shall be determined together with accrued Income (except to the extent contrary to market practice with respect to the relevant Securities). e. As to Transactions in which the defaulting party is acting as Buyer, the defaulting party shall be liable to the non -defaulting party for any excess of the price paid (or deemed paid) by the non -defaulting party for Replacement Securities over the Repurchase Price for the Purchased Securities replaced thereby and for any amounts payable by the defaulting party under Paragraph 5 hereof or otherwise hereunder. f. For purposes of this Paragraph 11, the Repurchase Price for each Transaction hereunder in respect of which the defaulting party is acting as Buyer shall not increase above the amount of such Repurchase Price for such Transaction determined as of the date of the exercise or deemed exercise by the non -defaulting party of the option referred to in subparagraph (a) of this Paragraph. g. The defaulting party shall be liable to the non -defaulting party for (i) the amount of all reasonable legal or other expenses incurred by the non -defaulting party in connection with or as a result of an Event of Default, (ii) damages in an amount equal to the cost (including all fees, expenses and commissions) of entering into replacement transactions and entering into or terminating hedge transactions in connection with or as a result of an Event of Default, and (iii) any other loss, damage, cost or expense directly arising or resulting from the occurrence of an Event of Default in respect of a Transaction. h. To the extent permitted by applicable law, the defaulting party shall be liable to the non -defaulting party for interest on any amounts owing by the defaulting party hereunder, from the date the defaulting party becomes liable for such amounts hereunder until such amounts are (i) paid in full by the defaulting party or (ii) satisfied in full by the exercise of the non -defaulting party's rights hereunder. Interest on any sum payable by the defaulting party to the non -defaulting party under this Paragraph 11(h) shall be at a rate equal to the greater of the Pricing Rate for the relevant Transaction or the Prime Rate. i. The non -defaulting party shall have, in addition to its rights hereunder, any rights otherwise available to it under any other agreement or applicable law. 12. Single Agreement. Buyer and Seller acknowledge that, and have entered hereinto and will enter into each Transaction hereunder in consideration of and in reliance upon the fact that, all Transactions hereunder constitute a single business and contractual relationship and have been made in consideration of each other. Accordingly, each of Buyer and Seller agrees (i) to perform all of its obligations in respect of each Transaction hereunder, and that a default in the performance of any such obligations shall constitute a default by it in respect of all Transactions hereunder, (ii) that each of them shall be entitled to set off claims and apply property held by them in respect of any Transaction against obligations owing to them in respect of any other Transactions hereunder, and (iii) that payments, deliveries and other transfers made by either of them in respect of any Transaction shall be deemed to have been Page 34 (Effective 11/01/2021) Item 18: Staff Report Pg. 78 Packet Pg. 263 of 857 74 Item 18 Attachment A - US Bank for General Banking made in consideration of payments, deliveries and other transfers in respect of any other Transactions hereunder, and the obligations to make any such payments, deliveries and other transfers may be applied against each other and netted. 13. Notices and Other Communications. Any and all notices, statements, demands or other communications hereunder may be given by a party to the other by mail, facsimile, telegraph, messenger or otherwise to the address specified by Bank, or so sent to such party at any other place specified in a notice of change of address hereafter received by the other. All notices, demands and requests hereunder may be made orally, to be confirmed promptly in writing, or by other communication as specified in the preceding sentence. 14. Entire Agreement; Severability. This MRA shall supersede any existing agreements between the parties containing general terms and conditions for repurchase transactions. Each provision and agreement herein shall be treated as separate and independent from any other provision or agreement herein and shall be enforceable notwithstanding the unenforceability of any such other provision or agreement. 15. Nonassignability; Termination. a. The rights and obligations of the parties under this MRA and under any Transaction shall not be assigned by either party without the prior written consent of the other party, and any such assignment without the prior written consent of the other party shall be null and void. Subject to the foregoing, this MRA and any Transactions shall be binding upon and shall inure to the benefit of the parties and their respective successors and assigns. This MRA may be terminated by either party upon giving written notice to the other, except that this MRA shall, notwithstanding such notice, remain applicable to any Transactions then outstanding. b. Subparagraph (a) of this Paragraph 15 shall not preclude a party from assigning, charging or otherwise dealing with all or any part of its interest in any sum payable to it under Paragraph 11 hereof. 16. Governing Law. This MRA shall be governed by the laws of the State of New York without giving effect to the conflict of law principles thereof. 17. No Waivers, Etc. No express or implied waiver of any Event of Default by either party shall constitute a waiver of any other Event of Default and no exercise of any remedy hereunder by any party shall constitute a waiver of its right to exercise any other remedy hereunder. No modification or waiver of any provision of this MRA and no consent by any party to a departure herefrom shall be effective unless and until such shall be in writing and duly executed by both of the parties hereto. Without limitation on any of the foregoing, the failure to give a notice pursuant to Paragraph 4(a) or 4(b) hereof will not constitute a waiver of any right to do so at a later date. 18. Use of Employee Plan Assets. a. If assets of an employee benefit plan subject to any provision of the Employee Retirement Income Security Act of 1974 ("ERISA") are intended to be used by either party hereto (the "Plan Party") in a Transaction, the Plan Party shall so notify the other party prior to the Transaction. The Plan Party shall represent in writing to the other party that the Transaction does not constitute a prohibited transaction under ERISA or is otherwise exempt therefrom, and the other party may proceed in reliance thereon but shall not be required so to proceed. b. Subject to the last sentence of subparagraph (a) of this Paragraph, any such Transaction shall proceed only if Seller furnishes or has furnished to Buyer its most recent available audited statement of its financial condition and its most recent subsequent unaudited statement of its financial condition. c. By entering into a Transaction pursuant to this Paragraph, Seller shall be deemed (i) to represent to Buyer that since the date of Seller's latest such financial statements, there has been no material adverse change in Seller's financial condition which Seller has not disclosed to Buyer, and (ii) to agree to provide Buyer with future audited and unaudited statements of its financial condition as they are issued, so long as it is a Seller in any outstanding Transaction involving a Plan Party. 19. Intent. a. The parties recognize that Services )a "repurchase agreement" as that term is defined in Section 101 of Title 11 of the United States Code, as amended (except insofar as the type of Securities subject to such Transaction or the term of such Transaction would render such definition inapplicable), and a "securities contract" as that term is defined in Section 741 of Title 11 of the United States Code, as amended (except insofar as the type of assets subject to such Transaction would render such definition inapplicable). b. It is understood that either party's right to liquidate Securities delivered to it in connection with Transactions hereunder or to exercise any other remedies pursuant to Paragraph 11 hereof is a contractual right to liquidate such Transaction as described in Sections 555 and 559 of Title 11 of the United States Code, as amended. c. The parties agree and acknowledge that if a party hereto is an "insured depository institution," as such term is defined in the Federal Deposit Insurance Act, as amended ("FDIA"), then each Transaction hereunder is a "qualified financial contract," as that term is defined in FDIA and any rules, orders or policy statements thereunder (except insofar as the type of assets subject to such Transaction would render such definition inapplicable). d. It is understood that this MRA constitutes a "netting contract" as defined in and subject to Title IV of the Federal Deposit Insurance Corporation Improvement Act of 1991 ("FDICIA") and each payment entitlement and payment obligation under any Transaction hereunder shall constitute a "covered contractual payment entitlement" or "covered contractual payment obligation", respectively, as defined in and subject to FDICIA (except insofar as one or both of the parties is not a "financial institution" as that term is defined in FDICIA). 20. Disclosure Relating to Certain Federal Protections. The parties acknowledge that they have been advised that: a. In the case of Transactions in which one of the parties is a broker or dealer registered with the Securities and Exchange Commission ("SEC") under Section 15 of the Securities Exchange Act of 1934 ("1934 Act"), the Securities Investor Protection Corporation has taken the position that the provisions of the Securities Investor Protection Act of 1970 ("SIPA") do not protect the other party with respect to any Transaction hereunder; b. In the case of Transactions in which one of the parties is a government securities broker or a government securities dealer registered with the SEC under Section 15C of the 1934 Act, SIPA will not provide protection to the other party with respect to any Transaction hereunder; and c. In the case of Transactions in which one of the parties is a financial institution, funds held by the financial institution pursuant to a Transaction hereunder are not a deposit and therefore are not insured by the Federal Deposit Insurance Corporation or the National Credit Union Share Insurance Fund, as applicable. Page 35 (Effective 11/01/2021) Item 18: Staff Report Pg. 79 Packet Pg. 264 of 857 75 P. ZERO BALANCE ACCOUNT (ZBA) SERVICES 1. General. ZBA Services allow Customer to concentrate balances across multiple checking accounts consisting of a lead ("Master Account") and one or more sub -accounts funded by the Master Account. At the close of each Business Day, at a time determined by Bank, Bank shall transfer available or collected balances between the Master Account and sub- account(s) via two-way automatic transfers to ensure that the sub - accounts maintain a zero balance or a balance otherwise designated by Customer (collectively, the "Established Balance"). In addition, one-way transfers can be made from: (i) the Master Account to the sub -account; (ii) the sub -account to the Master Account; or (iii) the Master Account to the sub -account with deposits remaining in the sub -account. Customer agrees to maintain sufficient available funds in the Master Account to cover the aggregate debits made to the sub -accounts to enable the sub -accounts to be maintained at the Established Balance at the close of each Business Day. If the available balance in the Master Account is insufficient to restore the balance in a sub -account to the Established Balance, a lesser amount may be transferred to the sub -account in Bank's sole discretion. If there are multiple sub -accounts and insufficient funds in the Master Account to fund all sub -accounts, Bank may, in its sole discretion, determine which sub -accounts to fund and to what extent. In addition, Bank may, in its sole discretion, either (i) reject any checks or other debit items drawn on any sub -account or (ii) accept any checks or other debit items drawn on a sub -account, even if such acceptance would bring the sub -account below the Established Balance. If Bank must reverse a provisional credit and such reversal causes the Master Account to have a negative balance, Customer agrees that Bank may reverse the transfer of any funds, in whole or in part, between the sub -account and the Master Account, and Bank may additionally reject any items not finally paid on the sub -account. Bank reserves the right to suspend or terminate ZBA Services without prior notice to Customer. 2. Focal Point Plus. If selected by Customer, the Focal Point Plus Service allows Customer to: (i) concentrate balances across multiple checking accounts consisting of a lead ("Master Account") with one or more subaccounts ("Shadow Accounts"), which are all funded by the Master Account; and (ii) track transactions with location reporting. Two-way automatic transfers ensure the Shadow Accounts maintain a zero balance. One-way transfers can also be made from the Shadow Accounts to the Master Account. Customer acknowledges and agrees the Shadow Accounts are deemed to be part of the Master Account for purposes of this Agreement and cannot be used to process transactions independent of the Master Account. Item 18 Attachment A - US Bank for General Banking Q. SINGLEPOINT® INTERNA Services R TRANSFER SERVICES The U.S. Bank SinglePoint® International Request for Transfer Services will enable domestic or foreign organizations doing cross -border business to initiate or execute payment or transfer instructions from, or between, Customer accounts held at Bank and foreign banks. Prior to implementation of this Service, the Forwarding Bank and the Executing Bank must enter into a Bilateral Agreement referencing their mutual accession to the SWIFT Request for Transfer (MT101) Service Level or other relevant Service Level. Bank acts in the capacity of the Forwarding Bank with respect to all Requests for Transfer. This Service or other similar remote initiation Services offered by Bank are governed by this Agreement, the Bilateral Agreement, the Interbank Agreement, and all other applicable federal, state and local laws and regulations. Unless otherwise defined, all capitalized terms shall have the meanings set forth in the Interbank Agreement and Bilateral Agreement. 1. Definitions. a. "Beneficiary" means the person or entity designated in the Originator's instruction to receive funds. b. "Beneficiary Bank" means the financial institution crediting the funds to the Beneficiary's account. c. "Execute" or "Execution" means the debiting of the Originator's account by the Executing Bank pursuant to a Request for Transfer from the Forwarding Bank and the forwarding of the credit transfer to the Beneficiary Bank. d. "Executing Bank" means the financial institution that receives and Executes the Request for Transfer from the Forwarding Bank and then forwards the credit transfer to the Beneficiary Bank. e. "Forwarding Bank" means a financial institution receiving a Request for Transfer from the Instructing Party and forwarding it to the Executing Bank. f. "Instructing Party" means a customer of the Forwarding Bank, which could be an office, department or division of the Originator, or a separate legal entity, authorized by the Originator to initiate a Request for Transfer to the Forwarding Bank. g. "Interbank Agreement" means the Service Level Master Agreement (SLMA) and Request for Transfer Service Level Rules and Regulations (MT 101) or other relevant Service Levels offered by Society for Worldwide Interbank Financial Telecommunication (SWIFT), to which the Forwarding Bank and the Executing Bank are a party. h. "Originator" means the customer of the Executing Bank whose account is to be debited pursuant to a Request for Transfer. i. "Request for Transfer" means a transfer instruction received by the Forwarding Bank from the Instructing Party for onward transmission as an MT101 to the Executing Bank, and which is capable of being processed under an Interbank Agreement. 2. Bank as the Forwarding Bank. If Customer selects Bank as the Forwarding Bank, Customer is deemed to be the Instructing Party for all Requests for Transfer. Customer will appoint those individuals authorized to instruct Bank regarding Request for Transfer Services ("Authorized Users") via the relevant Implementation Documents and System Administrator designations establishing the Authorized Users' access authority and transaction limits. Bank may rely on any such authorization until it has received Customer's written notice of revocation and has had a reasonable opportunity to act thereon. Customer and its Authorized Users and other Agents shall maintain the highest possible level of confidentiality with regard to PINs or other security devices and will take all steps necessary to prevent access to them by unauthorized persons. Customer shall be responsible for the accuracy, completeness and timeliness of all Requests for Transfer sent to Bank. Requests for Transfer received after Bank's established deadline or on any non -Business Day, including any Saturday, Sunday, holiday or any day that Bank's wire department is not open, will be considered received on the next Business Day. Customer authorizes Bank to process and forward to the Executing Bank all Requests for Transfer received in accordance with any established security procedures. Notwithstanding the foregoing, Bank does not Page 36 (Effective 11/01/2021) Item 18: Staff Report Pg. 80 Packet Pg. 265 of 857 76 assume any responsibility for the Execution of the Request for Transfer by the Executing Bank and completion of the credit transfer to the Beneficiary Bank. Customer understands and acknowledges that any applicable callback notifications on PIN limits established by Customer with Bank for wire transfer dollar thresholds do not apply to Requests for Transfer. Customer agrees not to initiate a Request for Transfer in violation of applicable federal, state or local law or regulations. 3. Security Procedures. Customer and Bank shall comply with any established security procedures with respect to the initiation and forwarding of any Request for Transfer, including but not limited to, the SWIFT authentication procedures identified in the SWIFT User Handbook, as amended from time to time. Customer agrees that any such security procedures shall be deemed commercially reasonable. Customer understands that the security procedures are not intended for the purpose of detecting errors in the transmission or content of a Request for Transfer controlled by Customer. Customer agrees to be bound by any Request for Transfer sent in the name of Customer that is processed by Bank in compliance with the agreed security procedures whether or not authorized. 4. Amendment or Cancellation. Customer does not have the right to reverse, adjust or revoke any Request for Transfer after it has been received by Bank; provided, however, that Bank will make a reasonable effort to act on such a request by Customer. With respect to a Request for Transfer that has already been Executed, Bank may intervene at Customer's request, to request that the Beneficiary Bank return all or a portion of the funds. Customer understands that the Beneficiary Bank is under no legal obligation to comply with this request. 5. Rejection/Repair. Bank may reject a Request for Transfer if: (i) it is not initiated or transmitted in accordance with the applicable security procedures; (ii) there is any inconsistency between a Request for Transfer and information previously supplied to Bank; or (iii) Bank has other reasonable grounds not to honor the Request for Transfer. Bank shall have no obligation to repair any Request for Transfer it receives but may, in its absolute discretion, endeavor to repair any Request for Transfer. Bank shall notify Customer of any rejections or suspensions. 6. Limits on Bank's Liability. Bank sends outgoing and receives incoming Requests for Transfer using SWIFT. Bank shall not be responsible for the acts or omissions of Customer, the SWIFT network, other financial institution or any other person. Payment to a foreign country is subject to the laws of the foreign country involved. Bank assumes no liability for foreign exchange risk, delays, non -delivery or other events resulting from causes beyond Bank's control. Item 18 Attachment A - US Bank for General Banking R. SWIFT -RELATED SERVICES Services The SWIFT -Related Services (the "Service") will enable organizations with domestic or cross -border activity to initiate or execute payment or transfer instructions from Customer's Bank account to another account held at Bank or a third -party bank, and to receive account information and payment notifications from Bank via products and services offered by the Society for Worldwide Interbank Financial Telecommunication ("SWIFT"). This Service or other similar services offered by Bank are governed by this Agreement, applicable SWIFT agreements, rules, and terms and conditions (collectively, "SWIFT Terms"), and all other applicable federal, state and local laws and regulations. Unless otherwise defined, all capitalized terms shall have the meanings set forth in the SWIFT Terms. 1. Definitions. a. "Account Reporting" means cash management notifications, transaction and account information provided by Bank to Customer. b. "Beneficiary" means the person or entity (including Customer) designated in Customer's Transfer Request to receive funds. c. "Beneficiary Bank" means the financial institution (including Bank) that credits the funds to the Beneficiary's account. d. "Execute" or "Execution" means the debiting of Customer's account by Bank and the forwarding of the credit transfer to the Beneficiary Bank pursuant to a Transfer Request from Customer. e. "FileAct" means a file transfer service that utilizes the SWIFT infrastructure to enable the transfer of data in various file formats. f. "Transfer Request" means a MT1 03 or other SWIFT transfer instruction sent by Customer to Bank for onward processing. If SWIFT -Related services are accessed using SCORE, "Transfer Request" means a MT101 Request for Transfer instruction. g. "SCORE" means the Standardized Corporate Environment, a SWIFT direct access corporate service which offers Customer a secure connection and standardized environment to manage Customer's payments and payment information. 2. Security Procedures. Customer shall comply with all security procedures established by Bank for the SWIFT -Related Services, including but not limited to, the SWIFT authentication procedures identified in the SWIFT User Handbook, as amended from time to time. Customer agrees that any such security procedures shall be deemed commercially reasonable. Customer understands that the security procedures are not intended for the purpose of detecting errors in the transmission or content of any Account Reporting, or of a Transfer Request controlled by Customer. Customer is solely responsible for maintaining its own internal security procedures to prevent errors or unauthorized access to Customer's computer systems by unauthorized employees, vendors or customers. Customer agrees to be bound by any Transfer Request that appears to have been sent by Customer that is processed by Bank in compliance with the agreed security procedures, whether or not authorized. Bank will use reasonable care in transmitting the Account Reporting but assumes no responsibility for the accuracy or timeliness of the information supplied by other financial institutions, the SWIFT network. Customer agrees to immediately notify and fully cooperate with Bank if it suspects or becomes aware of any breach or compromise of the security of the SWIFT -Related Services. 3. Transmission and Processing of Transfer Requests. Customer authorizes Bank to Execute all Transfer Requests delivered to Bank by Customer in compliance with the terms of this Agreement and any established security procedures. Customer shall adhere to formatting and processing requirements established by Bank. Customer authorizes Bank to use whatever means Bank, in good faith, deems reasonable under the circumstances to execute each Transfer Request, including selection of a funds transfer system, routing and means of transmission. Customer shall be responsible for the accuracy, completeness and timeliness of all Transfer Requests sent to Bank for Execution. Transfer Requests with settlement dates of more than thirty (30) calendar days from receipt may not be processed unless prior arrangements have been made. Customer is solely responsible for initiating Transfer Requests sufficiently in advance to meet Customer's contractual obligations to its vendors and/or customers. Bank shall not be responsible for any late payment or finance charges that may result from Customer's failure to allow sufficient lead- time to make a Transfer Request. Bank and any other financial institution may rely on the account, routing or BIC numbers in the Transfer Requests Page 37 (Effective 11/01/2021) Item 18: Staff Report Pg. 81 Packet Pg. 266 of 857 77 even if such numbers do not correspond to the name of Customer, the Beneficiary or the Beneficiary Bank. 4. Amendment or Cancellation of Transfer Requests. Customer does not have the right to reverse, adjust or revoke any Transfer Request after it has been received by Bank; provided, however, that Bank will make a reasonable effort to act on such a request by Customer. With respect to a Transfer Request that has already been Executed, Bank shall, at Customer's request, request that the Beneficiary Bank return all or a portion of the funds. Customer understands that the Beneficiary Bank is under no legal obligation to comply with this request. 5. Rejection/Repair of Transfer Requests. Bank may reject a Transfer Request if: (i) it is not initiated or transmitted in accordance with the applicable security procedures; (ii) does not adhere to Bank's formatting or processing requirements; (iii) there is any inconsistency between a Transfer Request and information previously supplied to Bank; (iv) Customer's Transfer Requests exceed any applicable transaction limits established by Bank; (v) if there are insufficient collected funds in Customer's account to fund the Transfer Request; or (vi) Bank has other reasonable grounds not to honor the Transfer Request. Bank shall have no obligation to repair any Transfer Request it receives but may, in its absolute discretion, endeavor to do so. 6. Account Reporting. Bank may send notifications that allow Customer to receive advices relating to Customer's payments processed by Bank. Bank may also provide Customer with information on accounts maintained at Bank. If Customer elects to receive notifications and other account information via SWIFT, Customer shall exercise extreme care in maintaining its own security in the receipt of the notifications or information. Customer acknowledges that the data received via SWIFT may include confidential information, including, without limitation, names, amounts, phone numbers and account information. Customer further acknowledges that it alone assumes full responsibility for maintenance of its internal security procedures to keep such information confidential. 7. Limits on Bank's Liability. Bank will use reasonable efforts to provide notifications and information in a prompt fashion but shall not be liable for the temporary failure to provide timely data. Bank assumes no responsibility for any delays caused, or for inaccurate or incomplete information provided, by the SWIFT network or third -party banks with respect to payments and related information. Bank shall not be responsible for the acts or omission of Customer, the SWIFT network, any other financial institution or any other person. Payment to a foreign country is subject to the laws of the foreign country involved. Bank assumes no liability for foreign exchange risk, delays, non -delivery or other events resulting from causes beyond Bank's control. 8. SCORE. If Customer accesses the SWIFT -Related Services using SCORE, Customer shall additionally comply with applicable SWIFT agreements, documentation, user guides, security procedures and all other instructions and recommendations provided by SWIFT or by Bank in relation to the use of SCORE. Customer acknowledges that Bank does not regulate the setup and provision of SWIFT membership, joining the SWIFT network or SCORE, the SWIFT network security or the facilities necessary to access and use them. Customer represents that it is, and will throughout the term of this Service remain, an authorized SWIFT participant. Customer authorizes Bank to act on any instruction contained in a SWIFT message received by Bank through SCORE which appears to have been sent by Customer. In the event that Customer requests Bank to provide SWIFT -Related Services through SCORE to a parent company, subsidiary, affiliate or other commonly owned company, Customer agrees that it shall be jointly and severally liable for such related entity's obligations under this Agreement. Customer represents and warrants that such related entity is a duly authorized agent of the Customer and that the related entity is acting on behalf of Customer in its authorized capacity. 9. FileAct. If the FileAct service is offered by Bank and selected by Item 18 Attachment A - US Bank for General Banking V. TERMS APPLICABLE TO Services XCHANGE SERVICES The following are additional terms and conditions applicable to all Foreign Exchange Services offered by Bank including, but not limited to, spot, forward, swap and option transactions, whether physically deliverable or non -deliverable FX transactions. Bank may change the number or type of Services offered at any time. 1. Conflicting Provisions and Separate Disclosures. With respect to all foreign exchange transactions or other derivative products entered into by Customer, to the extent that any provision of this Agreement conflicts with a provision of any ISDA Master Agreement by and between Customer and Bank or any documents related thereto (the "ISDA"), the ISDA terms shall govern. Disclosures herein supplement other disclosures that Bank may provide Customer and any other agreements between Bank and Customer in connection with FX transactions, including, but not limited to, ISDA Master Agreement, USBNA Assessment and Agreement for Swap Transactions, the ISDA August 2012 DF Protocol, the ISDA March 2013 DF Protocol, the ISDA General Disclosure Statement for Transactions, the ISDA Disclosure Annex for Foreign Exchange Transactions, and the U.S. Bank National Association Foreign Exchange Disclosures. 2. Foreign Exchange Risk. Many banking and finance transactions carry risk. All foreign exchange transactions, including but not limited to, swaps, options, forwards, foreign exchange transactions currency accounts, and other similar derivatives and related products involve unique risks specific to the nature of these types of transactions and the currency market. These types of transactions are not suitable for all Customers. Customer should fully understand the nature and extent of exposure to risk of loss, if any, which in some circumstances may significantly exceed the amount of any initial payment made by or to Customer. All decisions to enter into foreign exchange transactions should be made by Customer giving appropriate consideration to Customer's experience, objectives, financial resources and business environment. Bank will be truthful in its statements about any facts, but statements made by Bank should not be construed as recommendations or advice. 3. Arm's Length Transactions. Bank is a dealer and market maker in the foreign exchange market. As such, Bank engages in price quoting, order taking, trade execution and other related activities with counterparties and other dealers and for Bank's own account. Unless otherwise agree by Bank in writing, Bank acts as a principal on an arm's length basis, does not act as Customer's agent, broker, fiduciary, financial advisor or in any similar capacity when engaging in FX transactions with Customer, nor will Bank perform the duties associated with these roles. 4. Pricing. Many factors affect foreign exchange pricing, including but not limited to, the size and nature of the transaction, credit, capital and funding costs, applicable trading venue or platform and the manner that such trading platform or venue is utilized, settlement risk, operational considerations, regulatory requirements, relationship factors such as the amount and nature of service provided and volumes traded by Customer, the type of trade request, and business costs such as fees related to exchanges, brokers or other intermediaries. Market conditions, such as demand, frequency, timing and volatility, also affect foreign exchange pricing. These factors in pricing may result in Bank offering different prices to different customers for the same or similar FX transactions. Unless otherwise agreed, prices quoted by Bank on all FX transactions (actionable and indicative) are an "all in" price that typically includes Bank's bid or offer spread for the requested transaction and an amount to compensate Bank based on the many factors set forth above. These components will not be separately disclosed unless required by law. Bank's pricing may not be reflective of prices being offered by other dealers. During extreme market conditions, such as liquidity events, the notional size and price levels Bank offers may not match levels provided in normal market conditions. reliable transfer of files to exchange batches of financial messages, A. ELECTRONIC FOREIGN EXCHANGE SERVICES reports, bulk payment files, images and other data over the SWIFT 1. Introduction. Bank may provide foreign exchange services to network. FileAct supports both interactive (real-time) and store -and- Customer in connection with one or more web -based services, via private forward modes. Prior to implementation, Customer shall verify that Bank Internet site owned and operated by Bank ("EFX"). If requested by is capable of supporting the file formats and transaction types that Customer and agreed to by Bank, Bank will provide such services in Customer wishes to transmit. If the file format and transaction type is accordance with this Agreement and other terms and procedures provided supported by Bank, Customer agrees that the processing of each file shall to the Customer. Customer agrees that Customer's use of EFX and all be additionally subject to all applicable Sections of the Agreement. Page 38 (Effective 11/01/2021) Item 18: Staff Report Pg. 82 Packet Pg. 267 of 857 Item 18 Attachment A - US Bank for General Banking transactions initiated thereby shall be governed by this Section, all other relevant sections of the Agreement and any other related disclosures provided to Customer, in either paper or electronic format. EFX shall be available only during hours as established by Bank, which may vary by day or location. Notwithstanding anything to the contrary herein, Bank does not confirm that the person authorizing any EFX transaction is an Authorized Signer or is otherwise authorized to conduct any EFX transaction on behalf of Customer. 2. Access Devices. Once Bank has granted Customer access to any EFX system, System Administrator(s) designated by Customer in the Implementation Documents will be provided with one or more access devices, which may include cards, identification numbers and/or passwords. Customer shall use all EFX services in accordance with the security procedures set forth in this Agreement. 3. Trades. a. General Procedures. Within the applicable EFX platform, Customer informs Bank that Customer wishes to purchase or sell a stated amount of currency against a second currency on a designated date ("Settlement Date") either unconditionally or at a displayed exchange rate, if one may be obtained ("Trade"). Any transaction that results following the submission of a Trade shall be Customer's legally binding obligation. Trades submitted to Bank via an EFX platform shall be effective only upon acceptance by Bank. Bank will establish from time to time specific times of day after which Trades will not be processed on a "same -day" or "next - day" basis. Trades submitted after Bank's deadline will be considered received on the next business day. Deadlines will differ depending on the Trade currency and other factors. Market movements could occur while systems are processing Customer's transaction. These market movements may be in Customer's favor or against Customer's position and will be reflected in the execution price. b. Confirmation. Bank shall make reasonable efforts to provide information and status of the terms of any Trade on the EFX platform or by other means established by Bank. Failure by Bank to confirm a Trade for any reason, including without limitation computer malfunction, shall not excuse Customer's obligations related to any Trade. Bank's internal records with respect to each Trade shall constitute conclusive evidence of the terms of each Trade. The terms of each Trade shall be incorporated into and become part of this Agreement. b. Settlement Instructions and Payment. Once a Trade has been made, Customer agrees to make payment or delivery of currency to Bank on the Settlement Date of the Trade in accordance with the settlement instructions provided by Customer, plus any applicable fees or charges. Bank expects that all trades will settle via standing settlement instructions. Customer is solely responsible for the accuracy and completeness of any settlement instructions delivered to Bank through EFX and such settlement instructions are subject to the concurrence of Bank. Any change to Customer's standing instructions must be completed on the platform no less than three business days prior to settlement. Failure to do so may result in settlement after value date and a claim for compensation or use of the previously applicable settlement instructions and a claim for compensation. Bank strongly discourages the use of third - party payments to settle foreign exchange transactions. Third -party payments will only be permitted in certain instances in the sole discretion of Bank. Requests for third -party payments will require all information requested by Bank in connection with anti -money laundering regulations and policies. Settlement instructions for approved third -party payments must be provided on the platform no less than three (3) business days prior to settlement. Settlement instruction provided after this time or incorrect or incomplete instructions may result in settlement after the value date or use of the previously applicable settlement instructions. Should Customer instruct Bank to settle a Trade by debiting an account, Customer agrees to maintain sufficient available funds in the account to settle on the Settlement Date. Should funds be insufficient to settle the trade on the Settlement Date, Bank reserves the right in its sole discretion to debit any of Customer's account with the Bank in the amount of Trade, subject to applicable account fees and charges, or to terminate the Trade. c. Cancellation or Change. Customer acknowledges and agrees that Customer shall have no right to cancel or reverse a Trade once submitted. Bank will, however, make reasonable efforts in its sole and complete discretion to cancel or amend tl . Services Son Customer's request. Should a Trade be successfully canceled or amended, Customer agrees to reimburse Bank for any breakage costs and other expenses incurred by Bank to cancel or amend the Trade, including any fees imposed for this extraordinary service. Bank reserves the right to adjust the exchange rate on any Trade requiring a new Settlement Date to reflect any costs associated with carrying that Trade to a new Settlement Date. 4. Funds Transfers. Customer authorizes Bank to execute and charge the designated Customer account(s) for wire transfer payment orders delivered to Bank via any EFX service. Customer agrees that all such wire transfer payment orders will be governed by the relevant Sections of this Agreement. 5. Representations and Warranties. Customer represents and warrants to Bank as of the date of this Agreement and as of the date of each Trade that: (i) Customer is authorized to enter into this Agreement and any Trade, (ii) the persons entering into the Agreement (and each Trade) on Customer's behalf have been duly authorized to do so, (iii) the Agreement (and each Trade) is binding and enforceable against Customer in accordance with its terms, (iv) no Termination Event has occurred or is continuing, and (v) Customer is acting as principal with respect to each Trade. 6. Close -Out Events. Each of the following events shall constitute a close-out event under this Agreement (each a "Close -Out Event"): (i) failure by Customer to pay Bank for any amounts due under this Agreement or any Trade, (ii) any voluntary or involuntary insolvency proceeding (including without limitation any proceeding under any bankruptcy, insolvency or other similar laws governing the operations of Customer) shall have been commenced against Customer, (iii) Customer fails, or is otherwise unable, to pay its debts as they become due, (iv) Customer disaffirms, disclaims or repudiates any Trade, (v) any representation made by Customer under this Agreement shall prove to have been false or misleading in any material way at the time that it was made, or (vi) Customer shall be in default of any agreement between Customer and Bank or its subsidiaries or affiliates. 7. Rights Upon Close -Out Event. If a Close -Out Event has occurred, Bank shall have the right to terminate this Agreement and, upon notice to Customer, close out all outstanding Trades on a date specified by Bank (the "Close -Out Date"). In such event, Bank shall liquidate such Trades by calculating in good faith the gain or loss of all Trades as follows: (i) determine the close out amount of each Trade, which shall be equal to the sum of the face value of each Trade in a particular currency with a Settlement Date that is the same or later than the Close -Out Date and the face value of each Trade in the same currency with a Settlement Date prior to the Close -Out Date, plus interest at the Fed Funds rate from and including the Settlement Date, but excluding the Close -Out Date, (ii) convert the close out amount of each group of like currency Trades into U. S. Dollars at the rate of exchange at which, at the time of the calculation, Bank may buy U.S. dollars with or against currency of each closed out Trade, and (iii) determine for each Trade the sums that would have been owed by Customer to Bank and the sums that would be owed by Bank to Customer (adjusted to present value by discounting the gain or loss at the Fed Funds rate from and including the Settlement Date, but excluding the Close -Out Date). The preceding amounts shall be aggregated, so that all such amounts are netted into a single liquidated amount payable to or by Bank. Customer shall pay on demand any amounts owing to Bank pursuant to this Section and Bank's calculations shall be conclusively binding against Customer, absent manifest error. Page 39 (Effective 11/01/2021) Item 18: Staff Report Pg. 83 Packet Pg. 268 of 857 79 B. FOREIGN CURRENCY ACCOUNTS 1. Introduction. If requested by Customer and agreed to by Bank, Customer may open a Foreign Currency Account ("FCA") at U.S. Bank National Association ("Standard FCA"). 2. Permitted Deposits. Bank may accept the following for deposit into FCA: a. Proceeds of matured foreign exchange purchase contracts; b. Proceeds of foreign currency denominated letters of credit or documentary collection; c. Incoming international funds transfers; d. Proceeds of loan disbursements; or e. Foreign checks and other items subject to collection, which may not be available until funds are received by Bank. Bank will not accept currency or coin for deposit into FCA. Deposits not specifically enumerated above may be allowed if agreed to by Bank in writing. Only collected and verified funds can be deposited into FCA, whereupon funds will be immediately available for withdrawal or transfer by Customer. 3. Withdrawals. Customer can make withdrawals out of FCA in the following ways: a. Settlement of a foreign currency exchange sale contract; b. Negotiation of foreign currency denominated letters of credit or documentary collection; c. Outgoing international funds transfers by wires initiated in accordance with Bank procedures; or d. Payment of a foreign currency loan. Each of these methods of making a withdrawal will result in an immediate debit to the FCA for the entire amount Customer has elected to withdraw from such FCA. 4. Interest. Interest rates offered on FCAs are determined in Bank's discretion based on the applicable currency. Such interest rates may be set at zero or at a negative interest rate. Interest is calculated based on the average daily balance method. The average daily balance method is an annualized rate that reflects the relationship between the amount of interest each fiscal month and the average daily balance in the account for such fiscal month. Negative interest may be assessed as a fee based on the interest rate set by the applicable monetary authority plus the incremental cost of funding to U.S. Bank. 5. Denomination. Customer will elect the denomination of each FCA on a separate account opening document. Transfers of funds into and out of FCA in the currency in which that particular FCA is denominated will be made without regard to the equivalent value of that sum of foreign currency in U.S. dollars or other foreign currencies. Transfers of funds into and out of FCA in a currency other than the currency in which that particular FCA is denominated may be accommodated by the Bank in its discretion. Such transfers will be made at the prevailing exchange rate determined by Bank. 6. Non -Business Days. In addition to non -Business Days specified in the Agreement, there will occasionally be other days on which Bank cannot process or complete a transaction due to holidays in foreign countries. 7. Other Terms. Bank may refuse a deposit, limit the amount which Customer may deposit, return all or any part of a deposit or require that Customer close FCA at any time. Bank may also close FCA without prior notice and remit to Customer any balance remaining after taking into account all pending debits and charges against such FCA. 8. Foreign Currency Account Risks. Investing in any currency other than the base currency of the Customer carries risk. The value of the balances in such accounts may be significantly affected by changes in currency exchange rates. Some other risks of maintaining foreign currency balances include, but are not limited to: the effects of a different economic system in a foreign country, future political and economic developments, possible imposition of exchange controls or other government restrictions, and with respect to certain countries, the Item 18 Attachment A - US Bank for General Banking possibility of expropriation or c Services litical or social instability, or diplomatic developments which could adversely affect the value of the currency. Should Bank's balances in a foreign country become blocked or withdrawals by Bank become otherwise restricted, Customer's funds in the FCA will likewise be blocked or otherwise restricted. WHILE DEPOSITS IN FCAS MAY BE INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION ("FDIC") UP TO A MAXIMUM AMOUNT ALLOWED BY LAW, CUSTOMER IS NOT PROTECTED BY BANK AGAINST FOREIGN CURRENCY EXCHANGE RATE FLUCTUATIONS OR FROM INABILITY TO ACCESS FUNDS FROM FOREIGN REGULATIONS BY THE FDIC INSURANCE, OR ANY OTHER INSURANCE OR GUARANTY PROGRAM. 9. Limitations on Liability. In addition to other limitations on liability set forth in this Agreement, Customer expressly releases and holds harmless Bank, and its affiliates, agents and employees, from any liability, loss, damage or claim related to currency exchange rates or fluctuations in value of the currency in which the applicable FCA is denominated with respect to the U.S. dollar and other currencies. Customer hereby assumes all risks related to currency exchange rates and fluctuations in currency values, including that the foreign currency in FCA might be worth less, in U.S. dollars or other foreign currencies, than the U.S. dollar or other foreign currency equivalent of such funds at the time deposited into the FCA. Bank makes no warranty and no representation about the value of any FCA balance at any time. Page 40 (Effective 11/01/2021) Item 18: Staff Report Pg. 84 Packet Pg. 269 of 857 VI. TERMS APPLICABLE TO SPECIFIC MONEY CENTER AND SAFEKEEPING SERVICES The following are additional terms and conditions applicable to specific Money Center and Safekeeping Services offered by Bank. In the event of a conflict between this Section VI and any other provision of this Agreement, Section VI shall govern. Bank may change the number or type of Services offered at any time. Customer shall not be bound by the terms and conditions for the specific Services described in this Section VI to the extent Customer is not using such Service(s). Municipal Advisor Rule Disclosure. This disclosure applies to Customer if Customer is classified as a municipality or an "obligated person" under the Municipal Advisor Rule. For purposes of Section 15B of the Securities Exchange Act of 1934 (the "Act") (SEC Rule 15Ba1-1 et seq.) (the "Rule"), Bank: (1) is not recommending and will not recommend an action to Customer; (2) is not providing and will not provide "advice" to Customer as defined in the Rule, and any information or communication from Bank in respect of Customer's accounts with the Money Center or the Safekeeping Departments of Bank or in respect of any securities transaction or potential securities transaction to be executed via such account(s) is not intended to be and should not be construed as "advice" as defined in the Rule; and (3) is not acting as an advisor to Customer and does not owe Customer any fiduciary duty pursuant to Section 15B of the Act or otherwise with respect to any such account(s), information, communication, transaction or potential transaction. Customer should discuss any information or material provided to Customer by Bank in connection with trading, investing or other activity in the such account(s) with any and all of Customer's internal or external advisors and experts that Customer deems appropriate before acting on any such information or material. A. INVESTMENT, DEPOSITORY AND SAFEKEEPING SERVICES From time to time, Customer may effect securities transactions or establish deposits with Bank's Money Center Department and/or request safekeeping services from Bank's Safekeeping Department. All such transactions shall be subject to the terms and conditions of this Agreement. 1. Definitions. a. "Confirmation" means the confirmation statement from Bank as described in this Agreement. b. A "Money Center deposit" means an interest -bearing demand deposit account, a money market deposit account ("MMDA"), a time deposit, or other deposit liability of Bank to Customer established under this Agreement and maintained in Customer's Money Center investment account. c. "Safekept Securities" means securities that Bank has agreed to accept and hold for the account of Customer under the terms of this Agreement. d. The term "securities" means all securities (as Defined in the Securities Exchange Act of 1934) and all investment securities or products from time to time offered by Bank to Customer, other than certificates of deposit issued by Bank and deposits made with Bank. e. "Settlement Account" means any settlement account(s) designated by Customer or any replacement account identified by Customer in a written notice delivered to Bank. 2. Securities Transactions: Compensation and Capacity of Bank. a. In General. In any securities transaction governed by this Section VI.A, Bank may be acting as principal, riskless principal, or agent. Bank's capacity in any securities transaction will be indicated on the Confirmation. (i) As Principal. When acting as a principal in securities transactions, Bank will either buy securities for its own account or sell for its own account securities owned by Bank, whether such securities are bought before or after receiving Customer's order. Bank's compensation is reflected in the price at which Bank buys or sells the securities. (ii) As Riskless Principal. When acting as a riskless principal in securities transactions, after receiving from Customer an orderto buy 80 Item 18 Attachment A - US Bank for General Banking or sell securities, Bank will fServices is own account to offset the sale to or purchase from Customer. Bank's compensation is reflected in the price at which Bank buys and sells the securities. (iii) As Agent. When acting as Customer's agent in securities transactions, Bank will buy or sell securities solely for Customer's account. Bank's compensation due from Customer is the amount of any agency service charge indicated on the Confirmation. b. Service Fees. In addition to compensation received as a principal, riskless principal or agent, Bank may charge Customer service fees in relation to securities transaction as specified in the current fee schedule as provided to Customer, which may be amended from time to time upon notice to Customer. c. Other Compensation; Bank Securities. Bank may be paid a fee or other compensation by any other party in connection with any securities transaction, and any such fee or compensation will be in addition to fees payable by Customer to Bank under this Agreement. Such additional compensation may include, without limitation, advisory, custodial, distribution and/or shareholder service fees (which may be paid as service fees pursuant to Rule 12b-1 under the Investment Company Act of 1940) that Bank or its affiliates may receive from various mutual funds and/or mutual fund service providers, based upon moneys invested in the funds. Customer acknowledges that those fees or other compensation may be paid to Bank for such services, and that such payments will not reduce or offset any fee or compensation due from Customer to Bank under this Agreement. Further, Customer acknowledges that securities Customer acquires through Bank may directly or indirectly (including through mutual or money market funds) represent an ownership interest in securities issued by Bank or its affiliates or by funds sponsored by Bank or its affiliates. 3. Money Center Deposits. a. In General. If Customer elects to deposit funds through the Bank's Money Center Department, that Money Center deposit shall be maintained within Customer's Money Center investment account. Bank will provide Customer with a Confirmation upon Customer's placement of funds, and the deposit transaction will be reflected on Customer's Money Center account statement. With the exception of Eurodollar deposits (which are not deemed deposits under rules promulgated by the FDIC and therefore are not insured by the FDIC), Money Center deposits are FDIC insured per depositor, up to applicable FDIC limits. By opening and maintaining a Money Center deposit, Customer agrees to be bound by this Agreement. b. Access to Funds. In addition to any other restrictions specified elsewhere in this Agreement, Customer shall not be allowed to make withdrawals or transfers from a Money Center deposit at a U.S. Bank branch or ATM or via check. No debit or ATM cards will be issued on a Money Center deposit. Customer shall be permitted to make withdrawals or transfers from a Money Center deposit only by contacting the Money Center Department in the following manner: telephone, facsimile, email, or via an online system provided or approved by Bank. c. Notice of Withdrawal. Bank reserves the right to require at least seven (7) days written notice prior to withdrawal or transfer of funds from an MMDA, unless otherwise specified on the Confirmation for the Customer's placement of funds. Customer must provide such notice to Bank's Money Center Department by 3:00 PM Central Time via telephone, email, or fax. 4. Pledges; Segregation. a. Pledges. Upon request of Customer, Bank can provide a form of control agreement suitable for transactions where Customer wishes to grant to third parties a lien, pledge or other rights over its property held by or at the Money Center or Safekeeping Departments at Bank. Customer agrees that all costs of Bank, including reasonable fees and expenses of outside counsel if deemed necessary by Bank, will be at Customer's expense if such a control agreement is requested, whether or not a final agreement is entered into. b. Segregated Assets. Where Customer wishes to effect transactions hereunder on behalf of its customers using the property of such Page 41 (Effective 11/01/2021) Item 18: Staff Report Pg. 85 Packet Pg. 270 of 857 IT Item 18 Attachment A - US Bank for General Banking customers, Customer will first notify Bank in writing of its intention to do so before effecting any such transactions. Customer acknowledges that Bank may require one or more additional agreements in order to accept such transactions. Once acceptance of such transactions has been approved by Bank, Customer agrees to include in its instructions to Bank an agreed identifier or designation as to the applicable securities, deposits and transactions. 5. Securities Transaction Requests. a. Effecting Transactions. Each securities transaction will be effected pursuant to Customer's instructions made verbally, by fax or sent electronically via email or a trading system provided or approved by Bank. Emailed instructions must be directed to Bank's email address as designated from time to time by Bank, and fax instructions must be directed to Bank's fax number as designated from time to time by Bank. Securities transaction requests may be acted upon by Bank without acknowledgment by Bank that it has received such request. b. Cut -Off Times. Bank establishes cut-off times for receipt of securities transaction requests depending on the type of security and the market in which it is traded. In addition, market holidays, procedural or operational matters, and actions taken by market operators may affect Bank's ability to process securities transaction requests. Customer instructions for same day settlement received before the applicable cut-off time will be submitted for processing that Business Day. Customer instructions for same day settlement received after the applicable cut-off time may be processed by Bank on a 'best efforts' basis that Business Day and otherwise will be submitted for processing the next Business Day. c. Bank's Rights. Bank may reject, refuse to honor, or reverse all or any portion of any transaction request, with or without prior notice to Customer. If Customer fails to pay in full for any security purchased or fails to deliver security sold, in each case on or before the related settlement date, Bank is authorized in its discretion and without notice or demand to take any one or more of the following actions: cancel the transaction; sell the securities covered thereby; buy -in cover securities or other property required to make delivery; charge the Settlement Account for amounts due; hold Customer liable for any loss, cost or expense including but not limited to, breakage or pair -off fees and the capital charge and interest cost to carry any securities purchased; and/or impose fees. 6. Safekept Securities. Bank, acting through its Safekeeping Department, agrees to hold and keep as custodian hereunder all Safekept Securities, and to deliver such Safekept Securities in accordance with the instructions of Customer, all subject to the terms and conditions of this Agreement. a. Acceptance and Withdrawal. Securities eligible to be Safekept Securities may be delivered to Bank, and any Safekept Securities may be withdrawn from Bank, in each case upon an instruction of Customer delivered in accordance with this Agreement. Withdrawal or delivery of Safekept Securities is subject to availability (e.g., among other reasons, securities involved in a corporate action or in frozen status, restricted securities or pledged securities may not be available for withdrawal or delivery). Bank shall not be liable or responsible for or on account of any act or omission of any broker or other agent designated by Customer or, in the absence of such designation, selected by Bank to receive or deliver securities for the account of Customer. b. Registration; Depositories. Bank shall register Safekept Securities in nominee name and may from time to time change the registration of Safekept Securities from nominee name to Customer's name, or vice versa. Customer agrees that it will timely complete any necessary documentation provided by Bank to change the registration of Safekept Securities. Safekept Securities held in nominee name may be deposited with The Depository Trust Company or other third -party depository acceptable to Bank. Securities that are depository eligible will be held at the depository in the depository's nominee name. c. Securityholder Information. Unless otherwise required by law or pursuant to instructions from Customer, in no event shall Bank be responsible to take any action concerning any puts, calls, conversions, exchanges, reorganizations, offers, tenders or other corporate actions or similar matters relating to Safekept Securities, other than (i) to forward to Customer in accordance with this Agreement the written information received by Bank relating to L Services Jand (ii) follow Customer's lawful instructions with respect to such actions. Customer may directly vote any proxy or other corporate action, or if it instructs Bank to vote on its behalf, agrees that any instructions to Bank with respect to any such actions shall be delivered to Bank within sufficient time for Bank to act thereon if any action is required. Safekept Securities called for redemption prior to maturity will be presented by Bank for payment provided the trustee or other appropriate entity gives Bank adequate notice of redemption. Should any Safekept Security be called for partial redemption by the issuer of such security, Bank is authorized to accept the allocation applied by any central depository. In the event Bank has to allocate any redemption among its accounts, Bank shall allot the redemption proceeds in accordance with its standard procedures therefor, effected in such manner as it deems appropriate in its sole discretion. d. Collection of Income and Principal. Bank shall collect and receive the interest, principal and other income payable in connection with the Safekept Securities, and shall pay to Customer or credit to the Settlement Account all such amounts. Bank shall not be obligated (i) to pay to Customer or credit to the Settlement Account any payment of interest, principal or other income until Bank receives such payment in immediately available funds or (ii) to institute or participate in any collection proceedings or other proceedings to enforce Customer's rights relative to any Safekept Securities or to pursue any remedies on behalf of Customer. Bank is hereby authorized to sign on behalf of Customer any declarations, affidavits, certificates of ownership or other documents relating to securities held by Bank in nominee name that may at any time be required with respect to all coupons, registered interest, dividends or other income. If any of Customer's deposits or securities the subject of this Agreement, including Safekept Securities, are subject to a variable or fixed rate of interest and such deposits or securities bear an interest rate less than zero, Customer agrees to pay Bank all amounts of the negative interest or fees that Bank imposes as compensation for the less -than -zero interest rate (which may also be debited from the Settlement Account by Bank), and Customer agrees that the principal amount of such Safekept Securities may be reduced to the extent necessary to cover the amount of the negative interest or fees if available funds are not otherwise provided by Customer. e. Return of Payments. Customer will repay Bank, or Bank may charge the Settlement Account, in the event that for any reason (i) Bank is required to return to the issuer or to a third party any payments in respect of Safekept Securities, (ii) Bank fails to receive from the issuer or appropriate other party a payment Bank paid to Customer in respect of Safekept Securities, or (iii) Bank must return to the issuer or appropriate other party a payment Bank paid to Customer in respect of Safekept Securities. Customer further agrees that the principal amount of any Safekept Securities may be reduced, and any remittances due from Bank to Customer (whether or not under this Agreement), and any other accounts of Customer with Bank, may be offset to the extent necessary to cover the amount of such returned payments to the extent that immediately available funds are not otherwise provided by Customer to Bank. 7. Confirmation Statements. Promptly after effecting any transaction pursuant to this Section VIA, Bank will deliver to Customer a Confirmation which shall identify at least (i) Bank and Customer, (ii) the trade and settlement dates of the transaction, (iii) the issuer and par amount of the related securities (for securities transactions) and the principal amount of any deposit (for deposit transactions), (iv) the interest rate if applicable and/or any discount rate applicable to any securities transactions or deposit transactions, (v) the maturity date of the transaction, if applicable, (vi) the capacity of Bank as principal, riskless principal or agent (if the transaction is a securities transaction) and, if applicable, whether the securities will be Safekept Securities, (vii) any terms and information required by applicable law, and (viii) any other terms and information which Bank may include at its discretion. The information contained on the Confirmation shall be considered true and correct and conclusively binding upon Customer unless Customer notifies Bank of any error therein within three (3) business days after the date the Confirmation is deemed delivered to Customer in accordance with this Agreement. Customer may, by notice from an Authorized User in accordance with this Agreement, elect to receive Confirmations by mail, fax, email, or other electronic Page 42 (Effective 11/01/2021) Item 18: Staff Report Pg. 86 Packet Pg. 271 of 857 Item 18 Attachment A - US Bank for General Banking means including posting to a password -protected website), subject to the terms of this Agreement. 8. Settlement Account. Unless Bank is otherwise instructed in writing, Customer unconditionally authorizes, empowers, and directs Bank (and authorizes and directs Bank to communicate with any financial institution maintaining the Settlement Account as necessary) to: (i) debit the Settlement Account on the settlement date indicated on the Confirmation for the full amount of each transaction effected under this Section VI.A (including all fees and charges payable hereunder), notwithstanding that such debit may cause the Settlement Account to be overdrawn; and (ii) credit the Settlement Account with interest payments, principal payments, maturity payments or other payments received in respect of transactions effected under this Agreement. Customer hereby represents and warrants that instruction from any Authorized User is sufficient to authorize Bank to debit or credit the Settlement Account. If the Settlement Account is not held by Bank, Customer confirms to Bank that it has authorized the financial institution maintaining the Settlement Account to accept debit and credit entries to the Settlement Account and that no such authorization will be cancelled except with prior notice to Bank and in sufficient time and in such manner as to allow the financial institution maintaining the Settlement Account and Bank a reasonable opportunity to act on such termination without disruption of any transactions or services under this Agreement. Customer acknowledges that ACH payments to a Settlement Account not held by Bank are subject to ACH processing timelines, which may involve a delay in available funds. 9. Delivery. Through the instructions of an Authorized User, Customer shall specify the account to which any securities purchased hereunder are to be delivered. If such account is maintained by the Safekeeping Department of Bank, the securities will be held in accordance with this Agreement. If such account is maintained by an institution other than Bank, Bank's responsibility for ensuring delivery shall be limited to accurately conveying the instructions for the appropriate delivery account to the depository, agent or issuer of the securities, as applicable for the particular type of securities. Bank will issue no certificate, passbook, or any other evidence of any deposit except for the Confirmation. 10. Interest. All securities, Money Center deposits, and certificates of deposit purchased by Customer or held by Customer under this Agreement shall earn interest on the principal balance from the date of deposit or settlement date, as applicable, computed at the rate and in the manner established by Bank from time to time for the given product. Any interest due will be credited monthly unless otherwise agreed to by Customer and Bank. No interest shall accrue on the date of withdrawal. Bank reserves the right to change the applicable interest rate on variable rate products (including those products whose underlying interest rate is not managed by Bank) at any time. Such interest rate may be set at zero or an interest rate less than zero. If the interest rate, or the index or other referenced rate upon which the interest rate is based, is at any time less than zero percent, Customer agrees to pay Bank all amounts of the negative interest or fees that Bank imposes as compensation for the less - than -zero interest rate. Bank will not provide notice of rate changes, but Customer may call the Money Center Department to obtain current rate information. Bank shall notify Customer of the applicable interest rate and maturity term forthe product opened under this Agreement atthe time that the request for such product is made. 11. Fixed Investment Periods. Customer acknowledges that certain products held by Bank under this Agreement have fixed investment periods, and agrees that such products will be held by Customer until their maturity dates or through their commitment dates. Customer agrees that if it withdraws part or all of such product before such date, Bank shall be entitled to impose a penalty (including by debiting the Settlement Account for such amounts) in accordance with the terms of such product or the fee schedule provided to Customer, as applicable, and that the principal amount of such product may be reduced to the extent necessary to cover such penalty if available funds are not otherwise provided by Customer. collateral or as the subject of a tr& Services will be held by the Safekeeping Department of Bank subject to the terms of this Agreement, unless Customer is otherwise notified. To the extent of any inconsistency between the terms of any such agreement and the terms of this Agreement, the terms of such other agreement shall control. 13. Fees and Expenses. Customer shall pay to Bank such fees in respect of the services provided under this Agreement, as disclosed to Customer on the current fee schedule (which fee schedule may be amended from time to time by Bank). If the fee schedule is amended, the amended fees will apply to any Safekept Securities being held at that time, and to any securities transactions effected on the day such amendment becomes effective. Customer agrees to pay, and agrees and acknowledges that Bank may debit the Settlement Account for any fees and other amounts owing by Customer to Bank under this Agreement, or exercise an offset for such amounts against any funds of Customer on deposit with Bank, or against any interest, principal or other income received or to be received by Bank on behalf of Customer, whether or not in respect of Safekept Securities. In addition, Customer agrees to reimburse Bank for its commercially reasonable out-of-pocket expenses for providing the services hereunder, including, but not limited to the reasonable fees and expenses of outside counsel if retained by Bank in its discretion in connection with this Section VI. If Customer fails to pay Bank any sums due under this Section VI within thirty (30) days after the same are due (whether or not a late notice is sent to Customer by Bank), Bank may terminate this Agreement and return any Safekept Securities to Customer at Customer's expense, and to avail itself of any other remedy it may have in law or in equity. 14. Service Termination; Account Closure. Subject to Section VI.A.11 ("Fixed Investment Periods"), Customer may terminate the Service(s) described in this Section VI or close its Money Center investment account at any time upon prior notice to Bank. Bank may terminate the Service(s) described in this Section VI or close Customer's Money Center investment account at any time without prior notice to Customer. If any Service described in this Section VI is terminated or Customers Money Center investment account is closed for any reason, Customer will continue to be responsible for any obligation incurred by Customer prior to termination or closure and for the fees and costs, if any, payable under this Agreement with respect to delivery of Customer's securities (including Safekept Securities) or funds held by Bank to Customer or to another financial institution. 15. Notices. Except for oral instructions to Bank from Authorized Users or from Bank to Authorized Users, all notices, disclosures and communications (including Confirmations) under this Section VI shall be in writing and delivered by mail, fax, email or other electronic means as provided for in this Agreement. Notices, disclosures and communications (including Confirmations) shall be deemed delivered upon transmission of the same by mail, fax, email or other electronic means as provided for in this Agreement, or on the third (31) Business Day after deposit of the same in the United States mail, postage prepaid, and addressed to the mailing address provided by Customer. All written confirmations, notices, instructions, or other communications from Customer to Bank shall be sent to following address (which may be amended from time to time by Bank upon notice to Customer): For securities transactions: U.S. Bank National Association Money Center Department 800 Nicollet Mall, BC-MN-H18T Minneapolis, MN 55402 Fax: (866) 904-7067 Email: Money.Center.Sales@usbank.com For safekeeping services: U.S. Bank National Association Safekeeping Department 12. Repurchase Transactions. Customer shall not effect any securities 800 Nicollet Mall, BC-MN-H18R transactions under this Agreement in the expectation of entering into a Minneapolis, MN 55402 repurchase transaction with Bank as counterparty unless Customer shall Fax: (612) 303-0202 first have executed and delivered to Bank a written master repurchase Email: Safekeeping@usbank.com agreement, in form and substance satisfactory to Bank, governing such 16. Terms and Conditions of Electronic Delivery. All notices, transactions. In any such transaction, where Bank is to hold securities as disclosures and communications (including Confirmations and other Page 43 (Effective 11/01/2021) Item 18: Staff Report Pg. 87 Packet Pg. 272 of 857 account information) from Bank may be delivered to Customer by electronic means (including, without limitation posting to a password - protected website) to the extent Customer elects to receive such information through electronic means, subject to the Terms and Conditions of Electronic Delivery set forth in Section VI.B below. Customer agrees that sending information in this manner will constitute good and effective delivery of the information to Customer, regardless of whether Customer actually accesses the website or other electronic medium containing the information. 17. No Investment or Tax Advice. Customer acknowledges that Bank's role is ministerial in nature and that Bank will not provide supervision, recommendations, or advice to Customer in connection with the investment, purchase, sale, retention, or other disposition of any securities or Money Center deposits, or the advisability or suitability of any product or transaction. Customer is responsible for evaluating the risks associated with such decisions. Customer acknowledges Bank is not an investment adviser, has no investment discretion, and will merely carry out instructions as directed by Customer. Bank's ability to determine interest rates on securities or Money Center deposits shall not be deemed to be discretion or advice. Customer further acknowledges that Bank will not provide advice to Customer regarding the tax implications associated with the investment, purchase, sale, retention, or other disposition of any securities or Money Center deposits. 18. ERISA. If assets of an employee benefit plan subject to the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), are intended to be deposited, invested or used by Customer in a transaction under this Section VI.A, Customer shall notify Bank prior to effecting such deposit, investment or transaction and will provide Bank with such additional information as Bank may reasonably request. Customer represents and warrants to Bank that any deposit, investment, or transaction pursuant to this Section VI.A shall not result in a "prohibited transaction" under ERISA or shall otherwise be exempt under ERISA, and Customer further agrees to indemnify and hold Bank harmless from any loss or claim arising therefrom. 19. No Representation or Warranty. Customer acknowledges and agrees that Bank makes no representation or warranty, express or implied, with respect to the validity, enforceability, collectability or investment quality of any securities bought or sold hereunder, or any deposits made or terminated hereunder. 20. Records; Account Statements; Taxes. Bank will maintain records of Customer's account and provide customer with a Confirmation for transactions in accordance with this Section VI.A and periodic account statements. Bank will also send to Customer such notices and reports as are required by law. Customer acknowledges and agrees that it is Customer's obligation to prepare and file all required tax returns and to pay all taxes due on any income that Bank collects for Customer. 21. Set Off. Bank has the right to apply funds in Customer's Money Center investment account or Settlement Account to any debt Customer owes Bank. A debt includes any fees, overdrafts, debts that now exist and debts that Customer may incur in the future, or Customer's obligations under a guaranty. When Bank sets off a debt Customer owes Bank, Bank reduces the funds in the Money Center investment account or Settlement Account by the amount of the debt. Bank is not required to give Customer any notice before exercising its right of setoff. Customer agrees to hold Bank harmless from any claim arising as the result of Bank's enforcement of its right of setoff against Customer's Money Center investment account or Settlement Account. This right of setoff is in addition to any security interest that Bank might have in Customer's Money Center investment account or Settlement Account. 22. Legal Process. Legal process includes any levy, garnishment or attachment, tax levy or withholding order, injunction, restraining order, subpoena, search warrant, government agency request for information, forfeiture or seizure, or any other legal process relating to Customer's Money Center investment account or Settlement Account. Bank may accept and act on any legal process Bank believes to be valid, whether the process is served in person, by mail, by electronic notification, or at a banking location. If Bank incurs any fees or expenses (including attorneys' Item 18 Attachment A - US Bank for General Banking fees and expenses) due to re Services ess related to Customer's Money Center investment account or Settlement Account, Bank may, in its sole discretion, charge these costs to any other deposit account Customer maintains with Bank. All legal process is subject to Bank's rights of setoff and security interest in Customer's Money Center investment account and/or Settlement Account. Page 44 (Effective 11/01/2021) Item 18: Staff Report Pg. 88 Packet Pg. 273 of 857 Item 18 Attachment A - US Bank for General Banking B. TERMS AND CONDITIONS OF ELECTRONIC DELIVERY The following sets forth the terms and conditions of use of Bank's electronic delivery and notification service (the "Electronic Delivery Service") in connection with account(s) with Bank's Money Center Department or Safekeeping Department. The Electronic Delivery Service described in this Section VI.B shall constitute an Internet Service as defined in Section III of this Agreement and shall be subject to the terms set forth therein, as well as any other agreements between Customer and Bank and any applicable laws or regulations. If there is a conflict between the terms and conditions set forth in this Section VI.B and the terms and conditions of any other section of this Agreement or any other agreement between Customer and Bank as they relate to the Electronic Delivery Service, the terms and conditions set forth herein will control. 1. Electronic Delivery of Account Communications. Customer may elect to receive Account Communications (defined below) related to Customer's account(s) electronically. All Account Communications will be delivered electronically by posting to Bank's password -protected website designated for Customer's account(s) or, at Bank's election, delivered via electronic mail to the email address provided by Customer to Bank. "Account Communications" include, without limitation, all current and future account statements, Confirmations, security notices, maturity notices, prospectuses, offering and disclosure documents, shareholder communications (such as quarterly, semi-annual and annual reports, proxy statements, etc.), regulatory communications and other information, documents, data, notices and records regarding Customer's account(s) with Bank. Bank may, from time to time, designate additional Account Communications that are then eligible for electronic delivery through the Electronic Delivery Service, the delivery of which will then be subject to these terms and conditions. From time to time, Bank may add to, modify or delete any feature of the Electronic Delivery Service or Account Communications eligible for delivery through the Electronic Delivery Service at its sole discretion. Customer acknowledges and agrees that by being enrolled in the Electronic Delivery Service, Customer will no longer receive Account Communications by mail that is otherwise available for delivery as part of the Electronic Delivery Service. 2. Accessing Account Communications. Bank will notify Customer via email when Account Communications are posted. Bank may also provide, in its sole and absolute discretion, Account Communications directly via email. Customer may access all Account Communications for at least thirty (30) days from the date of initial posting. Customer acknowledges and agrees that all Account Communications will be deemed to constitute good and effective delivery to Customer upon posting, regardless of whether Customer actually or timely receives or accesses the Account Information, or if Account Communications are delivered directly to Customer via email, when so delivered. 3. Changes in Delivery Method. Customer must notify Bank if it wishes to discontinue use of the Electronic Delivery Service. Following Bank's receipt of such notice and after Bank has a reasonable opportunity to act on such notice, Customer will thereafter begin to receive Account Communications via U.S. mail beginning with Customer's next statement cycle and/or mailed Confirmation. 4. Reporting Unauthorized Transactions or Erroneous Statements. Customer agrees to promptly and carefully review all Account Communications as and when delivered and notify Bank in accordance with this Agreement if Customer objects to any of the information provided. 5. Third -Party Services. Customer acknowledges and agrees that Customer's access to the Electronic Delivery Service and Customer's receipt of email notifications when Account Communications are posted may be delayed or prevented by factors affecting Customer's or Bank's Internet or telephone service provider(s) or other similar entities ("Third - Party Service Providers"). Bank makes no representations or warranties whatsoever with regard to the products and services offered by such Third - Party Service Providers and shall not be liable for any loss caused, in whole or in part, by a Third -Party Service Provider. 6. International Use. Bank makes no representations or warranties that any content or use of the Electronic Delivery Service is appropriate, legal or available in locations outside the United States. Customer acknowledges and agrees that ac, Services klivery Services from territories where its contents or use is illegal and is prohibited by Bank. If Customer accesses the Electronic Delivery Service from locations outside the United States, Customer does so at its own risk. Customer is responsible for compliance with local laws. 7. Proprietary Rights; Materials; Trademarks. All content included or available through the Electronic Delivery Service (other than Customer's account information), such as advertisements, tests, graphics, logos, button icons, images, audio clips and software, is the property of Bank and/or third parties and is protected by copyrights, trademarks or other intellectual property rights. The compilation (meaning the collection, arrangement and assembly) of all content on the Electronic Delivery Service is the exclusive property of Bank and/or its licensors and is protected by copyrights or other intellectual property rights. The trademarks, logos and service marks displayed on the Electronic Delivery Service (collectively, "Trademarks") are the registered and unregistered Trademarks of Bank or third parties. Under no circumstances may Customer use, copy, alter, modify or change these Trademarks. Nothing contained on the Electronic Delivery Service should be construed as granting by implication or otherwise any license or right to use any Trademark without the express written permission of Bank or the third party that has rights to such Trademark, as the case may be. Page 45 (Effective 11/01/2021) Item 18: Staff Report Pg. 89 Packet Pg. 274 of 857 Item 18 Attachment B - Elavon Elavon(City of Palo Alto, CA) Elavon - Master Services Agreement with Master Services 4 FINAL Agreement for Merchant Services ELAVON MASTER SERVICES AGREEMENT This Master Services Agreement ("Agreement") is between Elavon, Inc. ("Elavon") and the entity identified as Company in the signature block below ("Company"). The Agreement will be effective on the date in Elavon's signature block (the "Effective Date"). The Agreement consists of: ❑x This signature page, the General Terms and ® Schedule E — SAFE -T Terms; Conditions, and Appendix 1 — Definitions; ❑ Schedule F — Services in Canada; ❑D Schedule A — Fees; ❑ Schedule G — Services in Puerto Rico; ❑x Schedule B — Company Application ® Schedule H — Government Terms; ❑x Schedule C — Affiliated Entities ❑ Schedule I — Electronic Check Services Terms; and Schedule D — Processing Services Terms; Any other schedules and any applicable Statements of Work entered into under the Agreement. Agreed and accepted CITY OF PALO ALTO, CALIFORNIA, on behalf of itself and each Affiliated Entity ("Company"): By: Name: Title: Date: ELAVON By: Title: Effective Date: If Company is receiving Processing Services under Schedule D to the Agreement, the Member, as designated on the Company Application (attached as Schedule B), agrees to and accepts the Agreement. MEMBER By: Name: Title: Item 18: Staff Report Pg. 90 Packet Pg. 275 of 857 Item 18 Attachment B - Elavon 2 Elavon. (City of Palo Alto, CA) Elavon - Master Services Agreement with Master Services 4 FINAL GENERAL TERMS AND CONDITIONS Agreement for Merchant Services 1. Defined Terms. Capitalized terms used in the Agreement will have the meanings stated in Appendix I. 2. Scope of Agreement. The Agreement governs Company's receipt and use of the Services selected by Company in the Company Application. In addition to the terms of the Agreement, Company will comply with the general terms of the Operating Guide, any terms of the Operating Guide applicable to each selected Service, and any Documentation Elavon provides to Company in writing from time to time that is applicable to the Services. Affiliated Entities. Company's Affiliated Entities may use the Services so long as they comply with all restrictions, obligations, and requirements imposed on Company. Company will remain fully responsible for any use of the Services by any Affiliated Entities, will cause its Affiliated Entities to comply with the terms and conditions of the Agreement, and will be liable for the acts and omissions of each Affiliated Entity, in each case as though each Affiliated Entity were Company. Affiliated Entities may not enforce the terms of the Agreement against Elavon, but Company may enforce the terms on behalf of its Affiliated Entities. The parties may add Affiliated Entities to Schedule C after the Effective Date by substituting a new Schedule C that is in writing and signed by Company and Elavon. Company will promptly notify Elavon in writing if any entity on Schedule C no longer qualifies as an Affiliated Entity that Company allows to use the Services. For any acts or omissions of an Affiliated Entity giving rise to a termination right by Elavon under Section 4.2, Elavon may terminate the Agreement with respect to (i) only such breaching Affiliated Entity, or (ii) Company and all Affiliated Entities. If Elavon terminates the Agreement under Section 4.2 as to Company, the Agreement will terminate with respect to Company and all Affiliated Entities. 4. Term and Termination 4.1. Term. Unless terminated as provided below, the Agreement will remain in effect for the Initial Term stated in Schedule A. Thereafter, the Agreement will automatically renew for successive Renewal Terms as stated in Schedule A unless terminated as provided below. 4.2. Termination. (a) Non -Renewal. Either party may terminate the Agreement effective at the end of the Initial Term or any Renewal Term by providing written notice of non -renewal to the other party at least 90 days prior to the expiration of the then current Term. (b) By Either Party for Cause. (i) Either party may terminate the Agreement if any of the following conditions remain uncured 30 days after the terminating party notifies the other party in writing of the existence of the condition: (1) The other party has failed to pay the party an undisputed amount owed to the party under the Agreement; or (2) The other party has failed to perform a material obligation under the Agreement. (ii) Either party may terminate the Agreement immediately in writing if any of the following occur: (1) The commencement of a Bankruptcy Proceeding by or against the other party; (2) Any representation by the other party in Section 12 is false or misleading in any material respect as of the date made, or becomes false or misleading in any material respect at any time during the Term. (c) By Elavon for Cause. Elavon may terminate the Agreement immediately in writing if any of the following occur: (i) A material adverse change in Company's financial condition; (ii) Any Payment Network or application of Payment Network Regulations requires Elavon to terminate the Agreement or cease processing Transactions for Company; or Item 18: Staff Report Pg. 91 Packet Pg. 276 of 857 Item 18 Attachment B - Elavon 3 Elavon(City of Palo Alto, CA) Elavon - Master Services Agreement with Master Services 4 FINAL Agreement for Merchant (iii) Assignment of the Agreement or a Change of Control of Company with Services nsent. (d) Force Majeure. Company will have the termination right stated in Section 18.14 if a Force Majeure occurs. (e) Additional Termination Rights. If Company is receiving Processing Services, Elavon also will have the termination rights set out in Section 1.6 of Schedule D. 4.3. Account Closing. (a) Company acknowledges that closing Company's account with Elavon may take up to 30 days following Elavon's receipt of written notice of termination. (b) All obligations of a party regarding Transactions serviced prior to termination will survive termination. Company will maintain enough funds in the DDA following termination to cover all Chargebacks and returns (if Company is receiving Processing Services), adjustments, fees, fines, penalties, assessments and charges from the Payment Networks and other amounts due under the Agreement for at least 180 days after termination. 4.4. Early Termination Fee. If Company terminates the Agreement before the end of the Initial Term (except for termination for Elavon's uncured default as stated in Section 4.2(b), termination pursuant to Section 4.2(d), or as stated in Section 7), Company will immediately pay Elavon an Early Termination Fee. Company acknowledges that the Early Termination Fee is not a penalty, but rather a reasonable estimate of the damages Elavon sustained because of Company's termination of the Agreement before the end of the Initial Term. 4.5. Transition Assistance. (a) At Company's request, Elavon will, at no additional cost to Company and for up to 90 days beginning on the termination date of the Services (or such earlier date following notice of termination as may be requested by Company), provide Company with Elavon's standard assistance in transitioning the Services to another provider designated by Company. In connection therewith, subject to Section 4.5(b) and at Company's request, Elavon will continue to perform the Services for up to 90 days after the date of termination, and Company will continue to pay Elavon, in accordance with the Agreement during any such period. Each party will fully comply with all provisions of the Agreement during any such period. (b) Elavon will not be obligated to provide any post -termination Services (other than standard transition assistance) to Company under Section 4.5(a) if Elavon terminates the Agreement for cause under Sections 4.2(b), Oc), or 5. Authorized Users; Access; Security of Passwords and User IDs. 5.1. Company will be responsible for the distribution of all passwords and user IDs issued to any Authorized User and for maintaining the confidentiality and security of Authorized User's passwords and user IDs. Company will ensure that the access granted to each Authorized User to the Services is limited to only the access and information necessary for the Authorized User to perform his or her job functions on behalf of Company. Company will ensure that all Authorized Users will be trained and qualified to access and use the Services in accordance with the terms of the Agreement, the Operating Guide and any Documentation. Company is responsible for its Authorized Users' compliance with the terms of the Agreement, the Operating Guide, and the Documentation, for all acts or omissions of the Authorized Users, and for all use of any Authorized User's user ID and password other than by Elavon or Elavon's third -party contractors or use by third -parties of the user IDs and passwords obtained by such third parties from Elavon or Elavon's third -party contractors. 5.2. Company will not, and will ensure that its Authorized Users do not: (a) access or use the Services for any purposes other than for its own internal business purposes (except as authorized by Elavon) as disclosed to Elavon in writing; (b) modify, reverse engineer, disassemble or decompile any part of the Services or Elavon Materials; (c) knowingly transmit any data that contains software viruses, time bombs, worms, Trojan horses, spyware, disabling devices, malicious code, or other harmful or deleterious computer code, files or programs to or through the Services; Item 18: Staff Report Pg. 92 Packet Pg. 277 of 857 Item 18 Attachment B - Elavon Elavon, (City of Palo Alto, CA) Elavon - Master Services Agreement with Master Services 4 FINAL provided, that Company will use commercially reasonable measures (at least ind Agreement for Merchant en for the foregoing. Services (d) interfere with or disrupt the servers or networks connected to or providing the Services; (e) remove, change or obliterate the copyright, trademark or other proprietary protection legends or notices that appear in connection with access to and use of the Services or any Elavon Materials; or (f) copy, re -sell, republish, download, frame or transmit the Services or Elavon Materials, including in order to act as a consultant for any third party or, unless otherwise permitted under the Agreement, as a service bureau, outsourcing or application service provider for any third parties, or otherwise allow any third party to use or access the Services. 5.3. Company is responsible for changing the user IDs and passwords of its Authorized Users if it believes that any of those user IDs or passwords have been stolen or might otherwise be misused and for disabling any Authorized User's IDs and passwords promptly upon the termination of employment of such Authorized User or the cessation of such Authorized User's need to access the Services. Company will promptly notify Elavon if Company believes the Services or Elavon's databases have been compromised by use of a user ID or password associated with the Services. 6. Fees and Taxes. 6.1. Compensation. Company will compensate Elavon for all fees and other amounts due for the Services and Equipment in accordance with Schedule A, or as otherwise agreed upon in writing by Elavon and Company. Such amounts will be calculated and debited from the DDA (or, if applicable and Company is receiving Processing Services, the Reserve Account) once a month for the previous month's activity, or, if Company is receiving Processing Services, may be deducted from the funds due Company under the Agreement. 6.2. Change of Fees. Elavon will not amend the fees for the Services for the Initial Term except (i) as stated in Schedule A or (ii) to pass through to Company increases in interchange, assessments or charges, or increased or new fees imposed by a third party (including a Payment Network). 6.3. Other Amounts Owed. (a) In addition to the amounts described in Section 6.1 above, Company will promptly pay Elavon for: (i) Any fines, penalties, assessments, or charges (including those imposed by the Payment Networks as a result of Company's violation of Payment Network Regulations), attributable to the Agreement (other than those directly attributable to Elavon's acts or omissions); and (ii) if Company is receiving Processing Services, any Chargebacks, returns, adjustments and associated fees. Elavon may debit these amounts from Company's DDA (or, if applicable and Company is receiving Processing Services, the Reserve Account) by ACH, or, if Company is receiving Processing Services, offset these amounts from funds Elavon otherwise owes to Company. If such offset or ACH debit does not fully reimburse Elavon for the amount owed, Company will promptly pay Elavon such amount upon demand. (b) Elavon will charge interest on all uncollected amounts owed to Elavon that are more than 30 days past due at a rate no greater than the maximum rate of interest permitted under Laws. 6.4. Taxes. Company will pay all taxes and other charges imposed by any governmental authority on the Services and Equipment provided under the Agreement, excluding any taxes based on Elavon's property or net income. If Company is a tax-exempt entity, Company will provide Elavon with an appropriate certificate of tax exemption. 6.5. Demand Deposit Account. Company will establish and maintain one or more DDAs to facilitate payment of fees to Elavon. Company authorizes Elavon and its Affiliates that provide Services under the Agreement to initiate ACH credit and debit entries to the DDA in order to pay the fees and any other amounts that may be due by Company to Elavon under the Agreement, and Company authorizes its depository institution to grant Elavon access to any information or records regarding the DDA reasonably requested by Elavon to debit or credit the DDA and to otherwise exercise Elavon's rights under the Agreement with respect to the DDA. The foregoing authorizations will remain in effect throughout the Term and after termination of the Agreement until all of Company's payment obligations to Item 18: Staff Report Pg. 93 Packet Pg. 278 of 857 Item 18 Attachment B - Elavon 5 CIA) `^VO I L (City of Palo Alto, CA) Elavon - Master Services Agreement with Master Services 4 FINAL Elavon have been paid in full. Elavon has the right to rely on written instructions su Agreement for Merchant requesting changes to the DDA. If Company changes the DDA, the ACH authorizations establi Services ment will apply to the new account, and Company will provide Elavon such information regarding the new DDA as Elavon deems necessary to effect debits from or credits to the DDA as provided under the Agreement. It may take Elavon up to 10 business days after Elavon's receipt of a written notice from Company to reflect in Elavon's system any change to Company's DDA. 7. Modifications and Discontinuance of Services. Elavon may modify the Services or particular components of the Services from time to time and will use commercially reasonable efforts to notify Company of any material modifications. If Elavon ceases to make a Service selected by Company generally available to its merchant customers (a "Discontinued Service"), Elavon may cease providing such Discontinued Service to Company upon 180 days' advance written notice. If discontinuing the Discontinued Service or making a modification to the Services has a material negative impact on Company, Company may terminate the Agreement without any obligation to pay the Early Termination Fee by notifying Elavon in writing within 60 days of Company's receipt of Elavon's notice of the Discontinued Service or modification. If Company does not terminate the Agreement within such 60 -day period, the Agreement will continue in full force and effect without the Discontinued Service or with the material modification, as applicable. Elavon will not be liable to Company or to any third party for any modification or discontinuance of the Services as described in this Section 7. Company may request transition assistance from Elavon under Section 4.5 for any Discontinued Service. 8. Compliance with Laws and Payment Network Regulations. 8.1. General. Elavon and Company will comply with all Laws and Payment Network Regulations applicable to the selected Services. 8.2. Office of Foreign Assets Control Compliance. Company acknowledges that Elavon is an entity governed by the Laws of the United States of America and as such, cannot provide any products or services to Company or its Customers that contravene the Laws of the United States of America, including the Laws promulgated by the Office of Foreign Assets Control (OFAC) or the United States Department of the Treasury or any successor thereto. 8.3. Export Laws Compliance. Company will comply with all United States export Laws governing the export and re- export of hardware, software or technology applicable to the Services and Equipment, including United States Department of State International Traffic In Arms Regulations (ITAR), United States Foreign Corrupt Practices Act, United States Commerce Department's Export Administration Regulations, OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, and Laws promulgated by OFAC or the United States Department of the Treasury or any successor thereto. Company will not, and will not request Elavon to, export, directly or indirectly, any technical data pursuant to the Agreement or any product using any such data to any country for which the United States Government or any agency thereof at the time of export requires an export license or other governmental approval without first obtaining such license or approval. 8.4. Customer Identification. To help the United States Government fight the funding of terrorism and money laundering activities, federal law requires financial institutions and their affiliates to obtain, verify, and record information that identifies each person who opens an account. Accordingly, Company will provide certain information and identifying documents requested by Elavon to allow Elavon to identify Company. 9. Confidentiality; Data Security and Use. 9.1. Confidentiality. (a) Confidential Information Generally. Each party will protect the other party's Confidential Information from unauthorized disclosure, publication, or dissemination with the same standard of care and discretion it employs with similar information of its own, but in no event less than reasonable care, and will not use, reproduce, distribute, disclose, or otherwise disseminate the other party's Confidential Information except in connection with the performance of its obligations or rights under the Agreement. The Receiving Party acknowledges that any breach of this Section 9.1 by the Receiving Party may result in irreparable harm to the Disclosing Party for which monetary damages may not provide a sufficient remedy. Therefore, the Disclosing Party may seek both monetary damages and equitable relief with respect to any such breach without any obligation to post bond. (b) Disclosure of Confidential Information. If the Receiving Party or its agents become legally required or compelled (by applicable public records laws, any publicly filed and noticed deposition, interrogatory, request Item 18: Staff Report Pg. 94 Packet Pg. 279 of 857 Item 18 Attachment B - Elavon 6 Elavo na (City of Palo Alto, CA) Elavon - Master Services Agreement with Master Services 4 FINAL for documents, civil subpoena, civil investigative demand or by any similar pr Agreement for Merchant nistrative order) to disclose Confidential Information, then the Receiving Party if permit Services isclosing Party with prompt prior written notice of such legal requirement so that the Disclosing Party may seek a protective order or other appropriate remedy. If the Disclosing Party does not obtain a protective order or other remedy, the Receiving Party agrees to disclose only that portion of the Confidential Information which the Receiving Party is legally required to disclose and to use reasonable efforts to obtain assurances that confidential treatment will be accorded such Confidential Information. Neither party will be obligated to notify the other of the receipt of any non-public or confidential investigative demand, summons, or grand jury subpoena or other similar process that requires confidentiality on the part of the applicable party. (c) Duration of Obligations. The non -disclosure obligations in this Section 9.1 will continue (i) with respect to Confidential Information that does not constitute a trade secret, for three years following termination, and (ii) with respect to Confidential Information that is a trade secret under Laws, for the longer of three years after termination and such period as the information retains its status as a trade secret under Laws. (d) Obligations on Termination. At the request of the Disclosing Party upon the termination of the Agreement, the Receiving Party will promptly delete or return to the Disclosing Party all originals and copies containing or reflecting any Confidential Information of the Disclosing Party (other than those required to be retained by Law, or that would be unreasonably burdensome to destroy, such as archived computer records). If a dispute arises between the parties in relation to the Confidential Information or the Agreement, the Receiving Party may retain a copy of such Confidential Information as the Receiving Party reasonably determines is necessary for its defense of the dispute. In all cases, any retained Confidential Information will continue to be subject to the terms of the Agreement. 9.2. Data Security and Use. (a) Security Programs Compliance. Elavon and Company will each comply with the applicable requirements of the Security Programs. (b) PCI-DSS Compliance. Elavon will undergo an annual assessment of its compliance with the PCI-DSS. Company may review Elavon's current PCI-DSS compliance status on the Payment Network websites as available. (c) Elavon Data Breach. If Elavon suffers an Elavon Data Breach, then it will comply with all Laws and Payment Network Regulations with respect to such Elavon Data Breach, including providing the required reporting and forensic audits to the Payment Networks, and, unless prohibited by law enforcement or the Payment Networks, will inform Company of such Elavon Data Breach. Elavon will not pass -through or require Company to be liable to Elavon for any fees, fines, penalties, assessments, or charges levied against Elavon by the Payment Networks in connection with an Elavon Data Breach. (d) Cardholder Data and Transaction Information. (i) Elavon and Company will ensure the security of Cardholder Data and Transaction Information in accordance with all Laws and Payment Network Regulations. In accordance therewith, each of Elavon and Company will maintain reasonable and appropriate administrative, physical, and technical safeguards designed to (i) maintain the security and confidentiality of Cardholder Data, Transaction Information, and Confidential Information; (ii) protect such information against anticipated threats or hazards to its security or integrity; and (iii) prevent unauthorized access, use, or exfiltration of such information in violation of applicable Laws. Elavon and Company will retain Cardholder Data and Transaction Information for the duration required by Laws and the Payment Network Regulations and thereafter will destroy, in a manner that will render the information unreadable, all such information that is no longer necessary or appropriate to maintain for ordinary business purposes. (ii) Company will not disclose Cardholder Data to any third party, except to a Service Provider, unless required by Laws or the Payment Network Regulations. Company will not retain or store magnetic stripe or CVV2/CVC2/CID data after authorization for any purpose. After authorization, Company will retain only the Customer account number, name, and card expiration date if Company has a reasonable business purpose to retain such information and is otherwise in compliance with the Agreement. If there is a failure Item 18: Staff Report Pg. 95 Packet Pg. 280 of 857 Item 18 Attachment B - Elavon I7 Elavon. (City of Palo Alto, CA) Elavon - Master Services Agreement with Master Services 4 FINAL or other suspension of Company's business operations, including any Ba Agreement for Merchant ICompany will not sell, transfer, or disclose Cardholder Data to third parties, an Services eturn this information to Elavon, or (b) provide acceptable proof of destruction of this information to Elavon. (iii) Elavon acknowledges that Company may collect information about Company's Customers as part of a Company sales transaction (e.g., price paid, time, store identifier, SKU information) regardless of the Customer's payment type and not in connection with the Services, and that the Agreement does not restrict Company's retention, use or disclosure of such information even though some of that information may overlap with elements of Transaction Information. (iv) Notwithstanding anything in Section 9.1, to the extent permitted by Law, any Cardholder Data, Transaction Information, and information regarding Company, its principals, or Affiliates included on the Company Application or that Elavon otherwise obtains in connection with the Agreement may be: (1) Used by Elavon and its Affiliates, third -party contractors, agents, and referral partners (a) to provide the Services and related functions to Company and to respond to any further application for Services, (b) for administrative purposes and to maintain Company's account pursuant to the Agreement, and (c) for Elavon's internal fraud and compliance monitoring; (2) Disclosed and shared by Elavon for reporting purposes to credit rating agencies and to the financial institution where the DDA is maintained; (3) Used to enhance or improve Elavon's products or services generally; (4) Used or disclosed by Elavon in the course of any sale, reorganization or other change to Elavon's business, subject to appropriate confidentiality agreements; (5) Collected, used and disclosed by Elavon as required by Laws (e.g., for tax reporting or in response to a subpoena); and (6) Retained for such periods of time as Elavon requires to perform its obligations and exercise its rights under the Agreement. Elavon may prepare, use, and share with third parties, aggregated, non -personally identifiable information derived from Transaction Information (so long as such information cannot be identified to Company) that is combined with similar information from all of or specific segments of Elavon's other customers. 10. Assessment and Audit 10.1. Elavon Reports on Internal Controls. Elavon will engage independent, qualified, external auditors (the "Elavon Auditors") to assess the internal controls and information security measures in place related to the Services ("Internal Controls Assessment"). The scope of the Internal Controls Assessment will conform with Laws, applicable Card Brand Regulations and industry standards, including generally accepted auditing standards such as the Statement on Standards for Attestation Engagements No. 18 "Attestation Standards: Clarification and Recodification" issued by the Auditing Standards Board of the American Institute of Certified Public Accountants. The frequency of the Internal Controls Assessment will be consistent with industry standards. Elavon will provide copies of its SOC 1 and SOC 2 reports to Company upon request, subject to Company's compliance with Elavon's confidentiality requirements applicable to the receipt of such reports. 10.2. Company Audit. If Elavon reasonably suspects that it is subject to a financial or reputational risk due to Company's acts or omissions, Company authorizes Elavon and its agents to perform an audit or inspection of Company's operations and records to confirm Company's compliance with the Agreement upon reasonable advance notice, during normal business hours, and at Elavon's expense (unless Elavon reasonably determines based on such audit that Company is not in compliance with the Agreement, in which case Company will bear the cost). Company will maintain complete and accurate records of its performance under the Agreement. Company will execute and deliver to Elavon all documents Elavon reasonably deems necessary to verify Company's compliance with Section 8.1. Item 18: Staff Report Pg. 96 Packet Pg. 281 of 857 Item 18 ,...7t1) Attachment B - Elavon 8 EI avo no (City of Palo Alto, CA) Elavon - Master Services Agreement with Master Services 4 FINAL 11. Proprietary Rights. As between Elavon and Company, Elavon retains all right, title and Agreement for Merchant Services, Elavon Materials, Updates, and all Intellectual Property Rights in any of the foregoing. Services quire any ownership interest or license rights (except such rights as are expressly stated in the Agreement (including the Operating Guide)) in or to the Services, Elavon Materials, Updates, or Intellectual Property Rights in any of the foregoing. The rights granted to Company under the Agreement are non-exclusive and nothing in the Agreement will limit the ability of Elavon to market, sell, offer for sale, license or otherwise exploit the Services, Elavon Materials, Updates, or Intellectual Property Rights in any of the foregoing to any third parties or to appoint or authorize any other person or entity to do the same. 12. Representations and Disclaimers 12.1. Elavon Representations. Elavon represents to Company the following as of the Effective Date: (a) Organization. Elavon is a corporation validly existing and duly organized under the laws of the state of Georgia with all authority, qualifications, licenses and registrations necessary to conduct its business, in all jurisdictions where Elavon conducts business, in compliance with all Laws and Payment Network Regulations. (b) Authority and Power. Elavon has the power to execute and perform the Agreement. The person executing the Agreement is duly authorized to bind Elavon to all provisions of the Agreement and such person is authorized to execute any document and to take any action on Elavon's behalf which may be required to carry out the Agreement. Further, the signing and performing in accordance with the Agreement will not violate any Laws or conflict with any other agreement to which Elavon is subject. (c) No Litigation. There is no action, suit, or proceeding pending or, to Elavon's knowledge, threatened, which if decided adversely would impair Elavon's ability to carry on its business substantially as now conducted or which would materially and adversely affect Elavon's financial condition or operations. 12.2. Company Representations. Company represents to Elavon the following as of the Effective Date: (a) Organization and Information. Company is validly existing and duly organized under the laws of the jurisdiction in which it was formed with all authority, qualifications, licenses and registrations necessary to conduct its business, in all jurisdictions where Company conducts business, in compliance with all Laws and Payment Network Regulations. All written information provided in the Company Application, the bid process, and enrollment forms, as applicable, and in the assumptions in Schedule A or any other document submitted to Elavon is true and complete and properly reflects the business, financial condition and ownership of Company in all material respects. (b) Authority and Power. Company has the power to execute and perform the Agreement. The person executing the Agreement is duly authorized to bind Company and each Affiliated Entity to all provisions of the Agreement as if each Affiliated Entity had executed the Agreement, and such person is authorized to execute any document and to take any action on behalf of Company that Elavon requires to carry out the Agreement. Further, the signing and performing in accordance with the Agreement will not violate any Laws or conflict with any other agreement to which Company is subject. (c) No Litigation. There is no action, suit, or proceeding pending or, to Company's knowledge, threatened, which if decided adversely would impair Company's ability to carry on its business substantially as now conducted or which would materially and adversely affect Company's financial condition or operations. (d) Business Use. Company is obtaining and using the Services from Elavon to facilitate lawful business Transactions between Company and its Customers, and using the DDA only for lawful business purposes. 12.3. Disclaimer of Warranties. EXCEPT AS OTHERWISE EXPRESSLY STATED IN THE AGREEMENT, THE SERVICES AND ELAVON MATERIALS ARE PROVIDED "AS IS," AND ELAVON DISCLAIMS ALL OTHER WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, REGARDING THE SERVICES, ELAVON MATERIALS, EQUIPMENT, SOFTWARE, DOCUMENTATION, AND COMPANY'S USE OF THIRD PARTY SERVICES, EQUIPMENT, SOFTWARE, OR DATA IN CONNECTION WITH THE SERVICES, INCLUDING THE IMPLIED WARRANTIES OF MERCHANTABILITY, ACCURACY, SATISFACTORY QUALITY, TITLE, SECURITY, NONINFRINGEMENT, UNINTERRUPTED OR ERROR -FREE USE, AND FITNESS FOR A PARTICULAR PURPOSE, AND ANY IMPLIED WARRANTY ARISING FROM COURSE OF PERFORMANCE, COURSE OF DEALING, USAGE OR TRADE. Item 18: Staff Report Pg. 97 Packet Pg. 282 of 857 Item 18 Attachment B - Elavon Elavo no (City of Palo Alto, CA) Elavon - Master Services Agreement with Master Services 4 FINAL Agreement for Merchant 12.4. No Viruses, Etc. Elavon will not code or insert into any portion of the Services, and v& Services Jeasonable efforts to ensure that no Service will otherwise contain, any computer virus, worm, software lock, drop dead device, Trojan - horse routine, trap door, time bomb or any other malicious codes or instructions that may be used to access, modify, delete, damage or disable the Services or Company's or any third party's software, firmware, computer system or devices. 13. Indemnification 13.1. By Elavon. Elavon will indemnify and defend Company, its Affiliates, and their respective employees, officers, directors, and agents against losses, damages, liabilities, fines, judgements and expenses (including all reasonable attorneys' fees) (collectively, "Losses") in connection with claims, actions, demands or proceedings (made or threatened) brought by a third -party ("Claims") arising out of (a) Elavon's breach of the Agreement; (b) Elavon's or its third party contractors' gross negligence or willful misconduct; (c) Elavon's or its third party contractors' violation of Laws or Payment Network Regulations; (d) subject to Section 13.5, Elavon's alleged infringement or other violation of a United States or Canada patent, copyright or trademark of a third party by the Services (but not Equipment) in the form delivered or Company's use thereof (an "Infringement Claim"); or (e) any personal injury or real or tangible personal property damage to the extent caused by Elavon or its third party contractors. 13.2. By Company. Company will indemnify and defend Elavon, its Affiliates, and their respective employees, officers, directors, and agents against Losses in connection with Claims arising out of (a) any goods or services sold by Company resulting in a Transaction processed under the Agreement; (b) Company's breach of the Agreement; (c) all use of any user ID and password other than by Elavon or Elavon's third -party contractors; (d) Company's or its Service Providers' gross negligence or willful misconduct; (e) Company's or its Service Providers' violation of Laws or Payment Network Regulations; or (f) any personal injury or real or tangible personal property damage to the extent caused by Company or its Service Providers. 13.3. Exceptions. The indemnifying party is not required to indemnify the indemnified party for Losses to the extent caused by or resulting from the negligence, gross negligence or willful misconduct of, or breach of the Agreement by, the indemnified party. 13.4. Procedure. (a) If a Claim is subject to indemnification under the Agreement, the indemnified party will: (i) Provide the other party prompt notice of the Claim (provided that any delay in notification will not relieve the indemnifying party of its obligations under this Section 13 except to the extent that the delay materially impairs its ability to fully defend the Claim); (ii) Subject to Section 13.4(b), give the indemnifying party the right to exercise exclusive control over the preparation and defense of the Claim, including appeals, negotiations and any settlement or compromise thereof, provided that the indemnifying party will notify the indemnified party in writing of its election regarding the assumption of control of the preparation and defense of such Claim within 15 days following receipt of the indemnified party's written notice of such Claim, but, in any event, no later than 10 days before the date on which any written response to a complaint, summons, or other legal filing is due; and (iii) Provide such assistance in connection with the defense and settlement of the Claim as the indemnifying party may reasonably request, at the indemnifying party's expense. The indemnifying party will not enter into any settlement that imposes any liability or obligation on the indemnified party, or contains any admission or acknowledgement of wrongdoing (whether in tort or otherwise), without the indemnified party's prior written consent. (b) The indemnified party may join in the defense, with its own counsel, at its own expense. 13.5. Infringement Claims. (a) If any part of the Services or the use of the Services becomes, or in Elavon's opinion is likely to become, the subject of an Infringement Claim, and as a result of such Infringement Claim Company's use of the Services may be enjoined or interfered with, then Elavon will, at its option and expense, either, and in addition to Item 18: Staff Report Pg. 98 Packet Pg. 283 of 857 Item 18 Attachment B - Elavon 10 Elavon. (City of Palo Alto, CA) Elavon - Master Services Agreement with Master Services 4 FINAL defending Company and paying the final amount of Losses as provided for in Agreement for Merchant ia license for Company to continue using the alleged infringing components of the Sek Services Jie alleged infringing components of the Services to avoid the infringement in a manner that still permits the Services to perform in all material respects in accordance with the Agreement; or (iii) replace the alleged infringing components of the Services with compatible, functionally equivalent, and non -infringing components. Elavon will use commercially reasonable efforts to accomplish the remedies identified in this section in a manner that minimizes the disruption to Company's business operations. If Elavon is not able to accomplish the above remedies within a commercially reasonable time frame and on commercially reasonable terms, Elavon may terminate the Agreement upon written notice to Company. Upon such termination, Elavon will promptly refund any fees paid for Services not performed as of the date of termination. (b) Elavon will have no liability for any Infringement Claim to the extent caused by (i) access to or use of the Services other than as specified under the Agreement and the related Documentation, (ii) combination or use of the Services with non-Elavon products or services (whether or not provided to Company by Elavon), (iii) any hardware, devices, software, services or other resources not provided by Elavon, (iv) failure or refusal by Company to install, implement or use any Update or correction provided by Elavon, (v) modification or alteration of the Services by anyone other than Elavon without Elavon's prior written consent, or (vi) Company's goods or services. (c) THIS SECTION 13.5 SETS FORTH THE EXCLUSIVE REMEDY OF COMPANY AND THE SOLE AND COMPLETE LIABILITY OF ELAVON WITH RESPECT TO ANY INFRINGEMENT CLAIMS. 14. Limitation of Liability. 14.1. Excluded Damages. Neither party or its agents, officers, directors, or employees will be liable to the other party for indirect, exemplary, punitive, special, or consequential damages in connection with the Agreement under any theory of law or equity (whether in contract, tort, negligence, strict liability, by statute, or otherwise). 14.2. General Limitation. Company acknowledges that fees for the Services are very small in relation to the funds conditionally credited to Company for Transactions, and, consequently, Elavon's willingness to provide these Services is based on the liability limitations contained in the Agreement. Therefore, Elavon's aggregate liability for any Losses, regardless of the form of action, arising out of the Agreement or Elavon's performance or non-performance of Services under any theory of law or equity (whether in contract, tort, negligence, strict liability, by statute, or otherwise), will not exceed, in the aggregate, an amount equal to the greater of (a) the sum of fees paid by Company to Elavon during the twelve months immediately preceding the event giving rise to the Losses, exclusive of fees and variable costs incurred by Elavon to process Transactions such as interchange costs, assessments, charges, and fees imposed by a third party, and (b) one hundred thousand dollars ($100,000). The foregoing limitation will not apply to (i) Losses arising out of Elavon's breach of its confidentiality obligations in Section 9.1 or subject to Elavon's indemnification obligations in Section 13.1 (excluding in each case a Data Breach, which is subject to Section 14.3), or (ii) Losses arising out of Elavon's gross negligence, willful misconduct, or fraud. 14.3. Data Breach Limitation. Notwithstanding the limitations set forth in Section 14.2 and the disclaimers in Section 14.1, Elavon will be liable to Company for Company's documented and incurred Elavon Data Breach Losses, up to an aggregate amount not to exceed the greater of (a) the sum of fees paid by Company to Elavon during the twelve months immediately preceding the event giving rise to the Losses, exclusive of fees and variable costs incurred by Elavon to process Transactions such as interchange costs, assessments, charges, and fees imposed by a third party, and (b) one hundred thousand dollars ($100,000). The foregoing limitation will not apply to Losses arising out of Elavon's gross negligence, willful misconduct, or fraud. NOTWITHSTANDING ANYTHING IN THE AGREEMENT TO THE CONTRARY, SECTION 9.2(c) AND THIS SECTION 14.3 SET FORTH COMPANY'S EXCLUSIVE REMEDY AND THE SOLE AND COMPLETE LIABILITY OF ELAVON WITH RESPECT TO DAMAGES, PENALTIES, COSTS, EXPENSES, OR LOSSES ARISING FROM A DATA BREACH. 15. Purchased Equipment. Elavon will ship to Company the Purchased Equipment described in Schedule A. any Statement of Work, additional application, setup, or order forms, or any addenda or schedules mutually agreed upon in writing by Elavon and Company for the purchase price stated thereon. Company has no right to cancel an order for Purchased Equipment. Unless otherwise agreed by the parties, Company will be responsible for all shipping costs, insurance, import and export duties and similar taxes and amounts. Item 18: Staff Report Pg. 99 Packet Pg. 284 of 857 10 Item 18 Attachment B - Elavon 11 EI avo n. (City of Palo Alto, CA) Elavon - Master Services Agreement with Master Services 4 FINAL 16. Third -Party Vendors. Agreement for Merchant Services 16.1. Company Service Providers and Company Resources. (a) Company may want to use a Service Provider to assist with Transactions. Company will cause each Service Provider and applicable Company Resource to undergo testing, approval and certification by Elavon before Company uses such Service Provider or applicable Company Resource in connection with accessing or using the Services. Company will ensure that each Service Provider or applicable Company Resource maintains certification and compatibility with the Services and that each Service Provider and applicable Company Resource is fully compliant with all Laws, Payment Network Regulations, and Security Programs. Failure of Company's systems, including Company's point -of -sale system or property management system, or any Service Provider systems to maintain certification under this section or to be compatible and function with the most recent version of the Services will excuse Elavon from all liability and all of its obligations under the Agreement to the extent that Elavon's provision of the Services is impaired by such failure. (b) Company is responsible for any violations of the Agreement that result from the acts or omissions of Company's Service Providers and any other person who obtains access to Transaction Information from Company or access to systems under Company's or Service Provider's control (excluding acts or omissions to the extent attributable to Elavon's breach of the Agreement, gross negligence, or willful misconduct). (c) Elavon is not responsible for Service Providers or for the products or services offered by Service Providers, nor is it responsible for any Transaction until Elavon receives complete data for the Transaction in the format required by Elavon. (d) Elavon may terminate a Service Provider's access to or ability to integrate with Elavon's products, services, and systems immediately if the termination results from: (i) The Service Provider's breach of any Laws or Payment Network Regulations, (ii) The requirement of any court order or Payment Network or application of Payment Network Regulations to the Services, (iii) Elavon's reasonable determination that the Service Provider poses an unacceptable security risk to Elavon, Company or any Payment Network, or (iv) The Service Provider's failure to maintain certification to Elavon or the expiration or termination of any agreement between Elavon and the Service Provider specific to certification to Elavon with respect to the Services. 16.2. Liability for Direct Agreement with Third Party. Elavon has no responsibility for, and will have no liability to Company in connection with, any hardware, software or services Company receives subject to a direct agreement (including any sale, warranty or end -user license agreement) between Company and a third party, including any Service Provider, even if Elavon collects fees or other amounts from Company with respect to such hardware, software or services (and such third party will not be considered a third party contractor of Elavon). Therefore, Company will be responsible and liable for the failure of any such hardware, software or services (including payment terminals) to comply with Laws, Payment Network Regulations, or this Agreement, or to function correctly. 16.3. Elavon Third -Party Contractors. Elavon may use third -party contractors in connection with the performance of its obligations under the Agreement. Elavon will be responsible for the performance of its obligations hereunder notwithstanding any use of or delegation of any responsibility to any Elavon third -party contractor. Elavon is responsible for any violations of the Agreement that result from the acts or omissions of its third -party contractors. 17. Professional Services. 17.1. Elavon will provide the Professional Services to Company as mutually agreed upon by the parties in a Statement of Work. Each executed Statement of Work will be deemed incorporated into the Agreement and will identify in reasonable detail the Professional Services that Elavon will perform, including: (a) the specific deliverables and services to be provided by Elavon; (b) any responsibilities of the parties in addition to those in the Agreement; (c) the fees and costs that Company is responsible for under the Statement of Work; and (d) any payment terms that are Item 18: Staff Report Pg. 100 Packet Pg. 285 of 857 11 Item 18 Attachment B - Elavon 12 Elavon. (City of Palo Alto, CA) Elavon - Master Services Agreement with Master Services 4 FINAL different from or in addition to the payment terms in the Agreement. As between El Agreement for Merchant avon will own all improvements to the Services made by or on behalf of Company that arise ou Services ervices. 17.2. Elavon will perform the Professional Services in a workmanlike manner. Company will notify Elavon of any failure to so perform within 15 days following the completion of the applicable Professional Services. Elavon's entire liability and Company's sole remedy for Elavon's failure to so perform will be for Elavon to, at its option, (a) use reasonable efforts to correct such failure, or (b) terminate the applicable Statement of Work and refund the portion of any fees received that corresponds to such failure to perform. 17.3. Company will (a) provide sufficient, qualified, knowledgeable personnel capable of (i) making timely decisions necessary to allow Elavon to perform the Professional Services, and (ii) participating in the project and assisting Elavon in rendering the Professional Services; (b) if applicable, provide Elavon with reasonable access to Company's facilities during Company's normal business hours and otherwise as Elavon reasonably requests to enable Elavon to perform the Professional Services; (c) provide Elavon with working space and any other services and materials which may reasonably be necessary in connection with the performance of the Professional Services; and (d) perform such other duties and tasks as Elavon reasonably requests to facilitate Elavon's performance of the Professional Services. Company acknowledges that: (x) Elavon's ability to perform the Professional Services is conditioned upon Company's timely performance of Company's obligations and (y) the performance of these Company obligations is material to Elavon's ability to commence and proceed with the Professional Services. 18. General Provisions. 18.1. Entire Agreement. The Agreement (including the Operating Guide, all appendices, schedules, attachments, exhibits, addenda and other documents incorporated by reference) and any amendment or supplement to it, constitutes the entire agreement between the parties, and all prior or other agreements, written or oral, are superseded by the Agreement. If a conflict exists between the documents comprising the Agreement, the following order of priority will apply: (a) Any schedules mutually agreed upon by the parties, with respect to the subject matter thereof; (b) General Terms and Conditions and the Appendices; (c) The Operating Guide; (d) Any signed Statement of Work; and (e) Any Documentation provided to Company in writing by Elavon. 18.2. Jurisdiction and Venue; Governing Law. All matters arising out of or related to the Agreement will be governed by and construed in accordance with the laws of the State of California, without giving effect to its conflict of laws provisions. 18.3. Exclusivity. During the Term, Company will not enter into an agreement with any other entity for services similar to those Services Company has elected to receive from Elavon under the Agreement without Elavon's written consent. 18.4. Construction. The headings used in the Agreement are inserted for convenience only and will not affect the interpretation of any provision. Each provision is to be construed as if the parties drafted it jointly. The word "day" will mean "calendar day", unless specifically stated otherwise. 18.5. Assignability. Company will not assign the Agreement, directly, by operation of law, or by Change of Control of Company, without Elavon's prior written consent. If Company nevertheless assigns the Agreement without Elavon's consent, the Agreement will be binding on both the assignee and Company. Elavon will not transfer or assign the Agreement without Company's prior written consent, except for (i) an assignment or delegation to an Affiliate of Elavon, or (ii) an assignment or delegation to any entity into or with which Elavon will merge or consolidate, or who may acquire substantially all of Elavon's stock or assets. 18.6. Notices. Unless otherwise specified, except for routine operational communications (including account modification, chargeback, and hold notices), which may be delivered personally or transmitted by electronic mail, all notices to the Item 18: Staff Report Pg. 101 Packet Pg. 286 of 857 12 Item 18 Attachment B - Elavon 13 A) EI V `^O I L (City of Palo Alto, CA) Elavon - Master Services Agreement with Master Services 4 FINAL other party will be deemed received upon the earlier of (a) actual receipt, (b) five bus Agreement for Merchant deposited in the United States mail, return receipt requested, or (c) two business days after b& Services Jnationally recognized overnight carrier. Such notices will be addressed to Company's address on the Company Application or the last address shown on Elavon's records, or to Elavon at 7300 Chapman Highway, Knoxville, Tennessee 37920, with a copy to Two Concourse Parkway, Suite 800, Atlanta, GA 30328, Attn: General Counsel, or such other addresses as Elavon may designate in writing. 18.7. Bankruptcy. Company will immediately notify Elavon of any Bankruptcy Proceeding initiated by or against Company. Company will include Elavon on the list and matrix of creditors as filed with the bankruptcy court, whether or not a claim may exist at the time of filing. Company acknowledges that the Agreement constitutes an executory contract for financial accommodations to, or for the benefit of Company, and, as such, cannot be assumed or assigned in the event of Company's bankruptcy. Company will be responsible to Elavon for any damages suffered by, and expenses incurred by, Elavon due to a Company Bankruptcy Proceeding. 18.8. Telephone Recording. For quality assurance and training purposes, Company authorizes Elavon to monitor and record customer service telephone conversations at any time, subject to Laws and applicable disclosures if required. 18.9. Amendments. Except as otherwise stated in the Agreement (including in Section 6.2), amendments to the Agreement will be in writing and signed by the parties. Notwithstanding the foregoing, Elavon may amend or modify the Agreement, to the extent such changes are required by changes in Laws or the Payment Network Regulations, upon written notice to Company. Elavon will inform Company of such a change in the Payment Network Regulations or Laws in a periodic statement or other written notice, and such change will become effective at least 30 days after the issuance of the statement or notice. 18.10. Severability and Waiver. If any provision of the Agreement is found to be invalid, illegal or otherwise unenforceable by a court of competent jurisdiction, the validity, legality and enforceability of the remaining provisions of the Agreement will not in any way be affected or impaired thereby. None of the failure to exercise, the delay by any party to exercise, or the partial exercise of any right under the Agreement will operate as a waiver or estoppel of such right, nor will such amend the Agreement. All waivers requested by a party must be signed by the waiving party. 18.11. Independent Contractors. Elavon and Company will be deemed independent contractors and no one will be considered an agent, joint venturer, or partner of the other, unless and to the extent otherwise specifically stated in the Agreement. The Agreement has been entered into solely for the benefit of the parties to the Agreement and is not intended to create an interest in any third party except where explicitly stated otherwise. 18.12. Survival. All of the obligations of each party that by their nature should survive termination or expiration of the Agreement in order to achieve its purposes, including Sections 3, 4.3, 4.4, 4.5, 5, 6, 8, 9, 12, 13, 14, 16, 18.2, and 18.12, will survive and remain binding upon and for the benefit of the parties. 18.13. Counterparts; Electronic Delivery. The Agreement may be signed in one or more counterparts, each of which will constitute an original and all of which, taken together, will constitute one and the same agreement. Signed counterparts may be delivered by fax or electronic means (e.g., .pdf documents via e-mail), and will constitute signed originals. 18.14.Force Majeure. Neither party will be considered in default in performance of its obligations to the extent such performance is delayed by Force Majeure affecting such party's ability to perform. A "Force Majeure" means an act of God, natural disaster, pandemic, war, act of terrorism, civil disturbance, action by governmental entity, strike, and other cause beyond such party's reasonable control. If a Force Majeure interrupts Elavon's provision of any Services, Company will continue to pay Elavon the fees for the Services owed under the Agreement and Elavon will make all reasonable efforts to restore such Services. If the delay caused by the Force Majeure continues for a more than 14 days, then Company may, upon notice to Elavon, as its sole and exclusive remedy, abate payment to Elavon (to the extent Services are not performed) and terminate the Agreement. 18.15.Business Continuity. Elavon will maintain and adhere to business continuity plans that are commercially reasonable within the industry for the Services. 18.16.Tribal Governments. If Company qualifies as a federally recognized or acknowledged tribal government or an instrumentality thereof, then Company expressly and irrevocably provides a limited waiver of its sovereign immunity (and any defense based thereon) from any suit, action or proceeding or from any legal process (whether through service Item 18: Staff Report Pg. 102 Packet Pg. 287 of 857 13 A) Item 18 Attachment B - Elavon `^ ito a o o, avon as er ervices greemen wi of notice, attachment prior to judgment, attachment in aid of execution, exercise of Agreement for Merchant therwise) brought by Elavon relative to disputes between the Elavon and Company under t Services exclusive jurisdiction set forth in Section 18.2. Without prejudice to the limited waiver of sovereign immunity provided in the Agreement, no other waiver of Company's sovereign immunity from suit may be implied from any action or document. Company waives any requirement for Elavon to exhaust tribal court remedies that might otherwise require, as a matter of law or comity, that a dispute be heard first in the tribal court of Company. The waivers and consents described in this Section 18.16 will inure to the benefit of the parties hereto. The parties will be entitled to all available legal and equitable remedies, including the right to specific performance, money damages and injunctive or declaratory relief. The waivers of sovereign immunity and of the obligation to exhaust tribal court remedies and the consents to jurisdiction contained in this Section 18.16 are irrevocable and will survive termination of the Agreement. Company covenants that it has obtained and will maintain in effect all authorizations and consents necessary to grant the waiver of sovereign immunity and the obligations to exhaust tribal court remedies contained herein. 14 Item 18: Staff Report Pg. 103 Packet Pg. 288 of 857 Item 18 Attachment B - Elavon 15 Elavon. (City of Palo Alto, CA) Elavon - Master Services Agreement with Master Services 4 FINAL APPENDIX 1- DEFINITIONS Agreement for Merchant Services "ACH" means Automated Clearing House, the funds transfer system governed by the rules of allows financial institutions to clear interbank entries electronically. "ACH Rules" means the NACHA Operating Rules and Operating Guidelines, which govern the interregional exchange and settlement of ACH transactions. "Affiliated Entity" means (i) an Affiliate of Company, or (ii) a person or entity operating a franchise under one or more of Company's brands pursuant to a written franchise agreement with Company whereby the franchisee consistently displays external identification prominently identifying itself with Company's trademarks; in each case as listed on Schedule C or an exhibit to an applicable schedule mutually agreed upon by Company and Elavon. "Affiliates" means entities affiliated under the majority ownership or control of, under common ownership or control with, or which own or control, a party. "Authorized Users" means Company's employees or contractors designated by Company to access and use the Services. "Bankruptcy Proceeding" means, with respect to an entity, (i) that the entity or any subsidiary of such entity will: (a) commence a voluntary case under the Bankruptcy Code of 1978, as amended, or other federal bankruptcy laws (as now or hereafter in effect); (b) file or be subject to a petition seeking to take advantage of any other applicable state or federal laws, domestic or foreign, relating to bankruptcy, insolvency, reorganization, winding up or composition or adjustment of debts or any other similar conservatorship or receivership proceeding instituted or administered by any regulatory agency or body; (c) consent to or fail to contest, in a timely and appropriate manner, any petition filed against it in an involuntary case under such bankruptcy laws or other applicable laws; (d) apply for or consent to, or fail to contest in a timely and appropriate manner, the appointment of, or the taking of possession by, a trustee, receiver, custodian, liquidator, or similar entity of such entity or of all or any substantial part of its assets, domestic or foreign; (e) admit in writing its inability to pay its debts as they become due; (f) make a general assignment for the benefit of creditors; (g) make a conveyance fraudulent as to creditors under any applicable state or federal laws; or (h) take any action for the purpose of effecting any of the foregoing; or (ii) that a case or other proceeding will be commenced against the entity or any subsidiary of such entity in any court of competent jurisdiction, or through any regulatory agency or body, seeking: (x) relief under the Bankruptcy Code of 1978, as amended, or other federal bankruptcy laws (as now or hereafter in effect) or under any other applicable laws, domestic or foreign, relating to bankruptcy, insolvency, reorganization, winding up or composition, or adjustment of debts; or (y) the appointment of a trustee, receiver, custodian, liquidator or the like of such entity or of all or any substantial part of the assets, domestic or foreign, of such entity or any other similar conservatorship or receivership proceeding instituted or administered by any regulatory agency or body. "Card Brands" means (i) Visa; (ii) Mastercard; (iii) American Express Travel Related Services Company, Inc.; (iv) Discover Network; (v) Diners Club International Ltd.; (vi) JCB International Co., Ltd.; (vii) China UnionPay Co., Ltd; and (viii) any other organization or association that hereafter contracts with Elavon to authorize, capture, and settle Transactions effected with Credit Cards issued or sponsored by such organization or association, and any successor organization or association to any of the foregoing. "Cardholder" means the individual in whose name a Payment Device has been issued and any authorized user of such Payment Device. "Cardholder Data" has the meaning stated in the Payment Card Industry (PCI) Data Security Standard (DSS) and Payment Application Data Security Standard (PA-DSS) Glossary of Terms, Abbreviations, and Acronyms. "Change of Control" means with respect to a party, (a) a merger or consolidation of such party with or into another entity, or the merger of another party with or into such party or any other transaction or series of transactions, with the effect that the equity holders of such party immediately prior to such transaction hold 50% or less of the total voting power entitled to vote in the election of directors, managers, or trustees of the surviving entity; or (b) any person or group acquires beneficial ownership of a majority interest of the voting power or voting capital or other equity interest of such person. "Chargeback" means a Transaction disputed by a Cardholder or Issuer pursuant to the Payment Network Regulations. "Company" has the definition set out in the first page of the Agreement. 15 Item 18: Staff Report Pg. 104 Packet Pg. 289 of 857 Item 18 �) Attachment B - Elavon 16 EI aio no (City of Palo Alto, CA) Elavon - Master Services Agreement with Master Services 4 FINAL "Company Application" means the Company Application attached as Schedule B and any Agreement for Merchant ontaining information regarding Company's business that is submitted to Elavon in connection with C&ServicesJ Services, including documents submitted by Company as a part of the bid process, if applicable. "Company Resources" means all equipment, communications devices, databases, services, systems and other resources that Company maintains or operates in Company's or its third party hosting provider's locations and which enable Company to access and use the Services. "Confidential Information" means all data and information, regardless of the form or media, relating to the business of the Disclosing Party of which the Receiving Party becomes aware as a consequence of, or through, the performance of its obligations under the Agreement, which has value to the Disclosing Party and is not generally known by its competitors, which is reasonably identified as confidential at the time of disclosure or which, under the circumstances surrounding disclosure, ought to be reasonably considered as confidential, including technical information, drawings, engineering data, performance specifications, cost and price information (except as provided otherwise in the Agreement), and other information, data and reports, and the terms and conditions of the Agreement. Confidential Information does not include any data or information which (i) is already known to the Receiving Party prior to disclosure by the Disclosing Party; (ii) has become generally known to the public through no wrongful act of the Receiving Party; (iii) has been rightfully received by the Receiving Party from a third party without restriction on disclosure and without, to the knowledge of the Receiving Party, a breach of an obligation of confidentiality running directly or indirectly to the other party; or (iv) is independently developed by the Receiving Party without use, directly or indirectly, of the Confidential Information received from the Disclosing Party. Cardholder Data and Transaction Information are not Confidential Information under this definition, and are addressed in Section 9.2(d). "Credit Card" means a card or device bearing the symbol of any Card Brand and associated with a revolving line of credit that can be used to purchase goods and services from Company or to pay an amount due to Company. "Customer" means a client of Company who elects to conduct a payment Transaction with Company through presentation of a Payment Device (including a Cardholder). "Data Breach" means unauthorized access to, use, disclosure or exfiltration of any Cardholder Data or Transaction Information provided by Company and received by Elavon in connection with Company's use of the Services under the Agreement. "DDA (Demand Deposit Account)" means the commercial checking account at an ACH participating financial institution designated by Company to facilitate payment for Transactions, Chargebacks, returns, adjustments, fees, fines, penalties, assessments and charges from the Payment Networks, and other payments due under the Agreement. "Debit Card" means a card or device bearing the symbols of one or more EFT Networks or Card Brands, which may be used to purchase goods and services from Company or to pay an amount due to Company by an electronic debit to the Cardholder's designated deposit account. A "Debit Card" includes (i) a card or device that bears the symbol of a Card Brand and may be used to conduct signature -based, offline debit Transactions; and (ii) a card or device that bears the symbol of an EFT Network and can be used to conduct PIN -based, online debit Transactions. "Disclosing Party" means the party providing the Confidential Information to the other party directly or indirectly (via one or more third parties acting on behalf of and at the direction of the party providing its Confidential Information). "Discover" means DFS Services LLC. "Discover Network" means the payment network operated and maintained by Discover. "Documentation" means the Elavon standard written description for the Services, as applicable, that is delivered to Company under the Agreement, including user manuals and best practices guides, as may be amended by Elavon from time to time, but not including marketing materials, proposals, demonstrations or other promotional information. "Early Termination Fee" means an amount equal to the sum of: (i) the greater of (A) the total fees paid by Company during the 12 months immediately prior to termination, and (B) the total fees that would be payable by Company during the 12 months immediately following termination (based, with respect to any per -Transaction fees, on projected monthly Transaction volume as reflected on Schedule A); and (ii) any up -front incentives afforded to Company. "EBT Card" means a card used for electronic benefits transfers. 16 Item 18: Staff Report Pg. 105 Packet Pg. 290 of 857 Item 18 /_7t1) Attachment B - Elavon 17 Elavon. (City of Palo Alto, CA) Elavon - Master Services Agreement with Master Services 4 FINAL "ECS (Electronic Check Services)" means the service offering by Elavon pursuant to which Tr Agreement for Merchant Ia an ACH Payment Device are presented for clearing and settlement by or through an ECS Association. Services "ECS Association" means NACHA and any regional ACH association or network, the Federal Reserve (in its processing of ACH entries or demand drafts or other legal replacements or substitutes for a paper check, including under the Check Clearing for the 21st Century Act or under applicable provisions of the Uniform Commercial Code), and any other organization or association Elavon uses in connection with the ECS that is hereafter designated as an ECS Association by Elavon from time to time. "EFT Networks" means (i) Interlink Network Inc., Maestro U.S.A., Inc., STAR Networks, Inc., NYCE Payments Network, LLC, PULSE Network LLC, ACCEL/Exchange Network, Alaska Option Services Corporation, Armed Forces Financial Network, Credit Union 24, Inc., NETS, Inc., and SHAZAM, Inc.; and (ii) any other organization or association that hereafter authorizes Elavon or a third party designated by Company to authorize, capture, and settle Transactions effected with Debit Cards, and any successor organization or association to any of the foregoing. "Effective Date" means the date stated in Elavon's signature block on the signature page of the Agreement. "Elavon" means Elavon, Inc., a Georgia corporation. Elavon is a registered member service provider of each Member. Elavon may also be referred to as "Servicer" in the Agreement, the Operating Guide or other documents provided to Company in connection with the Services. "Elavon Data Breach" means a Data Breach that (i) originated within data operating systems controlled by Elavon or its third - party contractors, (ii) occurred due to a breach of the Agreement by Elavon, (iii) was not attributable to any act or omission of Company or its Service Providers, and (iv) does not relate to any Company provided data in user defined fields not required by Elavon or used to perform the Services. "Elavon Data Breach Losses" means (i) any fine, penalty, assessment, or charge levied by any Payment Network or regulatory authority against Company, and paid by Company, due to an Elavon Data Breach; provided that, prior to any Payment Network or regulatory authority's finalization of any fine, penalty, assessment, or charge for which Company will seek recovery from Elavon, Company obtains for Elavon the opportunity to discuss and attempt to negotiate such fine, penalty, assessment or charge with the applicable Payment Network or regulatory authority, (ii) amounts paid by Company to third parties to reimburse them for their direct losses resulting from or attributable to an Elavon Data Breach, to the extent Company is required by Laws (including by a statutory or contractual obligation or court order) to make such payments (excluding amounts paid under clause (i) above), and (iii) Company's direct costs incurred in providing 12 months of credit monitoring to Cardholders affected by an Elavon Data Breach involving unauthorized access to unencrypted full primary account numbers (PANS) or social security numbers. "Elavon Materials" means the specifications, documentation (including Documentation), application programing interfaces (APIs) and other interfaces, nonpublic or proprietary data import routines, sample code and materials provided to Company to enable Company to perform its obligations or exercise its rights under the Agreement, including integration to the Services. "Electronic Gift Card (EGC)" means a special stored value card provided by or on behalf of Company that is redeemable for merchandise, services or other Transactions. "Equipment" means Purchased Equipment and other devices, equipment and hardware provided to Company under the Agreement. "Force Majeure" means has the meaning stated in Section 18.14. "Gateway Services" means the hosted gateway services provided by Elavon, as further described in the Operating Guide. "Initial Term" has the meaning stated in Schedule A. "Intellectual Property Rights" means worldwide patents, trade secrets, copyrights, trademarks, service marks, trade names, and all other intellectual property rights and proprietary rights, including all rights or causes of action for infringement or misappropriation of any of the foregoing. "Internal Controls Assessment" has the meaning stated in Section 10.1. "Issuer" means the financial institution or other entity that issued the Credit Card or Debit Card to the Cardholder 17 Item 18: Staff Report Pg. 106 Packet Pg. 291 of 857 Item 18 Attachment B - Elavon 18 Elavon. (City of Palo Alto, CA) Elavon - Master Services Agreement with Master Services 4 FINAL "Laws" means all applicable local, state, and federal statutes, regulations, ordinances, rules, and Agreement for Merchant Iffect from time to time. Services "Mastercard" means MasterCard International Incorporated. "Member" means the sponsoring Member designated on the Company Application or on a particular schedule, as applicable. Elavon may change any Member at any time and will provide Company notice of the change. "NACHA" means the National Automated Clearing House Association. "Operating Guide" means Elavon's Operating Guide (formerly the "Merchant Operating Guide" or "MOG"), located at www.mypgymentsinsider.com and www.merchantconnect.com (or such other website that Elavon may specify), that prescribes rules and procedures governing Transactions and Company's use of the Services. Elavon may amend the Operating Guide from time to time, which amendments will be effective upon notice to Company. "Payment Device" means any device or method used for the purpose of obtaining credit or debiting a designated account including a Credit Card, Debit Card, and any other financial transaction device or method, including an Electronic Gift Card, check (whether converted into electronic form or used as a source document for an electronic fund transfer), EBT Card, stored value card, "smart" card, or other device created to be used for the purpose of obtaining credit or debiting a designated account. "Payment Network" means any Card Brand, EFT Network, ECS Association or automated clearing house association, governmental agency or authority, and any other entity or association that issues or sponsors a Payment Device or PayPal Payment Device (as defined in the Operating Guide) or operates a network on which a Payment Device is processed. "Payment Network Regulations" means the rules, operating regulations, guidelines, specifications and related or similar requirements of any Payment Network. "PCI-DSS" means the Payment Card Industry Data Security Standards. "POS Device" means a terminal, software or other point -of -sale device at a Company location that conforms to the requirements established from time to time by Elavon and the applicable Payment Network. "Processing Services" means Services other than Gateway Services, SAFE -T Services, and Professional Services. "Professional Services" means the work Elavon performs for Company in connection with the installation or implementation of the Services, as more fully described in a Statement of Work. "Purchased Equipment" means the devices, equipment and hardware purchased by Company from Elavon under the terms of the Agreement. "Receiving Party" means the party receiving Confidential Information from the other party directly or indirectly (via one or more third parties acting on behalf of and at the direction of the party providing its Confidential Information). "Renewal Term" has the meaning stated in Schedule A. "Reserve Account" means the ledger account established by Elavon on its books and records reflecting a contingent payment obligation from Elavon to Company. "SAFE -T Services" means the integrated security services provided by Elavon, as further described in Schedule E. "Security Programs" means the PCI-DSS, including the Cardholder Information Security Program (CISP) of Visa, the Site Data Protection Program (SDP) of Mastercard, the Data Security DISC Program and the PCI-DSS regulations of Discover Network, and the security programs of any other Payment Network, and any modifications to, or replacements of, such programs that may occur from time to time. "Service Provider" means any entity that stores, processes, transmits or accesses Cardholder Data or Transaction Information on behalf of Company or that provides software to Company for transaction processing, storage, or transmission, except to the extent such services are performed by the entity in its capacity as a third -party contractor of Elavon performing Elavon's obligations under the Agreement. Elavon third -party contractors are not Service Providers. "Services" means the services Elavon provides to Company pursuant to the Agreement. Item 18: Staff Report Pg. 107 Packet Pg. 292 of 857 18 Item 18 /_7t1) Attachment B - Elavon 19 Elavon. (City of Palo Alto, CA) Elavon - Master Services Agreement with Master Services 4 FINAL "Statement of Work" means a statement of work for Professional Services that references the Agreement for Merchant lecuted by the parties. Services "Term" means the Initial Term and any Renewal Term. "Transaction" means any action between Company and a Cardholder or Payment Network that results in transmission of Cardholder Data or Transaction Information (e.g. payment, purchase, refund, return, chargeback, authorization request, settlement submission, transaction inquiry, decryption, conversion to and from tokens). "Transaction Information" means any data or information resulting from a Transaction. Transaction Information includes payment processing -related transactional information that may be collected or stored by Elavon, including the price paid for products or services, date, time, approval, unique transaction number, store identifier, and Customer bank information relating to a Transaction. "Updates" means all updates, revisions, patches, fixes, new releases, and other improvements or changes to any Services provided to Company under the Agreement. "United States" means the United States of America. "Visa" means Visa U.S.A., Inc. Item 18: Staff Report P . 108 19 P Pg. Packet Pg. 293 of 857 Elavon. (City of Palo Alto, CA) Elavon - Master Services Agreement SCHEDULE A FEES [Separately provided] Item 18 Attachment B - Elavon 20 with Master Services 4 FINAL Agreement for Merchant Services Item 18: Staff Report Pg. 109 20 Packet Pg. 294 of 857 Elavon. (City of Palo Alto, CA) Elavon - Master Services Agreement SCHEDULE B COMPANY APPLICATION [Separately provided] Item 18 Attachment B - Elavon 21 with Master Services 4 FINAL Agreement for Merchant Services Item 18: Staff Report Pg. 110 21 Packet Pg. 295 of 857 Item 18 Attachment B - Elavon 22 Elavon(City of Palo Alto, CA) Elavon - Master Services Agreement with I Master Services 4 FINAL SCHEDULE C Agreement for Merchant Services AFFILIATED ENTITIES Check one: ® Company named on page 1 only, and all locations will operate under Tax ID Number 946000389. ❑ Company named on page 1, with Tax ID Number and the following Affiliates or franchisees (a separate Form W-9 or Form W-8BEN, as applicable, must be submitted for each entity identified below): Name Tax ID Number COMPANY, on behalf of itself and each of the Affiliated ELAVON, INC. Entities identified above: By: W By: Title: Date: (Schedule C "Effective Date") 22 Item 18: Staff Report Pg. 111 Packet Pg. 296 of 857 Item 18 Attachment B - Elavon 23 Elavon(City of Palo Alto, CA) Elavon - Master Services Agreement with Master Services 4 FINAL Agreement for Merchant Services SCHEDULE D PROCESSING SERVICES TERMS This Schedule D sets out additional terms (and modifications to terms in the General Terms and Conditions) that are applicable if Company is receiving certain Processing Services. 1. Processing Services. This Section 1 of Schedule D applies if Company is receiving Processing Services. 1.1. Company Compliance. Company will not submit Transactions for processing to Elavon for any businesses, materially different products, or methods of selling other than those stated in the Company Application without Elavon's prior written consent. 1.2. Reserve Account. (a) Establishment. If a Reserve Event occurs, Elavon may establish a Reserve Account in the Reserve Amount to provide security and a source of funds to pay Elavon for all amounts that Company may owe under this Agreement. Elavon will have sole control of the Reserve Account, and, upon Company's delivery of funds to Elavon for creating credits in the Reserve Account (or Elavon's crediting the Reserve Account with amounts that otherwise would have been paid to Company), Company will have no further property interest in such funds (or rights to payment) other than with respect to a contingent right to payment from Elavon as described in this Agreement upon the termination of the Reserve Account. (b) Reserve Amount. The "Reserve Amount" is equal to the aggregate dollar value of: [(average % credits to processing volume during the same period plus average % Chargebacks to processing volume during the same period) multiplied by four] multiplied by [average monthly processing volume] plus [one month's average fees] plus [number of days delayed delivery multiplied by the average day's processing volume] plus [the amount of fines, assessments, or charges imposed or reasonably expected to be imposed by the Payment Networks, if any]. For purposes of this calculation, the number of days delayed delivery means the number of days between the date on which the Cardholder's Payment Device is charged and the date the product is shipped to the Cardholder (if the goods are being shipped) or the date the Cardholder receives the product or service. Further, for purposes of this calculation, Elavon will determine the applicable period considering factors such as Company's Transaction volume and seasonality. (c) Reserve Event. The following will constitute "Reserve Events": (i) Fraudulent activity in any monthly period that equals or exceeds 1% of Company's average monthly volume over the preceding 12 -month period; (ii) Chargebacks in any monthly period that equal or exceed 1% of the total dollar value of incoming items to Elavon; (iii) Elavon's reasonable belief that Company, if not approved by Elavon to engage in delayed delivery transactions, has accepted deposits but has not delivered the goods or services; (iv) The commencement of a Bankruptcy Proceeding by or against Company; (v) Termination of the Agreement for any reason or the occurrence of an event listed in Section 4.2 of the Agreement giving Elavon the right to terminate the Agreement; (vi) Nonpayment of amounts owed by Company to Elavon; (vii) Fines, assessments, or charges imposed or reasonably expected to be imposed by the Payment Networks; (viii) The occurrence of a material adverse change in Company's financial condition; (ix) Assignment of the Agreement by Company in violation of Section 18.5 of the Agreement; and 23 Item 18: Staff Report Pg. 112 Packet Pg. 297 of 857 Item 18 Attachment B - Elavon 24 Elavon. (City of Palo Alto, CA) Elavon - Master Services Agreement with Master Services 4 FINAL Agreement for Merchant (x) Revocation, termination, expiration or non -renewal of any guaranty, indei Services Jr of credit or any other Alternate Security provided in connection with the Agreement, if applicable. (d) Funding. Elavon may fund the Reserve Account up to the Reserve Amount by any of the following means: (i) Elavon may require Company to transfer funds to Elavon for credit to the Reserve Account; (ii) Elavon may debit the DDA and provide a corresponding credit to the Reserve Account; or (iii) Elavon may credit to the Reserve Account amounts it would otherwise be obligated to credit to Company. (e) Use of Funds in Reserve Account. Elavon may apply credits in the Reserve Account against any outstanding amounts Company owes under the Agreement. Additionally, Elavon may debit the Reserve Account to exercise its rights under the Agreement, including its rights of set-off and recoupment to collect any amounts due to Elavon. (f) Termination of Reserve Account. Credits in the Reserve Account that have not been applied against amounts due to Elavon will remain in the Reserve Account until Company has paid in full all amounts owing or that may be owed under the Agreement, including all Chargebacks, returns, adjustments, fees, fines, penalties, assessments and charges from the Payment Networks, and any other payments due under the Agreement. Notwithstanding the foregoing, if Elavon determines that the Reserve Event that gave rise to the establishment of the Reserve Account has been sufficiently cured, then Elavon may terminate the Reserve Account or release credits from the Reserve Account, or both, based on Elavon's reasonable determination for the continuing potential risk of loss to Elavon. (g) Alternate Security. In lieu of or in addition to establishing and crediting a Reserve Account, Elavon may accept an alternative form of security ("Alternate Security") for the purpose of providing a source of funds to pay Elavon for all amounts owed by Company. Elavon may at any time reevaluate Alternate Security it previously accepted and require funding of a Reserve Account so that the amount of credits in a Reserve Account, taken together with amounts represented by any Alternate Security Elavon accepts, equals the Reserve Amount. 1.3. Recoupment and Set-off. (a) Elavon has the right of recoupment and set-off, and may offset any outstanding or uncollected amounts owed to it hereunder from: (i) Any amounts it would otherwise be obligated to deposit into the DDA; (ii) The Reserve Account by reducing the credits thereto; and (iii) Any other amounts it may owe Company under the Agreement. (b) Company acknowledges that in the event of a Bankruptcy Proceeding, in order for Company to provide adequate protection under Bankruptcy Code Section 362 to Elavon hereunder, Elavon may require the creation of a Reserve Account and will have the right to offset against the Reserve Account for all obligations Company may owe to Elavon, without regard to whether the obligations relate to Transactions initiated or processed before or after the initiation of the Bankruptcy Proceeding. 1.4. MATCHTM and Consortium Merchant Negative File. Company acknowledges that Elavon may be required to report Company's business name and the name of Company's principals to the MATCHTM listing maintained by MasterCard and accessed by Visa, to the Consortium Merchant Negative File maintained by Discover, if applicable, or to any other negative or terminated merchant file of any other Payment Network, if applicable, pursuant to the requirements of the Payment Network Regulations. Company specifically consents to Elavon's fulfillment of the obligations related to the listing of Company and Company information in such databases, and Company waives all claims and liabilities Company may have as a result of such reporting. 24 Item 18: Staff Report Pg. 113 Packet Pg. 298 of 857 Item 18 Attachment B - Elavon 25 Elavon. (City of Palo Alto, CA) Elavon - Master Services Agreement with Master Services 4 FINAL 1.5. Remedies Cumulative. The rights conferred upon Elavon in this Schedule D, Se Agreement for Merchant Ided to be exclusive of each other or of any other rights and remedies of Elavon under the Agree Services y. Rather, each and every right of Elavon under the Agreement, at law or in equity, is cumulative and concurrent and in addition to every other right. 1.6. Termination. In addition to Elavon's termination rights in Section 4 of the Agreement, Elavon may terminate the Agreement: (a) If, after providing 30 days' written notice, either of the following conditions remain: (i) Excessive Activity; or (ii) The acceptance of Card Not Present or Convenience Fee Transactions without proper disclosure to Elavon in the Agreement (including in the Company Application) or an amendment to the Agreement. (b) Immediately if any of the following occur: (i) The levy, garnishment or attachment of the Alternate Security, the DDA, the Reserve Account, or any of Company's property in Elavon's possession; (ii) Any change, not approved by Elavon, that constitutes a material change in the types of goods or services Company sells or in the methods by which Company sells them, or any change that results in Company's violation of Elavon's underwriting policy; or (iii) Revocation, termination, expiration or non -renewal of any guaranty, indemnity agreement, letter of credit or other Alternate Security executed in connection with the Agreement. 1.7. Member Responsibilities. Member will facilitate ACH Transactions and comply with all ACH Rules as applicable to Member in providing Services under this Agreement. Member will have no liability to Company under this Agreement. Member is an entity governed by the Laws of the United States of America and as such, cannot provide any products or services to Company or its Customers that contravene the Laws of the United States of America, including the Laws promulgated by OFAC or any successor thereto. 1.8. Company Information. (a) Authority. Company authorizes Elavon to make, upon receipt of the Company Application and from time to time, any business credit or other inquiries it considers reasonably necessary to review the Company Application or continue to provide Services under the Agreement. Company also authorizes any person or credit reporting agency to compile information to answer those business credit inquiries and to furnish that information to Elavon. (b) Financial Information. At Elavon's request, Company will provide Elavon financial statements (audited if available) prepared by an independent certified public accountant selected by Company. Within 120 days after the end of each fiscal year, Company will furnish Elavon, as requested, a financial statement of profit and loss for the fiscal year and a balance sheet as of the end of the fiscal year, each audited if available. Company also will provide Elavon such interim financial statements and other information as Elavon may request from time to time. Notwithstanding the requirements in this section, Company will not be obligated to provide financial statements or similar information required by this section if Company files its financial statements with the Securities and Exchange Commission so long as Company remains registered and obligated to file financial statements (including annual reports on Form 10-K and quarterly reports on Form 10-Q) pursuant to the Securities Exchange Act of 1934, as amended. 1.9. Company Data Incident. (a) Notice and Investigation. Company acknowledges that Cardholder Data and bank account information it obtains in connection with any Transaction is the property of the financial institution that issued the Payment Device or holds the Customer's account. Company will notify Elavon within 24 hours (and if notice is given orally, it must be confirmed in writing within the same 24 hour period) if Company knows or suspects that Cardholder Data, Customer information, or Transaction Information has been accessed or used without 25 Item 18: Staff Report Pg. 114 Packet Pg. 299 of 857 Item 18 Attachment B - Elavon 26 Elavo n (City of Palo Alto, CA) Elavon - Master Services Agreement with Master Services 4 FINAL authorization from Company or systems within Company's control (a "Data I Agreement for Merchanj should be delivered by electronic mail to adcqueries-na(a�elavon.com and must include: Services (i) A detailed written statement about the Data Incident including the contributing circumstances, (ii) The form, number and range of compromised account information, (iii) Specific account numbers compromised, and (iv) Details about the ensuing investigation and Company's security personnel who may be contacted in connection with the Data Incident. Company will fully cooperate with the Payment Networks and Elavon in the forensic investigation of the Data Incident. Within 72 hours of becoming aware of the Data Incident, Company will engage the services of a data security firm acceptable to the Payment Networks and to Elavon to assess the vulnerability of the compromised data and related systems. Company will provide weekly written status reports to Elavon until the forensic audit is complete. Company will promptly furnish updated lists of potential or known compromised account numbers and other documentation or information that the Payment Networks or Elavon may request. In addition, Company will provide all audit reports to Elavon, and such audits must be completed to the satisfaction of the Payment Networks and of Elavon. If Company fails to supply the forensic audits or other information required by the Payment Networks or by Elavon, Company will allow Elavon to perform or have performed such audits at Company's expense. (b) Preservation of Records. If there is a Data Incident, Company will take immediate steps to preserve all business records, logs and electronic evidence relating to the Data Incident. Company will cooperate with Elavon to rectify, correct and resolve any issues that may result from the Data Incident, including providing Elavon with (and obtaining any necessary waivers for) all relevant information to verify Company's ability to prevent future data incidents in a manner consistent with the Agreement. (c) Liability for Data Incident. Without waiving any of Elavon's rights and remedies, Company is liable to the extent provided in the Payment Network Regulations for all fraudulent transactions related to any Data Incident and all costs Elavon incurs as a result of such Data Incident. 2. Payment Navigator Services. This Section 2 of Schedule D applies if Company is receiving Payment Navigator Services. 2.1. Additional provisions. (a) Section 13.2. Indemnification By Company. In addition to Company's indemnification obligations in Section 13.2, Company will indemnify and defend Elavon, its Affiliates, and their respective employees, officers, directors, and agents against all Losses in connection with Claims arising from alleged infringement of patent, copyright or other intellectual property right, or misappropriation of trade secrets, of any third party by Payment Navigator as modified or altered by Company, its partners, employees, agents or contractors, or the use of any data submitted by Company. (b) Section 18.3. Exclusivity. This section is amended by adding to the end of Section 18.3 of the Agreement: "Notwithstanding the foregoing, this exclusivity provision will not apply to any Company point -of -sale location that does not interface or interact with the Payment Navigator Services. The parties intend that this Section only applies to Company's Affiliated Entities that interface with the Payment Navigator Services." 3. Additional Definitions "Alternate Security" has the meaning stated in Schedule D, Section 1.2(g). "Card Not Present" means the processing environment where the Payment Device is not physically presented to Company by the Cardholder as the form of payment at the time of the Transaction. Item 18: Staff Report Pg. 115 Packet Pg. 300 of 857 26 -il) Item 18 Attachment B - Elavon 27 Elavon. Master Services (City of Palo Alto, CA) Elavon - Master Services Agreement with 4 FINAL "Convenience Fee" means a fee charged by Company for an added convenience to the Card Agreement for Merchant Payment Device in a Transaction in accordance with the Payment Network Regulations. Services "Excessive Activity" means the occurrence, during any monthly period, of Chargebacks or Retrieval Requests in excess of 1% of the gross dollar amount of Company's Transactions or returns in excess of 2.5% of the gross dollar amount of Company's Transactions. "Reserve Amount" means the amount established pursuant to the calculation stated in Schedule D, 1.2(b). "Reserve Event" means the events designated in Schedule D, Section 1.2(c). "Retrieval Request" means a request initiated by a Cardholder or Issuer that requires Company to produce a legible copy of the Cardholder's signed Transaction Receipt within a specified period of time. "Transaction Receipt" means the paper or electronic record evidencing the purchase of goods or services from, or payment to, a Company by a Cardholder using a Payment Device. 27 Item 18: Staff Report Pg. 116 Packet Pg. 301 of 857 Item 18 p== Attachment B - Elavon 28 Master Services Agreement for Merchant Services emiry H m. Mulnpk MCc.? (on:aiieem vary.�:�veartU Rme.al seem w.@mwl.d.NN*N(oebl(N (\N tSwlbv.o6b,IW DN. -per .valbhl ac.mmn.a mt(uwl. ea:l)eo rm.r,..a.a.do a rypa �eemm.t )s...ea p a ...:reim.NR w m v n.woe::amw: p. o. m. y bl.vom.to:n.e. al Au,,. q&NW.N ..amtmbm po mm b.%m mg p ne 5)Renmly em monW mmaom.oe ry �mnmuea y y p.ny Item 18: Staff Report Pg. 117 Packet Pg. 302 of 857 Item 18 M== Attachment B - Elavon 29 Master Services Agreement for Merchant Services e<Po pp .form.. q yrnsonormfoRmem� n .ofa<w PP I, �opmr oo go- e' mru. o�worce sN'eisok ®. Fxmawmb q wr h4o�a �ooaa moomb s.rz.isom saoaw pon Faoona.borcwMEhw P mwiw.ommioo of om-Mwgm smxe Fee wnn Ehwn FOS �.nmvsema Fs Tmnmeh VA u-EUAbk MCC$: s311.9]N. &H. &<9.9311.9Y¢.9)11.9399 VA mCAA -Eh®bk MCC$: nv I, v4 x99, 9v I, Aa 91v, m I I, m94 9f m dVAVEVpA$$-EhAbk MCCs: 311en0,A49,A49,9311,9333,9311,9399 orer(AnLbbvOhmmArgonm) eb'e {sELELTALL IIvg'APPL6l') wC&-9399k MAC s:e211, 9120, 9299, 9[II, 9111911393II, 9399, 9001 VA ovA (Anllnk v 9hmm AgneA) semmisekctou ogmnE<kw, PinoNy ifComwn SeNea)(Aeairion.l Enrdlmm$Pwm Reguirm). Item 18: Staff Report Pg. 118 Packet Pg. 303 of 857 Item 18 p== Attachment B - Elavon 30 Master Services Agreement for Merchant Services orm rm.�om ma.,aro.�.s«<.nsm.a,mrcc�uss-�.m.,<�,m�mparcvs.r�nm.�swa.me«ea„<n,m�m<rs,sm. ormmnvvm�.rm<v.ar. ac�emrna,<�ka. s.�r Q m,x�oss v =<., e<mam,wnem�rvcvs.r�nm.e�su.ew ra. «m,mmzmo.m„�, a nm<�aomm,w wa „m.a�ma, ac�e..r„umk=wmvmK<mm.Rn,a.m wrm<a�<.�m ra wm m.wm�«rm�rarm<m�,mrr<,.a. meno�.,m,�<a,wmx�ose v <.,.w��rmm oma.yr s w�smm wr Ra wr <mu,um.,<.��maeevs.r<n e�e.m sm�a.m e«u.ai wr ,wa,,.�,ix�ose v «. .mm rwaa.r, mim,.me�� �mv�m.acamwro„m.o-, rc�ussmm<zsna.r or. mo m, comwm.aia< mm,m<rvc�rs.mne,o�m,«<.�m rR m,m<�zma.�n„�w�.Cm<mo�m vu,o«amm orm.n.mvr am<mom min m�.rn rmry.ry orm<mm,,;�r<,.a row,,; m<maor<.m�...ix�rss wmPm.a„ua.a..ewa,comwor h. mmorm<mgma.mm..m..<.mvu..«o,comwro.mm�.a<a�owr m<mu,.m <.�m ma.my rvcvs.mne,o�s aw rtl Item 18: Staff Report Pg. 119 Packet Pg. 304 of 857 Item 18 Attachment B - Elavon 31 Master Services Agreement for Merchant Services avon.Elavon— Master Services Agreement - Sche&ule E (Safe -T Terms) (v.4.13.24) SCHEDULE E SAFE -T TERMS This Schedule E sets out additional terms that are applicable if Company is receiving Safe -T Services. Safe -T Services apply to card -present Transactions (the processing environment where the Payment Device is physically presented to the Company by the Cardholder as the form of payment at the time of Transaction), and mail order/telephone order Transactions (only when information is hand -keyed into the POS Device)- Safe -T Services do not apply for electronic commerce Transactions. Schedule E consists of this cover page, the Safe -T Terns and Conditions, and each other applicable Exhibit as indicated below: 0 Exhibit A (Fees) Safe -T Services (check desired options): 0 Safe -T Solo, Elavon's non-integrated security solution (if this box is checked, only the Safe -T Terms and Conditions and Exhibit A will apply to Company in connection with this Schedule E}- ❑ Safe -T Link, Elavon's semi -integrated security solution (if this box is checked, in addition to the Safe -T Terms and Conditions and Exhibit A, Exhibit C (Simplify License) will apply to Company). ❑ Safe -T Link with P2PE Protect (f this box is checked, in addition to the Safe -T Terms and Conditions and ExhibitA. Exhibit C (Simples License) will apply to Company. In addition, Company will comply with all the terms of the Point - to -Point Encryption Product Implementation Manual, a copy of which is available at https,llwww.mypaymentsinsider.com/apililelclSafe-T PIM). Equipment (check one of the following options): ❑■ Company will use only POS Devices and related equipment purchased from Elavon on or after the effective date of this Schedule (if this box is checked, ExhibitB will apply to Company in connection with this Schedule E). ❑ Company will use only POS Devices and related equipment purchased from a third party, or purchased from Elavon prior to the effective date of this Schedule (if this box is checked, Company and Elavon must enter into an associated Statement of Work). ❑ Company will use both POS Devices and related equipment purchased from Elavon on or after the effective date of this Schedule and POS Devices and related equipment provided by third parties (or purchased from Elavon prior to the effective date of this Schedule) (f this box is checked, Exhibits C and F will apply and Company and Elavon must enter into an associated Statement of Work). ❑ (United States only) Company will rent POS Devices and related equipment from Elavon (f this box is checked, applicable rental terms in the Equipment chapter of the Operating Guide will apply)- ❑ (Canada only) Company will use, but not purchase, POS Devices and related equipment from Elavon (f this box is checked, Provisions Applicable to Equipment Received as Part ofEla on s Services" in the Canada chapter of the Operating Guide will apply). Service Web Site (check if applicable): ❑ Service Web Site Terms and Conditions (if Company is receiving Gateway Services from Elavon, Company will receive access to the Service Web Site under the applicable terms setforth in the Operating Guide and not under the terms of ExhibitD to this Schedule E. If Company is receiving Processing Services but not Gateway Services from Elavon and Company elects to receive the Service Web Site from Elavon, then this box should be checked and ExhibitD under this Schedule E. rather than the applicable terms of the Operating Guide, will apply to Company's receipt of the Service Web Site.) Professional Services: If Company will receive professional services pursuant to this Schedule E, check the box below. ❑ Professional Services Terms (if this box is checked an associated Statement of Work will apply to Company in connection with this Schedule E). Item 18: Staff Report Pg. 120 Packet Pg. 305 of 857 Item 18 32 Attachment B - Elavon Master Services Agreement for Merchant Services /l i1 Elavon. Elavon— Master Sen^iees Agreement— Schedule E (Safe -T Tesuis) (v.4.13.24) SAFE -T TERMS AND CONDITIONS 1. FEES. Company will pay Elavon the fees set forth on Exhibit A to this Schedule E (the "Safe -T Services Fees")_ 2. DESCRIPTION OF SAFE -T SERVICES. Subject to the terms and conditions of this Schedule E and the Agreement. Elavon will provide Company the following Safe -T Services: (a) ENCRYPTION SERVICES, which will consist of decryption of full primary Credit Card or Debit Card account numbers (`PANs") properly encrypted by Company using Elavon-approved software and Equipment and Elavon- injected encryption keys, all in accordance with the terms and conditions of this Schedule E and the Agreement (such services, the "Encryption Services")_ Transactions submitted via the POS Device with Elavon-approved software will not be transmitted by the POS Device to Elavon if the Application or POS Device, as applicable, fails to encrypt the PANS_ (b) TOKENIZATION SERVICES, which will consist of a tokenization feature pursuant to which Elavon will provide Company with randomized surrogate identifiers (each, a "Token") in substitution for PANS (such services, the "Tokenization Services"). More specifically, when Company transmits to Elavon a PAN associated with a Transaction. Elavon will: (i) generate a Token; (ii) associate the Token with the PAN; and (iii) send the Token, instead of the PAN, back to Company in the Transaction authorization response message Company may submit the Token, rather than the associated PAN to Elavon to process additional Transactions to the Credit Card or Debit Card associated with such Token across all Company locations. The PAN associated with each Token generated by Elavon can be retrieved by Elavon, on Company's written request, until the date that is three years after the expiration or termination of the Agreement (the "Token Validity Period'), provided that the retrieval of PANs after the expiration or termination of the Agreement will be subject to additional terms and conditions and at an additional cost to Company. Company acknowledges that the Tokens will be formatted in Elavon's reasonable discretion and may not be compatible with other Company Resources. 3. COMPANY RESPONSIBILITIES. (a) Company will cause the appropriate Equipment, including POS Devices and any Equipment provided by or on behalf of Elavon from time to time, to be readily available for use at all Company locations that are the recipients or users of the Safe -T Services. For purposes of this Schedule E, the term "POS Device" refers only to payment terminals and does not refer to any other point -of -sale devices or software. (b) Company acknowledges that Elavon does not store Credit Card or Debit Card expiration dates. In order to use a Token to process a Transaction, Company must provide the Token (in lien of a PAN) together with the expiration date for the original Credit Card or Debit Card. (c) For Safe -T Solo, Company must cooperate with Elavon to promptly take any action necessary to enable the Safe -T Services on Company's Equipment, including promptly downloading, installing and implementing any software or updates thereto in accordance with Elavon's instructions_ 4. DE-TOKENIZATION_ For Safe -T Link Company may request a reversal of the Tokenization process as follows: (a) To reverse the Tokenization process on an individual Token basis, Company may access an Elavon web portal and, with appropriate authentication credentials, retrieve the PAN associated with any Token - (b) To reverse the Tokenization process on a bulk basis (i.e., in excess of 100 Tokens at a time), an officer of Company must make a request in writing to Elavon and provide Elavon with the Tokens for which Company wishes to reverse the Tokenization process. Elavon will provide Company's requesting officer with an encrypted file containing the PANs associated with such Tokens within 30 days of receiving the request. Company acknowledges and agrees that additional terms and conditions may apply to reversal of Tokenization on a bulk basis. 5. P2PE PROTECT. For Safe -T Link with P2PE Protect, Elavon will maintain the solution's P2PE validation status, will update the Point to Point Product Encryption Manual with any necessary additions for Company to maintain compliance, and will maintain applicable Equipment in Elavon' s or its service provider's possession (and deploy such equipment) in accordance with PCI P2PE guidelines. 6. SAFE -T REIMBURSEMENT. If Company suffers unauthorized third party access to personal information of individuals (which personal information must include the individual's unencrypted PAN) as a result of the failure of the Safe -T Services Item 18: Staff Report Pg. 121 Packet Pg. 306 of 857 Item 18 Attachment B - Elavon 33 Master Services Agreement for Merchant 1� Services Ela V o n. Elasron- Master Services Agreement - Schedule E (Safe -T Teams) (v.4.13.24) to perform in accordance with this Schedule E, Elavon will reimburse Company (on a Company -wide, not a per -MID basis) for (a) Company's documented costs incurred for a forensic investigation conducted in accordance with subsection (ii) to identify the source of the Data Incident, and (b) any fines and assessments levied or collected by a Payment Network in connection with a Data Incident, up to an aggregate amount not to exceed $50,000 (if Company uses Safe -T Link) or $250,000 (if Company uses Safe -T Solo) (the "Safe -T Reimbursement"). ForLeve14 companies, the Safe -T Reimbursement will be in lieu of (and not in addition to) any reimbursement allowed under Elavon's PCI Compliance Program. In order to be eligible to receive the Safe -T Reimbursement, Company must certify to Elavon in writing that: (i) Company was, at the time of the unauthorized access, in full compliance with the requirements applicable to the Safe -T Services under this Schedule E; (ii) such unauthorized third party access due to the failure of the Safe -T Services has been confimned through a forensic investigation conducted by an independent third party auditor reasonably acceptable to Elavon; and (iii) Company did not, at the time of the unauthorized access, possess or store (directly or indirectly, including through any third party service provider) any PANs or other information subject to the requirements of the Payment Card Industry Data Security Standards Council in any form other than in the form of Tokens in compliance with the Tokenization Services. Any Safe -T Reimbursement paid to Company hereunder is separate from and will not be applied toward the overall aggregate liability cap set forth in Section 14.2 of the General Terms and Conditions or toward the liability cap for Elavon Data Breach Losses set forth in Section 143 of the General Terms and Conditions_ Item 18: Staff Report Pg. 122 Packet Pg. 307 of 857 Item 18 34 Attachment B - Elavon Master Services Agreement for Merchant Services EIa V o 1 1. Elavon—Master Sere ioes Agreement — Schedule E (Safe -T Teems) (v_4.1324) EXHIBIT A TO SCHEDULE E Fees [Note: Elavon sales to contact pricing team for custom pricing schedule for Safe -T] ❑1 Fees are set forth on Schedule A to Agreement ❑ Fees are separately provided under this Schedule E (Attachment follows) EE:f u'3 F77 F-V41*a ei�.iYxYf:"�F8:i5lIF7 Item 18: Staff Report Pg. 123 Packet Pg. 308 of 857 Item 18 Attachment B - Elavon 35 Master Services Agreement for Merchant Services Elavon. Elan— Mar Services Agreeme¢t — Schedule E (Safe -T Teams) (v.4.13.24) EXHIBIT B TO SCHEDULE E Enuiument Schedule If Company elects to purchase Equipment from Elavon in connection with Safe -T Link this Exhibit B will be a part of this Schedule E. 1. Equipment and Pricing. a) Purchased Equipment. Company has elected to purchase the Purchased Equipment set forth in Exhibit A to this Schedule E from Elavou. The fees payable by Company for the Purchased Equipment are set forth on Exhibit A to this Schedule E_ b) Shipping. The fees payable by Company for shipment of the Purchased Equipment to the location or locations designated by Company are set forth in Exhibit A to this Schedule E; provided, however, if the shipping fees are not set forth in Exhibit A to this Schedule E, then all actual costs and expenses of shipping will be paid by Company. Provided that the Purchased Equipment is shipped using Elavon's freight account, Elavon will bear the risk of loss of such Purchased Equipment until the time of delivery to Comnpany, if the Company directs Elavon to use any other shipping method, Company expressly acknowledges and agrees that all risk of loss for the Purchased Equipment will pass to Company when the Purchased Equipment is tendered by Elavon or on Elavon's behalf to the carrier for shipment to Company. Terminal Software and Encryption Keys _ Elavon will install the encryption keys and any applicable licensed software onto Company's POS Devices as specified in Exhibit A to this Schedule E prior to delivery of such POS Devices to Company, and Company will pay the applicable fees detailed in Exhibit A to this Schedule E for any encryption keys or licensed software that Company has elected to receive_ 3. Warranty Terms. Elavon's limited warranty with respect to POS Devices is set forth in the Equipment chapter of the Operating Guide_ If Company has selected additional warranty options for POS Devices purchased from Elavon, as indicated on Exhibit A to this Schedule E. the following terms will apply, as applicable, limited only to such POS Devices purchased from Elavon (and specifically excluding any other peripheral equipment purchased from Elavon and all equipment purchased from a third party): Premium Advanced Exchange Pro gram: The Premium Advanced Exchange Program provides the following services during the applicable warranty period, which will commence on the date of shipment of the POS Device to Company: i. If a POS Device requires service, on Company's request, Elavon will ship a like -model, refurbished POS Device to Company for delivery the next business day (provided Company's request is received prior to 6 pm. Eastern time) at no additional cost to Company. The refurbished POS Device will be configured and tested prior to shipment to Company. ii Company will be provided with a call tag to enable Elavon to retrieve or cause the retrieval of Company's POS Device requiring service. Company oust use the call tag promptly upon receipt. If Elavon does not receive the POS Device requiring service within 30 days of the issuance of the call tag, Company may be charged the cost of a new replacement POS Device_ iii_ Elavon will retrieve or cause the retrieval of the POS Device requiring service at no additional cost to Company_ iv_ Elavon will bill Company, and Company will be responsible for paying Elavon, for the costs of repairing PO5 Devices retrieved by Elavon unless such repairs are covered by the OEM warranty With regard to the Premium Advanced Exchange Program: (a) Company must initiate the exchange process with Elavon, and (b) Elavon will bear the risk of loss of the refurbished POS Device sent to Company and the POS Device requiring service while such POS Devices are in the possession of Elavon or its freight carrier, and Company will bear the risk of loss at all other times. Premium Repair Warranty Program: Item 18: Staff Report Pg. 124 Packet Pg. 309 of 857 Item 18 36 Attachment B - Elavon Master Services Agreement for Merchant Services �! y-� Elo r . Elavon - Mar Services Agreement - Schedule E (Safe -T Terms] (v_d_ 1334) The Premium Repair Warranty Program provides the following services during the warranty period, which will commence on the date of shipment of the POS Device to Company: i_ All repair fees, service, and parts related to any repair of the POS Device, other than with respect to repairs attributable to misuse or abuse of the POS Device or cosmetic damage not affecting the performance of the PO5 Device. ii_ cleaning and testing of repaired PO5 Devices_ With regard to the Premium Repair Warranty Program: (a) Company must obtain an RMA Number from Elavon in order to initiate the warranty process, and (b) Elavon will bear the risk of loss of the repaired PO5 Device while such POS Device is in the possession of Elavon or its freight carrier, and Company will bear the risk of loss at all other times. For the avoidance of doubt. any and all warranties provided under this Schedule E including this Exhibit B will not extend to any equipment, software or hardware purchased from any third party_ 4. A Miscellaneous Terms/Disclaimer. s/Disclaimer. This Exhibit B is supplemental to and forms a part of this Schedule E, the terms of which are fully applicable hereto. IN THE EVENT OF ANY DEFECT, MALFUNCTION, ERROR, OR DAMAGE TO ANY PURCHASED EQUIPMENT PROVIDED HEREUNDER, ELAVON'S SOLE OBLIGATION WILL BE THE PROVISION OF WARRANTY SERVICE PURSUANT TO THE WARRANTY OPTION (IF ANY) SELECTED BY COMPANY ON EIIBIT A TO THIS SCHEDULE E, AND COMPANY'S SOLE REMEDIES WITH RESPECT TO ELAVON WILL BE THE RECEIPT OF WARRANTY SERVICE FROM ELAVON OR ITS DESIGNEE PURSUANT TO SUCH WARRANTY OPTION OR UNDER THE MANUFACTURER'S WARRANTY_ ELAVON WILL HAVE NO LIABILITY TO COMPANY FOR COSTS, LOSSES, OR DAMAGES OF ANY I[ID OR NATURE, WHETHER DIRECT, INDIRECT, CONSEQUENTIAL OR OTHERWISE, WITH RESPECT TO ANY SUCH DEFECT, MALFUNCTION, ERROR, OR DAMAGE. Item 18: Staff Report Pg. 125 Packet Pg. 310 of 857 Item 18 37 Attachment B - Elavon Master Services Agreement for Merchant r Services EI Y o 1 Elavon — blaster Services Agreement — Schedule E (Safe -T Teams) EXII-IIBTT C TO SCHEDULE E Sintnlify skirt Bridge Software License If Company elects Safe -T Link, this Exhibit C will be a part of this Schedule E_ Section A — Terms and Conditions Definitions_ Capitalized terms used in this Exhibit C (the "Simplify License") and not otherwise defined herein will have the meanings ascribed to them in the glossary set forth in Section B of this Simplify License or, if not defined in such glossary, as defined in the Agreement 2. License Grant and Permitted Use. a) Elavon hereby grants to Company a limited, personal, non-exclusive, non-sublicensable (except as specifically set forth herein), and non -assignable (except in connection with a permitted assignment of the Agreement) license in the U.S. and, if the Agreement includes Schedule F, in Canada, during the Term to use and allow Authorized Users to use the Simplify Software as installed on Company's POS Devices owned or otherwise controlled by Company and to install, use, and allow Authorized Users to use any subsequent Releases of such Simplify Software provided to Company from time to time, solely for Company's internal business purposes to process data in accordance with the Documentation. This Simplify License permits Company to use the Simplify Software only on the total number of POS Devices set forth in Exhibit A to this Schedule E. Company is not permitted to use the Simplify Software to service any other POS Devices unless permitted by Elavon in writing_ Company is not authorized to make copies of the Simplify Software_ b) Elavon hereby grants to Company a limited, personal, non-exclusive, non-sublicensable (except as specifically set forth herein) and non -assignable (except in connection with a permitted assignment of the Agreement) license during the Tenn to use and to allow Authorized Users to use the Documentation solely in connection with access to and use of the Simplify Software pursuant to this Simplify License. Company will have the right to make a reasonable number of copies of the Documentation, at no additional charge, solely for Company's own internal business purposes in connection with access to and use of the Simplify Software under this Simplify License; provided, however, that all proprietary markings of Elavon must be affixed and retained by Company on any such copies_ c) Except as provided in this Simplify License, Company will not: (i) copy, re -sell, reproduce, transfer, rent, lease, pledge, sublicense, distribute or republish in any form or by any means or allow another to use or access the Licensed Materials, or any portion thereof, including, without limitation, to provide outsourcing, service bureau, hosting services or training to third parties; (ii) alter, modify or otherwise prepare derivative works of the Licensed Materials; (iii) reverse engineer, disassemble or decompile the Simplify Software, or any part thereof, (iv) remove, change or obliterate the copyright, trade secret or other proprietary protection legends or notices which appear on or in the Licensed Materials; or (v) combine any Licensed Materials with any unauthorized third party software_ Company will not access or use, and it will not permit any Authorized Users to access or use, the Licensed Materials or proprietary materials disclosed to Company for the purpose of creating, in whole or in parr:, a system that is functionally competitive with the Simplify Software_ Company will promptly notify Elavon of and will otherwise cooperate with Elavon in preventing any unauthorized access to, use of, or copying of the Licensed Materials by Authorized Users or any other third party_ d) Company may sublicense the foregoing license to its Affiliated Entities, provided that Company will be responsible for the acts and omissions of such Affiliated Entities as if the same were performed by Company. e) All rights not expressly granted to Company under this Simplify License are reserved by Elavon. 3. Delivery and Installation. a) All installation of the Simplify Software, other than installation of Releases (as described below) must be conducted by or at the direction of Elavon If Company purchases POS Devices from Elavon in conjunction with or subsequent to the Agreement Effective Date, the Simplify Software will be installed on such terminals prior to shipment to Company. If Company requests installation of the Simplify Software on POS Devices purchased prior to the Agreement Effective Date or not obtained from Elavon, Elavon and Company must enter into a Statement of Work or other agreement governing the delivery of such terminals to Elavon or Elavon's designee for installation of the Simplify Software_ b) Delivery of the Simplify Software by Elavon will be deemed to have occurred when a POS Device with the Simplify Software installed is tendered by Elavon or on Elavon's behalf to a carrier for shipment to Company. Elavon will deliver one copy of the Documentation to Company in a format determined by Elavon 4. Simnlif; Software Sunnort Services; Releases_ Item 18: Staff Report Pg. 126 Packet Pg. 311 of 857 Item 18 Attachment B - Elavon 38 Master Services Agreement for Merchant Services Elavon. Elavon- Master Services Agreement - Schedule E (Safe -T Tema) (v.4.13.24) a) Simplify Software Support Services. Elavon will provide Company with the following support services: i) Providing Company with solutions to any known material problem relating to each installation of the Simplify Software in a timely manner as such solutions become known to Elavon; ii) Using commercially reasonable efforts to supply timely corrections for problems reported to Elavon by Company that Elavon can reproduce in a currently supported version of the Simplify Software; iii) Furnishing a reasonable level of telephone support, as determined by Elavon, in the form of counsel and advice on use and maintenance of the Simplify Software; and iv) Providing Company with new Releases of the Simplify Software as provided herein. b) New Releases. Elavon will provide new Releases of the Simplify Software to Company in a manner consistent with the provision of new Application Releases, if applicable_ Elavon will not be responsible for any updates, upgrades or changes to Company's computer systems that may be necessary in conjunction with delivery, installation or use of any new Release of the Simplify Software. c) Supported Releases. Elavon will provide Simplify Software Support Services to Company only for (i) the then -current Release of the Simplify Software, if Company is using the On -Guard 3DES encryption solution, or (ii) the then -current Release and, for no more than 14 days following the delivery of the then -current Release, the immediately prior Release of the Simplify Software, if Company licenses an Application from Verifone, Inc_ (collectively, a "Supported Release"); provided that Company complies with the terms and conditions of this Simplify License and the Documentation, including, without limitation, payment obligations. d) Unsupported Releases_ If Company uses any Release other than a Supported Release (an "Unsupported Release'), except for providing telephone support under Section 4{a)(iii) above for the Unsupported Release, Elavon will have no obligation to provide any other Simplify Software Support Services for such Unsupported Release_ Elavon, in its sole discretion, may elect to provide Simplify Software Support Services for Unsupported Releases at an additional charge to be mutually determined by the parties in writing. Whether or not Elavon elects to provide Simplify Software Support Services for an Unsupported Release, Elavon will have no responsibility or liability for the compliance or non- compliance of any such Unsupported Release with industry standards, Laws or Payment Network Regulations. 5. Responsibilities of Comuanv. a) Company Data. Company acknowledges the Simplify Software does not verify accuracy of information or format of any data or information input by Company. b) Company Telecommmunications. Company will be responsible f4 ensuring that its telecominu cations connectivity, and any such connectivity provided by any third party on behalf of Company, is properly certified and maintained and complies with applicable industry rules and regulations, including Payment Network Regulations. c) Company Systems and Equipment Company will be responsible for ensuring that the systems and equipment, including, without limitation, any POS Devices and any systems or equipment of third -party vendors used by Company, remain certified and compatible with the most recent Release of the Simplify Software. Elavon will not be responsible for any updates, upgrades, or changes to Company's systems or equipment, including, without limitation, the POS Device or any third -party systems or equipment, that may be necessary in conjunction with delivery, installation or use of the Simplify Software. Failure of the Company's systems or equipment, including, without limitation, the POS Device, or any third -party systems, to remain certified or to be compatible and function with a Supported Release of the Simplify Software as regulated or required will excuse Elavon from any and all liability under this Simplify License and in connection with any other services that Elavon may be providing to Company for the failure of the Simplify Software to perform in accordance with the Documentation. If Company has obtained Purchased Equipment from Elavon, Elavon will ensure that each new Release of the Simplify Software is compatible with the Purchased Equipment until the end - of -life date established by the terminal manufacturer for such Purchased Equipment If any Purchased Equipment reaches its end -of -life date and Company has obtained replacement POS Devices that are compatible with the Simplify Software, Company and Elavon may enter into a Statement of Work providing for the installation of the Simplify Software on such replacement terminals. Company will not be obligated to pay a new license fee in conjunction with such installation, although Company may be obligated to pay fees for Professional Services in conjunction with such installation, as agreed by the parties_ d) ELAVON DOES NOT GUARANTEE THE ACCURACY, COMPLETENESS OR ADEQUACY OF ANY DATA OR OTHER INFORMATION PROVIDED OR MADE AVAILABLE BY COMPANY OR ITS AUTHORIZED USERS, AND ELAVON WILL NOT BE LIABLE FOR ANY ERROR, OMISSION, DEFECT, DEFICIENCY, OR NONCONFORMITY IN THE DATA OR RESULTS FROM USING THE LICENSED MATERIALS. EXCEPT TO Item 18: Staff Report Pg. 127 Packet Pg. 312 of 857 Item 18 39 Attachment B - Elavon Master Services Agreement for Merchant Services Elavon. Elavon— Master Sennoes Agreemetit — Schedule E (Safe -T Teams) (v.4.13.24) THE EXTENT DIRECTLY CAUSED BY A FAILURE OF THE LICENSED MATERL4LS TO PERFORM IN ACCORDANCE WITH THE DOCUMENTATION. e) Compliance by Company's Authorized Users. Company is responsible for compliance by each of its Authorized Users with the terms and conditions of this Simplify License and is responsible and liable for all access and use by Authorized Users and acts or omissions of Authorized Users under this Simplify License. 6. Ownership and Reservation of Rights. Elavon retains all right, title and interest in and to the Licensed Materials and all Intellectual Property Rights related thereto. No rights in the Licensed Materials are granted to Company other than those limited license rights expressly set forth in this Simplify License. Section B — Glossary for Simplify License Licensed Materials means one installed copy of the executable code (i.e. object code) of the Simplify Software per authorized Company POS Device and a copy of the Documentation reasonably necessary for a user to operate the Simplify Software and any permitted copies of the foregoing. Release means additional or replacement code or Documentation made generally available by Elavon that alters the capabilities or functionality of the Licensed Materials. Release does not include new or additional modules of Licensed Materials, which must be licensed separately from Elavon_ Revision means any product temporary fix, error corrections, work -around, or other maintenance correction made available by Elavon to its customers, as designated by a change in the number to the right of the second decimal point in the version number (e.g., from 1.1.1 to 1.1.2). Simplify Software means the installed version of the software application referred to and marketed as the Simplify software, including any Releases made available by Elavon to Company under this Simplify License. Simplify Software Support Services means the support services provided by Elavon to Company, as set forth in Section 4fa of this Simplify License. Supported Release has the meaning given to it in Section 4(d) of this Simplify License. Unsupported Release has the meaning given to it in Section 4(e of this Simplify License. Warranty Period means the period beginning on the Agreement Effective Date and ending on the earlier of 90 days from the Agreement Effective Date or the date of Company's first use in a production environment of a POS Device on which the Simplify Software is iastalled. Section C — Elavon Bridge License 1. Aunlicability. If Company has elected or is technically required to receive the Elavon Bridge software to facilitate the Gateway Services, the terms and conditions of this Section C will apply_ License Grant and Permitted Use. a) Elavon hereby grants to Company a limited, personal, non-exclusive, non-sublicensable (except as provided herein), and non -transferable (except in connection with a permitted assignment of the Agreement) license for the Term to use the Elavon Bridge as installed on Company's hardware solely to facilitate the Gateway Services (the "Bridge License"). b) Except as set forth above, Company will not (i) reproduce, market, distribute (electronically or otherwise), sell, assign, pledge, lease, deliver, license, sublicense, outsource, rent or otherwise transfer the Elavon Bridge to any third party or use the Elavon Bridge for service bureau, time-sharing, or other third -party use or to provide hosting or remote processing services to a third party; (ii) alter, modify or otherwise prepare derivative works of the Elavon Bridge; (iii) reverse engineer, disassemble or decompile the Elavon Bridge, or any part thereof (iv) remove, change or obliterate the copyright, trade secret or other proprietary protection legends or notices which appear on or in the Elavon Bridge; or (v) combine any Elavon Bridge with any unauthorized third party software_ Company will not access or use, and it will not permit any Authorized Users to access or use, the Elavon Bridge or proprietary materials disclosed to Company for the purpose of creating, in whole or in part, a system that is functionally competitive with the Elavon Bridge. Company will promptly notify Elavon of and will otherwise cooperate with Elavon in preventing any unauthorized access to, use of, or copying of the Elavon Bridge by Authorized Users or any other third party. Elavon and its designated agents may monitor and audit Company's use of the Elavon Bridge for purposes of verifying compliance with this Schedule_ Item 18: Staff Report Pg. 128 Packet Pg. 313 of 857 Item 18 Attachment B - Elavon 40 Master Services Agreement for Merchant Services Elavon. Elavon- Master Services Agreement - Schedule E (Safe -T Terms) (v.4.1324) c) Company may sublicense the foregoing license to its Affiliated Entities (if applicable), provided that Company will be responsible for the acts and omissions of such Affiliated Entities as if the same were performed by Company. d) All rights not expressly granted to Company under this Bridge License are reserved by Elavon_ 3. Installation. All installation of the Elavon Bridge must be conducted by or at the direction of Elavori Either Company will install the Elavon Bridge or Elavon will remotely install the Elavon Bridge on Company's hardware after consultation with Company as to the timing of such installation_ Company will allow Elavon all access to Company's hardware and related systems necessary to install the Elavon Bridge and any new releases. 4. Biidee Suunort Services: Feedback. a) Bridge Support Services_ Elavon will provide Company with the following support services (the "Bridge Support Services'): v) Providing Company with solutions to any known material problem relating to each installation of the Elavon Bridge in a timely manner as such solutions become known to Elavon; vi) Using commercially reasonable efforts to supply timely corrections for problems reported to Elavon by Company that Elavon can reproduce in a currently supported version of the Elavon Bridge; vii) Furnishing a reasonable level of telephone support, as determined by Elavon, in the form of counsel and advice on use and maintenance of the Elavon Bridge; viii) Providing Company with new releases of the Elavon Bridge (so long as Company complies with the terns set forth in this Bridge License)_ b) Limited. Warranty_ The Bridge Support Services will be performed in a professional and workmanlike manner_ Elavon will have and maintain sufficient resources to perform the Bridge Support Services in accordance with this Bridge License_ c) Feedback Company has no obligation to provide Elavon any suggestions, comments, or other feedback regarding the Elavon Bridge (collectively, -Feedback")_ If Company nonetheless provides Feedback to Elavon, Company agrees that Elavon may freely use, disclose, reproduce, license, distribute, and otherwise commercialize the Feedback in any products, technology, services, specifications or other documentation of Elavon or its Affiliates_ Feedback will not constitute Confidential Information, even if it would otherwise qualify as such pursuant to the Agreement. 5. Responsibilities of Comnanv. a) Company Systems and E ug ipment. Company will be responsible for ensuring that the systems and equipment, including any POS Devices and any systems or equipment of third -party vendors used by Company, remain certified and compatible with the most recent release of the Elavon Bridge. Elavon will not be responsible for any updates, upgrades, or changes to Company's systems or equipment, including the POS Device or any third -party systems or equipment, that maybe necessary in conjunction with delivery, installation or use of the Elavon Bridge_ Failure of the Company's systems or equipment, including POS Device, or any third -party systems, to remain certified or to be compatible and function with the most recent release of the Elavon Bridge as regulated or required will excuse Elavon from all liability under this Bridge License and in connection with any other services that Elavon maybe providing to Company for the failure of the Elavon Bridge to perform in accordance with its specifications. b) ELAVON DOES NOT GUARANTEE THE ACCURACY, COMPLETENESS OR ADEQUACY OF ANY DATA OR OTHER INFORMATION PROVIDED OR MADE AVAILABLE BY COMPANY OR ITS AUTHORIZED USERS, AND ELAVON WILL NOT BE LIABLE FOR ANY ERROR, OMISSION, DEFECT, DEFICIENCY, OR NONCONFORMITY IN THE DATA OR RESULTS FROM USING THE ELAVON BRIDGE, EXCEPT TO THE EXTENT DIRECTLY CAUSED BY A FAILURE OF THE ELAVON BRIDGE TO PERFORM IN ACCORDANCE WITH ITS SPECIFICATIONS. c) Compliance by Company's Authorized Users. Company is responsible for compliance by each of its Authorized Users with the terms and conditions of this Bridge License and is responsible and liable for all access and use by Authorized Users and acts or omissions of Authorized Users under this Bridge License. Item 18: Staff Report Pg. 129 Packet Pg. 314 of 857 Item 18 Attachment B - Elavon 41 Master Services Agreement for Merchant n Services Elo ! 1. Elavon - Master Services Agent - Schedule E Safe -TT (v-4-1334) EXHIBIT D TO SCHEDULE E Service Web Site Terms and Conditions If Company elects to use the Service Web Site (as defined below) in connection with Safe -T Link for certain Transaction management functionality, this Exhibit D ("Service Web Site Terms and Conditions") will be a part of this Schedule E and access to the Service Web Site will be deemed to constitute a part of the Safe -T Services. This Exhibit D only applies to Company if Company is receiving Processing Services from-Elavon- If Company is not receiving Processing Services from Elavon, the Service Web Site terms in the Operating Guide, and not the Service Web Site Terms and Conditions set forth below, will govern Company's access to the Service Web Site. 1- Definitions. Administratormeans the Company employee designated by Company to establish user groups for access to the Service Web Site by Authorized Users of Company and to issue and manage user IDs and passwords of Authorized Users. Service Web Site means the browser -based user interface operated by Elavon and located at the URL designated by Elavon (as such URL may be updated from time to time), which provides Company with batch management, settlement balancing, and Transaction research and reporting functionality 2. Company Access and Use of the Service Web Site. Subject to and in accordance with the terms, conditions and limitations set forth in the Agreement, including this Schedule E and this Exhibit D, Elavon grants Company a limited, revocable, non- exclusive, non -assignable (except as permitted under Section 1$5 of the General Terms and Conditions), non -transferable right during the Term of the Agreement to access and use the Service Web Site solely for Company's own internal business purposes- Company will designate an Administrator in writing- The Administrator will create passwords and user IDs for Authorized Users- For clarity, Section 5 of the Agreement applies to the Service Web Site - 3. Monitoring. Company acknowledges and agrees that Elavon may be able to monitor access to and use of the Service Web Site and to prohibit any access or use of data or information within the Service Web Site that Elavon reasonably believes is unauthorized, may violate applicable Law or Payment Network Regulations or that may pose an unacceptable risk of material harm to Elavon, other Elavon customers or Elavon's systems. Elavon has no obligation to detect or prevent, and will not be liable for failing to detect or prevent, any unauthorized access to or use of the Service Web Site using any password or user ID assigned to or by Company 4. Transaction Data. (a) Elavon will not be liable for Company's use of Company's or a thud party's telecommunications services and related networks, or fir any connectivity failure, erroneous transmission, comiption or loss of data, or inability to access the Service Web Site resulting from Company's or a third party's telecommunications systems, equipment, resources, or software - Without limiting the foregoing, Elavon will not be responsible for the reconstruction of any information or data lost in transmission to or from the Service Web Site due to any malfimriion of Company's or Company's third -party service provider's systems. Elavon is not responsible for ensuring or verifying the accuracy of the content or format of any Transaction Information it receives- COMPANY ACKNOWLEDGES AND AGREES THAT THE SERVICE WEB SITE RELIES ON THE DATA AND DIRECTIONS PROVIDED BY COMPANY AND ITS AUTHORIZED USERS- ELAVON DOES NOT GUARANTEE THE ACCURACY, COMPLETENESS OR ADEQUACY OF ANY DATA OR OTHER INFORMATION PROVIDED OR MADE AVAILABLE BY COMPANY OR ITS AUTHORIZED USERS, AND ELAVON WILL NOT BE LIABLE FOR ANY ERROR, OMISSION, DEFECT, DEFICIENCY, OR NONCONFORMITY IN DATA OR RESULTS OBTAINED THROUGH COMPANY'S USE OF THE SERVICE WEB SITE, EXCEPT TO THE EXTENT CAUSED BY ELAVON'S BREACH OF THESE SERVICE WEB SITE TERMS AND CONDITIONS - (b) Elavon may rely on instructions and approvals submitted by Company regarding access to and use of Transaction Information- Company (and its Authorized Users) may view and transmit certain Transaction Information via Service Web Site. If Company wants to access or receive copies of Transaction Infonn.ation that is not accessible or dowuloadable via the Service Web Site, Company may request that Elavon provide such Transaction Information, and Elavon will work with Company to provide such Transaction Information on mutually agreed upon terms, but Elavon will provide access to clear - text data only upon Company's execution of a completed clear card request form, which is available from Elavon upon request Following the expiration or termination of the Agreement, if Company wants to access or receive copies of Transaction Information stored by Elavon, Company will be required to: (i) enter into a data access agreement to be separately executed by the parties and (m) pay any fees imposed by Elavon in connection with such access. 11 Item 18: Staff Report Pg. 130 Packet Pg. 315 of 857 Elavon Item 18 42 Attachment B - Elavon Master Services Elavon Master Services A Agreement for Merchant 1.22) Services SCHEDULE H GOVERNMENT TERMS The terms in this Schedule H are applicable only in the event Company (i) has selected the checkbox on the signature page of the Agreement indicating that these terms apply, and (ii) qualifies as a "government entity" or "government institution" under applicable local, state or federal law. Except as expressly modified pursuant to this schedule, all terms and conditions of the Agreement, including all other schedules and addenda to the Agreement, remain in full force and effect and will govern the relationship between Elavon and Company. 1. Services for government entities and institutions. The Agreement is modified as follows for government entities and institutions: 1.1. Section 4.2. Company will have the following termination right added to the Agreement as 4.2(f): "(f) Company may terminate the Agreement on 60 days' prior written notice to Elavon if sufficient legislative appropriation is not available." 1.2. Section 4.4, Early Termination Fee, is deleted and replaced with "Intentionally Omitted." 1.3. Section 9.2(b) is revised as follows: "(b) PCI —DSS Attestation. Company may review Elavon's current PCI-DSS compliance status on the Payment Network website https://www.visa.com/splisting/searchGrsp.do, as available. Elavon will undergo an annual assessment of its compliance with the Security Programs and, if applicable to the Services provided under the Agreement, the Payment Application Data Security Standards. 1.4. Section 10.1 is revised as follows: "10.1. Elavon Reports on Internal Controls. Elavon will engage independent, qualified, external auditors (the "Elavon Auditors") to assess the internal controls and information security measures in place related to the Services ("Internal Controls Assessment"). The Internal Controls Assessment will conform with Laws, applicable Card Brand Regulations and industry standards, including generally accepted auditing standards such as the Statement on Standards for Attestation Engagements No. 18. "Attestation Standards: Clarification and Recodification" issued by the Auditing Standards Board of the American Institute of Certified Public Accountants (the "SSAE 18"). The frequency of the Internal Controls Assessment will be consistent with industry standards. Upon Company's written request and 30 days advance notice, Elavon make its SSAE 18 S0C 1 and S0C 2 reports available for Company review on Elavon's premises or through internet conferencing software (e.g. Cisco Webex or Microsoft Teams). Company's review shall take place during Elavon's normal business hours and not more frequently than once every 12 months. Company is not allowed to retain, record, or make copies of Elavon's S0C 1 or S0C 2 reports, which constitute Elavon's Confidential Information." 1.5. Section 13.1 is revised as follows: "13.1 Elavon Responsibilities. In addition to Elavon's obligations in Section 13.5, Elavon will be responsible for and will at its own expense defend itself against any suits, claims, losses, demands or damages arising out of (a) Elavon's breach of the Agreement; (b) Elavon's or its third party contractors' gross negligence or willful misconduct; (c) Elavon's or its third party contractors' violation of applicable Laws or Payment Network Regulations; (d) Elavon's alleged infringement or other violation of a U.S. or Canada patent, copyright or trademark of a third party by the Services in the form delivered or Company's use thereof, or (e) any personal injury or real or tangible personal property damage to the extent caused by Elavon or its third party contractors." Item 18: Staff Report Pg. 131 Packet Pg. 316 of 857 Elavon 1.6. Section 13.2 is revised as follows: Item 18 Attachment B - Elavon 43 Master Services Elavon Master Services A Agreement for Merchant 1.22) Services "13.2 Company Responsibilities. As between Company and Elavon, Company will be responsible for, and at its own expense, defend itself against any suits, claims, losses, demands or damages arising out of (a) any sale of goods or services resulting in a Transaction processed under the Agreement; (b) Company's breach of the Agreement; (c) all use of any user ID and password other than by Elavon or Elavon's third -party contractors; (d) Company's or its Service Providers' gross negligence or willful misconduct; (e) Company's or its Service Providers' violation of Laws or Payment Network Regulations; or (f) any personal injury or real or tangible personal property damage to the extent caused by Company or its Service Providers. Company will not make any claims against Elavon for any liabilities, claims losses, costs, expenses and demands of any kind or nature, arising out of or in connection with any of the foregoing suits, claims, losses, demands or damages." 1.7. Sections 13.3 is deleted. 1.8. Section 13.4 is revised as follows: 13.4. Procedure. (a) If an Infringement Claim (as defined in Section 13.5) is subject to Elavon's obligations in Section 13.5 of the Agreement, Company will: (i) Provide Elavon prompt notice of the Infringement Claim (provided that any delay in notification will not relieve Elavon of its obligations under Section 13.5 except to the extent that the delay materially impairs its ability to fully defend the Infringement Claim); (ii) Subject to Section 13.4(b), give Elavon the right to exercise exclusive control over the preparation and defense of the Infringement Claim; and (iii) Provide such assistance in connection with the defense and settlement of the Infringement Claim as Elavon may reasonably request, at Elavon's expense. Elavon will not enter into any settlement that imposes any liability or obligation on Company, or contains any admission or acknowledgement of wrongdoing (whether in tort or otherwise), without Company's prior written consent. (b) Company may join in the defense, with its own counsel, at its own expense. 1.9. Section 13.5 is revised as follows: "13.5. Infringement Claims. (a) Elavon will defend Company and its employees, officers, and agents in connection with claims, actions, demands or proceedings (made or threatened) brought by a third party, and will pay the final award of damages assessed against Company, its employees, officers or agents in a final judgment by a court of competent jurisdiction, including awarded costs, or any amount in settlement or compromise authorized by Elavon in writing, arising out of Elavon's alleged infringement or other violation of a U.S. or Canada patent, copyright or trademark of a third party by the Services (but not Equipment) in the form delivered or Company's use thereof (an "Infringement Claim"). (b) If any part of the Services or the use of the Services becomes, or in Elavon's opinion is likely to become, the subject of an Infringement Claim, and as a result of such Infringement Claim Company's use of the Services may be enjoined or interfered with, then Elavon will, at its option and expense, either, and in addition to defending Company and paying the final amount of damages as provided for in this section, (i) obtain a license for Company to continue using the alleged infringing component(s) of the Services; (ii) modify the alleged infringing component(s) of the Item 18: Staff Report Pg. 132 Packet Pg. 317 of 857 Item 18 Attachment B - Elavon I44 Master Services E Iavon. Elavon Master Services A Agreement for Merchant 1.22) Services J Services to avoid the infringement in a manner that still permits the Services to perform in all material respects in accordance with the Agreement; or (iii) replace the alleged infringing component(s) of the Services with compatible, functionally equivalent, and non -infringing component(s). Elavon will use commercially reasonable efforts to accomplish the remedies identified in this section in a manner that minimizes the disruption to Company's business operations. If Elavon is not able to accomplish the above remedies within a commercially reasonable time frame and on commercially reasonable terms, Elavon may terminate the Agreement upon written notice to Company. Upon such termination, Elavon will promptly refund any fees paid for Services not performed as of the date of termination. (c) Elavon will have no liability for any Infringement Claim to the extent caused by (i) access to or use of the Services other than as specified under the Agreement and the related Documentation, (ii) combination or use of the Services with non-Elavon products or services (whether or not provided to Company by Elavon), (iii) any hardware, devices, software, services or other resources not provided by Elavon, (iv) failure or refusal by Company to install, implement or use any Update or correction provided by Elavon, (v) modification or alteration of the Services by anyone other than Elavon without Elavon's prior written consent, (vi) Company's goods or services, or (vii) the negligence, gross negligence or willful misconduct of, or breach of the Agreement by, Company. (d) THIS SECTION 13.5 SETS FORTH THE EXCLUSIVE REMEDY OF COMPANY AND THE SOLE AND COMPLETE LIABILITY OF ELAVON WITH RESPECT TO ANY INFRINGEMENT CLAIMS." 1.10. Section 18.2, Jurisdiction and Venue; Governing Laws, is deleted and replaced with "Intentionally Omitted." 1.11. Section 18.3, Exclusivity, is deleted and replaced with "Intentionally Omitted." 1.12. Section 1.7(b) of Schedule D, Financial Information, is revised as follows: "1.7(b) Financial Information. At Elavon's request, Company will provide Elavon audited financial statements prepared by an independent certified public accountant selected by Company, or if Company is audited by a governmental authority, then Company will provide financial statements from such governmental authority. Within 120 days after the end of each fiscal year (or in the case of a government entity, when available), Company will furnish Elavon, as requested, a financial statement of profit and loss for the fiscal year and a balance sheet as of the end of the fiscal year, each audited as provided above. Company will also provide Elavon such interim financial statements and other information as Elavon may request from time to time." 2. Elavon Fee Collection Models 2.1. Direct Debit Fee Collection Model. If Company elects the Direct Debit fee collection model on Schedule B, then Section 6.1 of the Agreement will remain unchanged and in full force and effect. 2.2. Invoice Fee Collection Model. If Company elects and is approved for the invoice fee collection model on Schedule B, then the second sentence of Section 6.1 of the Agreement is deleted and replaced with the following: "Such fees will be calculated once each month for the previous month's activity. Elavon will send Company an invoice reflecting the fees due, which Company will pay within 30 days of the invoice date. In addition to all other available remedies, Elavon may offset any outstanding or uncollected amounts that are more than 90 days past due from (i) any amounts it would otherwise be obligated to deposit into the DDA and (ii) any other amounts Elavon may owe Company under the Agreement." Item 18: Staff Report Pg. 133 Packet Pg. 318 of 857 Item 18 (Tht C 1 Attachment C - US Bank THIS DOCUMENT IS A STANDARD AGREEMENT FOR USE WITH GENERAL A Agreement for WITH AN Investment Safekeeping INSURER, INVESTMENT -FUND SPONSOR, OUTSIDE TRUSTEE, OR EMPLOYEE 1. (Custodial) Services CUSTODY AGREEMENT (GENERAL ASSETS) This Custody Agreement (the "Agreement") is between (legal name of entity), a (legal form of entity) organized under the laws of , ("Customer"), and U.S. Bank National Association, a national banking association organized under the laws of the United States with offices in Minneapolis, Minnesota ("Bank"). The parties hereby agree as follows: SECTION 1 DEFINITIONS 1.1. "Account" means (i) the custody account established in the name of Customer and maintained under this Agreement for the Assets (as defined below) and (ii) where the context requires, one or more Sub -accounts (as defined below). 1.2. "Accounting Standards" means Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 820, Fair Value Measurement, or Governmental Accounting Standards Board (GASB) Codification Statement No. 72, Fair Value Measurement and Application. 1.3. "Affiliated Investment" means a security or other property issued, offered, or serviced by Customer or Customer's affiliate. 1.4. "Assets" means the securities, cash, and other property Customer contributes, or causes to be contributed, from time to time under this Agreement; investments and reinvestments thereof; and income thereon, as provided herein. 1.5. "Cash -flow Analysis" means a periodic written analysis of Customer's cash -flow history, short-term financial needs, long-term financial needs, expected levels and timing of contributions, expected levels and timing of distributions, liquidity needs (including but not limited to the anticipated liquidity required to make distributions), ability to provide future funding, and other significant information which could affect cash -flow or the exercise of discretion to manage the Assets. 1.6. "CFR" means the Code of Federal Regulations. 1.7. "Client -controlled Asset" means an asset that is neither registered in the name of Bank or Bank's nominee nor maintained by Bank at a Depository (as defined below) or with a sub -custodian nor held by Bank in unregistered or bearer form or in such form as will pass title by delivery. 1.8. "Code" means the Internal Revenue Code of 1986, as amended. 1.9. "Depository" means any central securities depository (such as the DTC), international central securities depository (such as Euroclear Bank SA/NV), or Federal Reserve Bank. 1.10. "DTC" means the Depository Trust Company. 1.11. "ERISA" means the Employee Retirement Income Security Act of 1974, as amended. 1.12. "Guidelines" means the written investment objectives, policies, strategies, and restrictions for the Account (or for any Sub -accounts therein), including but not limited to proxy -voting guidelines, as amended from time to time Page Item 18: Staff Report Pg. 134 Packet Pg. 319 of 857 Item 18 Attachment C - US Bank Agreement for 1.13. "Harm" means claims, costs, damages, expenses (including attorneysand other es, interest, Investment Safekeeping liabilities, losses, penalties, and taxes. (Custodial) Services 1.14. "Indemnified Person" means Bank and its affiliates, and their officers, directors, employees, agents, successors, and assigns. 1.15. "Investment Advice" means a recommendation, or a suggestion to engage in or refrain from taking a particular course of action, as to (i) the advisability of acquiring, holding, disposing of, or exchanging any Asset or any securities or other investment property or (ii) the Guidelines, the Cash -flow Analysis, the composition of the Account's portfolio, or the selection of persons to provide investment advice or investment management services with respect to the Assets. 1.16. "Investment Company Act" means the Investment Company Act of 1940, as amended. 1.17. "IRS" means the Internal Revenue Service. 1.18. "Messaging System" means any financial -messaging system, network, or service acceptable to Bank, such as the Society for Worldwide Interbank Financial Telecommunication messaging system. 1.19. "National Securities Exchange" means a securities exchange that is registered with the SEC (as defined below) under Section 6 of the Securities Exchange Act of 1934. 1.20. "Plan -assets Vehicle" means an investment contract, product, or entity that holds plan assets (as determined pursuant to ERISA §§3(42) and 401 and 29 CFR §2510.3-101). 1.21. "Private Fund" means an issuer that would be an "investment company" as defined in the Investment Company Act but for §3(c)(1) or (7) thereof. 1.22. "SEC" means the United States Securities and Exchange Commission. 1.23. "State" means the State of Minnesota, United States of America. 1.24. "Statement Recipient" means Customer and anyone else Customer so designates. 1.25. "Sub -account" means a separate portion of the Account. SECTION 2 APPOINTMENT AND ACCEPTANCE 2.1. Appointment; Acceptance. Customer hereby appoints Bank as custodian of the Assets. Bank hereby accepts such appointment and agrees to hold the Assets in the Account with due care in accordance with reasonable commercial standards, upon the terms and conditions set forth below. 2.2. Establishment of Account. 2.2.1. Customer hereby contributes Assets, or causes Assets to be contributed, to the Account. 2.2.2. Customer hereby represents, warrants, and covenants as follows, and Bank may resign immediately if Customer breaches any such representation, warranty, or covenant: 2.2.2.1. Customer holds good and valid legal title to all Assets. 2.2.2.2. None of the Assets is (i) an asset of any "plan" as defined in ERISA §3(3); any "plan" as defined in Code §4975(e)(1); any Plan -assets Vehicle; or any plan or entity not otherwise within the foregoing definitions that is subject to similar restrictions under federal, state, or local law; (ii) subject to the requirements of a special reserve bank account under SEC Rule 15c3-3; a customer segregated account, cleared swaps customer account, or customer secured Page Item 18: Staff Report Pg. 135 Packet Pg. 320 of 857 Item 18 Attachment C - US Bank account under U.S. Commodity Futures Trading Commission Rules 1.20, 22.5, or 30.7; or Agreement for Igulation; or (iii) subject to a public -deposits, public -funds, or other State law that would require Bank to Investment Safekeeping government � p p ' q (Cutodial) services obligations, government -guaranteed obligations, surety bonds, letters of credit, or other ass rdless of the type or amount of capital of Bank, the amount of public deposits held by Bank, or the extent to which the Assets are not insured by the Federal Deposit Insurance Corporation or exceed federal deposit insurance limits. 2.2.2.3. Customer is neither (i) a Private Fund, (ii) an investment pool or entity that is an "investment company" as defined in Investment Company Act §3(a) or is excluded from such definition (or exempted from regulation) by the Investment Company Act, (iii) an insurer, (iv) a reinsurer, nor (v) a natural person. 2.2.2.4. Customer is not a trustee of, and has no duty to engage a trustee for, the Assets. 2.2.3. As directed by Customer, Bank will establish one (1) or more Sub -accounts and allocate Assets among Sub - accounts. Customer hereby covenants not to direct Bank to establish any Sub -account for the benefit of any entity having a different taxpayer identification number than Customer and acknowledges that each Sub -Account will have the same taxpayer identification number as Customer. 2.2.4. Customer hereby covenants not to cause or permit the Account to acquire any Affiliated Investment the price of which is not quoted on a National Securities Exchange. 2.2.5. Bank will keep the Assets (other than deposits at Bank) separate and apart from the assets of Bank. SECTION 3 BOOKS, RECORDS, AND ACCOUNTS 3.1. Accounting. Bank shall maintain proper books of account and complete records of Assets and transactions in the Account. SECTION 4 ASSET DELIVERY, TRANSFER, CUSTODY, AND SAFEKEEPING 4.1. Customer will from time to time deliver, or cause to be delivered, Assets to Bank. Bank shall receive and accept such Assets for the Account upon directions from Customer. 4.2. Account Statements. Bank will furnish each Statement Recipient with (i) an Account statement with the frequency designated below (or as subsequently agreed upon by Bank and Customer) within thirty (30) calendar days after the end of the reporting period and (ii) a final Account statement within thirty (30) calendar days after Bank has transferred all Assets from the Account as provided under this Agreement. (However, if Customer directs Bank to hold an Account statement, then Bank may delay delivery thereof until thirty (30) calendar days after the hold has expired.) Such Account statements will reflect Asset transactions during the reporting period and ending Asset holdings. To the extent Customer has established an account in Bank's on-line portal and granted access thereunder to Statement Recipients, Bank will furnish such Account statements by way of such system. If no frequency is so designated or agreed upon, Customer shall be deemed to have designated "Monthly". (Check at least one): ❑ Monthly ❑ Quarterly ❑ Semi-annually ❑ Annually 4.3. Confirmations; Notification by Agreement. Except to the extent that Customer and Bank have entered into a separate written agreement that expressly makes Bank an investment manager of the Assets, the Account statements described above (including their timing and form) serve as the sole written notification of any securities transactions effected by Bank for the Account. Even so, Customer has the right to demand that Bank provide written notification of such transactions pursuant to 12 CFR § 12.4(a) or (b) at no additional cost to Customer. Page Item 18: Staff Report Pg. 136 Packet Pg. 321 of 857 4 Item 18 Attachment C - US Bank Agreement for 4.4. Corporate Actions. Bank shall forward to any person authorized under this Agr Investment Safekeeping purchase or sale of an Asset information Bank receives with respect to the Asset concerning corporate (Custodial) Services 4.4.1. Notwithstanding anything herein to the contrary, Bank will, without forwarding such information or providing notice, (i) cause Assets to participate in any mandatory exchange transaction that neither requires nor permits approval by the owner of the Assets and (ii) file any proof of claim received by Bank during the term of this Agreement regarding class-action litigation over a security held in the Account during the class-action period, regardless of any waiver, release, discharge, satisfaction, or other condition that might result from such a filing. 4.5. Upon receipt of directions from Customer, Bank shall return Assets to Customer, or deliver Assets to such location or third party as such directions may indicate, provided that in connection therewith it is the sole responsibility of Customer to provide any transfer documentation as may be required by the applicable Depository or third party recipient. Bank shall have no power or authority to assign, hypothecate, pledge or otherwise dispose of any Assets, except as provided herein or pursuant to such directions. SECTION 5 POWERS OF BANK 5.1. In the performance of its duties under this Agreement, Bank shall have the power to: 5.1.1. Sign Documents. Make, execute, acknowledge, and deliver any and all documents of transfer and conveyance and any or all other instruments that may be necessary or appropriate to the proper discharge of its duties under this Agreement. 5.1.2. Hire Service Providers. Hire service providers to assist Bank in exercising Bank's powers under this Agreement, including any service provider that is affiliated with Bank, and provide them with information about the Account as needed to that end. 5.1.3. Hold Assets Un-invested. Hold in a noninterest-bearing deposit account of Bank any cash Assets (i) that are subject to pending investment or distribution directions received by Bank with respect to the Account, (ii) that were received by Bank too late in the day to be invested into the Account's designated sweep vehicle, (iii) as directed under this Agreement, or (iv) for other operational reasons. 5.1.4. Retain or Interplead Disputed Funds. With respect to Assets that are the subject of a dispute, (i) withhold delivery or distribution thereof pending final adjudication of the dispute by a court or (ii) file an interpleader action or petition a court for instructions at Account expense. 5.1.5. Distribute Assets. Distribute Assets as set forth herein. 5.1.6. Safe -keep Assets. Safe -keep Assets as set forth herein. 5.1.7. Register Assets. Register any Asset in the name of Bank or Bank's nominee or to hold any Asset in unregistered or bearer form or in such form as will pass title by delivery, provided that Bank's records at all times show that all such assets are part of the Account. 5.1.8. Maintain Assets at a Depository or with a Sub -custodian. Maintain Assets that are (i) book -entry securities at any Depository or with any sub -custodian and to permit such Assets to be registered in the name of Bank, Bank's nominee, the Depository, the Depository's nominee, the sub -custodian, or the sub -custodian's nominee and (ii) physical securities at Bank's office in the United States and in a safe place. 5.1.9. Maintain Assets at a Mutual Fund. Maintain Assets that are mutual -fund shares in Bank's omnibus position at the fund. Page Item 18: Staff Report Pg. 137 Packet Pg. 322 of 857 5 Item 18 Attachment C - US Bank 5.1.10. Collect Income. Collect all income, principal, and other distributions Agreement for Assets. If Customer directs Bank to search the DTC's Legal Notice System for notice that a particular Investment Safekeeping has refused payment after due demand, then Bank will conduct such a search and notify Customer of an (Custodial) Services Inds therein. 5.1.11. Exchange Foreign Currency. Exchange foreign currency into and out of United States dollars through customary channels, including Bank's foreign exchange department. 5.1.12. Advance Funds or Securities. Advance funds or securities in furtherance of settling securities transactions and other financial -market transactions under this Agreement. SECTION 6 PERMISSIBLE INVESTMENTS; SWEEP DIRECTION 6.1. Permissible investments for the Account include, but are not limited to, any securities or property administered, advised, custodied, held, issued, offered, sponsored, supported by the credit of, underwritten, or otherwise serviced by Bank or by Bank's affiliate. 6.2. Sweep Direction. To the extent Bank has received no investment direction as to cash Assets held in the Account, Bank will use such Assets to purchase a position in the Account's designated sweep vehicle. SECTION 7 SETTLEMENT 7.1. Upon receipt of directions from Customer, Bank will settle purchases made with Assets and sales of Assets on a contractual basis according to Bank's instruction -deadline schedule and current securities -industry practices, if Bank has all the information and the Account has all the Assets necessary for the purchase or sale. With respect to purchases and redemptions of mutual -fund shares, Customer hereby acknowledges that meeting Bank's internal trading cut-off on any business day does not guarantee (i) that Bank will settle the purchase or redemption on the same business day or (ii) if the fund has a floating or variable net asset value ("NAV"), the use of the NAV then most recently determined. 7.2. Customer hereby covenants not to (i) direct the purchase of an asset, notify a third party that Bank will settle the purchase, or cause or permit anyone else to provide such direction or notice, if the Account has insufficient funds to settle the purchase; (ii) cause or permit proceeds from the sale of an Asset to be used to pay for the earlier purchase of the same Asset; or (iii) cause or permit the sale of an Asset that the Account has not fully paid for. 7.3. With respect to any sale of an Asset on a non -delivery -versus -payment basis, Bank hereby covenants to use commercially reasonable efforts to obtain payment on the same business day that Bank delivered the Asset, and the Account (and not Bank) assumes all risk that payment is delayed or not received. SECTION 8 PRICE -REPORTING; CLIENT -CONTROLLED ASSETS 8.1. Price -reporting. For purposes of reporting the price of an Asset on an Account statement: 8.1.1. Pricing from Vendor or Exchange. If Bank receives a price from its third -party pricing vendor, or if a price is quoted on a National Securities Exchange, then Bank will report such price. 8.1.2. Pricing from Other Sources. If Bank does not receive a price from its third -party pricing vendor, and a price is not quoted on a National Securities Exchange, then Bank will report (i) the most recent price that Bank received from Customer or Customer's agent (and Customer hereby covenants that Customer and Customer's agents will use a pricing form acceptable to Bank as the means of providing prices to Bank), (ii) the most recent price that Bank received from the Asset's broker, fund accountant, general partner, issuer, investment manager, transfer agent, or other service provider, (iii) the Asset's par value, or (iv) a nominal value for the Asset. Page Item 18: Staff Report Pg. 138 Packet Pg. 323 of 857 Item 18 Attachment C - US Bank Agreement for 8.1.3. Limitations. Customer hereby acknowledges that Bank is performii terial, non - discretionary price -reporting function and that the reported price might be neither fair m Investment Safekeeping Value (under Accounting Standards or applicable law). Customer hereby covenants not to rely on the r (Custodial) Services ubstitute for (i) determining the Asset's value in connection with a decision to acquire, hold, dispose of, or exchange any securities or other investment property; (ii) obtaining and ensuring the reliability of an independent third -party appraisal with respect to such a decision; or (iii) obtaining Investment Advice. 8.1.4. Pricing Sources; Methodology. Upon Customer's request, Bank will provide Customer with information about Bank's pricing sources and methodologies. 8.2 Client -controlled Assets. Customer may direct Bank from time to time to include in the Account statements specific Client -controlled Assets that are registered in the name of Customer. In such a case, Bank has the right to exclude such assets from the Account statements or to include them with a notation about control. To the extent Bank includes them, Customer hereby acknowledges that: 8.2.1. Customer is responsible for reviewing (i) the Account statements to ensure that they include notations about the control of each such asset and (ii) any third -party reports made accessible by Bank to ensure that they do not inaccurately identify the holder of any such assets. 8.2.2. Bank is not responsible for performing any duties under this Agreement (other than statement -reporting duties, as limited herein) with respect to such assets, and Customer assumes all such duties. 8.2.3. When furnishing Account statements or making third -party reports accessible, Bank may rely on information provided by Customer or by Customer's agents, affiliates, or representatives with respect to such assets (including, but not limited to, information on the units, price, or marketability of such assets) without questioning the information. To that end, Customer will cause each holder of such assets to provide Bank with a copy of such holder's periodic Customer account statements with respect to such assets. 8.2.4. Such assets are subject to Exhibit A (Fee Schedule) hereto. SECTION 9 LIMITATIONS ON DUTIES 9.1. Customer hereby acknowledges that Bank does not provide any services under this Agreement (i) in a "fiduciary capacity" within the meaning of 12 CFR §9.2(e) or (ii) as a "fiduciary" as such term may be defined in State law or otherwise. 9.2. The duties of Bank will be strictly limited to those set forth in this Agreement, and no implied covenants, duties, responsibilities, representations, warranties, or obligations shall be read into this Agreement against Bank. Without limiting the generality of the foregoing, Bank shall have no duty to: 9.2.1. Evaluate or to advise anyone of the prudence, suitability, or propriety of action or proposed action of Customer in any particular transaction involving an Asset or the suitability or propriety of retaining any particular investment as an Asset; review, question, approve, or make inquiries as to any investment directions received under this Agreement; or review the securities or other property held in the Account with respect to prudence or diversification. 9.2.2. Act as trustee of the Assets. 9.2.3. Act as custodian of any assets other than the Assets. 9.2.4. Act as investment manager of the Assets, except to the extent the Assets are subject to Bank's discretion to manage under a separate written investment -management agreement (if any). 9.2.5. Provide Investment Advice. Page Item 18: Staff Report Pg. 139 Packet Pg. 324 of 857 Item 18 Attachment C - US Bank 9.2.6. Determine, monitor, question, or collect any contributions to the Account Agreement for rice with any Investment Safekeeping applicable funding requirements. (Custodial) Services 9.2.7. Inspect, review, or examine any Client -controlled Asset or governing, offering, subscription, or similar document with respect thereto, to determine or question whether the asset or document is authentic, genuine, enforceable, properly signed, appropriate for the represented purpose, is what it purports to be on its face, or for any other purpose, or to execute such document, regardless of whether Bank has physical possession of such asset or document. 9.2.8. (i) Collect any income, principal, or other distribution due and payable on an Asset if the Asset is in default or if payment is refused after due demand or (ii) except as expressly provided herein, to notify Customer in the event of such default or refusal. 9.2.9. Provide notice of, or forward, mini -tenders (which are tender offers for less than 5% of an outstanding equity or debt issue) for any equity or debt issue. 9.2.10. Determine or question whether any direction received under this Agreement is prudent or contrary to applicable law; to solicit or confirm directions; or to take notice of facts not actually known by any Bank employee with direct responsibility for providing services under this Agreement. 9.2.11. Calculate, withhold, prepare, sign, disclose, file, report, remit, or furnish to any taxing authority or any taxpayer any federal, state, or local taxes, tax returns, or information returns that may be required to be calculated, withheld, prepared, signed, disclosed, filed, reported, remitted, or furnished with respect to the Assets or the Account, except to the extent such duties are required by law to be performed only by Bank in its capacity as custodian under this Agreement or are expressly set forth herein. 9.2.12. Monitor service providers hired by Customer or guarantee their performance. 9.2.13. Advance funds or securities or otherwise expend or risk its own funds or incur its own liability in the exercise of its powers or rights or performance of its duties under this Agreement. SECTION 10 AUTHORIZED PERSONS; DELIVERY OF DIRECTIONS 10.1. Authorized Persons. With respect to this Agreement: 10.1.1. Customer will notify Bank of the identity of each (i) employee of Customer who is authorized to act on Customer's behalf, (ii) third -party agent that is authorized to act on Customer's behalf, and (iii) employee of each third - party agent who is authorized to act on such agent's behalf. In no event is any such agent authorized to execute this Agreement or any amendment thereto or to terminate this Agreement. 10.1.2. Bank may assume that any such employee or agent continues to be so authorized, until Bank receives notice to the contrary from Customer (or, with respect to any such employee of any such agent, from such agent). 10.1.3. Customer hereby represents and warrants that any such employee or agent was duly appointed and is appropriately monitored and covenants that Customer will furnish such employee or agent with a copy of this Agreement, as amended from time to time. Customer hereby acknowledges that (i) such employee's or agent's actions or omissions are binding upon Customer as if Customer had taken such actions or made such omissions itself and (ii) Bank is indemnified, released, and held harmless accordingly. 10.2. Delivery of Directions. Any direction, notice, or other communication under this Agreement will be given in writing and (i) addressed as provided pursuant to this Agreement, (ii) entered into Bank's on-line portal, or (iii) sent by Messaging System. If a direction, notice, or other communication was so addressed, entered, or sent, then the recipient bears no risk that the direction, notice, or other communication as received by the recipient was compromised by fraud. Furthermore, any direction under this Agreement to Bank to distribute or transfer cash Assets will not be sent by email. Page Item 18: Staff Report Pg. 140 Packet Pg. 325 of 857 Item 18 Attachment C - US Bank SECTION 11 Agreement for FEES AND EXPENSES Investment Safekeeping (Custodial) Services 11.1. Fees; Expenses. Customer shall pay Bank compensation for providing services under this Agreement. A schedule of that compensation is attached as Exhibit A (Fee Schedule) hereto. 11.2. Outstanding Fees and Expenses. To the extent of any outstanding compensation, expenses, fees, costs, or other charges incurred by Bank in providing services under this Agreement, Customer hereby grants Bank a first -priority lien and security interest in, and right of set-off against, the Assets. Bank may execute that lien and security interest, and exercise that right, at any time. 11.3. Advance of Funds or Securities. To the extent of any advance of funds or securities under this Agreement, Customer hereby grants Bank a first -priority lien and security interest in, and right of set-off against, the Assets. Bank may execute that lien and security interest, and exercise that right, at any time. Furthermore, nothing in this Agreement constitutes a waiver of any of Bank's rights as a securities intermediary under Uniform Commercial Code §9-206, and Customer hereby acknowledges that the obligation to pay a purchase price to Bank arises at the time of the purchase. SECTION 12 INDEMNIFICATION 12.1. Indemnification. 12.1.1. Customer hereby indemnifies and releases each Indemnified Person and holds each Indemnified Person harmless from and against, and an Indemnified Person will incur no liability to any person or entity for, any Harm that may be imposed on, incurred by, or asserted against an Indemnified Person by reason of the Indemnified Person's action or omission in connection with this Agreement or the Account, except to the extent that a court of competent jurisdiction has made a final, non -appealable judgment that the Harm resulted directly from the Indemnified Person's willful misconduct, gross negligence, or bad faith. 12.1.2. The foregoing provisions shall survive the termination of this Agreement. 12.2. Force Majeure. No party is liable for any delay or failure in performing its obligations under this Agreement caused by wars (whether declared or not and including existing wars and the invocation of war powers), revolutions, insurrections, riots, civil commotion, acts of God, medical emergencies, disease outbreaks, accidents, fires, explosions; stoppages of labor, strikes, or other differences with employees (other than Bank's disputes with its employees); laws, regulations, orders, or other acts of any governmental authority; or any other circumstances beyond its reasonable control, regardless of whether such was already in existence as of the date of this Agreement. Nor will any such failure or delay give any party the right to terminate this Agreement. 12.3. Damages. No party is liable for any indirect, incidental, special, punitive, or consequential damages arising out of or in any way related to this Agreement or the performance of its obligations under this Agreement. This limitation applies even if the party has been advised of, or is aware of, the possibility of such damages. 12.4. Statements. Bank is not liable with respect to the propriety of Bank's actions or omissions reflected in a statement furnished under this Agreement, except to the extent a Statement Recipient objects to Bank within thirty (30) calendar days after such statement is furnished. SECTION 13 TERMINATION OR SHUTDOWN 13.1. Termination of Agreement. This Agreement terminates upon the effective date of Bank's resignation or removal under this Agreement. 13.2. Resignation; Removal. Page Item 18: Staff Report Pg. 141 Packet Pg. 326 of 857 Item 18 Attachment C - US Bank 13.2.1. Bank may resign under this Agreement by notice to Customer. Custom Agreement for k under this Agreement by notice to Bank. The resignation or removal shall be effective thirty (30) ca Investment Safekeeping livery of the notice, except to the extent the parties agree in writing to a different effective date. By such(Custodial) Services stomer shall appoint a new custodian and notify Bank of the appointment. If Customer fails to do so, Bank shall have the right to petition a court at Account expense for appointment of a new custodian. 13.2.2. Upon receiving notice of such appointment, Bank will transfer Assets to the new custodian as directed by Customer or the court, as the case may be. However, Bank shall not be required to transfer any Assets until Bank has received payment or reimbursement for all (a) compensation, expenses, fees, costs, or other charges incurred by Bank in providing services under this Agreement and (b) funds or securities advanced under this Agreement. 13.3. Shutdown. Notwithstanding anything herein to the contrary, Bank shall have the power to segregate or restrict an asset, delay processing a direction or transaction, refuse to process a direction or transaction, or suspend the Account for one or more business days or close the Account or terminate this Agreement at any time (i) to comply with Bank's economic sanctions or anti -money laundering policies or obligations, (ii) to safeguard against fraud, or (iii) pursuant to a court order or direction of an authorized governmental agency or as required by law, and Bank will incur no liability to any person or entity for any Harm in connection with any such segregation, restriction, delay, refusal, suspension, closure, or termination. SECTION 14 DATA PRIVACY, CONFIDENTIALITY, AND SECURITY 14.1. Definitions. For purposes of this Section: 14.1.1. "Applicable Privacy, Confidentiality, and Security Laws" means, with respect to a party, all applicable federal, state, and local laws, rules, regulations, directives, and other binding requirements issued by any Governmental Authority (as defined below) pertaining to the privacy, confidentiality, or security of Confidential Information (as defined below), including, with respect to Bank, GLBA (as defined below). 14.1.2. "Confidential Information" means all information, data, documents, records, and other materials one party receives in connection with this Agreement or the Account from another party that is labeled "Confidential Information" or should reasonably be classified by the recipient as personal or confidential information given the nature of the information or the circumstances of its receipt, other than Non -Confidential Information (as defined below). 14.1.3. "GLBA" means the Gramm -Leach -Bliley Act, 15 U.S.C. §§6801 et seq., and its implementing regulations, including Regulation P, 12 C.F.R. Part 1016. 14.1.4. "Governmental Authority" means, with respect to a party, a state or federal governmental entity having jurisdiction over such party with respect to the activities that are the subject matter of this Agreement. 14.1.5. "Non -Confidential Information" means information (i) of the disclosing party that was known by the receiving party without any obligation of confidentiality prior to the disclosing party's disclosure thereof; (ii) of a party that was or becomes publicly available other than pursuant to a breach of this Agreement by the other party; (iii) of a party that was received by the receiving party in good faith on a non -confidential basis from a third party that is not actually known to the receiving party to have disclosed such information in violation of a confidentiality agreement in favor of the other party; (iv) that is independently developed by one party without use of Confidential Information; or (v) of a party that is approved for disclosure by that party. 14.1.6. "Services" means the services provided by Bank pursuant to this Agreement. 14.2. Compliance with Law. Bank hereby represents and warrants that it complies with all Applicable Privacy, Confidentiality, and Security Laws. 14.3. Privacy. Page Item 18: Staff Report Pg. 142 Packet Pg. 327 of 857 Item 18 10 Attachment C - US Bank 14.3.1. Program. Bank hereby represents and warrants that it maintains an ente Agreement for rogram that (i) complies with federal banking law and regulations and (ii) is consistent with industry st Investment Safekeeping s of services similar to the Services. (Custodial) Services 14.3.2. Use and Disclosure of Confidential Information. Bank will use and disclose Confidential Information only as permitted by Applicable Privacy, Confidentiality, and Security Laws and this Agreement. Upon Customer's request, Bank will provide a monthly written report to Customer regarding how Confidential Information has been used. 14.3.3. Records Retention. Bank will maintain commercially -standard records of Confidential Information for the period required by Applicable Privacy, Confidentiality, and Security Laws (or, if longer, the period required by Bank's record -retention policy). Following the expiration of such period, Bank will, to the extent practicable, promptly destroy all Confidential Information. 14.3.4. Aggregated, Anonymized, or De -Identified Data. Customer hereby authorizes Bank to use Confidential Information in an aggregated, anonymized, or de -identified format (i) for the purpose of providing reports and analytics to other customers of Bank and to develop new products and services and (ii) for internal purposes that do not involve disclosure of such data to third parties. 14.3.5. Consents. If Customer is a "financial institution" as defined in GLBA [ 15 U.S.C. §6809(3)], then Customer hereby represents and warrants that Customer has obtained all consents from its customers as needed in order to permit Bank to provide the Services and to use Confidential Information as described in this Agreement. 14.4. Information Security. 14.4.1. Program. Bank hereby represents and warrants that it maintains an enterprise -wide information -security program that (i) complies with federal banking law and regulations and (ii) is consistent with industry standards for providers of services similar to the Services. 14.4.2. Safeguards. Bank will maintain physical, electronic, and procedural safeguards that are designed to (i) maintain the security and confidentiality of Confidential Information; (ii) protect Confidential Information against anticipated threats or hazards to the security or integrity of Confidential Information; and (iii) prevent unauthorized access to; unauthorized use, disclosure, or modification of; or misuse or loss of such Confidential Information that could result in substantial harm or inconvenience to Customer. 14.4.3. Notification of Breach. Within seven (7) calendar days after Bank becomes aware that Confidential Information has been compromised as a result of a breach of security at Bank, Bank will, to the extent permitted by law, provide written notice thereof to Customer. Such notice will include Bank's estimate of the number of Customer's records affected and the nature of the information exposed, together with the steps to be taken by Bank to limit such exposure and avoid a recurrence thereof. Bank will cooperate in Customer's investigation relating to the breach and address the cause of the breach. 14.5. Business Continuity. 14.5.1. Business -Continuity Plan. Bank hereby represents and warrants that it maintains a business -continuity plan that (i) complies with federal banking law and regulations and (ii) is consistent with industry standards for providers of services similar to the Services. 14.5.2. Transfer of Services. In the event of aforce-majeure event or a bankruptcy or insolvency of Bank that renders Bank unable to provide the Services, Bank will cooperate with Customer and the replacement vendor selected by Customer to transition performance of the Services to such replacement vendor, including through the delivery of any Account records to such replacement vendor. However, the foregoing will not require Bank to provide any Confidential Information of Bank to any third party unless such third party has executed a confidentiality agreement acceptable to Bank. 14.6. Audit. Page Item 18: Staff Report Pg. 143 Packet Pg. 328 of 857 Item 18 11 Attachment C - US Bank J14.6.1. Third -Party Audit. Bank hereby represents and warrants that it obtains Agreement for or's System Investment Safekeeping and Organization Controls (SOC) 2 Report or its equivalent annually. Upon Customer' provide the most recent such report to Customer. (Custodial) services 14.6.2. Assessment. No more than once per calendar year, Customer has the right to assess the policies, standards, and practices of Bank with respect to the performance of this Agreement, to the extent necessary to verify Bank's compliance with the terms of this Section. Customer hereby acknowledges that information which Bank deems confidential or proprietary may not be considered necessary to verify Bank's compliance. The assessment will be conducted during regular business hours upon not less than ninety (90) calendar days written notice by Customer to Bank on a date agreed upon by them. Bank will make efforts to resolve deficiencies noted as a result of such assessment in a manner commensurate to the risk those deficiencies represent. 14.6.3. Regulatory Audit. Bank hereby authorizes Customer to provide information regarding the performance of this Agreement to a Governmental Authority with authority to review Customer's service arrangements, but only when the Governmental Authority specifically requests such information. Notwithstanding anything in this Agreement to the contrary, Bank may disclose Confidential Information to a governmental agency that regulates Bank, whether in routine disclosures or in connection with such agency's inquiry about or examination of Bank records or otherwise, without notice to Customer. 14.7. Insurance. Bank hereby represents and warrants that (i) Bank maintains Cyber Liability Insurance, Bankers Professional Liability Insurance, and a Financial Institution Bond (Crime and Dishonesty Policy) and (ii) such insurance complies with federal banking law and regulations and is consistent with industry standards for providers of services similar to the Services. Upon Customer's request, Bank will provide Customer with copies of a certificate of insurance for each form of insurance stated above. 14.8. Customer. Customer hereby represents and warrants that it (i) complies with all Applicable Privacy, Confidentiality, and Security Laws, (ii) maintains an enterprise -wide information -security program that is consistent with its own industry's standards, and (iii) obtains an annual independent risk -assessment of its information -security program. Customer will (i) use and disclose Confidential Information only as permitted by Applicable Privacy, Confidentiality, and Security Laws and this Agreement; maintain commercially -standard records of Confidential Information for the period required by Applicable Privacy, Confidentiality, and Security Laws; and, following the expiration of such period, to the extent practicable, promptly destroy all Confidential Information; and (ii) notify Bank within seven (7) calendar days after becoming aware that Confidential Information has been compromised as a result of a breach of security at Customer, cooperate in Bank's investigation of the breach, and address the cause of the breach. 14.9. Third Party/Subcontractor. Each party hereby acknowledges that it is responsible for the actions of its officers, directors, employees, and agents with respect to the privacy, confidentiality, and security of Confidential Information. Customer will not, and will not ask Bank to, disclose Bank's Confidential Information to any online portal or platform maintained by any third party that Customer has hired to manage or assess Customer's vendor due -diligence and monitoring activities, unless (i) Customer has identified the third party (and the portal or platform) to Bank, (ii) the third party has provided information about its information -security processes and procedures to Bank, in a form acceptable to Bank, (iii) Bank has assessed those processes and procedures, and (iv) Bank has notified Customer that such disclosure to the portal or platform is permitted under this Agreement. SECTION 15 MISCELLANEOUS 15.1. Services Not Exclusive. Bank is free to render services to others, whether similar to those services rendered under this Agreement or of a different nature. 15.2. Binding Obligations. Customer and Bank each represent and warrant that (i) it has the power and authority to transact the business in which it is engaged and to execute, deliver, and perform this Agreement and has taken all action necessary to execute, deliver, and perform this Agreement and (ii) this Agreement constitutes its legal, valid, and binding obligation enforceable according to the terms hereof. Page Item 18: Staff Report Pg. 144 Packet Pg. 329 of 857 12 15.3. Complete Agreement; Amendment. Item 18 Attachment C - US Bank Agreement for Investment Safekeeping 15.3.1. Complete Agreement. This Agreement contains a complete statement oic(cnUStodic6�' nts between the parties with respect to its subject matter and supersedes any existing agreements between them concerning the subject. 15.3.2. Amendment. This Agreement may be amended at any time, in whole or in part, by a written instrument signed by Customer and Bank. Notwithstanding the foregoing, the terms of Exhibit A (Fee Schedule) hereto alone govern amendments thereto. 15.3.3. Control Agreement. Customer has the power to direct Bank to enter into a separate written control agreement with respect to the Account or any Asset. Any such control agreement prevails over this Agreement to the extent such agreements are inconsistent with each other. 15.4. Governing Law; Venue. This Agreement will be governed, enforced, and interpreted according to the laws of the State without regard to conflicts of laws, except where pre-empted by federal law. All legal actions or other proceedings directly or indirectly relating to this Agreement will be brought in federal court (or, if unavailable, state court) sitting in the State. The parties submit to the jurisdiction of any such court in any such action or proceeding and waive any immunity from suit in such court or execution, attachment (whether before or after judgment), or other legal process in or by such court. 15.5. Successors and Assigns. 15.5.1. This Agreement binds, and inures to the benefit of, Customer, Bank, and their respective successors and assigns. 15.5.2. No party may assign any of its rights under this Agreement without the consent of each other party, which consent will not be unreasonably withheld. Customer hereby acknowledges that Bank will withhold consent unless and until Bank verifies an assignee's identity according to Bank's Customer Identification Program and, to that end, Customer hereby agrees to notify Bank of such assignment and provide Bank with the assignee's name, physical address, EIN, organizational documents, certificate of good standing, and license to do business, as well as other information that Bank may request. No consent is required if a party merges with, consolidates with, or sells substantially all of its assets to another entity, provided that such other entity assumes without delay, qualification, or limitation all obligations of that party under this Agreement by operation of law or by contract. 15.6. Severability. The provisions of this Agreement are severable. The invalidity of a provision herein will not affect the validity of any other provision. 15.7. No Third -Party Beneficiaries. This Agreement is made solely for the benefit of the parties. No person other than such parties has any rights or remedies under this Agreement. 15.8. Solvency. Customer hereby represents and warrants that Customer is neither insolvent nor subject to any pending bankruptcy proceeding. Customer will promptly notify Bank of any such insolvency or proceeding. 15.9. Tax -Lot Selection -Method. For the purpose of complying with IRS regulations requiring cost basis reporting, Customer hereby designates the tax -lot selection -method for the Account: ❑ Minimize Gain — Shares are sold from tax lots having the highest per unit federal tax cost with a holding period of more than one year. ❑ First In First Out (FIFO) — Shares are sold from tax lots having the earliest federal tax acquisition date. ❑ Last In First Out (LIFO) — Shares are sold from tax lots having the most recent federal tax acquisition date. ❑ Highest Federal Cost First Out (HIFO) — Shares are sold from tax lots having the highest federal tax cost per share. ❑ Lowest Federal Cost First Out (LOFO) — Shares are sold from tax lots having the lowest federal tax cost per share. Page Item 18: Staff Report Pg. 145 Packet Pg. 330 of 857 Item 18 13 Attachment C - US Bank Agreement for ❑ Specify Tax Lot — Shares are sold from tax lots that you specify. ❑ Investment Safekeeping Average Federal Tax Cost — Shares are sold across all tax lots using t he Account holds investments for which this method is not permitted, the FIFO defa (Custodial) Services used, unless Customer directs otherwise. ❑ Maximize Gain — Shares are sold from tax lots having the lowest per unit federal tax cost. If the foregoing does not designate one and only one tax -lot selection -method, then Customer is deemed to have designated FIFO method. If Customer wishes to use a tax -lot selection -method that is different from what is selected above for an individual trade, then Customer may designate such other selection -method when executing the trade. 15.10. Shareholder Communications Act Election. Under the Shareholder Communications Act of 1985, as amended, Bank must try to permit direct communications between a company that issues a security held in the Account (the "Securities -Issuer") and any person who has or shares the power to vote, or the power to direct the voting of, that security (the "Voter"). Unless the Voter registers its objection with Bank, Bank must disclose the Voter's name, address, and securities positions held in the Account to the Securities -Issuer upon the Securities -Issuer's request ("Disclosure"). To the extent that Customer is the Voter, Customer hereby (i) acknowledges that failing to check one and only one box below will cause Customer to be deemed to have consented to Disclosure and (ii) registers its (check only one): ❑ Consent to Disclosure. ❑ Objection to Disclosure. 15.11. Tax Reclaims. To the extent Bank provides the Account with a service to minimize foreign withholding or reclaim foreign taxes withheld with respect to an Asset, Customer hereby directs Bank to disclose Customer's name, address, and taxpayer identification number, as well as the Account's position in the Asset, to Bank's sub -custodians and other service providers, to the Asset's issuer and the issuer's agents, and to local (foreign) tax authorities as needed in order to provide such service. 15.12. Abandoned Property. Bank will escheat Assets pursuant to the applicable state's abandoned property, escheat, or similar law, and Bank shall be held harmless therefrom. The provisions of this Section shall survive the termination of this Agreement. 15.13. Legal Advice. Customer hereby acknowledges that it (i) did not receive legal advice from Bank concerning this Agreement, (ii) had an adequate opportunity to consult an attorney of its choice before executing this Agreement, and (iii) executed this Agreement upon its own judgment and, if sought, the advice of such attorney. 15.14. Waiver of Jury Trial. Each party hereby irrevocably waives all right to a trial by jury in any action, proceeding, claim, or counterclaim (whether based on contract, tort, or otherwise) directly or indirectly arising out of or relating to this Agreement. 15.15. Legal Action. If Bank is served with any freeze order, garnishment, levy, restraining order, search warrant, subpoena, writ of attachment or execution, bankruptcy -court order, receivership order, or similar order relating to the Account (each, a "Legal Action"), then Bank will, to the extent permitted by law, use commercially reasonable efforts to notify Customer of such service. Customer will reimburse Bank for any expenses, fees, costs, or other charges incurred by Bank in responding to the Legal Action, including, but not limited to, any fees charged by an attorney of Bank's choice. If Customer notifies Bank that Customer is seeking a protective order to resist the Legal Action, then Bank will provide reasonable cooperation at Customer's request and sole cost and expense. In any event, Bank may comply with the Legal Action at any time, except to the extent Bank has received a protective order that prevents Bank from complying. 15.16. Representations and Warranties. Customer hereby covenants that, if any of the representations or warranties that it provides in this Agreement becomes inaccurate or incomplete, it will promptly notify Bank thereof and of any fact, omission, event, or change of circumstances related thereto. 15.17. Publicity. No party will disclose the existence of this Agreement or any terms thereof in advertising, promotional, or marketing materials without obtaining, in each case, the prior written consent of each other party. Page Item 18: Staff Report Pg. 146 Packet Pg. 331 of 857 14 Item 18 Attachment C - US Bank Agreement for 15.18. Counterparts and Duplicates. This Agreement may be executed in any numbe Investment Safekeeping ch of which shall be considered an original, but all of which together shall constitute the same instru (Custodial) Services ent and any administrative form under this Agreement may be proved either by a signed original or by a reproduced copy thereof (including, not by way of limitation, a microfiche copy or an electronic file copy). 15.19. E -signature. Each party hereby (i) consents to electronically sign this Agreement, amendments thereto, and Account forms requiring its signature, but may, by notice to each other party, withdraw such consent or opt -out of electronic signing and (ii) covenants to rely on DocuSign (or another e -sign vendor as subsequently agreed upon by all parties) to facilitate any such e -signatures. The party creating the e -signed document through its account with the e -sign vendor hereby covenants to retain the authoritative copy and provide a copy to each other party. No party hereby forfeits any power to use a conventional handwritten signature as a means of signing this Agreement, amendments thereto, and Account forms. 15.20. Foreign Customer. If Customer is organized outside the U.S., then Customer hereby acknowledges that (i) Bank has not obtained a license under the laws of Customer's domicile to provide the services described in this Agreement and (ii) Bank has no duty to determine or question whether this Agreement or any Account transaction complies with the laws of Customer's domicile. 15.21. Effective Date. This Agreement will become effective when all parties have signed it. The date of this Agreement will be the date this Agreement is signed by the last party to sign it (as indicated by the date associated with that party's signature). IN WITNESS WHEREOF, an authorized officer of each party hereby executes this Agreement on the date stated beneath that party's signature. CUSTOMER: By: (Signature of Customer's authorized officer) (Printed name of Customer's authorized officer) Its: (Title of Customer's authorized officer) Dated: U.S. Mail Address: Email Address: U.S. BANK NATIONAL ASSOCIATION By: (Signature) (Printed name) Its: Vice President and Relationship Manager Page Item 18: Staff Report Pg. 147 Packet Pg. 332 of 857 15 Dated: U.S. Mail Address: Email Address: Item 18 Attachment C - US Bank Agreement for Investment Safekeeping (Custodial) Services Page Item 18: Staff Report Pg. 148 Packet Pg. 333 of 857 16 Item 18 Attachment C - US Bank FEE SCHEDULE Agreement for This Fee Schedule relates to the U.S. Bank National Association ("USBNA') Institutional Trust & Investment Safekeeping C') account identified below (such account, including any sub -accounts therein, the `Account') and is effectiv (Custodial) services ate) (or, if no date is entered there, then the effective date of the Account's governing trust or custody agreement) (the "Fee Schedule's Effective Date ). Account Name: City of Palo Alto Account Number: 6736304270 USBNA; Elavon Financial Services DAC ("Elavon'); PFM Asset Management LLC ("PFMAM ); PFM Fund Distributors, Inc. (`PFMFD ); U.S. Bancorp Asset Management, Inc. ("USBA'); U.S. Bancorp Fund Services, LLC ("USBFS'); and U.S. Bank Global Fund Services (Cayman), (Guernsey), and (Ireland) Limited and (Luxembourg) S.a.r.l. ("USBGFS) are affiliates of U.S. Bancorp (collectively with U.S. Bancorp, "U.S. Bank'). This Fee Schedule, together with the service contract(s) between the Customer (as defined below) and USBNA regarding the Account (`Account's Governing USBNA Service Contract(s)'), describes services that U.S. Bank expects to provide to the Account pursuant thereto and compensation that U.S. Bank expects to receive therefor: Account Profile (Part A): Describes the Account and U.S. Bank's role with respect to the Account. Account -level Fees (Part B): Describes fees U.S. Bank receives directly from the Account (the `Account Fees'). Fund -level Fees (Part C): Describes fees the Account pays on the investment of Account assets in open-end investment companies registered under the Investment Company Act of 1940 (`Mutual Funds'), 3(c)(1) or (7) funds ("Private Funds'), Undertakings for Collective Investment in Transferable Securities funds ("UCITS'), and Alternative Investment Fund Managers Directive funds (`AIFs") (each of the foregoing, a "Fund') (the "Fund Fees') and fees U.S. Bank receives from those investments or their agents ("U.S. Bank Revenue Share'). Other Compensation (Part D): Describes compensation that U.S. Bank receives other than Account Fees or U.S. Bank Revenue Share ("Other Compensation"). Changes (Part E): Describes circumstances under which this Fee Schedule may be changed. Approval (Part F): Provides the customer's approval of the fees described herein. ACCOUNT PROFILE (PART A) If the Account is a USBNA trust account, then the undersigned is the trust's grantor; if the Account is a USBNA custody account, then the undersigned is the Account's owner (such undersigned, the "Customer"). USBNA has no discretion to invest Account assets (a "Directed Account"). ACCOUNT -LEVEL FEES (PART B) The Account Fees, which are in addition to Fund Fees and are paid directly to USBNA, are as follows. For a complete description of services that U.S. Bank expects to provide to the Account, see the Account's Governing USBNA Service Contract(s). Administration fee Provide account administration. The administration fee is calculated in tiers: (FOR A 0.5 bps on the first $ 500 million of Account assets USBNA CUSTODY ACCOUNT): 0.25 bps on the balance of Account assets Foreign Securities. For Account assets invested in foreign securities other than Euroclear-eligible securities, U.S. Bank provides account administration by way of a sub -contract (the "Foreign -securities Custody greement") between USBNA and a foreign -securities custodian (the "Foreign -securities Custodian"). The name, address, and principal place of business of the Foreign -securities Custodian (and the name and address of the regulatory authority that supervises or regulates it) can be obtained upon request from the Customer's Relationship Manager at USBNA. Account assets invested in any foreign securities are excluded from the fee -tiers above, the fee -rates on such assets are instead set forth in the U.S. Bank Institutional Trust & Custody Global Fee Schedule (the "Global Fee Schedule"), and the fee for such assets is based on Account assets invested in the applicable country. (U.S. Bank compensates the Item 18: Staff Report Pg. 149 Packet Pg. 334 of 857 17 Item 18 Foreign -securities Custodian from U.S. Bank's o Attachment C - US Bank I does not pay fees in addition to the fees stated herein in conne Agreement for vided by the Foreign -securities Custodian.) Investment Safekeeping (Custodial) Services Securities -transfer fees: Transfer DTC-eligible securities (including ETFs), Fed book -entry securities, or domestic open-end mutual funds: Free receipts (per security) Included Free deliveries (per security) Included Trade -processing fees: Process purchases, sales, or other transactions with respect to Account assets: DTC-eligible securities, including ETFs (per transaction) Included Fed book -entry securities (per transaction) Included Domestic open-end mutual funds (per transaction) Included Foreign securities (per transaction) See the Global Fee Schedule. Certificates of deposit (per set-up, deposit, or withdrawal) Included Closely -held or restricted stock (per transaction) Included Derivatives: Forwards, futures, options, or swaps (per transaction) Included Insurance or annuity contracts (per set-up or transaction) Included Non-marketable/physical not otherwise listed here (per transaction) Included Real-estate deeds, leases, or mortgages (per set-up or transaction) Included Distribution fees: Distribute Account cash: ACH payment to DDA at USBNA (per ACH payment) Included ACH payment to non-USBNA DDA (per ACH payment) Included Check (per check) Included Wire to domestic location (per wire) Included Wire to international location (per wire) Included Foreign-exchange fees: Execute foreign -currency exchange ("FX") transactions related to Account assets invested in foreign securities. A spread -fee is built into the exchange rate for each FX transaction; reduces the amount of foreign securities purchased, the amount of proceeds from the sale thereof, or the amount of entitlement payments received with respect thereto, as the case may be; and varies from FX transaction to FX transaction, based on current market conditions. In addition, each FX transaction is subject to trade -processing fees at the applicable rate set forth in the Global Fee Schedule. Class -actions fees: File proofs of claim regarding class-action litigation over the Account's securities: Filing fee (per filing) $ 25 Recovery fee (per recovery) 2% of recovery Maximum recovery fee (per recovery) $00 Asset -holding fee: Hold assets (per year): Commingled funds (CITs/CTFs), LPs, or hedge funds (per holding) Included Insurance or annuity contracts (per contract) Included Private equity/debt or other commitment -based funds (per holding) Included Real-estate deeds, leases, or mortgages (per deed, lease, or mtge.) Included Syndicated bank loans (per loan) Included Securities -intermediary fee: Serve as securities intermediary with respect to the Account under a control agreement (per control agreement per year): For a complete description of services that U.S. Bank expects to provide to the Account, see the governing control agreement(s). ADR tax services: Provide the Account with a service to minimize foreign tax withholding or to reclaim foreign taxes withheld with respect to ADRs (per year) $250 Contract -negotiation fee: Consider the Customer's proposed edits to USBNA's standard service contract(s) (per contract) Other fees: Minimum relationship fees (per year) $_30,000 Item 18: Staff Report Pg. 150 Packet Pg. 335 of 857 18 Item 18 Attachment C - US Bank Agreement for Extraordinary -services fee: Provide services described in neither this Fee Sch Investment Safekeeping 's Governing USBNA Service Contract(s). The extraordinary (Custodial) services lculated at an hourly rate or be a flat fee. USBNA will obtain the Customer's consent to the fee. Minimum Relationship Fees. The Account is subject to minimum relationship fees. For each billing period, they apply as follows. Start with the minimum annual relationship fees stated above. Prorate that amount to reflect the length of the billing period elected below (the "Minimum Relationship Fees"). Find the sum of the Account Fees (other than the Minimum Relationship Fees) and the account fees owed with respect to the Customer's other Institutional Trust & Custody division accounts (excluding accounts that hold plan assets) for the billing period (the "Actual Relationship Fees"). If the Actual Relationship Fees are less than the Minimum Relationship Fees, then the Account Fees for the billing period are the Account's proportionate share of the Minimum Relationship Fees (rather than the Account Fees otherwise disclosed under this Fee Schedule). That proportionate share is based on relative account balances as of the end of the billing period or over the billing period, as applicable based on the balance method elected below. Manner of Receipt. Account Fees will be calculated (check one and only one): ❑ Monthly. ® Quarterly. Any asset -based Account Fees will be based on (check one and only one): ® the applicable Account balance (or portion thereof) as of the end of the billing period / El the average applicable Account balance (or portion thereof) over the billing period. (The asset values used in such calculation may vary from the asset values reported on an asset statement because of timing issues, such as the posting of accruals or the late -pricing of securities.) Account Fees will then be (check one and only one): Billed and invoiced to the Customer with instructions on how to remit payment. The Customer hereby acknowledges that U.S. Bank may charge such fees to the Account if the Customer has not paid the invoice within sixty (60) calendar days of receiving it. ❑ Charged to the Account, with a subsequent advice to the Customer about the charges. (This option is unavailable if the Account is a USBNA trust account and the trust's beneficiary intends to seek credit for reinsurance in respect of the trust.) FUND -LEVEL FEES (PART C) Fund Fees. Fund Fees, and U.S. Bank Revenue Share, are based on investment in a Fund and may vary by Fund and by class of shares or units issued by the Fund. Fund Fees are charged against the Fund's assets and reduce the Funds' average daily balance and investment yields. U.S. Bank Revenue Share is paid indirectly from the Fund Fees and is not in addition to the Fund Fees. Additional Investment -Related Information. See a Mutual Fund's or UCITS's prospectus; a Private Fund's or AIF's governing documents (such as a limited liability company agreement, limited partnership agreement, trust agreement, or declaration of trust), offering documents (such as an offering circular, offering memorandum, private placement memorandum, prospectus, or summary description), and subscription documents (such as an adoption agreement or subscription agreement); and any Fund's fund -fact sheet (collectively, as applicable, the "Fund -Issuer's Disclosure") for Fund details not reflected in this Fee Schedule. See, especially, sections thereof regarding fees, expenses, additional compensation, and payments to financial intermediaries. First American Funds. USBAM is the investment advisor to the Mutual Funds in the First American Funds, Inc. family (the "First American Funds"). First American Funds issue shares in multiple classes, and their fees may vary by class. U.S. Bank may enter into agreements with First American Funds or with First American Funds' service providers (including investment advisers, administrators, transfer agents, or distributors) whereby U.S. Bank provides services to the First American Funds, including, as applicable, services provided by USBAM (investment advisory, shareholder services), by USBNA (custody, securities -lending), and by USBFS (accounting, administration, transfer agency), and receives fees for these services from the Fund or the Fund's sponsor or agent. Prospectuses for First American Funds are available at https://www.firstamericanfunds.com/index/FundPerformance/Shareholderpocuments.html. PFMAM Funds. PFMAM is the investment advisor to the Mutual Funds in the PFM Multi -Manager Series Trust (the "PFMAM Funds"). U.S. Bank may enter into agreements with PFMAM Funds or with PFMAM Funds' service providers (including investment advisers, administrators, transfer agents, or distributors) whereby U.S. Bank provides services to the PFMAM Funds, including, as applicable, services provided by PFMAM (investment advisory), by USBNA (shareholder services), and by PFMFD (distribution), and receives fees for these services from the Fund or the Fund's sponsor or agent. Prospectuses for PFMAM Funds are available at https://mmst.pfmam.com/forms-documents. Item 18: Staff Report Pg. 151 Packet Pg. 336 of 857 19 Item 18 Attachment C - US Bank Other Mutual Funds. U.S. Bank may enter into agreements with Mutual Funds other than First MAM Funds ("Other Mutual Funds") or with Other Mutual Funds' service providers (including investment advi Agreement for nsfer agents, or distributors) whereby U.S. Bank provides services to the Other Mutual Funds, including, as applicj Investment Safekeeping d by USBNA (custody, securities lending, shareholder services, National Securities Clearing Corporation (N (Custodial) Services kl by USBFS (accounting, administration, transfer agency), and receives fees for these services from the Fund or the Fund's sponsor or agent. Prospectuses for Other Mutual Funds are available at https://www.sec.gov/edgar/searchedgar/prospectus. v/edgar/searchedggr/prospectus. Private Funds. U.S. Bank may enter into agreements with Private Funds or with their service providers, whereby U.S. Bank provides services to such Funds, including, as applicable, services provided by USBNA (custody) and by USBFS (accounting, administration, shareholder services, transfer agency), and receives fees for these services from the Fund or the Fund's sponsor or agent. UCITS and AIFs. U.S. Bank may enter into agreements with UCITS or AIFs or with their service providers, whereby U.S. Bank provides services to such Funds, including, as applicable, services provided by Elavon (depositary) and USBGFS (accounting, administration, shareholder services) and receives fees for these services from the Fund or the Fund's sponsor or agent. OTHER COMPENSATION (PART D) Float Income. USBNA may hold (i) cash awaiting either investment or distribution to proper recipients or (ii) funds held for other purposes (for example, pending investment following a trade fail, because funds were received too late to be posted the same day, or pursuant to an investment direction) in a noninterest-bearing deposit account at USBNA and, thereby, earn and retain income on the float as part of its fees for servicing the Account. Expenses. Expenses, fees, costs, and other charges incurred by USBNA in providing services under the Account's Governing USBNA Service Contract(s) are expenses of the Account. Advance of Funds. If USBNA advances funds in furtherance of settling the redemption of Fund shares or units, then the yield, if any, paid on the shares or units that were treated as redeemed is retained by USBNA as part of its fees for servicing the Account. Foreign Securities or Deposits. In connection with the Account's global activity, USBNA may hold cash in the form of U.S. dollars or foreign currency in a deposit account at a bank other than USBNA. For example, cash may be held pending settlement of an FX transaction or a foreign -securities purchase. Interest, if any, earned on such deposits is retained by USBNA as part of its fees for servicing the Account. External Insured Deposit Program. If the Account participates in an insured deposit program offered by an external cash manager (the "Program Manager"), then USBNA transfers Account assets as directed under the program to and from deposit accounts at banks other than USBNA and receives fees from the Program Manager for making the transfers. The Program Manager and fee are as follows: Program Manager's full legal name: Program Manager's employer identification number: bps on Account assets held by USBNA in such deposit accounts Furthermore, the Program Manager receives a portion of any interest earned on such deposits, thereby reducing the amount of interest credited to the Account. For a complete description of the Account's participation in the program, see the Program Manager's agreement with respect to the Account. CHANGES (PART E) USBNA may amend this Fee Schedule by delivering to the Customer an amended and restated Fee Schedule (or another written notice of the change). If the Customer does not deliver a written objection to USBNA within thirty (30) calendar days thereafter, USBNA will treat the Customer's silence as approval. APPROVAL (PART F) The Customer hereby acknowledges that it: • is independent of U.S. Bank and has authority to enter into, extend, and renew contracts for the services described herein and to select the investments and approve the fees described herein. • received, read, understands, and executed the Account's Governing USBNA Service Contract(s). • will obtain, read, and understand the Fund -Issuer's Disclosure for a Fund before selecting the Fund, including, but not limited to, the sections thereof describing fees, expenses, and compensation, and acknowledges that the purchase or sale of Fund shares or units is subject to the terms of the Fund -Issuer's Disclosure. Item 18: Staff Report Pg. 152 Packet Pg. 337 of 857 20 Item 18 Attachment C - US Bank • expects to (check one and only one) ❑ cause or permit the Account to acquire foreig Ved, read, and understands the Global Fee Schedule / ® neither cause nor permit the Account to acq Agreement for ities. Investment Safekeeping • understands and approves the services and fees described herein, including the Accoun (Custodial) Services Jor each Fund, U.S. Bank Revenue Share for each Fund, and the Other Compensation. • agrees to the process described herein for amending this Fee Schedule. • may contact its Relationship Manager at USBNA regarding this Fee Schedule. • FOR AN ACCOUNT WHERE A U.S. BANK -AFFILIATED REGISTERED INVESTMENT ADVISER IS THE ACCOUNT'S INVESTMENT MANAGER, understands that USBNA waives any securities -transfer, trade -processing, foreign-exchange, corporate -actions, class -actions, asset -holding, ADR-tax-services, foreign -securities -or -deposits, or external -insured -deposit -program fees described herein. The Customer hereby executes this Fee Schedule. Customer: City of Palo Alto By: (Signature of Customer's authorized officer) (Printed name of Customer's authorized officer) Its: (Title of Customer's authorized officer) Dated: Shares of registered investment companies, and units of private funds, are not deposits or obligations of, or endorsed or guaranteed in any way by, any bank, including any bank affiliated with U.S. Bancorp. Nor does the Federal Deposit Insurance Corporation, the Federal Reserve Board, or any other governmental agency insure such products. An investment in such products involves investment risks, including the possible loss of principal, due to fluctuations in each product's net asset value. Deposit products are offered by U.S. Bank National Association, member FDIC. Item 18: Staff Report Pg. 153 Packet Pg. 338 of 857 21 Item 18 Attachment C - US Bank CUSTODY AGREEMENT Agreement for Investment Safekeeping Exhibit A (Fee Schedule) (Custodial) Services Page Item 18: Staff Report Pg. 154 Packet Pg. 339 of 857 Dale Barton Director, Relationship Manager 415-940-1023 Item 18 t D Attachment D - Wells Fargo Agreement for Lockbox and Related Services May 01, 2024 City of Palo Alto 250 Hamilton Avenue, 4th Floor Palo Alto, CA 94301 Re: Contact for Treasury Manaaement Services and of Palo Alto Contract No. C24189061. Amendment No. 1 We are pleased to extend the term of the contract with the City of Palo Alto at the pricing for the deposit and treasury management services as described on the Wells Fargo Treasury Management Proposal, Pricing as of May 2024, which is attached hereto as Exhibit 1, for one (1) term of one year, effective as of June 1, 2024, through June 30, 2025. Additional fees will apply to new deposit and treasury management services not described on Exhibit 1, We will provide information regarding those fees in connection with the implementation of any such additional services. We reserve the right to modify pricing to reflect the impact of any changes in law, regulations or interpretations thereof. We also reserve the right to change our pricing methodology, including element IDs for a particular service, so long as the change does not increase the total price of such service to you (unless permitted under the immediately preceding sentence). This letter agreement along with your Master Agreement for Treasury Management Service signed 10/01/2020, attached hereto as Exhibit 2, and other Service Documentation (as that term is defined in the Master Agreement for Treasury Management Services) applicable to your accounts and treasury management services provided as described on Exhibit 1, which is incorporated by reference, will constitute the contract governing our deposit and treasury management services relationship. The Service Documentation, including the Service Descriptions for the treasury management services you are enrolled in are posted at our Vantage portal. If at the end of this extended contract term, the contract is not extended or renewed by your and our mutual agreement or otherwise terminated in accordance with the Service Documentation, the Service Documentation will remain in effect, and we will notify you of changes to pricing for the deposit accounts and treasury management services. If you agree, please sign, date, and return this agreement below. Thank you for your business and continued partnership with Wells Fargo Bank. Please feel free to call me with any questions. Acknowledged and Agreed: City of Palo Alto By: Name: Titl Date: APPROVED AS TO FORM: City Attorney or designee Item 18: Staff Report Pg. 155 Packet Pg. 340 of 857 Item 18 Attachment D - Wells Fargo Agreement for Lockbox and Related Services Exhibit 1 Wells Fargo Treasury Management Proposal, Pricing as of May 2023 (Attached) Item 18: Staff Report Pg. 156 Packet Pg. 341 of 857 3 Item 18 Attachment D - Wells Fargo Agreement for Lockbox and Related Services Master Agreement for Treasury Management Services The Service Documentation contains the terms under which Wells Fargo Bank, N.A. and the banks, branches or subsidiaries listed in Appendix X (collectively, "Bank") provide you treasury management services (each a "Service"). "You," "your" or "yours" refer to the Bank customer identified on the Acceptance of Services that is signed when you enroll in a Service ("Acceptance"). The terms "we," "us," or "our" refer to the Bank. Other capitalized terms used in this Master Agreement for Treasury Management Services ("Agreement") are defined in this document. You and we agree: Service documentation. The Service Documentation contains the terms governing each Service and includes: a. The Service Description (which contains terms and conditions applicable to the specific Service), b. The Acceptance (which indicates your acceptance of the Service Documentation), c. This Agreement (which contains terms and conditions applicable to all Services), d. The account agreement governing the account(s) (each, an "Account") you use in connection with the Service, e. The Product Enrollment Form (which contains set-up information for each Service in which you are enrolling), and f. User Guides (which include our vendors' and our documentation related to the installation, set-up function, features, operation, use, pricing or other aspects of the Services, including Terms of Use, software, software licenses, price schedules, specifications, instructions, and notices). The documents and individual provisions of the Service Documentation are intended to be read together as one agreement between you and us. This Agreement and the Service Descriptions for Services you enroll in are posted on Wells Fargo Vantages"" ("Vantage") f/k/a Commercial Electronic Office® (CEO®) . If there is a conflict among the documents that are part of the Service Documentation, they will govern in the order listed above. Your use of a Service confirms your receipt of, and agreement to be bound by, this Agreement and all Service Documentation. 2. Services. You and we will agree upon the Services to be provided and the start date for each Service. Each Service is subject to the approval by our applicable branch or subsidiary. We will notify you when you have completed all requirements for enrolling in the Service and the Service is ready for you to use. Changes to services. We may change (or add to) the terms and fees in the Service Documentation at any time. If a change to a Service requires a change to the Service Documentation, we will post the document(s) with the change on Vantage. When required by Applicable Law, we will notify you of the change. If you continue to use a Service after a change takes effect, you will be bound by the change. As used in this Agreement, the term "Applicable Law" means all applicable laws (including common or customary laws), statutes, constitutions, policies, decrees, judgments, treaties, regulations, directives, by-laws, rulings, orders or operating circulars governing our activities and/or any Transaction (see section 6-a) governed by this Agreement, including, but not limited to, the funds transfer system and clearing and settlement house rules. 4. Term and termination. Unless a Service is terminated in accordance with the Service Documentation, this Agreement and each Service will continue in effect until terminated by either party upon 30 days' prior written notice to the other party. When a Service is terminated for any reason, the Service Documentation governing the terminated Service is also terminated. © 2023 Wells Fargo Bank, N.A. All rights reserved. Revised: April 4, 2023 Item 18: Staff Report Pg. 157 Packet Pg. 342 of 857 4 Item 18 Attachment D - Wells Fargo Agreement for Lockbox and Related Services We may suspend or terminate any Service: a. After we notify you of a breach of any provision of the Service Documentation or any other agreement with us, and you fail to cure the breach (if it can be cured) within 15 days of the date of the notice; or b. Without prior notice to you if: i. We reasonably suspect that an Account associated with a Service has been compromised or otherwise subject to irregular, unauthorized, fraudulent, or illegal activity, ii. You become subject to any insolvency or bankruptcy proceeding, or any receivership, liquidation, reorganization, or other similar proceeding, or you enter into any agreement or proceeding for voluntary liquidation, dissolution, composition with or assignment for the benefit of creditors or other winding up, iii. We determine in our sole discretion that continuing to provide a Service may place us at risk of financial loss or result in an unacceptable credit exposure, iv. Any guaranty of your obligations to us ("Guaranty") is terminated, revoked, or its validity contested by the guarantor ("Guarantor"), v. We determine in our sole discretion that a material adverse change has occurred in your ability to perform your obligations under the Service Documentation, or in the ability of a Guarantor to perform its obligations under a Guaranty, or vi. The Account necessary to provide a Service is closed. The termination of a Service will not affect your or our respective rights and obligations with respect to the Service(s) provided before the termination including without limitation Transactions. We will not be liable to you for any losses or damages you may incur as a result of any termination of any Service or termination or restriction of any Vantage access rights under section 9(d) below. Service fees. You will pay us the fees described in the Service Documentation and any taxes applicable to each Service, however designated, but excluding taxes based on our net income. We may debit your Account for any fees not covered by earnings credits and any taxes that are due, or we may send you an invoice for these amounts, which you will promptly pay. Our charges and fees are in the applicable fee schedule for Services used in connection with your Account. Security procedures. a. Unless otherwise agreed, you agree that "Security Procedure" is the applicable security procedure described in the Service Documentation for your Initiation Method for the Service, which we will use to verify the authenticity of a Transaction. The term "Initiation Method" refers to the method we offer in the product enrollment form ("Set-up Form") or other Service Documentation for delivering your Transaction instructions to us with respect to the applicable Service and includes any applicable transmission protocols. The term "Transaction" means (i) any funds transfer, payment order, or payment instruction (including any communication cancelling or amending an instruction), and (ii) any instruction, data or other information which we receive in your name with respect to a funds transfer. The purpose of the Security Procedure is to verify the authenticity of the Transaction. We will not use the Security Procedure to detect an erroneous or duplicate Transaction. You will be responsible for any erroneous or duplicate transaction we receive in your name. You agree to be bound by each Transaction, whether or not authorized by you, issued in your name and accepted by us in compliance with the Security Procedure for the Service. b. You agree that each Security Procedure for the Initiation Method in the Set-up Form or other Service Documentation for each of the Services (a) best meets your requirements with regard to the size, type and frequency of your Transactions, and (b) is commercially reasonable. 7. Confidential information. Unless otherwise stated in the Service Documentation, "Confidential Information" means all (a) User Guides, (b) Security Procedures, passwords, codes, security devices and related instructions and technical and non -technical information and intellectual property rights relating to our vendors' or our technology, IT infrastructure or data security, including trade secrets, systems information security program or processes, SSAE or SOC reports, and testing procedures or results. You will not acquire any ownership interest in or rights to Confidential Information as a result of your use of any Service. Page 2 Master Agreement for Treasury Management Servic Item 18: Staff Report Pg. 158 Packet Pg. 343 of 857 5 Item 18 Attachment D - Wells Fargo Agreement for Lockbox and Related Services You will: a. Maintain the confidentiality of the Confidential Information, b. Not disclose (or permit your employees or agents to disclose), copy, transfer, sublicense, or otherwise make any of it available to any person or entity, other than your employees who have a need to use the Confidential Information in connection with the applicable Service, and c. Not decompile, reverse engineer, disassemble, modify, or create derivative works of any Confidential Information. You will notify us immediately if you know of or suspect any unauthorized disclosure, possession, use, or knowledge (each, an "Unauthorized Use") of any Confidential Information. If you (or your employees or agents) are responsible for the Unauthorized Use, you will, at your expense, promptly take all actions, including initiating court proceedings to recover possession and prevent further Unauthorized Use of the Confidential Information. You will also compensate us for any injury caused to us as a result of the Unauthorized Use. Currency conversion. When your instructions require us to convert the amount of a Transaction from the currency in which the Account is denominated ("Account Currency") to another currency ("Foreign Currency"), we will do so using the Applicable Exchange Rate in effect at the time we execute your Transaction. "Applicable Exchange Rate" means the exchange rate we set and use for you when we convert one currency to another currency and includes a markup. The markup factors include costs incurred, market risks and our desired return. The exchange rate we provide to you may be different from the exchange rates you see elsewhere. Foreign exchange rates are dynamic, and rates fluctuate over time based on market conditions, liquidity, and risks. If a financial institution designated to receive the funds does not pay the beneficiary specified in the Transaction, and the funds are returned to us, we will not be liable to you for a sum greater than the amount of the Transaction after we have converted it from the Foreign Currency to the Account Currency using the Applicable Exchange Rate in effect at the time the funds are returned to us. You accept the risks of any change in the Applicable Exchange Rate between the time you request a Transaction and the time the Transaction is either completed or is unwound due to a cancellation, an amendment, a rejection, or a return. 9. Vantage. a. Description of Vantage. Vantage is our electronic banking platform that is accessed through the Internet. Your Authorized Agents (defined below) may use Vantage to access (i) Services in which you have separately enrolled and (ii) third -party sites we may make available through Vantage. We offer different channels through which you may access Vantage, including personal computers and mobile devices. We may add or eliminate channels at any time. A Service or third party site accessible through one channel may not be accessible through another channel. b. Access to Vantage. When you enroll in Vantage, and as we may determine is necessary after enrollment, we will provide Log -On Credentials (defined below) to the persons who are authorized to access Vantage on your behalf (each, an "Authorized Agent"). Log -On Credentials mean one or more secure methods we provide to access the Services and may include user IDs, passwords, token IDs, and other methods that we adopt from time to time. We have no obligation to separately verify or authenticate any communication we receive in your name through Vantage, whether or not it was actually from an Authorized Agent. You assume the entire risk of (i) unauthorized use of your Log -On Credentials and (ii) unencrypted electronic transmissions. c. Administration of Vantage. We offer two options for administering Vantage: (i) Administration and (ii) Bank administration. Administration. If you enroll in the Administration option, there are three categories of Authorized Agents: Company Administrator, Administrator, or User. Unless you and we separately agree, we will provide Log -On Credentials only to your initial Company Administrator(s) who will (a) assign Log -On Credentials to other individuals and (b) designate those individuals as one of the following: (1) A Company Administrator, who may perform all functions of your initial Company Administrator, Page 3 Master Agreement for Treasury Management Servic Item 18: Staff Report Pg. 159 Packet Pg. 344 of 857 6 Item 18 Attachment D - Wells Fargo Agreement for Lockbox and Related Services (2) An Administrator, who may perform all functions of an Administrator including designating other Administrator(s) and User(s), or (3) A User, who may access the Services designated by a Company Administrator or an Administrator, as well as those Services in which we permit a User to self -enroll. Each Company Administrator and Administrator has the authority to enroll you in additional Services. In addition to your use of Administration as described in this subsection, you may request that we assign Log -On Credentials to Users that you designate in writing to us. Your designation to us will specify the Services which the User is authorized to access in addition to those Services in which we permit a User to self -enroll. ii. Bank administration. For the Bank administration option, there is one category of Authorized Agent: Users. We will assign Log -On Credentials to each User you designate. You will promptly revoke the Log -On Credentials of any Authorized Agent or User when that individual is no longer authorized to access Vantage. If you notify us in writing to revoke the Log -On Credentials of an Authorized Agent or User, we will have a reasonable time after receiving your written notification to revoke the individual's access. d. Terminating access. We may terminate or restrict any Authorized Agent's access to any Service through Vantage if we determine such use: i. Does not comply with any term applicable to Vantage, ii. Is not permitted by Applicable Law, iii. Is not authorized by you or any third party whose authorization we believe is necessary, or iv. Should be denied for your or our protection (without us agreeing to or being required to make this determination in any circumstance). e. Financial information. Financial market data, quotes, news, research, and other financial information developed by third parties and transmitted to us ("Financial Information") may be available to you at Vantage. The posting of any Financial Information or any other information or data at Vantage is not a recommendation by us of any particular Service or action. We do not guarantee the accuracy or completeness of any Financial Information, nor are we responsible for (i) the actions or omissions of the third parties developing or transmitting Financial Information or (ii) any decision you make or action you take by relying on any Financial Information. f. Miscellaneous. For purposes of this section 9 only, "Service" includes each service and product we or any of our affiliates offer that you access through Vantage. This section 9 will survive the termination of any Service or this Agreement. 10. Alerts. a. Non -subscribed alerts. When you enroll in Vantage or other channels or Services, you consent to receiving by email or other delivery channels, servicing messages that we determine are important or urgent. You do not need to subscribe to receive such alerts and you do not pay additional service fees. b. Subscribed alerts. You may also enroll in fee -based alerts for applicable Services so that you can receive messages you subscribe to at the intervals and through delivery channels that you choose. 11. Liability and indemnification. a. We are not obligated to honor, in whole or in part, any Transaction or other instruction that: i. Exceeds the available balance in the Account, unless otherwise provided in the Service Documentation, ii. Does not comply with the Service Documentation or our applicable policies, procedures, or practices made available to you, iii. We have reason to believe may not have been duly authorized, should not be honored for our or your protection, or involves funds subject to a hold, dispute, restriction, or legal process, or iv. Would possibly result in us not complying with Applicable Law. b. Neither we nor our software vendors make any express or implied representations or warranties with respect to the Services or any software used in connection with the Services, including any warranty as to the merchantability or fitness for a particular purpose, other than those expressly set forth in the Service Documentation. Page 4 Master Agreement for Treasury Management Servic Item 18: Staff Report Pg. 160 Packet Pg. 345 of 857 7 Item 18 Attachment D - Wells Fargo Agreement for Lockbox and Related Services c. Any claim, action, or proceeding against us for losses or damages arising from a Service, must be brought within one year from the date of the act or omission, except as otherwise stated in the account agreement governing the Account. d. We will have no liability for our failure to perform or delay in performing a Service if the failure or delay is due to circumstances beyond our reasonable control. If we determine that any funds transfer or communications network, Internet service provider, or other system used to provide a Service is unavailable, inaccessible, or otherwise unsuitable for use by you or us, we may, upon notice to you, suspend or discontinue the affected Service. e. We will only be liable to you for actual damages incurred as a direct result of our failure to exercise reasonable care in providing the Services. Reasonable care requires only that we follow standards that do not vary unreasonably from the general standards followed by similarly situated banks. Our policies and procedures are general internal guidelines for our use and do not establish a higher standard of care for us than otherwise established under Applicable Law. A mere clerical error or an honest mistake will not be considered a failure by us to perform any of our obligations. Our liability to you will be limited to an amount not greater than 10 times our fees incurred in the calendar month immediately before the calendar month in which the loss or damages were incurred (or, if no fees were incurred in that month, our fees incurred in the month in which the losses or damages were incurred). f. Except in the case of our negligence or intentional misconduct, you will indemnify and hold us, our directors, officers, employees and agents ("Representatives") harmless from all losses or damages that arise out of: i. The performance of a Service in compliance with the Service Documentation, including any warranty we are required to make to a third party in connection with a Service, ii. An act or omission of any of your agents, couriers, or Authorized Agents, and iii. If the Service includes a license or sublicense of any software, any use or distribution of the software by you or any person gaining access to the software through you that is inconsistent with the license or sublicense. You will promptly provide us with written proof of loss, and notify us if you become aware of any third party claim related to a Service. You will cooperate fully (and at your own expense) with us in recovering a loss. If we reimburse you, we or our designee will be subrogated to all of your rights (i.e., we will be entitled to assert any legal rights you had relating to the claim). g. Except as expressly provided otherwise in the Service Documentation, neither party nor its Representatives will be liable to the other party for: i. Any special, consequential, incidental (including court costs and attorneys' fees), indirect, or punitive losses or damages, or ii. Business interruption, loss of profits, loss of business, loss of revenue, loss of goodwill, loss of opportunity, loss or injury to reputation, or loss of anticipated savings, whether any claim is based on contract or tort, or whether the likelihood of these losses or damages was known to the other party and regardless of the form of the claim or action. h. When you send payments on behalf of your third party customers, you agree you are solely liable to your customers for any and all losses those customers may suffer. We exclude all and any liability of whatever nature (including those losses detailed in subsection g above) arising out of your relationship with your customer. 12. Governing law. The Service Documentation will be governed by: (a) U.S. federal law and (b) the law of (i) the U.S. state in which the office of Bank that maintains the Account is located or, if there is no such state or no account associated with such Service, (ii) the State of New York, without reference to its principles of conflicts of laws ("Governing Law"). 13. Arbitration agreement. Upon demand by you or us, any dispute or claim arising out of or relating to this Agreement, or the breach thereof, must be submitted to arbitration administered by the American Arbitration Association ("AAA") under its Commercial Arbitration Rules, and must be heard before three arbitrators if the amount in dispute is U.S. $5,000,000 or more or its equivalent in any other currency, and before one arbitrator for amounts in dispute of less Page 5 Master Agreement for Treasury Management Servic Item 18: Staff Report Pg. 161 Packet Pg. 346 of 857 Item 18 8 Attachment D - Wells Fargo Agreement for Lockbox and Related Services than U.S. $5,000,000 or its equivalent in any other currency. Arbitration will proceed in a location selected by AAA in the state of the applicable Governing Law, and if there is no such state, the place of arbitration must be New York, NY. The language of the arbitration must be English. Judgment on the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof. This arbitration requirement does not limit the right of you or us to: (a) exercise self-help remedies including setoff or (b) obtain provisional or ancillary remedies such as injunctive relief or attachment, before, during or after the pendency of any arbitration proceeding. This exclusion does not constitute a waiver of the right or obligation of you or us to submit any dispute to arbitration hereunder, including those arising from the exercise of the actions detailed in (a) and (b) of this section. 14. Jurisdiction. For any proceedings regarding this Agreement (not subject to arbitration as provided in this Agreement), you hereby irrevocably submit to the jurisdiction of the courts of the Borough of Manhattan, New York City, in the State of New York or the federal courts located there and irrevocably agree that all claims in relating to the proceeding may be heard or determined in those courts. 15. Miscellaneous. a. Severability. Any portion of the Service Documentation which is inconsistent with Applicable Law or Governing Law will be deemed modified and applied in a manner consistent therewith, and we will incur no liability to you as a result of the inconsistency or modification and application to any dispute regarding the Service Documentation. If any portion or provision of the Service Documentation is deemed unenforceable, it will not affect the enforceability or validity of the remaining Service Documentation nor the enforceability or validity of that portion or provision under the law of any other jurisdiction. b. Entire agreement. The Service Documentation (and any documents referred to therein): i. Constitutes the entire agreement between you and us regarding the Services we provide for all Accounts opened with us, and ii. Supersedes and extinguishes all prior agreements, understandings, representations and warranties of any nature (including requests for proposals and other sales material), whether oral or written, between you and us relating to any of our Services (including any other Master Agreement for Treasury Management Services, but excluding the current Commercial Account Agreement or Global Commercial Account Agreement, as applicable). c. Electronic agreement. To facilitate execution, the Service Documentation may be executed by a party in the form of an "Electronic Record" (as defined in the Electronic Signatures in Global and National Commerce Act at 15 U.S.C. §7001 et seq. ["ESIGN Act"]). The Service Documentation may be executed in as many counterparts as may be required to reflect all parties' approval, and all counterparts will collectively constitute a single agreement. An "Electronic Signature" (as defined in the ESIGN Act) that can be authenticated will constitute an original and binding signature of a party. The fact that a document is in the form of an Electronic Record or is signed using an Electronic Signature will not, in and of itself, be grounds for invalidating such document. d. No waiver. Neither our failure nor any delay by us in exercising any right or remedy will be deemed to be a waiver of the right or remedy. No course of dealing or waiver of any right on one occasion will constitute a modification of the Service Documentation or be a waiver of that right on a subsequent occasion. e. Third party beneficiaries. Except as otherwise provided in the Service Documentation, no person or entity other than the parties to this Agreement will be deemed to be a third party beneficiary under the Service Documentation. f. Financial condition. You will provide us promptly upon our request any existing financial statements or other information pertaining to your financial condition or any previously unprepared financial statements which we may require you to prepare and/or to be audited or reviewed by independent certified public accountants acceptable to us. g. Your representations and warranties. You represent and warrant that: (i) you will not use any Service in a manner that would violate any Applicable Law by you or us; (ii) if you employ an agent in connection with its use of any Service, you represent and warrant to us that: (1) your governing body has duly authorized the agent; (2) you will exercise appropriate controls to ensure each authorized agent does not exceed the authority granted to it; and (3) you will preserve the confidentiality of the Log -On Credentials and immediately notify us if you become aware or suspect that any Log -On Credential may have been compromised. Page 6 Master Agreement for Treasury Management Servic Item 18: Staff Report Pg. 162 Packet Pg. 347 of 857 9 Item 18 Attachment D - Wells Fargo Agreement for Lockbox and Related Services Use of names. You and we will not use each other's name or refer to our relationship in any solicitation, marketing material, advertisement, news release, or other written, online or oral communication without specific prior written consent for each such use or release, except that we may use your name as a reference in service proposals if we obtain your prior written approval for such use. Notices and communications. Either party may provide notice to the other party by mail, personal delivery, or electronic transmission. i. You will notify us promptly in writing of any change in your name, Address, legal status, or any other changes relevant to the conduct of the Account or affecting your business relationship with us. ii. The term "Address" as used in this Agreement refers to a mailing or electronic address. iii. You will use the Address where your relationship manager or other manager is located and will address any notice to the attention of the manager. iv. Each party will have a reasonable time after receipt of any notice to act on it. v. Any communication or notice to us from your agent about your use of a Service will be deemed to be a communication from you, and you authorize us to communicate with your agent about any such communication or Service. vi. We are entitled to rely on any communication or notice from you that we believe in good faith was authorized by your authorized representative or Authorized Agent and, we will have no obligation to verify or authenticate an identity of a sender or signature on any notice or communication, except as expressly provided in the Service Documentation. 16. Survival. Sections 7, 9, 11 - 15 will survive termination of the Services or this Agreement. Page 7 Master Agreement for Treasury Management Servic Item 18: Staff Report Pg. 163 Packet Pg. 348 of 857 10 Item 18 Attachment D - Wells Fargo Agreement for Lockbox and Related Services Appendix X Applicable Branches or Subsidiaries of Bank 1. Wells Fargo Bank, N.A., UK Branch 2. Wells Fargo Bank, N.A., Canadian Branch 3. Wells Fargo Bank, National Association, Shanghai Branch 4. Wells Fargo Bank, National Association, Hong Kong Branch Page 8 Master Agreement for Treasury Management Servic Item 18: Staff Report Pg. 164 Packet Pg. 349 of 857 11 Item 18 Attachment D - Wells Fargo Agreement for Lockbox and Related Services Exhibit 2 Master Agreement for Treasury Management Services (Attached) Item 18: Staff Report Pg. 165 Packet Pg. 350 of 857 12 Item 18 Attachment D - Wells Fargo Agreement for Lockbox and Related Treasury Manageme Services a CITY OF PALO ALTO Average Positive Collected Balance Reserve Requirement @ 0.00% Investable Balance Available for Services Monthly Analyzed Charges Earnings Allowance @ 5.24% Net Monthly Analyzed Charges *Monthly Fee Based Charges Total Monthly Analyzed Charges *Charges not offset by balances Investable balance required to offset $1.00 of analyzed charges Pricing as of April 2024 $ 550,000.00 $ 0.00 $ 550,000.00 $ 2,516.20 $ 2,447.73 $ (68.47) $ 0.00 $ (68.47) $ 225.31 '- BALANCE & COMPENSATION INFORMATION IAMTH 000230 RECOUPMENT MONTHLY 0.12750 287 36.59 BALANCE & COMPENSATION INFORMATION Subtotal 36.59 GENERAL ACCOUNT SERVICES 22051 010000 ACCT MAINTENANCE 7.00000 1 7.00 CK021 010100 DEBITS POSTED 0.10000 18 1.80 GENERAL ACCOUNT SERVICES Subtotal 8.80 LOCKBOX SERVICES 36769 05011 L LBX PAPER PACKAGE BASE 40.00000 1 40.00 03302 050400 LBX TRANSMISSION BASE 150.00000 1 150.00 03711 050136 LBX WEEKEND SERVICE BASE 70.00000 1 70.00 36709 050140 LBX WHOLESALE BASE 150.00000 1 150.00 03611 050000 LBX REMIT PROCESSED EXPRESS MAIL 1.00000 13 13.00 36731 050530 LBX CORRESPONDENCE OR REJECTS 0.30000 8 2.40 36755 050100 LBX STANDARD CHECK PROCESSED 0.30000 435 130.50 03905 050140 LBX DOCUMENT SCANNED 0.05000 5,823 291.15 36791 050600 LBX 7 YEAR IMAGE ARCHIVE 0.03000 5,823 174.69 36745 050129 LBX VALUE ADDED KEYING 0.02000 13,686 273.72 03303 050410 LBX PKG US MAIL DELIVERY 1.00000 5 5.00 48200 050020 LBX WHOLETAIL BASE 100.00000 1 100.00 48210 050100 LBX WT CHECKS 0.00000 2,049 0.00 48220 050122 LBX WT TOTAL PAYMENTS PROCESSED 0.15000 2,574 386.10 48307 059999 LBX WT STD ITEM PROCESSED NON SCAN 0.30000 36 10.80 48221 050122 LBX WT MULTI PAYMENT 0.10000 513 51.30 48222 050002 LBX WT PARTIAL PAYMENT 0.02000 180 3.60 48257 050899 LBX WT MARK SENSE OR ADDRESS CHANGE 0.06000 2,574 154.44 48501 050401 LBX WT TRANSMISSION PER ITEM 0.01000 2,610 26.10 LOCKBOX SERVICES Subtotal 260.00000 2,032.80 Pro Forma Item 18: Staff Report Pg. 166 Packet Pg. 351 of 857 1 of 3 13 Item 18 Attachment D - Wells . Fargo Agreement for Lockbox and Related DEPOSITORY SERVICES Services CK061 100400 RETURN ITEM - CHARGEBACK 2.00000 16.00 CK064 100416 RETURN ITEM SERVICE MTHLY BASE 0.00000 1 0.00 CK069 100401 RETURN ITEM SPECIAL INSTRUCTIONS 0.25000 8 2.00 CK081 100401 RETURN ITEM SPECIAL INST MTHLY BASE 15.00000 1 15.00 08025 100015 MISCELLANEOUS CREDITS POSTED 1.75000 67 117.25 311 100224 WHOLESALE LOCKBOX - DEPOSITED CHECK 0.05000 2,683 134.15 DEPOSITORY SERVICES Subtotal 284.40 PAPER DISBURSEMENT SERVICES 22225 150240 CHECK CASHING THRESHOLD MO BASE 0.00000 1 0.00 22245 150240 CHECKS PAY TO INDIV BLOCK MO BASE 0.00000 1 0.00 22235 150240 OTC DEBIT BLOCK MONTHLY BASE 0.00000 1 0.00 MD091 150240 PYMT AUTH MAX CHECK MTHLY BASE 10.00000 1 10.00 PAPER DISBURSEMENT SERVICES Subtotal 10.00 GENERAL ACH SERVICES CK018 250201 ELECTRONIC CREDITS POSTED 0.10000 48 4.80 ES349 250220 ACH RECEIVED ADDENDA 0.00000 30 0.00 ES344 250202 ACH RECEIVED ITEM 0.30000 31 9.30 34333 251050 ACH FRAUD FILTER REVIEW MO BASE 5.00000 1 5.00 GENERAL ACH SERVICES Subtotal 19.10 WIRE & OTHER FUNDS TRANSFER SERVICE ES139 350100 WIRE OUT DOMESTIC VANTAGE/API 3.00000 12 36.00 WIRE & OTHER FUNDS TRANSFER SERVICE Subtotal 36.00 nF INFORMATION SERVICES 34123 40022Z ALERTS SERVICE - EMAIL 0.75000 36 27.00 34120 400055 INTRADAY BASE PER ACCT PER REPORT 20.00000 1 20.00 34121 400275 INTRADAY REPORTING ITEMS RPTD 0.07500 134 10.05 34100 400052 PREV DAY BASE PER ACCT PER REPORT 20.00000 1 20.00 34115 400425 PREV DAY REPORTING ITEMS LOADED 0.07500 144 10.80 34216 400832 WIRE TEMPLATE ONLINE 0.33000 2 0.66 INFORMATION SERVICES Subtotal 88.51 Pro Forma 2 of 3 Item 18: Staff Report Pg. 167 Packet Pg. 352 of 857 14 Item 18 Attachment D - Wells Fargo Agreement for Lockbox and Related Services We created this proposal for you based on our understanding of your requirements and the services in which you expressed interest. This proposal confirms the deposit and treasury management services and the pricing we plan to provide you based on certain assumptions including projected volumes and other relevant information you provided. This document is confidential. Please do not share it without first obtaining our written permission. The services and pricing contained in this proposal are valid for 90 days. The pricing is subject to change if the actual volume or scope of services differs from the assumptions upon which we based the pricing. Please let us know if you believe this proposal does not accurately represent the prices or services we discussed with you. If you have questions about the services in this proposal, please contact your Treasury Management Sales Consultant or visit: www.wellsfargo.com/accountanalysis for additional information about the services. Regarding your services Alerts Service Charges are assessed against the volume of Alerts per user, per company, per month basis. Users are only charged for the first 80 events/alerts per month, per delivery mechanism (email or text). There is no per company cap for billing. Wire Book Transfer A Vantage/API Wire book transfer is between two accounts initiated via Vantage/API Wires Book Transfer workflow. A Payment Manager Book transfer is charged when the debit and credit accounts are setup in a single Vantage Company ID and entitled to Book Transfer. Services with No Volumes Services listed with zero volume are not included in the estimated monthly analysis fee but are included in the event the service is used in the future. ¶!® WM This message may contain confidential and/or privileged information. If you are not the addressee or authorized to receive this for the addressee, you must not use, copy, disclose, or take any action based on this message or any information herein. If you have received this message in error, please advise the sender immediately by reply email and delete this message.Thank you for your cooperation. © 2024 Wells Fargo Bank, N.A. All rights reserved. Not intended for public distribution. Pro Forma Item 18: Staff Report Pg. 168 Packet Pg. 353 of 857 3 of 3 Item 19 Item 19 Staff Report City Council Staff Report From: City Manager CITY O F Report Type: CONSENT CALENDAR PALO Lead Department: Public Works ALTO Meeting Date: June 17, 2024 Report #:2404-2838 TITLE Authorization for the City Manager or Designee to Negotiate and Execute a Line of Credit totaling $31 Million to Address Regional Wastewater Treatment Fund Cashflow as Recommended by the Finance Committee; CEQA Status — Not a Project RECOMMENDATION The Finance Committee and staff recommend that the City Council: 1. Direct staff to pursue a line of credit totaling $31 million to restore a positive cash balance in the Regional Wastewater Treatment Fund, and 2. Authorize the City Manager or their designee to negotiate and execute all agreements, certificates, instruments, and documents necessary to obtain the line of credit. EXECUTIVE SUMMARY On May 21, 20241, the Finance Committee reviewed the Regional Wastewater Treatment Fund current and forecasted negative cashflow balances and to address the fund's negative cash balance, recommends that the City Council authorize staff to negotiate and execute a line of credit (LOC) totaling $31 million. The capital improvement program at the City's Regional Water Quality Control Plant (RWQCP) is entering its peak construction period. Although the City obtained $212 million in low interest loans for its projects from the state's Clean Water Revolving Fund (SRF), the Regional Wastewater Treatment (WWT) Fund is experiencing short-term negative cash balances. Given the magnitude of the fund's capital costs and timing of reimbursement requests, the WWT Fund is not able to cover the shortage. 1 Finance Committee, May 21, 2024, Item #2: https://recordsportal.paloalto.gov/Weblink/DocView.aspx?id=64565 Item 19: Staff Report Pg. 1 Packet Pg. 354 of 857 Item 19 Item 19 Staff Report Pursuing a $31 million LOC will restore a positive cash balance in the WWT Fund. During the term of the LOC, the WWT Fund will pay for issuance costs and interest, recovered through periodic billing to the six partner agencies, including the City's Wastewater Collection Fund. Regarding the City's Debt Policy', the Enterprise Funds have a debt service limit of 15% of operating expense. Issuance of a $31 million LOC would increase the fund's debt service limit appropriately 0.6 to 1.8 percentage points between FY 2025 and 2027. The estimated debt limit for FY 2025 is 7.6%. The City Council approved an exception to the debt limit on December 5, 2022 upon approving the budget amendment to fund the Secondary Treatment Upgrade (STU) project using the 2022 SRF Loan. In FY 2028, based on estimated interest cost and forecast budget, the WWT Fund is estimated to exceed the 15% debt limit due to repayment of the 2022 SRF Loan. BACKGROUND On May 21, 2024, the Finance Committee voted unanimously to recommend that the City Council authorize staff to negotiate and execute a $31 million LOC. The Finance Committee's motion is outlined below: 1. Direct staff to pursue negotiating a line of credit, totaling $31 million, and 2. Authorize the City Manager or designee to negotiate and execute the line of credit MOTION PASSED, 3-0 This report to the City Council summarizes the WWT Fund cashflow shortfall and details of the LOC. For detailed background and analysis, please refer to staff's report to the Finance Committee' that outlines the RWQCP operating and capital budgets; the primary drivers for the WWT Fund's negative cash balance position; interim borrowing options, including advantages and challenges associated with each option; and future RWQCP CIP projects. ANALYSIS As of March 31, 2024, the WWT Fund is currently experiencing a cash shortfall in the amount of $8.2 million and, based on cumulative forecasted cashflows reaches a peak shortfall of $31 million (rounded) in October 2024. As SRF loan proceeds flow to the City on a reimbursement basis, this cumulative shortfall declines through November 2025 and is positive for several months. Cash shortfalls are expected to recur thereafter through October 2028. Thereafter, the 2 City Debt Policy, dated April 11, 2017: https://www.cityofpaloalto.org/files/assets/public/v/1/administrative- services/adopted-debt-policy-2017-04-11.pdf 3 City Council, December 5, 2022, CMR ID 14710: https://www.cityofpaloalto.org/files/assets/public/v/1/agendas- minutes-reports/reports/city-ma nager-reports-cmrs/2022/id.-14710-secondary-treatment-upgrades-approval-of- contract-design-contract-amendment-and-partner-agreements.pdf Item 19: Staff Report Pg. 2 Packet Pg. 355 of 857 Item 19 Item 19 Staff Report WWT Fund cash balance is positive. Chart 1 displays the WWT Fund's current cash balance and forecast through September 2028. Chart 1: Wastewater Treatment Fund Cumulative Cash Balance (in millions) $30 $20 $10 - $o �I•_� .� _III, ($10) iIIII�I I 'll I 'III ($20) ($30) ($40) O1b O�� O�� Ocl� O11� O1y O�y Ooh Ooh O�� O0� O�� OHO O1O OHO OHO OHO OVA OVA O1� OCR O1A OaA Oa% Off% O1% O�� O�� July 2024: PST Complete March 2025: Advanced Water Purification System begins July 2026: Outfall Pipeline begins April 2028: STU complete October 2028: 2022 SRF debt service begins; assumes bond proceeds for Headworks Project Based on these estimates, it is useful to note a couple features of these expected cash shortfalls. First, the amount of borrowing needed fluctuates over time. It reaches a peak of $30.9 million at the end of the first quarter of FY 2025 (September 30, 2024), decreases thereafter, and peaks again to $28.1 million in September 2028. Second, there are months without cash shortfalls and it would be advantageous to have no debt outstanding in those months. The draw and repayment flexibility (or lack thereof) offered by an LOC or bond anticipation note ("BAN") were considered in the context of these fluctuating short-term borrowing needs. State SRF reimbursement delays are not unique to Palo Alto. In coordination meetings, State staff shared that many agencies struggle with the delays; the issue was also an audit finding4 for the SRF program. Other local agencies including Silicon Valley Clean Water in Redwood City, San Jose, and San Mateo have pursued and obtained interim borrowing financing to manage SRF reimbursement delays. Line of Credit (LOC) A line of credit is a flexible loan, for a defined amount of money, from a financial institution that is accessed to manage cash flow or other short-term financing needs. Unlike a bond issuance, 4 The CA CWSRF: Review of the Loan Award and Disbursement Processes, July 2022; PDF pp. 27, 35-6 https://www.waterboards.ca.gov/water issues/programs/grants loans/srf/docs/CWSRF-program-review.pdf Item 19: Staff Report Pg. 3 Packet Pg. 356 of 857 Item 19 Item 19 Staff Report the line of credit has terms directly negotiated with the bank and has more flexibility with use of the monies. Under this option, the City would enter into a line of credit with a commercial bank for five years, not to exceed $31 million. Over that five-year period, the City can draw down funds from the line of credit on an as -needed basis. When SRF reimbursement proceeds are received, the line of credit may be immediately repaid and the full amount, or portion, would be reconstituted. Flexibility is a key attribute of a line of credit; the City may borrow, repay, and re -borrow on a regular frequency, hence the revolving nature of this financing strategy. The LOC also provides flexibility on the use of funds amongst WWT projects during the term, which is relevant as WWT has multiple upcoming projects. With the assistance of the City's municipal finance advisor, PFM, a request for proposal would be issued and proposals would be evaluated based on proposed terms and conditions. Issuance costs are approximately $0.2 million and include the request for proposals, evaluation of proposers, outside counsel legal review, and executing the agreement. A line of credit has both a "utilized" (also known as a Secured Overnight Financing Rate, or SOFR) and an "unutilized" fee. The utilized fee is applied against the amount drawn down from the line of credit. As of the writing of this report, the utilized fee ranges between 3.0 to 5.1% and is applied only to the amount drawn from the line of credit. The rate will reset monthly and under current market conditions, short-term rates are relatively high. In 2024, it is expected that the Federal Open Markets Committee (FOMC) may decrease the federal rate by 0.5%, which would decrease rates on a line of credit. The unutilized fee is applied against the portion of the line of credit that is not drawn or utilized. It is essentially a "capacity" fee that is charged by commercial banks that allows borrowers immediate access to liquidity with one to two days' notice. As of the writing of this report, the unutilized fee is estimated to be 0.35%. FISCAL/RESOURCE IMPACT A $31 million LOC's expected expenses for the WWT Fund and partners is shown in Table 1 below. This is based on maintaining a minimum guideline of $7 million in cash reserves in the WWT Fund. Line of Credit Fiscal Year (SOFR Current) Line of Credit (SOFR 5 -Year Avg.) 2025 $0.7M $0.4M 2026 $0.5M $0.3M 2027 $0.4M $0.3M 2028 $0.9M $0.5M 2029 $0.5M $0.3M Total $3.OM $1.8M The LOC is expected to be issued late summer 2024. Over the 5 -year duration of the LOC, the total cost is approximately $0.7 to $1.0 million in the Wastewater Collection Fund. The remaining cost will be covered by contributions from the partners. Item 19: Staff Report Pg. 4 Packet Pg. 357 of 857 Item 19 Item 19 Staff Report STAKEHOLDER ENGAGEMENT RWQCP meets regularly with partner agency staff to discuss CIP developments and financing scenarios. Public Works staff began communicating the cashflow issue with partners in 2021 as STU Project details came into focus. The most recent partner meetings with partner agencies on cashflow were on March 26, 2024 and May 21, 2024. An interdepartmental team, including Administrative Services, Public Works, Utilities, City Attorney's Office, and City Manager's office staff meets monthly to review and discuss the RWQCP CIP, including the cashflow issue. ENVIRONMENTAL REVIEW Council action on this item is not a project as defined by CEQA because capital project financing activities are a government funding mechanism or fiscal activity which does not involve any commitment to any specific project which may result in a potentially significant physical impact on the environment. CEQA Guidelines section 15378(b)(4). APPROVED BY: Brad Eggleston, Director Public Works/City Engineer Item 19: Staff Report Pg. 5 Packet Pg. 358 of 857 Item 20 Item 20 Staff Report City Council Staff Report From: City Manager CITY O F Report Type: CONSENT CALENDAR PALO Lead Department: Administrative Services ALTO Meeting Date: June 17, 2024 Report #:2405-3108 TITLE Resolution to Vacate Portions of Three Public Service Easements at 1700 Embarcadero Road RECOMMENDATION Staff recommends that the City Council adopt the attached resolution (Attachment A: Resolution to Summarily Vacate a Public Service Easement for 1700 Embarcadero Road) ordering the summary vacation of three public service easements in part or whole for utility and incidental purposes located on the commercial property at 1700 Embarcadero Road in Palo Alto, CA. BACKGROUND The Grant of Easements documented in the Santa Clara County Official Records are as follows: 1. Book 8517, page 596, dedicated and accepted by the City on April 30, 1969; 2. Book 8535, page 632, accepted by the City on May 15, 1969; and 3. Book 8047, page 634, accepted by the City on March 6, 1968. These easements are for public utility purposes and affect the property located at 1700 Embarcadero Road. The developer has requested that the entirety of the easements described in Book 8517, page 596 and Book 8535, page 632 and a portion of the easement described in Book 8047, page 634 on the property to be vacated for the development of a new automotive dealership ("Preexisting Easements").' The portion of the Preexisting Easements to be vacated previously served a transformer that is no longer in place. The City has accepted a new grant of easement, attached as Attachment B: Grant of Public Service Easement at 1700 Embarcadero Road ("Superseding Easement"), which will be used to serve a newly installed transformer. The Superseding Easement was sent for recording on June 4, 2024. The City's Utilities department has reviewed the vacation request and has determined that the portion of the easements to be vacated will be superseded by relocation (Attachment B: Grant of Public Service Easement at 1700 Embarcadero Road). Therefore, once the Superseding Easement is recorded, the 1 https://www.cityofpaloalto.org/Departments/Planning-Development-Services/Current-Planning/Projects/1700- 1730-Embarcadero-Road Item 20: Staff Report Pg. 1 Packet Pg. 359 of 857 Item 20 Item 20 Staff Report superseded portions of the Preexisting Easements may be vacated in accordance with the summary proceeding authorized in Section 8333 of the California Streets and Highways Code. FISCAL/RESOURCE IMPACT The Summary Easement Vacation Processing fee of $1,980 as set forth in the FY 2024 Municipal Fee Schedule has been paid by the developer. ENVIRONMENTAL REVIEW Council action to relocate this public service easement is within the scope of the Mitigated Negative Declaration prepared for the 1700 & 1730 Embarcadero Road Auto Dealership Project and adopted by the Council on June 24, 2019 (#19PLN-00291). ATTACHMENTS Attachment A: Resolution to Summarily Vacate a Public Service Easement for 1700 Embarcadero Road Attachment B: Grant of Public Service Easement at 1700 Embarcadero Road APPROVED BY: Lauren Lai, Administrative Services Director Item 20: Staff Report Pg. 2 Packet Pg. 360 of 857 Recorded at no charge in accordance with Streets & Highways Code Section 8336 at the request of and when recorded return to: City of Palo Alto Real Estate Division 250 Hamilton Avenue Palo Alto, CA 94301 Item 20 Attachment A - Resolution Vacating a Portion of Easement at 1700 Embarcadero Rd SPACE ABOVE LINE FOR RECORDER'S USE APN: 008-03-084 Address: 1700 Embarcadero Road, Palo Alto, CA 94303 SUMMARY VACATION RESOLUTION NO. RESOLUTION OF THE COUNCIL OF THE CITY OF PALO ALTO SUMMARILY VACATING A PORTION OF A PUBLIC SERVICE EASEMENT AT 1700 EMBARCADERO ROAD, PALO ALTO, CA 94303 WHEREAS, Section 8333 of the Streets and Highways Code authorizes the City Council to summarily vacate a public service easement in any of the following cases: (a) the easement has not been used for the purpose for which it was dedicated or acquired for five consecutive years immediately preceding the proposed vacation, (b) the date of dedication or acquisition is less than five years, and more than one year, immediately preceding the proposed vacation, and the easement was not used continuously since that date, (c) the easement has been superseded by relocation, or determined to be excess by the easement holder, and there are no other public facilities located within the easement; and WHEREAS, the City of Palo Alto accepted and recorded a Grant of Easement on the property located at 1700 Embarcadero Road, Palo Alto, CA 94303, for public utility purposes, dated April 30, 1969, in Book 8517 of Official Records of Santa Clara County, page 596; and WHEREAS, the City of Palo Alto accepted and recorded a Grant of Easement on the property located at 1700 Embarcadero Road, Palo Alto, CA 94303, for public utility purposes, dated May 15, 1969, in Book 8535 of Official Records of Santa Clara County Records, page 632; and WHEREAS, the City of Palo Alto accepted and recorded a Grant of Easement on the property located at 1700 Embarcadero Road, Palo Alto, CA 94303, for public utility purposes, dated March 6, 1968, in Book 8047 of Official Records of Santa Clara County, page 634; and WHEREAS, the City of Palo Alto accepted and, on June 4, 2024, sent for recording a Grant of Easement on the property located at 1700 Embarcadero Road, Palo Alto, CA 94303, for public utility purposes, ("Superseding Easement"); and Item 20: Staff Report Pg. 3 Packet Pg. 361 of 857 Item 20 Attachment A - Resolution Vacating a Portion of Easement at WHEREAS, the City of Palo Alto Utilities Department has eva 1700 Embarcadero Rd ned that upon the recording of the Superseding Easement, a portion of the preexisting public utilities easements located on the property atl700 Embarcadero, Palo Alto, CA 94303 will be excess and may be superseded by relocation; and WHEREAS, the City Council of the City of Palo Alto intends to summarily vacate the portion of public service easements as more particularly described in Exhibit "A" attached to this resolution and depicted on the plat map attached as Exhibit "B" to this resolution upon the recording of the Superseding Easement; and NOW, THEREFORE, the City Council does hereby RESOLVE as follows: SECTION 1. This vacation is made under the authority of California Streets and Highways Code Chapter 4 of part 3 of Division 9, commencing at Section 8333 et. seq. 1. Upon recording of the Superseding Easement, the portions of the public service easements described herein on Exhibit "A" and depicted on the plat map attached as Exhibit "B" will be excess; and 2. Will be superseded by relocation. SECTION 2. Based upon the findings made in Section 1 of this Resolution and the provisions of Section 8333 of the Streets and Highways Code, the City Council does hereby order that the portion of public service easements as shown on the said Exhibits "A" and "B" shall be summarily vacated upon the recording of the Superseding Easement. SECTION 3. The City Clerk, acting by and through the Real Property Manager, is hereby directed to record at the Santa Clara County Clerk -Recorder's Office a certified copy of this Resolution, including the Map at a time after the Superseding Easement has been recorded. SECTION 4. The portion of public service easement for utilities and incidental purposes described in Exhibit "A" and depicted in the plat map attached as Exhibit "B" will no longer constitute a public service easement from and after the date of recordation of the documents identified in Section 3 of this Resolution. // // // // // // // Item 20: Staff Report Pg. 4 Packet Pg. 362 of 857 Item 20 Attachment A - Resolution Vacating a Portion of Easement at SECTION 5. Council action on this item is not a project as defy 17°° 7mbarcaaer° Ra lrnia Environment Quality Act because summary vacation of a public utilities easement is an organizational or administrative activity that will not result in direct or indirect physical changes in the environment. CEQA Guidelines section 15378(b)(5). INTRODUCED: PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: City Clerk Mayor APPROVED AS TO FORM: APPROVED: Deputy City Attorney City Manager Director of Administrative Services Item 20: Staff Report Pg. 5 Packet Pg. 363 of 857 Recorded at no charge in accordance with Government Code Section 6103 at the request of, and when recorded return to: City of Palo Alto Real Estate Division 250 Hamilton Avenue Palo Alto, CA 94301 "DOCUMENTARY TRANSFER TAX $NONE (Exempt — Section 11922), CA Rev. & Tax Code Item 20 Attachment B - Grant of a Public Service Easement at 1700 Embarcadero Road SPACE ABOVE THIS LINE FOR RECORDER'S USE ONLY A.P. No.: 008-003-084 Property Address: 1700 Embarcadero Road, Palo Alto, CA 94303 GRANT OF EASEMENT FOR A VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, SC Palo Alto RE, LLC, a California Limited Liability Company, "GRANTOR." GRANTOR, as owner of that certain real property described in Exhibit A, does hereby GRANT to CITY OF PALO ALTO, a chartered municipal corporation, "GRANTEE," an easement and right of way to construct, maintain, repair, replace and upgrade public utilities and related improvements with the right of ingress and egress, all in perpetuity, in, over, under, across, along, and upon that certain portion of GRANTOR's property in the City of Palo Alto, County of Santa Clara, State of California, more particularly described in Exhibit A and shown on the map in Exhibit B attached hereto and by this reference incorporated herein, whenever GRANTEE desires for the purposes set forth herein. The rights granted herein (i) are for the benefit of GRANTEE, its officers, agents, employees, or any contractor, its agents or employees, engaged by GRANTEE, whenever necessary for the purposes above set forth; (ii) shall run with the land; and (iii) shall bind GRANTOR and GRANTOR's successors and assigns. GRANTOR shall not plant any trees or bushes, or erect, construct or install any fence, wall, 1 Item 20: Staff Report Pg. 6 Packet Pg. 364 of 857 Item 20 Attachment B - Grant of a Public Service Easement irrigation or any other type of permanent structure, improvement or private I at 1700 Embarcadero er, across or upon said easement and right-of-way without first obtaining writt Road GRANTEE, which shall not be unreasonably withheld. GRANTOR shall keep the easement area clear from any obstacles that will make the area inaccessible. Item 20: Staff Report Pg. 7 Packet Pg. 365 of 857 Item 20 Attachment B - Grant of a Public Service Easement IN WITNESS WHEREOF, the undersigned has caused this instrument to b at 1700 Embarcadero Road Grantor: SC Palo Alto RE, LLC a California Limited Liability Company By: _ Name: Title: _ Dated: Grantee: City of Palo Alto, a chartered municipal corporation By: _ Name: Title: Dated: 3 Item 20: Staff Report Pg. 8 Packet Pg. 366 of 857 Item 20 Attachment B - Grant of a Public Service Easement CERTIFICATE OF ACKNOWLEDGMENT at 1700 Embarcadero (Civil Code § 1189) L Road A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. STATE OF CALIFORNIA COUNTY OF SANTA CLARA On , before me, , a notary public in and for said County, personally appeared who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under penalty of perjury under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature: Name: Item 20: Staff Report Pg. 9 Packet Pg. 367 of 857 Item 20 ment B - Grant of a Public Service Easement This is to certify that the interest in real property conveyed by the within del at 1700 Embarcadero City of Palo Alto, a municipal corporation, is hereby accepted by the under Road agent on behalf of the Council of the City of Palo Alto, pursuant to authority conterred by resolution of the said Council adopted on March 15, 1971, and the City of Palo Alto consents to recordation thereof by its duly authorized officer. Dated: APPROVALS Approved as to Form By: City Attorney or Designee By: City Manager or Designee Approved as to Content By: Utilities CERTIFICATE OF ACKNOWLEDGMENT (Civil Code § 1189) A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. STATE OF CALIFORNIA COUNTY OF SANTA CLARA On , before me, , a notary public in and for said County, personally appeared who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under penalty of perjury under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature: Name: 5 Item 20: Staff Report Pg. 10 Packet Pg. 368 of 857 EXHIBIT "A" Item 20 Attachment B - Grant of a Public Service Easement 9 at 1700 Embarcadero Z Road LEGAL DESCRIPTION FOR: UNDERGROUND ELECTRICAL EASEMENT All that certain real property situate in the City of Palo Alto, County of Santa Clara, State of California, being a portion of Parcel A as described in that certain document entitled "Certificate of Compliance (Lot Line Adjustment — Merger)" recorded December 17, 2009 as Document No. 20544106, of Official Records of Santa Clara County, and shown on that certain Record of Survey filed for record on July 15, 2010 in Book 808 of Maps at Page 11, Santa Clara County Records and being more particularly described as follows: BEGINNING at the southwesterly corner of said Parcel A; THENCE along the westerly line of said Parcel A, North 16°19'50" West, 64.13 feet to the southerly easement line of that 10 -foot easement for the purpose of underground electric dedicated to the City of Palo Alto as described in that certain document entitled "Grant of Easement" recorded March 6, 1968, in Book 8407, Page 634 of Official Records of Santa Clara County; THENCE along said southerly easement line, North 55°41'07" East, 10.51 feetto the TRUE POINT OF BEGINNING; THENCE the following five (5) courses and distances: 1. North 52°43'52" East, 175.25 feet; 2. North 37°16'08" West, 28.25 feet; 3. North 52°43'52" East, 12.00 feet; 4. South 37°16'08" East, 38.25 feet; 5. South 52°43'52" West, 191.08 feet to a point on the northeasterly easement line of that 10 -foot easement for the purpose of underground electric dedicated to the City of Palo Alto as described in that certain document entitled "Grant of Easement" recorded March 13, 1968, in Book 8054, Page 680 of Official Records of Santa Clara County, THENCE along said northeasterly easement line, North 16°19'50" West, 10.71 feet to the TRUE POINT OF BEGINNING. Containing 2,231 square feet, more or less. Item 20: Staff Report Pg. 11 Packet Pg. 369 of 857 EXHIBIT "A" Item 20 Attachment B - Grant of a 3 Public Service Easement 9 at 1700 Embarcadero f a Road As shown on "EXHIBIT B" attached hereto and by this reference made a part hereof. Legal Description was prepared by Barber Surveying, Inc. for ams associates. Date I SDU- Zo23 Sha Item 20: Staff Report Pg. 12 Packet Pg. 370 of 857 Exhibit B Item 20 Attachment B - Grant of a Public Service Easement at 1700 Embarcadero Road EMBARCADERO ROAD / 251.52' S 52°42'10" W LINE TABLE: /"I / / LINE BEARING DISTANCE / FC 10'VNo L1 N 55°41'07" E 10.51' O ECTR�C Fh'GRO L2 N 37°16'08" W 28.25' �804j �� F6SF No L3 N 52°43'52" E 12.00' R. MFNT L4 S 37°16'08" E 38.25' L5 N 16°19'50"W 10.71' / O � M PARCEL A LOT LINE ADJUSTMENT [Doc No. 20544106] `v 2.534 ± ACRES IL / zCLL / / O w 0 RECORD OF SURVEY Q [838M11] O) ° W O ch L3 TRUE POINT w 12.00' OF BEGINNING w 'd — N 5252�E 1 175 25� S 52 '5 W I191.08' M O � O O r POINT OF l BEGINNING N 55°41'07" E 393.67' J �No 18054 F SCt/l�0 ,`� L AND Slr / o(__ 0 60 120 / "B" Scale 1" = 60 ft EXHIBITF °F GA��Fo PLAT TO ACCOMPANY LEGAL DESCRIPTION FOR: UNDERGROUND ELECTRICAL EASEMENT SNOT 1 a � DATE DEC- 2023 I REQV d1 AV DATE DES[�IPTIDN SCALE: 1 = 60' 8A1 YGNACIO VALLEY RD. SUITE 220 OF 1 WALNUT CREEK, CA 9x596 DESIGNED: Sa Q DRAWN: se PROJECT CHECKED: AS D 13-2159 associates, InC. PROJ. MGR: AS PLANNING ENGINEERING SURVEYING TRANSPORTATION I FILE PATH: USIRShme Soler 8:\2022\22-Cf\OIE\SLRWY\PIA1S\PCF\C-PEAT-PGAa L(CISSR 13, 2023 7:53 All Item 20: Staff Report Pg. 13 Packet Pg. 371 of 857 Item 21 Item 21 Staff Report City Council Staff Report From: City Manager CITY O F Report Type: CONSENT CALENDAR PALO Lead Department: Planning and Development Services ALTO Meeting Date: June 17, 2024 Report #:2405-3110 TITLE Approval of an Extension to Building Permit 18000-00536 for 429 University Ave; CEQA status — Mitigated Negative Declaration (ENV20718). RECOMMENDATION Staff recommends the City Council: 1. Approve an extension to building permit 18000-00536 for a term of three months, with additional three-month extensions not to exceed a total of 18 months to January 20, 2026 on the condition that the property is maintained in a manner consistent with City of Palo Alto Municipal Code and window coverings, if applied, are maintained free from damage or discoloration; and, 2. Authorize staff to take any administrative steps to effectuate this extension. BACKGROUND AND ANALYSIS Through the planning application process, Bellomo Architects on behalf of Kipling Post LP, was approved to demolish the two, one-story commercial structures on two existing parcels located at 425 and 429 University Ave in March 2017. In its place would be the construction of a new four-story mixed -use residential and commercial building. In March 2019, the City issued two demolition permits (18000-00537 and 18000-00539) for the existing structures. The demolition was completed and finalized by the City in July 2019. In the same month, a new permit (18000-00526) was issued to commence construction of the new building, which includes two levels of below grade parking (18,124 sq ft), commercial spaces (18,305 sq ft), and three residential units (6,740 sq ft). Since the permit was issued in July 2019, three 180 -day extensions were authorized in September 2022, May 2023, and January 2024 by the Chief Building Official, in accordance with Palo Alto Municipal Code Section 16.04.130. Construction progress continued and between 2019 to 2023, 141 building inspections took place at this site. Item 21: Staff Report Pg. 1 Packet Pg. 372 of 857 Item 21 Item 21 Staff Report In May 2023, the property owner requested that the permit be transferred to an owner -builder permit and notified the City of a dispute between the property owner and the contractor firm. As pending litigation between the two parties continued, the property owner requested an additional extension in January 2024. At this time, construction at this site has been halted, and the owner has requested an additional permit extension. The owner has exhausted the maximum number of administrative extensions, and the Municipal Code requires that any further extensions be approved by the City Council. Due to the unknown timeline for resolution between the property owner and construction firm, staff recommends that Council approve a three-month extension, with up to five additional three-month extensions for a total not to exceed 18 -months. The Chief Building Official will execute the extension under the condition that the property is operated in compliance with City code, including signage and sidewalk obstructions. The extension would allow the property owner additional time to resolve the construction dispute and reduce the administrative resources required to maintain the building permits. The City has received complaints about the building and in particular the presence of caution tape and cones surrounding the street frontages, the deterioration of the butcher block paper on the windows and the lack of follow through on replanting street trees on Kipling Street as required by the project approval. Staff has since met with the owner who has now planted the street trees on Kipling Street in coordination with the City's public works department and urban forestry staff. The owner has stated that the existing butcher block paper will be replaced with a similar window covering. Staff has and will continue to engage the owner on the possibility of using the vacant storefront to display artwork through the City's Cubberley Artist Studio Program, but due to the pending litigation, this result may not be realized. Lastly, the owner has stated the caution tape and cones surrounding the building will be removed in June 2024. The owner asserts a request from her insurance broker seeking to retain the caution tape on the inside of the building as a deterrent to vandalism. Staff has communicated to the owner that the caution tape either inside or outside represents a sign pursuant to the City's sign code and must be removed to avoid escalating, daily penalties. If the caution tape and cones are not removed prior to permit expiration on June 20, 2024, the building permit will not be extended and will lapse. To reactivate the permit, a new building permit application will be required. POLICY IMPLICATIONS Granting the building permit extension keeps the permit active to enable additional work and inspections to achieve project completion. If the permit is not extended, the owner would need to apply for a new building permit to complete all remaining work and any reconstruction that may be required. The new building permit package will have to comply with the California Item 21: Staff Report Pg. 2 Packet Pg. 373 of 857 Item 21 Item 21 Staff Report Building Standards Code as adopted by the Palo Alto Municipal Code at the time of the new permit application submission. FISCAL/RESOURCE IMPACT There is no fiscal impact associated with extension of the building permit. Any additional assessed fees required will be determined by the Chief Building Official or designee. STAKEHOLDER ENGAGEMENT Planning and Development Services staff have been engaged with the applicant to assist with construction progress at this location. ENVIRONMENTAL REVIEW The project at 429 University has been reviewed under CEQA and the City approved a mitigated negative declaration in March 2017 (ENV20718). APPROVED BY: Jonathan Lait, Planning and Development Services Director Item 21: Staff Report Pg. 3 Packet Pg. 374 of 857 Item 22 Item 22 Staff Report City Council Staff Report From: City Manager CITY O F Report Type: CONSENT CALENDAR PALO Lead Department: Planning and Development Services ALTO Meeting Date: June 17, 2024 Report #:2405-3039 TITLE SECOND READING: Adoption of an Ordinance extending the Term of Ordinance No. 5517 by an Additional 12 Months from June 16, 2024 to June 30, 2025. Ordinance 5517 Amends Title 18 (Zoning) of the Palo Alto Municipal Code to Update Definitions, Broaden Permitted Uses and Provide Limits on Certain Uses through Updates to the Conditional Use Permit Thresholds. Environmental Review: CEQA Exemption 15061(b)(3) (FIRST READING: June 3, 2024 PASSED 7-0) BACKGROUND This was previously heard by the City Council on June 3, 2024 for a first reading and was approved 7-0. No changes were made to the ordinance; it is now before the Council for a second reading. ATTACHMENTS Attachment A: Ordinance Extending Ord 5517 Amending PAMC Ch 18.04, 18.16, 18.18, 18.30 Attachment B: Ordinance #5517 APPROVED BY: Jonathan Lait, Planning and Development Services Director Item 22: Staff Report Pg. 1 Packet Pg. 375 of 857 NOT YET ADOPTED Ordinance No. Item 22 Attachment A - Ordinance Extending Ord 5517 Amending PAMC Ch 8.0418.16, 18.18, 18.3 Ordinance of the Council of the City of Palo Alto Temporarily Extending Ordinance 5517, Amending Palo Alto Municipal Code (PAMC) Title 18 (Zoning), Chapters 18.04 (Definitions), 18.16 (Neighborhood, Community, and Service Commercial (CN, CC and CS) Districts), 18.18 (Downtown Commercial (CD) Districts) and 18.30 (A) and (C) —the Retail and Ground Floor combining districts The Council of the City of Palo Alto does ORDAIN as follows: SECTION 1. Findings and Declarations. The City Council finds and declares as follows: A. On April 5, 2021 the City Council adopted Ordinance 5517 to temporarily relax certain zoning regulations in the City's commercial zoning districts to address some of the economic challenges created by the COVID-19 pandemic and to spur economic activity. B. The City Council directed the Planning and Transportation Commission (PTC) to review certain elements of the temporary ordinance and provide a recommendation to the City Council. C. On March 30, 2022 the PTC recommended that the term of Ordinance 5517 be extended to allow additional time for consideration of whether the temporary relaxation of zoning regulations should remain indefinitely, and whether such regulations should be otherwise amended. D. On May 16, 2022, the City Council adopted Ordinance 5549, extending the term of Ordinance 5517 to expire on December 16, 2022. E. On August 31, 2022, the PTC was unable to recommend a replacement ordinance and recommended instead that the term of Ordinance 5517 be further extended. F. On December 12, 2022, the City Council adopted Ordinance 5573, extending the term of Ordinance 5517 to expire on June 16, 2024. G. Between Fall 2023 and Spring 2024, the PTC held seven study sessions and an ad hoc committee of the PTC met on four occasions to discuss a draft Retail Study Report that will inform permanent changes to the City's zoning code, modifying or replacing the provisions of Ordinance 5517. H. Because the PTC and City Council have yet to receive the final Retail Study Report and provide direction for a replacement ordinance, it is necessary to further extend Ordinance 5517. 0160070_ 20220420_ay16 Item 22: Staff Report Pg. 2 Packet Pg. 376 of 857 Item 22 Attachment A - Ordinai NOT YET ADOPTED Extending Ord 5517 Amending PAMC Ch SECTION 2. The effective date of Ordinance 5517 of the Palo Alt 8A, 18.16, 18.18, 18 incorporated herein by reference, is hereby extended so that the Ordinance shall expire upon the earlier of June 30, 2025 or adoption of replacement legislation by the City Council. Upon expiration of Ordinance 5517, the City Clerk shall direct the City's codifier to update the Palo Alto Municipal Code as appropriate. SECTION 3. If any section, subsection, sentence, clause, or phrase of this Ordinance is for any reason held to be invalid or unconstitutional by a decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this Ordinance. The City Council hereby declares that it would have passed this Ordinance and each and every section, subsection, sentence, clause, or phrase not declared invalid or unconstitutional without regard to whether any portion of the ordinance would be subsequently declared invalid or unconstitutional. SECTION 4. The Council finds that the adoption of this ordinance is exempt from the provisions of the California Environmental Quality Act pursuant to CEQA Guideline sections 15061(b)(3) because it can be seen with certainty that temporary relaxation of minor land use regulations will not have a significant, adverse impact on the environment. ►iX419[s1 I.i its adoption. INTRODUCED: PASSED: AYES: NOES: ABSENT: ABSTENTIONS: NOT PARTICIPATING: ATTEST: City Clerk This ordinance shall be effective on the thirty-first date after the date of APPROVED AS TO FORM: Assistant City Attorney Mayor APPROVED: City Manager Director of Planning & Development Services 0160070_ 20220420_ay16 Item 22: Staff Report Pg. 3 Packet Pg. 377 of 857 DocuSign Envelope ID: 2FFD3DF9-38C6-4D8A-8AAD-4B626E119FA7 Item 22 Attachment B - Ordinance #5517 Ordinance No. 5517 Ordinance of the Council of the City of Palo Alto Amending Palo Alto Municipal Code (PAMC) Title 18 (Zoning), Chapters 18.04 (Definitions), 18.16 (Neighborhood, Community, and Service Commercial (CN, CC and CS) Districts), 18.18 (Downtown Commercial (CD) Districts) and 18.30 (A) and (C) —the Retail and Ground Floor Combining Districts The Council of the City of Palo Alto does ORDAIN as follows: SECTION 1. Findings and Declarations. The City Council finds and declares as follows: A. On March 4, 2020, California Governor Gavin Newsom declared a State of Emergency due to the threat of Coronavirus Disease 2019 ("COVID-19"). B. As a result of the COVID-19 pandemic and the public health response, restaurant, retail, tourism, and hospitality business has significantly declined and the nation is experiencing a recession. C. The City Council desires to relax certain zoning regulations in the City's commercial zoning districts to address some of the economic challenges created by the COVID-19 pandemic and to spur economic activity. D. The public health, safety, or welfare require that such changes to the City's zoning regulations be enacted for a temporary period and as expediently as possible, without review by the Planning and Transportation Commission pursuant to Palo Alto Municipal Code section 18.80.090. SECTION 2. Section 18.04.030 (Definitions) of Chapter 18.04 (Definitions) of Title 18 (Zoning) of the Palo Alto Municipal Code is amended to read as follows: 18.04.030 Definitions (a) Throughout this title the following words and phrases shall have the meanings ascribed in this section. (45) "Drive-in/drive-through service" means a feature or characteristic of a use involving sales of products or provision of services to occupants in vehicles, including drive-in or drive -up windows and drive- through services such as mechanical automobile washing, pharmacy windows, coffee stands, automatic teller machines, etc. 0160034_20210330_ayl6 Item 22: Staff Report Pg. 4 Packet Pg. 378 of 857 DocuSign Envelope ID: 2FFD3DF9-38C6-4D8A-8AAD-4B626E119FA7 Item 22 Attachment B - Ordinance #5517 (47) "Eating and drinking service" means a use providing preparation and retail sale of food and beverages with a full menu and providing indoor seating area. Eating and drinking service include presence of a full commercial kitchen and commercial dishwasher. including rcstaurants, fountains, cafcs, coffcc shops, sandwich shops, icc crcam parlors, tavcrns, cocktail lounges and similar uscs. For establishments with incidental sale alcoholic beverages, a minimum of 50% of revenues from an 'eating and drinking service' must be derived from the sale of food. Related definitions are provided in subsections (45) (Drive-in/drive-through service), (125)(B) (Intensive retail service) and (136) (Take-out service). (95) "Medical office" means a use providing consultation, diagnosis, therapeutic, preventive, or corrective personal treatment services by doctors, dentists, medical and dental laboratories, and similar practitioners of medical and healing arts for humans, licensed for such practice by the state of California. Incidental medical and/or dental research within the office is considered part of the office use, where it supports the on -site patient services. Medical office use does not include the storage or use of hazardous materials in excess of the permit quantities as defined in Title 15 of the Municipal Code. Medical gas storage or use shall be allowed up to 1,008 cubic feet per gas type and flammable liquids storage and use shall be allowed up to 20 gallons total (including waste). 95.1 "Medical research" means a use related to medical and/or dental research, testing and analysis, including but not limited to trial and clinical research. Biomedical and pharmaceutical research and development facilities are not included in this definition. Medical Research does not include the storage or use of quantities of hazardous materials above the exempt quantities listed in Title 15 of the Municipal Code nor any toxic gas regulated by Title 15. Additionally, Medical Research may include storage and use of etiological (biological) agents up to and including Risk Group 2 or Bio Safety Level 2 (Center for Disease Control). 95.2 "Medical support retail" means a retail use providing sales, rental, service, or repair of medical products and services to consumers or businesses, and whose location near hospitals or medical offices facilitates the provision of medical care or medical research. Examples of medical retail uses typically include, but are not limited to, pharmacies, sale of prosthetics, and sale of eyeglasses or other eye care products. (95.3) {.G "Medical support service" means a use providing administrative support functions for healthcare providers or facilities, intended to support the operations of hospitals or of medical and dental office uses, and whose location near those medical facilities enhances the interaction between medical providers and/or facilitates the provision of medical care or medical research. Examples of medical support service uses typically include, but are not limited to, administration and billing services, public relations, training, and fundraising. Hospitals and ambulance services are not included in this definition. 0160034_20210330_ayl6 Item 22: Staff Report Pg. 5 Packet Pg. 379 of 857 DocuSign Envelope ID: 2FFD3DF9-38C6-4D8A-8AAD-4B626E119FA7 Item 22 Attachment B - Ordinance #5517 (114) "Personal service" means a use providing services of a personal convenience nature, and cleaning, repair or sales incidental thereto, including: (A) Beauty shops, nail salons, day spas, and barbershops; (B) Self-service laundry and cleaning services; laundry and cleaning pick-up stations where all cleaning or servicing for the particular station is done elsewhere; and laundry and cleaning stations where the cleaning or servicing for the particular station is done on site, utilizing equipment meeting any applicable Bay Area Air Quality Management District requirements, so long as no cleaning for any other station is done on the same site, provided that the amount of hazardous materials stored does not at any time exceed the threshold which would require a permit under Title 17 (Hazardous Materials Storage) of this code; (C) Repair and fitting of clothes, shoes, and personal accessories; (D) Quick printing and copying services where printing or copying for the particular service is done on site, so long as no quick printing or copying for any off -site printing or copying service is done on the same site; (E) Internet and other consumer electronics services; (F) Film, data and video processing shops, including shops where processing for the particular shop is done on site, so long as no processing for any other shop is done on the same site; (G) Art, dance or music studios intended for an individual or small group of persons in a class (see "commercial recreation" for other activities); and (H) Fitness and exercise studios, or similar uses, in a space having of1,800 5,000 square feet or fewer of gross floor area (see "commercial recreation" for uses exceeding 5,000 square feet other ti tic ) (I) Learning centers intended for individual or small group settings, including tutoring, standardized test preparation, language classes, after -school programs, cooking classes, and similar uses_ (125) "Retail service" means a use open to the public during typical business hours and predominantly engaged in providing retail sale, rental, service, processing, or repair of items primarily intended for consumer or household use. (A) "Extensive retail service," as used with respect to parking requirements, means a retail sales use having more than seventy-five percent of the gross floor area used for display, sales, and related storage of bulky commodities, including household furniture and appliances, lumber and building materials, carpeting and floor covering, air conditioning and heating equipment, and similar goods, which uses have demonstrably low parking demand generation per square foot of gross floor area. 0160034_20210330_ayl6 Item 22: Staff Report Pg. 6 Packet Pg. 380 of 857 DocuSign Envelope ID: 2FFD3DF9-38C6-4D8A-8AAD-4B626E119FA7 Item 22 Attachment B - Ordinance #5517 (B) "Intensive retail service" as used with respect to parking requirements, means any retail service use not defined as extensive retail service and including limited food service (i.e. 'ready -to -eat' food and/or beverage shops without a full commercial kitchen, where food and/or beverages are ready to consume at the time of sale and any seating area is limited; examples include sandwiches, frozen desserts, non-alcoholic beverages, and baked items). (136) "Take-out service" means a characteristic of an eating or drinking service which encourages, on a regular basis, consumption of food or beverages, such as prepared or prepackaged items, outside of a building, in outdoor seating areas where regular table service is not provided, in vehicles parked on the premises, or off -site. Take-out service does not include intensive retail service uses, as defined in subsection (125)(B). SECTION 3. Section 18.16.040 (Land Uses) of Chapter 18.16 (Neighborhood, Community, and Service Commercial (CN, CC, CS) Districts) of Title 18 (Zoning) of the Palo Alto Municipal Code is amended to read as follows: The uses of land allowed by this chapter in each commercial zoning district are identified in the following tables. Land uses that are not listed on the tables are not allowed, except where otherwise noted. Where the last column on the following tables ("Subject to Regulations in") includes a section number, specific regulations in the referenced section also apply to the use; however, provisions in other sections may apply as well. (a) Commercial Zones and Land Uses Permitted and conditionally permitted land uses for each commercial zone are shown in Table 1: TABLE 1 PERMITTED AND CONDITIONALLY PERMITTED USES P = Permitted Use CUP = Conditional Use Permit Required LAND USE CN(4) CC, CC(2) CS (4) Subject to Regulations In: ACCESSORY AND SUPPORT USES Accessory facilities and activities P P P 18.42 customarily associated with or essential to permitted uses, and operated incidental to the principal use. Drive-in services or take-out CUP CUP CUP 18.42 services associated with permitted uses(3) 4 0160034_20210330_ayl6 Item 22: Staff Report Pg. 7 Packet Pg. 381 of 857 DocuSign Envelope ID: 2FFD3DF9-38C6-4D8A-8AAD-4B626E119FA7 Item 22 Attachment B - Ordinance #5517 Tire, battery, and automotive service CUP 18.42, 18.40.160 facilities, when operated incidental to a permitted retail service or shopping center having a gross floor area of more than 30,000 square feet. Safe Parking 18.42.160 EDUCATIONAL, RELIGIOUS, AND ASSEMBLY USES Business and Trade Schools P P Churches and Religious Institutions P P P Private Educational Facilities CUP P P Private Clubs, Lodges, or Fraternal CUP P P Organizations MANUFACTURING AND PROCESSING USES Recycling Centers CUP CUP CUP Warehousing and Distribution CUP OFFICE USES Administrative Office Services P 18.16.050 Medical Offices CUP CUP CUP 18.16.050 Professional and General Business P P P 18.16.050 Offices PUBLIC/QUASI-PUBLIC USES Utility Facilities essential to provision CUP CUP CUP of utility services but excluding construction or storage yards, maintenance facilities, or corporation yards. RECREATION USES Commercial Recreation CUP CUP CUP 18.40.160 Outdoor Recreation Services CUP CUP CUP 0160034_20210330_ayl6 Item 22: Staff Report Pg. 8 Packet Pg. 382 of 857 DocuSign Envelope ID: 2FFD3DF9-38C6-4D8A-8AAD-4B626E119FA7 Item 22 Attachment B - Ordinance #5517 RESIDENTIAL USES Multiple -Family P(1) P(1) P(1) 18.16.060(b) and (c) Home Occupations P P P Residential Care Homes P P P RETAIL USES Eating and Drinking Services, excluding drive-in and take-out services P P P 18.40.160 Retail Services, excluding liquor stores P P P 18.40.160 Liquor stores CUP P P 18.40.160 Shopping Centers P 18.16.060(e), 18.40.160 SERVICE USES Ambulance Services CUP CUP CUP Animal Care, excluding boarding and kennels P P P Boarding and Kennels CUP Automobile Service Stations CUP CUP CUP 18.30(G) Automotive Services CUP Convalescent Facilities CUP P P Day Care Centers P P P 18.40.160 Small Family Day Care Homes P P P Large Family Day Care Homes P P P Small Adult Day Care Homes P P P Large Adult Day Care Homes CUP P P Banks and Financial Services V CUP P(2) P(2) General Business Services CUP P Hotels P P 18.16.060(d), 18.40.160 0160034_20210330_ayl6 Item 22: Staff Report Pg. 9 Packet Pg. 383 of 857 DocuSign Envelope ID: 2FFD3DF9-38C6-4D8A-8AAD-4B626E119FA7 Item 22 Attachment B - Ordinance #5517 Mortuaries CUP P P Neighborhood Business Services P 18.16.060(f) Personal Services P P.j P 18.16.060(f), 18.40.160 Reverse Vending Machines P P P TEMPORARY USES Farmer's Markets CUP CUP CUP Temporary Parking Facilities, provided that such facilities shall remain no more than five years. CUP CUP CUP TRANSPORTATION USES Parking as a principal use CUP CUP Transportation Terminals CUP CUP P = Permitted Use CUP = Conditional Use Permit Required (1) Residential is only permitted: (i) as part of a mixed use development, pursuant to the provisions of Section 18.16.060(b), or (ii) on sites designated as housing inventory sites in the Housing Element of the Comprehensive Plan, (iii) on CN or CS sites on El Camino Real, or (iv) on CC(2) sites, all pursuant to the provisions of Section 18.16.060(b) and (c). (2) Except drive-in services. (3) So long as drive up facilities, excluding car washes, provide full access to pedestrians and bicyclists. A maximum of two such services shall be permitted within 1,000 feet, and each use shall not be less than 150 feet from one another. (4) For properties in the CN and CS zone districts, businesses that operate or have associated activities at any time between the hours of 10:00 p.m. and 6:00 a.m. require a conditional use permit. (5) A conditional use permit is not required for medical office or commercial recreation uses up to 5,000 square feet of gross floor area, with the following exceptions, for which a conditional use permit is always required: (A) medical office fronting on California Avenue and in the Midtown Shopping District; (B) commercial recreation uses fronting on California Avenue and in the Town and Country Village Shopping Center. (6) A conditional use permit is required for the following uses when fronting on California Avenue: (A) Fitness or exercise studios, and similar uses exceeding 1,800 square feet in gross floor area; and (B) Learning centers intended for individual or small group settings. A conditional use permit is required for 7 0160034_20210330_ayl6 Item 22: Staff Report Pg. 10 Packet Pg. 384 of 857 DocuSign Envelope ID: 2FFD3DF9-38C6-4D8A-8AAD-4B626E119FA7 Item 22 Attachment B - Ordinance #5517 fitness or exercise studios. and similar uses exceedi Country Village Shopping Center. 800 square feet in gross floor area in Town and SECTION 4. Section 18.16.060 (Development Standards) of Chapter 18.16 (Neighborhood, Community, and Service Commercial (CN, CC, CS) Districts) of Title 18 (Zoning) of the Palo Alto Municipal Code is amended to read as follows: 18.16.060 Development Standards (f) Size of Establishments in the CN District In the CN district, permitted commercial uses shall not exceed the floor area per individual use or business establishment shown in Table 5. Such uses may be allowed to exceed the maximum establishment size, subject to issuance of a conditional use permit in accord with Section 18.76.010. The maximum establishment size for any conditional use shall be established by the director and specified in the conditional use permit for such use. TABLE 5 MAXIMUM SIZE OF ESTABLISHMENT Type of Establishment Maximum Size (sq ft) Personal Services 2,500 3,000 Retail services, except grocery stores 15,000 Grocery stores 20,000 Eating and drinking services 5,000 Neighborhood business services 2,5OO 3,000 (h) Outdoor Sales and Storage (2) In the CC district and in the CC (2) district, the following regulations shall apply to outdoor sales and storage: (A) Except in shopping centers, all permitted office and commercial activities shall be conducted within a building, except for: (i) Incidental sales and display of plant materials and garden supplies occupying no more than 2,000 square feet of exterior sales and display area, (ii) Outdoor eating areas operated incidental to permitted eating and drinking services or intensive retail uses. (iii) Farmers' markets that have obtained a conditional use permit, and 0160034_ 20210330ay16 N Item 22: Staff Report Pg. 11 Packet Pg. 385 of 857 DocuSign Envelope ID: 2FFD3DF9-38C6-4D8A-8AAD-4B626E119FA7 Item 22 Attachment B - Ordinance #5517 (iv) Recycling centers that have obtained a conditional use permit. (B) Any permitted outdoor activity in excess of 2,000 square feet shall be subject to a conditional use permit. SECTION 5. Sections 18.18.050 (Land Uses) of Chapter 18.18 (Commercial Downtown (CD) District) of Title 18 (Zoning) of the Palo Alto Municipal Code is amended to read as follows: 18.18.050 Land Uses The uses of land allowed by this chapter in each commercial zoning district are identified in the following table. Land uses that are not listed on the tables are not allowed, except where otherwise noted. Where the last column on the following tables ("Subject to Regulations in") includes a section number, specific regulations in the referenced section also apply to the use; however, provisions in other sections may apply as well. Permitted and conditionally permitted land uses for the CD district are shown in Table 1: Table 1 CD Permitted and Conditionally Permitted Uses P Permitted Use • CUP Conditional Use Permit Required CD -C CD -S CD -N Subject to regulations in der: ACCESSORY USES Accessory facilities and activities associated with or P P P essential to permitted uses, and operated incidental to the principal use Drive-in or Take-out Services associated with CUP CUP CUP permitted uses (2) Tire, battery, and automotive service facilities, when CUP 18.40.160 operated incidental to a permitted retail service or shopping center having a gross floor area of more than 30,000 square feet Safe Parking 18.42.160 EDUCATIONAL, RELIGIOUS, AND ASSEMBLY USES Business and Trade Schools P P Churches and Religious Institutions P P P 9 0160034_20210330_ayl6 Item 22: Staff Report Pg. 12 Packet Pg. 386 of 857 DocuSign Envelope ID: 2FFD3DF9-38C6-4D8A-8AAD-4B626E119FA7 Item 22 Attachment B - Ordinance #5517 Private Educational Facilities P P CUP Private Clubs, Lodges, or Fraternal Organizations P P CUP MANUFACTURING AND PROCESSING USES Recycling Centers CUP CUP CUP Warehousing and Distribution CUP OFFICE USES Administrative Office Services P 18.18.060(f) Medical, Professional, and General Business Offices P P P 18.18.060(f) PUBLIC/QUASI-PUBLIC FACILITY USES Utility Facilities essential to provision of utility services but excluding construction or storage yards, maintenance facilities, or corporation yards CUP CUP RECREATION USES Commercial Recreation CUP CUP CUP Outdoor Recreation Services CUP CUP CUP RESIDENTIAL USES Multiple -Family p(l) p(l) P (1) 18.18.060(b) Home Occupations P P P Residential Care Homes P P P RETAIL USES Eating and Drinking Services, except drive-in or take- out services P P P 18.18.060(g) , L 8.40.160 Retail Services, excluding liquor stores P P P 18.18.060(g) , 8.40.160 Shopping Centers P 18.18.060(g) , 1 10 0160034_ 20210330_ay16 Item 22: Staff Report Pg. 13 Packet Pg. 387 of 857 DocuSign Envelope ID: 2FFD3DF9-38C6-4D8A-8AAD-4B626E119FA7 Item 22 Attachment B - Ordinance #5517 8.40.160 Liquor Stores P P CUP 18.40.160 SERVICE USES Animal Care, excluding boarding and kennels P P P Ambulance Services CUP CUP CUP 18.30(G) Automobile Service Stations CUP CUP CUP Automobile Services CUP Convalescent Facilities P P CUP Day Care Centers P P P 18.40.160 Small Family Day Care Homes P P P Large Family Day Care Homes P P P Small Adult Day Care Homes P P P Large Adult Day Care Homes Financial Services, except drive -up services P P CUP General Business Services CUP P P Hotels P P P 18.18.060(d) , 8.40.160 Mortuaries P P CUP Personal Services P4 P(4 P.j4 18.18.060(g) , 8.40.160 Reverse Vending Machines P P P TRANSPORTATION USES Parking as a principal use CUP CUP Passenger Transportation Terminals CUP 11 0160034_ 20210330_ay16 Item 22: Staff Report Pg. 14 Packet Pg. 388 of 857 DocuSign Envelope ID: 2FFD3DF9-38C6-4D8A-8AAD-4B626E119FA7 Item 22 Attachment B - Ordinance #5517 TEMPORARY USES Indoor Farmers' Markets CUP CUP CUP Temporary Parking Facilities, provided that such facilities shall remain no more than five years CUP CUP CUP P Permitted Use CUP Conditional Use Permit Required (1) Residential is only permitted as part of a mixed use development, pursuant to the provisions of Section 18.18.060(b), or on sites designated as Housing Opportunity Sites in the Housing Element of the Comprehensive Plan, pursuant to the provisions of Section 18.18.060(c). (2) Drive -up facilities, excluding car washes, provide full access to pedestrians and bicyclists. A maximum of two such services shall be permitted within 1,000 feet and each use shall not be less than 150 ft from one another. (3) A conditional use permit is not required for commercial recreation uses up to 5,000 square feet of gross floor area, with the following exceptions, for which a conditional use permit is always required: (A) medical office fronting on University Avenue; (B) commercial recreation uses fronting on University Avenue. (4) A conditional use permit is required for the following uses when fronting on University Avenue: (A) Fitness or exercise studios, and similar uses; and (B) Learning centers intended for individual or small group settings. SECTION 6. Section 18.18.060 (Development Standards) of Chapter 18.18 (Commercial Downtown (CD) District) of Title 18 (Zoning) of the Palo Alto Municipal Code is amended to read as follows: (g) Restrictions on Size of Commercial Establishments in CD -N Subdistrict In the CD -N subdistrict, permitted commercial uses shall not exceed the floor area per individual use or business establishment shown in Table 4. Such uses may be allowed to exceed the maximum establishment size, subject to the issuance of a conditional use permit in accordance with Chapter 18.76. The maximum establishment size for any conditional use shall be established by the director and specified in the conditional use permit for such use. // // 12 0160034_20210330_ayl6 Item 22: Staff Report Pg. 15 Packet Pg. 389 of 857 DocuSign Envelope ID: 2FFD3DF9-38C6-4D8A-8AAD-4B626E1 19FA7 Item 22 Attachment B - Ordinance #5517 TABLE 4 MAXIMUM SIZE OF ESTABLISHMENT Type of Establishment Maximum Size (ft 2 ) Personal Services 2,500 3,000 Retail services, except grocery stores 15,000 Grocery stores 20,000 Eating and drinking services 5,000 (h) Outdoor Sales and Storage. The following regulations shall apply to outdoor sales and storage in the CD district: (1) CD -C Subdistrict In the CD -C subdistrict, the following regulations apply: (A) Except in shopping centers, all permitted office and commercial activities shall be conducted within a building, except for: (i) Incidental sales and display of plant materials and garden supplies occupying no more than 2,000 square feet of exterior sales and display area, (ii) Outdoor eating areas operated incidental to permitted eating and drinking services or intensive retail uses (iii) Farmers' markets which have obtained a conditional use permit, and (iv) Recycling centers that have obtained a conditional use permit. (B) Any permitted outdoor activity in excess of 2,000 square feet shall be subject to a conditional use permit. (C) Exterior storage shall be prohibited, except recycling centers which have obtained a conditional use permit. (2) CD -S Subdistrict In the CD -S subdistrict, outdoor sales and display of merchandise, and outdoor eating areas operated incidental to permitted eating and drinking services and intensive retail uses shall be permitted subject to the following regulations: (A) Outdoor sales and display shall not occupy a total site area exceeding the gross building floor area on the site, except as authorized by a conditional use permit. 13 0160034_ 20210330ay16 Item 22: Staff Report Pg. 16 Packet Pg. 390 of 857 DocuSign Envelope ID: 2FFD3DF9-38C6-4D8A-8AAD-4B626E119FA7 Item 22 Attachment B - Ordinance #5517 (B) Areas used for outdoor sales and display of motor vehicles, boats, campers, camp trailers, trailers, trailer coaches, house cars, or similar conveyances shall meet the minimum design standards applicable to off-street parking facilities with respect to paving, grading, drainage, access to public streets and alleys, safety and protective features, lighting, landscaping, and screening. (C) Exterior storage shall be prohibited, unless screened by a solid wall or fence of between 5 and 8 feet in height. (3) CD -N Subdistrict In the CD -N subdistrict, all permitted office and commercial activities shall be conducted within a building, except for: (A) Incidental sales and display of plant materials and garden supplies occupying not more than 500 square feet of exterior sales and display area, and (B) Farmers' markets that have obtained conditional use permits. SECTION 7. Section 18.30(A).040 (Permitted Uses) of Chapter 18.30(A) (Retail Shopping (R) Combining District Regulations) of Title 18 (Zoning) of the Palo Alto Municipal Code are amended to read as follows: Except to the extent a conditional use permit is required pursuant to Section 18.30(A).050, the following uses shall be permitted in an R district: (a) Eating and drinking services, except drive-in and take-out services. (b) Personal services, except the following on California Avenue: beauty shops; nail salons; barbershops; laundry and cleaning services as defined in Section 18.04.030(114)(B)i fitness or exercise studios exceeding 1,800 square feet in gross floor area; and learning centers intended for individual or small group settings. (c) Retail services. (d) All other uses permitted in the underlying commercial district, provided they are not located on a ground floor. SECTION 8. Section 18.30(A).050 (Conditional Uses) of Chapter 18.30(A) (Retail Shopping (R) Combining District Regulations) of Title 18 (Zoning) of the Palo Alto Municipal Code are amended to read as follows: The following uses may be conditionally permitted in an R district, subject to the issuance of a conditional use permit in accord with Chapter 18.76 (Permits and Approval): (a) Financial services, except drive-in services, on a ground floor. (b) All other conditional uses allowed in the underlying commercial district provided they are not located on a ground floor. (c) Formula retail businesses on California Avenue. 14 0160034_20210330_ayl6 Item 22: Staff Report Pg. 17 Packet Pg. 391 of 857 DocuSign Envelope ID: 2FFD3DF9-38C6-4D8A-8AAD-4B626E119FA7 Item 22 Attachment B - Ordinance #5517 (d) Beauty shops, nail salons, ad barbershops, fitness or exercise studios exceeding 1,800 square feet in gross floor area; and learning centers intended for individual or small group settings. SECTION 9. Section 18.30(C).020 (Permitted Uses) of Chapter 18.30(C) (Ground Floor (GF) Combining District Regulations) of Title 18 (Zoning) of the Palo Alto Municipal Code are amended to read as follows: (a) The following uses shall be permitted in the GF combining district, subject to restrictions in Section 18.40.38180: (1) Eating and drinking; (2) Hotels; (3) Personal services, except for parcels with frontage on University Avenue, where uses defined in Section 18.04.030(114)(B), (G), a+4 (H), and I are not permitted; (4) Retail services; (5) Theaters; (6) Travel agencies; (7) Commercial Recreation up to 5,000 square feet in gross floor area, except for parcels with frontage on University Avenue; (78) All other uses permitted in the underlying district, provided such uses are not on the ground floor. (b) Elimination or conversion of basement space currently in retail or retail -like use or related support purposes is prohibited. (c) Entrance, lobby, or reception areas serving non -ground floor uses may be located on the ground floor to the extent reasonably necessary, provided they do not interfere with the goad- ground floor use(s), and subject to the approval of the Director. SECTION 10. Section 18.30(C).030 (Conditional Uses) of Chapter 18.30(C) (Ground Floor (GF) Combining District Regulations) of Title 18 (Zoning) of the Palo Alto Municipal Code are amended to read as follows: (a) The following uses may be conditionally allowed on the ground floor in the GF ground floor combining district, subject to issuance of a conditional use permit in accord with Chapter 18.76 (Permits and Approvals) and with the additional finding required by subsection (b), subject to restrictions in Section 18.40.160: (1) Business or trade school; (2) Commercial recreation over 5,000 square feet in gross floor area or with frontage on University Avenue; (3) Day care; (4) Financial services, except drive in services; (5) General business service; (6) Learning centers intended for individual or small group settings; 15 0160034_20210330_ayl6 Item 22: Staff Report Pg. 18 Packet Pg. 392 of 857 DocuSign Envelope ID: 2FFD3DF9-38C6-4D8A-8AAD-4B626E119FA7 Item 22 Attachment B - Ordinance #5517 All other uses conditionally permitted in the applicable underlying district, provided such uses are not on the ground floor. (b) The director may grant a conditional use permit under this section only if he or she makes the following findings in addition to the findings required by Chapter 18.76 (Permits and Approvals): (1) The location, access or design of the ground floor space of the existing building housing the proposed use, creates exceptional or extraordinary circumstances or conditions applicable to the property involved that do not apply generally to property in the same district. (2) The proposed use will not be determined to the retail environment or the pedestrian -oriented design objectives of the GF combining district. (c) Any use conditionally permitted pursuant to this section shall be effective only during the existence of the building that created the exceptional circumstance upon which the finding set forth in subsection (b) was made. SECTION 11. Any provision of the Palo Alto Municipal Code or appendices thereto inconsistent with the provisions of this Ordinance, to the extent of such inconsistencies and no further, is hereby repealed or modified to that extent necessary to effect the provisions of this Ordinance. SECTION 12. If any section, subsection, sentence, clause, or phrase of this Ordinance is for any reason held to be invalid or unconstitutional by a decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this Ordinance. The City Council hereby declares that it would have passed this Ordinance and each and every section, subsection, sentence, clause, or phrase not declared invalid or unconstitutional without regard to whether any portion of the ordinance would be subsequently declared invalid or unconstitutional. SECTION 13. The Council finds that the adoption of this ordinance is exempt from the provisions of the California Environmental Quality Act pursuant to CEQA Guideline sections 15061(b)(3) because it can be seen. // // // // I- II 16 0160034_20210330_ayl6 Item 22: Staff Report Pg. 19 Packet Pg. 393 of 857 DocuSign Envelope ID: 2FFD3DF9-38C6-4D8A-8AAD-4B626E119FA7 Item 22 Attachment B - Ordinance #5517 SECTION 14. This ordinance shall be effective on the thirty-first date after the date of its adoption and shall expire upon the earlier of June 30, 2022 or adoption of replacement legislation by the City Council. Upon expiration of this ordinance, the City Clerk shall direct the City's codifier to update the Palo Alto Municipal Code as appropriate. INTRODUCED: PASSED: AYES: NOES: ABSENT: ABSTENTIONS: NOT PARTICIPATING: ATTEST: DocuSigned by: City Clerk March 8, 2021 April 12, 2021 BURT, DUBOIS, FILSETH, KOU, STONE CORMACK, TANAKA APPROVED AS TO FORM: DocuSigned by: Assistant City Attorney DocuSigned 7`gnby: Mayor APPROVED: DocuSigned by: 41 $e14.h FSOCA1 CCCCD4E City Manager DocuSigned by: -293CF322E 1294F8 Director of Planning & Development Services 0160034_20210330_ayl6 17 Item 22: Staff Report Pg. 20 Packet Pg. 394 of 857 Item 22 Attachment B - Ordinance #5517 CLJ� • S E C U N E D Certificate Of Completion Envelope Id: 2FFD3DF938C64D8A8AAD4B626E119FA7 Status: Completed Subject: Please DocuSign: ORD 5517 Ordinance Amending PAMC Title 18 Ch 18.04 Definitions 18.16 Neighborh... Source Envelope: Document Pages: 17 Signatures: 5 Envelope Originator: Certificate Pages: 2 Initials: 0 Danielle Kang AutoNav: Enabled 250 Hamilton Ave Envelopeld Stamping: Enabled Palo Alto , CA 94301 Time Zone: (UTC-08:00) Pacific Time (US & Canada) Danielle.Kang@cityofpaloalto.org IP Address: 199.33.32.254 Record Tracking Status: Original Holder: Danielle Kang Location: DocuSign 4/16/2021 4:40:29 PM Danielle.Kang@cityofpaloalto.org Security Appliance Status: Connected Pool: StateLocal Storage Appliance Status: Connected Pool: City of Palo Alto Location: DocuSign Signer Events Signature Timestamp Albert Yang ED-USil"Id by: U' '1" Sent: 4/16/2021 4:45:43 PM Albert.Yang@CityofPaloAlto.org Viewed: 4/19/2021 10:27:07 AM Assistant City Attorney 15BSc45220134Dc... Signed: 4/19/2021 10:28:38 AM City of Palo Alto Security Level: Email, Account Authentication Signature Adoption: Pre -selected Style (None) Using IP Address: 97.113.131.147 Electronic Record and Signature Disclosure: Not Offered via DocuSign Jonathan Lait D Sig d by: E293CF322EI294F6 Sent: 4/19/2021 10:28:40 AM Jonathan.Lait@CityofPaloAlto.org Viewed: 4/19/2021 4:12:00 PM Interim Director Planning and Community Signed: 4/19/2021 4:12:27 PM 9 Environment Signature Adoption: Uploaded Signature Image City of Palo Alto Security Level: Email, Account Authentication Using IP Address: 99.88.42.180 (None) Electronic Record and Signature Disclosure: Not Offered via DocuSign Ed Shikada gnedby. Sent: 4/19/2021 4:12:30 PM Ed.Shikada@CityofPaloAlto.org EDSiUViewed: 4/19/2021 5:07:55 PM Ed Shikada, City Manager F2DCA,gCCCBD4Fg Signed: 4/19/2021 5:08:31 PM City of Palo Alto Security Level: Email, Account Authentication Signature Adoption: Pre -selected Style (None) Using IP Address: 199.33.32.254 Electronic Record and Signature Disclosure: Not Offered via DocuSign Tom DuBois D Sg dby: Sent: 4/19/2021 5:08:33 PM tomforcouncil@gmail.com � :E Viewed: 4/26/2021 10:08:06 AM Security Level: Email, Account Authentication EDD53585CASC84E9... Signed: 4/26/2021 10:08:30 AM 9 (None) Signature Adoption: Pre -selected Style Using IP Address: 24.5.55.204 Electronic Record and Signature Disclosure: Not Offered via DocuSign Item 22: Staff Report Pg. 21 Packet Pg. 395 of 857 Signer Events Beth Minor beth.minor@cityofpaloalto.org City Clerk City of Palo Alto Security Level: Email, Account Authentication (None) Electronic Record and Signature Disclosure: Not Offered via DocuSign In Person Signer Events Editor Delivery Events Agent Delivery Events Intermediary Delivery Events Certified Delivery Events Carbon Copy Events Witness Events Notary Events Envelope Summary Events Envelope Sent Certified Delivered Signing Complete Completed Payment Events Item 22 Attachment B - Ordinance Signature Timest #5517 CDoouS geed by: Sent: 4/26/20211 10:08:32 AM W HZ~4 Viewed: 4/26/2021 10:09:22 AM 27523117DA804D7 Signed: 4/26/2021 10:09:45 AM Signature Adoption: Pre -selected Style Using IF Address: 199.33.32.254 Signature Timestamp Status Timestamp Status Timestamp Status Timestamp Status Timestamp Status Timestamp Signature Timestamp Signature Timestamp Status Timestamps Hashed/Encrypted 4/16/2021 4:45:43 PM Security Checked 4/26/2021 10:09:22 AM Security Checked 4/26/2021 10:09:45 AM Security Checked 4/26/2021 10:09:45 AM Status Timestamps Item 22: Staff Report Pg. 22 Packet Pg. 396 of 857 Item 23 Item 23 Staff Report City Council Staff Report Report Type: CONSENT CALENDAR CITY O F Lead Department: City Clerk PALO ALTO Meeting Date: June 17, 2024 Report #:2406-3125 TITLE SECOND READING: Ordinance Amending Chapter 16.14 (California Green Building Standards, California Code of Regulations, Title 24, Part 11) of the Palo Alto Municipal Code to Adopt the 2022 Green Building Standards Code, Along With Local Modifications Related to Electrical Vehicle Charging Infrastructure Requirements and Building Electrification Requirements and an Ordinance Amending Chapter 16.17 (California Energy Code, California Code of Regulations, Title 24, Part 6) of the Palo Alto Municipal Code to Adopt the 2022 California Energy Code, Along with Local Modifications to Increase Energy Efficiency Standards for Buildings, Mandate Electric -Ready Requirements and Incentivize All -Electric New Construction. CEQA Status: Exempt under CEQA Guidelines Sections 15308 and 15061(b)(3) (FIRST READING: June 3, 2024 PASSED 6-1, Tanaka no and 7-0) BACKGROUND This was heard by the City Council on May 13, 2024 for a first reading. An ordinance amending Chapter 16.14 was approved 6-1, Tanaka no and an ordinance amending Chapter 16.17 was approved 7-0. No changes were made to the ordinances; it is now before you for a second reading. ATTACHMENTS Attachment A - Ordinance Amending Ch 16.14 Attachment B - Ordinance Amending Ch 16.17 APPROVED BY: Mahealani Ah Yun, City Clerk Item 23: Staff Report Pg. 1 Packet Pg. 397 of 857 *NOT YET APPROVED* Item 23 Attachment A - Ordinance Amending Ch 16.14 T A Ordinance No. XXXX Ordinance of the Council of the City of Palo Alto Amending Chapter 16.14 (California Green Building Standards, California Code of Regulations, Title 24, Part 11) of the Palo Alto Municipal Code to Adopt the 2022 Green Building Standards Code, Along With Local Amendments Thereto, Related to Electrical Vehicle Charging Infrastructure Requirements and Building Electrification Requirements The Council of the City of Palo Alto does ORDAIN as follows: SECTION 1. Findings and Declarations. (a) The City of Palo Alto adopted a Sustainability and Climate Action Plan, or S/CAP, to meet the City's stated goal of "80 x 30": reducing greenhouse gas emissions 80% below 1990 levels by 2030. (b) The S/CAP outlines goals and key actions in eight areas, one of which is energy and more specifically, energy efficiency and electrification. The goals for the energy area of the S/CAP are to reduce GHG emissions from the direct use of natural gas in Palo Alto's building sector by at least 60% below 1990 levels (116,400 MT CO2e reduction) and to modernize the electric grid to support increased electric demand to accommodate state- of-the-art technology. (c) One key action the City is taking to accomplish those goals is use codes and ordinances - such as the energy reach code, green building ordinance, zoning code, or other mandates - to facilitate electrification in both existing buildings and new construction projects where feasible. (d) The purpose of this ordinance is to formally adopt California Code of Regulations, Title 24, Part 11, 2022 California Green Building Standards Code, with local amendments in furtherance of the City of Palo Alto's S/CAP goals. (e) California Health and Safety Code sections 17958.5 and 17958.7 requires that the City, in order to make changes or modifications in the requirements contained in the California Green Building Standards on the basis of local conditions, make express finding that such modifications or changes are reasonably necessary because of local climatic, geological or topographical conditions. (f) The required findings are attached to this ordinance as Exhibit A. SECTION 2. Chapter 16.14 (California Green Building Standards, California Code of Regulations, Title 24, Part 11) of the Palo Alto Municipal Code is hereby amended by repealing in its entirety existing 16.14 and adopting a new Chapter 16.14 to read as follows: 0280100_ KB2_20240523_CA Item 23: Staff Report Pg. 2 Packet Pg. 398 of 857 *NOT YET APPROVED* Item 23 Attachment A - Ordinance Amending Ch 16.14 T A CHAPTER 16.14 CALIFORNIA GREEN BUILDING STANDARDS CODE, CALIFORNIA CODE OF REGULATIONS, TITLE 24, PART 11 Sections Part 1— General 16.14.010 2022 California Green Building Standards Code, Title 24, Part 11 adopted and amended. 16.14.020 Cross - References to California Green Building Standards Code. 16.14.030 Local Amendments. Part 2 — Local Modifications to CHAPTER 1— ADMINISTRATION 16.14.040 Administration & Enforcement of 2022 California Green Building Standards Code. 16.14.050 Adoption of Chapter 1 Administration. 16.14.060 Section 101.4 Appendices. Part 3 — Local Modifications to CHAPTER 2 — DEFINITIONS 16.14.070 Section 202 Definitions. Part 4— Local Modifications to CHAPTER 3 — GREEN BUILDING 16.14.080 Section 301— Voluntary Tiers Added. Part 5 — Local Modifications to CHAPTER 4 — RESIDENTIAL MANDATORY MEASURES 16.14.090 Section 4.106.5 Full Electrification 16.14.100 Section 4.306 Swimming Pool and Spa Covers. 16.14.110 Reserved Part 6— Local Modifications to CHAPTER 7— INSTALLER AND SPECIAL INSPECTOR QUALIFICATIONS 16.14.120 Section 702.2 Special Inspection. Part 7— Local Modifications to APPENDIX A4 — RESIDENTIAL VOLUNTARY MEASURES 16.14.130 Residential Projects. Appendix A4 Preface: Green Building Measures for Project Type and Scope. 0280100_ KB2_20240523_CA Item 23: Staff Report Pg. 3 Packet Pg. 399 of 857 *NOT YET APPROVED* Item 23 Attachment A - Ordinance Amending Ch 16.14 T A 16.14.140 Section A4.104 Site Preservation. 16.14.150 Section A4.105 Deconstruction and Reuse of Existing Materials. 16.14.160 Section A4.106.8 Electric Vehicle (EV) Charging for New Construction. 16.14.170 Section A4.106.9 Bicycle Parking. 16.14.180 Section A4.106.10 Light Pollution Reduction. 16.14.190 Section A4.203.1 Performance Approach for Newly Constructed Buildings. 16.14.200 Section A4.304.3 Irrigation Metering Device. 16.14.210 Section A4.305 Water Reuse Systems. 16.14.220 A4.305.4 Additions and Alterations. 16.14.230 Section A4.403.1 Frost Protection Foundation Systems. 16.14.240 Section A4.403.2 Reduction in Cement Use. 16.14.250 Section A4.408.1 Enhanced Construction Waste Reduction. 16.14.260 Section A4.504.1 Compliance with formaldehyde limits. 16.14.270 Section A4.504.3 Thermal Insulation. Part 8— Local Modifications to CHAPTER 5— NONRESIDENTIAL MANDATORY MEASURES 16.14.280 Nonresidential Projects: Chapter 5 Preface Green Building Requirements for Project Type and Scope. 16.14.290 Section 5.106.1.1 Local Storm Water Pollution Prevention. 16.14.295 Section 5.106.8 Light Pollution Reduction. 16.14.300 Section 5.106 Full Electrification. 16.14.310 Reserved 16.14.320 Reserved 16.14.330 Section 5.304.2 Invasive Species Prohibited. 16.14.340 Section 5.306 Nonresidential Enhanced Water Budget. 16.14.350 Section 5.307 Cooling Tower Water Use. 16.14.360 Section 5.410.4.6 Energy STAR Portfolio Manager. 16.14.370 Section 5.410.4.7 Performance Reviews — Energy. 16.14.380 Section 5.410.4.8 Performance Reviews — Water. 16.14.390 Section 5.506 Indoor Air Quality. Part 9— Local Modifications to APPENDIX A5 — NONRESIDENTIAL VOLUNTARY 0280100_ KB2_20240523_CA Item 23: Staff Report Pg. 4 Packet Pg. 400 of 857 *NOT YET APPROVED* Item 23 Attachment A - Ordinance Amending Ch 16.14 T A MEASURES 16.14.400 Section A5.106.5.3 Electric Vehicle (EV) Charging for New Construction. 16.14.410 Section A5.203.1 Performance Approach for Newly Constructed Buildings. 16.14.420 Section A5.405.5 Cement and Concrete. 16.14.430 Section A5.408 Construction Waste Reduction, Disposal and Recycling. Part 1— General 16.14.010 2022 California Green Building Standards Code, Title 24, Part 11 adopted and amended. The California Green Building Standards Code, 2022 Edition, Title 24, Part 11 of the California Code of Regulations, together with those omissions, amendments, exceptions and additions thereto, is adopted and hereby incorporated in this Chapter by reference and made a part hereof the same as if fully set forth herein. Unless superseded and expressly repealed, references in City of Palo Alto forms, documents and regulations to the chapters and sections of the former California Code of Regulations, Title 24, shall be construed to apply to the corresponding provisions contained within the California Code of Regulations, Title 24, 2022. Ordinance No. 5570 of the City of Palo Alto and all other ordinances or parts of ordinances in conflict herewith are hereby suspended and expressly repealed. Wherever the phrases "California Green Building Standards Code" or "CALGreen" are used in this code or any ordinance of the City, such phrases shall be deemed and construed to refer and apply to the California Green Building Standards Code, 2022 Edition, as adopted and amended by this chapter. One copy of the California Green Building Standards Code, 2022 Edition, has been filed for use and examination of the public in the Office of the Chief Building Official of the City of Palo Alto. 16.14.020 Cross - References to California Green Building Standards Code. The provisions of this Chapter contain cross-references to the provisions of the California Green Building Code, 2022 Edition, in order to facilitate reference and comparison to those provisions. 16.14.030 Local Amendments. The provisions of this Chapter shall constitute local amendments to the cross-referenced provisions of the California Green Building Standards Code, 2022 Edition, and shall be deemed to replace the cross-referenced sections of said Code with the respective provisions set forth in this Chapter. Part 2 — Local Modifications to CHAPTER 1— ADMINISTRATION 16.14.040 Administration & Enforcement of 2022 California Green Building Standards Code. 0280100_KB2_20240523_CA Item 23: Staff Report Pg. 5 Packet Pg. 401 of 857 *NOT YET APPROVED* Item 23 Attachment A - Ordinance Amending Ch 16.14 T A Administration and enforcement of this code shall be governed by Chapter 1, Division II of the 2022 California Building Code as amended by Palo Alto Municipal Code Chapter 16.04. 16.14.050 Adoption of Chapter 1 Administration. Chapter 1 Administration of the 2022 California Green Building Code is adopted by the City of Palo Alto to supplement, to the extent it does not conflict with, Chapter 1, Division II of the 2022 California Building Code, as amended. 16.14.060 Section 101.4 Appendices. The following Appendix Chapters of the California Green Building Standards Code, 2022 Edition, are adopted and hereby incorporated in this Chapter by reference and made a part hereof the same as if fully set forth herein: A. Appendix A4 - Residential Voluntary Measures (Tier 1 and Tier2) B. Appendix A5 - Nonresidential Voluntary Measures (Tier 1 and Tier 2) Part 3 — Local Modifications to CHAPTER 2 — DEFINITIONS 16.14.070 Section 202 Definitions. Section 202 of Chapter 2 of the California Green Building Standards Code is amended to include the following definitions: ALL -ELECTRIC BUILDING / SITE. A building or parcel of land whose sole source of energy is electricity and contains no combustion equipment or plumbing for combustion equipment. CPAU. City of Palo Alto Utilities Department. CALGREEN MANDATORY. Mandatory measures are triggered for projects outlined in Section 301.1 Scope of this code, as amended. Projects that only trigger Mandatory measures are not required to fulfill Tier 1 or Tier 2 measures in Appendix A4 and A5. CALGREEN TIER 1. To achieve Tier 1 status, a project must comply with measures identified in Appendix A4, Section A4.601.4 for residential projects and Appendix A5, Section A5.601.2 for nonresidential projects. Projects subject to Tier 1 must fulfill all mandatory measures, all Tier 1 prerequisite measures and a defined number of Tier 1 elective measures. CALGREEN TIER 2. To achieve Tier 2 status, a project must comply with requirements identified in Appendix A4, Section A4.601.5 for residential projects and Appendix A5, Section A5.601.3 for nonresidential projects. Projects subject to Tier 2 must fulfill all mandatory measures, all Tier 2 prerequisite 0280100_KB2_20240523_CA Item 23: Staff Report Pg. 6 Packet Pg. 402 of 857 Item 23 *NOT YET APPROVED* Attachment A - Ordinance Amending Ch 16.14 T A measures and a defined number of Tier 2 elective measures. CALGREEN TIER 1 AND TIER 2 PREREQUISITE MEASURES. Projects subject to Tier 1 or Tier 2 must fulfill all prerequisites as described within Appendix A4, Division A4.6 for residential projects and Appendix A5, Division A5.6 for nonresidential projects. CALGREEN TIER 1 AND TIER 2 ELECTIVE MEASURES. Projects subject to Tier 1 or Tier 2 must fulfill a defined number of electives as described within Appendix A4, Division A4.6 for residential projects and Appendix A5, Division A5.6 for nonresidential projects. CALGREEN INSPECTOR is a person certified as a CALGreen Inspector/Plans Examiner through the International Code Council (ICC), demonstrating knowledge and application of Green Building concepts during plan review and inspection. For projects that require a CALGreen Inspector/Plans Examiner verification, the Inspector must be contracted directly with the owner and may not be a contractor or employee of the design or construction firm. CERTIFIED ENERGY ANALYST is a person registered as a Certified Energy Analyst with the California Association of Building Energy Consultants as of the date of submission of a Certificate of Compliance as required under section 10-103 of Building Energy Efficiency Standards for residential and nonresidential buildings. MODEL WATER EFFICIENT LANDSCAPE ORDINANCE. The California Department of Water Resources Model Water Efficient Landscape Ordinance. SALVAGE. Salvage means the controlled removal of items and material from a building, construction, or demolition site for the purpose of on- or off -site reuse, or storage for later reuse. Examples include air conditioning and heating systems, columns, balustrades, fountains, gazebos, molding, mantels, pavers, planters, quoins, stair treads, trim, wall caps, bath tubs, bricks, cabinetry, carpet, doors, ceiling fans, lighting fixtures, electrical panel boxes, fencing, fireplaces, flooring materials of wood, marble, stone or tile, furnaces, plate glass, wall mirrors, door knobs, door brackets, door hinges, marble, iron work, metal balconies, structural steel, plumbing fixtures, refrigerators, rock, roofing materials, siding materials, sinks, stairs, stone, stoves, toilets, windows, wood fencing, lumber and plywood. SUBSTANTIAL REMODEL (or "50-50-50" RULE). Any project or projects that affects the removal or replacement of 50% or more of the linear length of the existing exterior walls of the building, and/or 50% or more of the linear length of the existing exterior wall plate height is raised, and/or 50% or more of the existing roof framing area is removed or replaced, over a 3 -year period. Any permit(s) applied for will trigger a review of a 3 -year history of the project. This review will result in determining if a substantial remodel has occurred. The Chief Building Official or designee shall make the final determination regarding the application if a conflict occurs. 0280100_KB2_20240523_CA Item 23: Staff Report Pg. 7 Packet Pg. 403 of 857 Item 23 * NOT YET APPROVED* Attachment A - Ordinance Amending Ch 16.14 T A SQUARE FOOTAGE. For application of green building requirements, "square footage" refers to all new or altered square footage, including basement areas (7 feet or greater in height), as calculated based on outer boundary of proposed construction area, including exterior walls. Part 4— Local Modifications to CHAPTER 3 — GREEN BUILDING 16.14.080 SECTION 301- Voluntary Tiers Added. SECTION 301 of Chapter 3 of the California Green Building Standards Code is amended to read: SECTION 301 GENERAL 301.1 Scope. Buildings shall be designed to include the green building measures specified as mandatory in the application checklists contained in this code and any applicable local amendments. In addition, the City requires the use of Voluntary Tiers, as provided in Appendices A4 and A5, for certain residential and nonresidential new construction, additions, and alterations. 301.1.1 Residential additions and alterations. [HCD] The Mandatory provisions of Chapter 4 shall be applied to additions and/or alterations of existing residential buildings where the addition and/or alteration increases the building's conditioned area, volume, or size. The requirements shall apply only to and/or within the specific area of the addition or alteration. Tier 1 adopted (Residential). All residential building additions and/or alterations exceeding 1000 square feet must meet CALGreen Mandatory plus the Tier 1 measures, as amended by this Chapter and as applicable to the scope of work. For Tier 1 projects, the area of alterations will include any construction or renovation to an existing structure other than repair or addition. Alterations include raising the plate height, historic restoration, changes or rearrangements of the structural parts or elements, and changes or rearrangement of bearing walls and full height partitions. Normal maintenance, reroofing, painting or wall papering, floor finishes, replacement -in -kind of mechanical, plumbing and electrical systems, or replacing or adding new kitchen counter and similar furniture, plumbing fixture to the building are excluded for the purposes of establishing scope of Tier 1 projects. The area of alteration should be limited to the footprint of element(s) being altered. This does not exclude mandatory CALGreen measures. The sum of the footprint of the elements being altered with respect to Tier 1, shall be calculated using the following methodology: 1. Raising the plate height: The calculation with respect to raising of the plate height will be based on the area of the footprint in which the plate height is being increased. Plate height means the vertical distance measured from the top of the finished floor to the top of the plates. 0280100_ KB2_20240523_CA Item 23: Staff Report Pg. 8 Packet Pg. 404 of 857 Item 23 * NOT YET APPROVED* Attachment A - Ordinance Amending Ch 16.14 T A 2. Historic restoration: The calculation with respect to historic restoration will be based on the area of work covered in the California Historical Building Code (Title 24, Part 8). 3. Structural parts or elements: The calculation with respect to changes or rearrangements of the structural parts or elements will be based on the sum of the individual footprints of each structural change or rearrangement. The footprint shall be calculated based on the proposed design and inclusive of any demolished structural parts or elements. 4. Bearing walls and full height partition: The calculation with respect to changes or rearrangement of walls and full height partitions will be based on the footprint of any demolished wall or full height partition and any new wall or new full height partition. Exception: Attached and detached Accessory Dwelling Units, ADU conversions of existing structures shall meet the California Green Building Standards Code Mandatory measures only. 301.2 Low-rise and high-rise residential buildings. [HCD] The provisions of individual sections of CALGreen may apply to either low-rise residential buildings, high-rise residential buildings, or both. Individual sections will be designated by banners to indicate where the section applies specifically to low-rise only (LR) or high-rise only (HR). When the section applies to both low-rise and high-rise buildings, no banner will be used. 301.2.1 Low -Rise residential new construction — Tier 2 adopted. All new constructed or substantial remodel projects must meet CALGreen Mandatory plus Tier 2 measures, as amended by this ordinance and as applicable to the scope of work. 301.3 Nonresidential additions and alterations. [BSC-CG] The provisions of individual sections of Chapter 5 apply to building nonresidential additions of 1,000 square feet or greater, and/or building alterations with a permit valuation of $200,000 or above (for occupancies within the authority of California Building Standards Commission). Code sections relevant to additions and alterations shall only apply to the portions of the building being added or altered within the scope of the permitted work. A code section will be designated by a banner to indicate where the code section only applies to newly constructed buildings [N] or to additions and alterations [A]. When the code section applies to both, no banner will be used. Tier 1 adopted. Nonresidential alterations (including tenant improvements or renovations) of 5,000 square feet that include replacement of at least two of the following: HVAC system, building envelope, hot water system, or lighting system, must comply with CALGreen Mandatory plus Tier 1 measures, as amended by this Chapter and as applicable to the scope of work. Tier 2 adopted. Nonresidential additions of 1000 square feet or greater must comply 0280100_KB2_20240523_CA Item 23: Staff Report Pg. 9 Packet Pg. 405 of 857 Item 23 *NOT YET APPROVED* Attachment A - Ordinance Amending Ch 16.14 T A with CALGreen Mandatory plus Tier 2 measures, as amended by this Chapter and as applicable to the scope of work. 301.3.1- 301.3.2 Unmodified 301.3.3 Nonresidential new construction — Tier 2 adopted. All new nonresidential construction must meet CALGreen Mandatory plus Tier 2 measures, as amended by this ordinance and as applicable to the scope of work. 301.6 Special inspector requirements. Residential and nonresidential project owners subject to CALGreen Mandatory, CALGreen Mandatory plus Tier 1, or CALGreen Mandatory plus Tier 2 measures shall contract a Special Inspector in accordance with section 702.2 of CALGreen, as amended. 301.7 Low -carbon concrete requirements for Tier 1 and Tier 2 projects. Plain and reinforced concrete installed as part of any project subject to the application of this code shall demonstrate compliance with the requirements of PAMC 16.14.240. Part 5— Local Modifications to CHAPTER 4— RESIDENTIAL MANDATORY MEASURES Division 4.1 — PLANNING AND DESIGN 16.14.090 Section 4.106.5 Full Electrification Section 4.106 of Chapter 4 of the California Green Building Standards Code is amended to add new subsection, 4.106.5 as follows: 4.106.5 Full electrification. Full electrification is recommended for new buildings, substantial remodels, and new outdoor appliances/equipment such as fireplaces, firepits, heaters for swimming pool/spa, and similar equipment. Full electrification is required for outdoor grills, stoves, and barbecues. This subsection does not prohibit freestanding and/or portable grills, stoves, or barbecues whose sole source of energy is self-contained fuel canisters. Division 4.3 — WATER EFFICIENCY AND CONSERVATION 16.14.100 Section 4.306 Swimming Pool and Spa Covers Section 4.306 of Chapter 4 of the California Green Building Standards Code is added to read: 4.306 Swimming pool and spa covers. Swimming pools and spas shall be provided with a vapor retardant cover. Part 6— Local Modifications to CHAPTER 7— INSTALLER AND SPECIAL INSPECTOR QUALIFICATIONS 0280100_KB2_20240523_CA Item 23: Staff Report Pg. 10 Packet Pg. 406 of 857 Item 23 *NOT YET APPROVED* Attachment A - Ordinance Amending Ch 16.14 T A 16.14.120 Section 702.2 Special Inspection. Section 702.2 of Chapter 7 of the California Green Building Standards Code is amended to read: 702.2 Green building special inspection. When required by the enforcing agency, the owner or responsible entity acting as the owner's agent shall employ one or more Green Building Special Inspectors to provide inspection or other duties necessary to substantiate compliance with this code. Green Building Special Inspectors shall demonstrate competence to the satisfaction of the enforcing agency for the particular type of inspection or task to be performed. In addition to other certifications or qualifications acceptable to the enforcing agency, the following certifications or education may be considered by the enforcing agency when evaluating the qualifications of a Special Inspector. The City shall maintain a list of pre -approved Special Inspectors in accordance with this section. The owner shall contract a Special Inspector from the pre -approved list meeting one of the following: 1. Certification by a national or regional green building program: ICC Certified CALGreen Inspector/Plans Examiner 2. Other programs acceptable to the enforcing agency. Note: Special Inspectors shall be independent entities with no financial interest in the materials or the project they are inspecting for compliance with this code. Part 7— Local Modifications to APPENDIX A4 — RESIDENTIAL VOLUNTARY MEASURES Division A4.1 — PLANNING AND DESIGN 16.14.130 Residential Projects. Appendix A4 Preface: Green Building Measures for Project Type and Scope. A preface is added to Chapter A4 of the California Green Building Standards Code to read: Preface - Green Building Requirements for Project Type and Scope. For design and construction of residential projects, the City of Palo Alto requires compliance with the mandatory measures of Chapter 4, in addition to use of Tier 1 and Tier 2 as specified in Palo Alto Municipal Code Chapter 16.14. See Section 202 for definitions on CALGreen Mandatory, Tier 1 Prerequisites and Electives, and Tier 2 Prerequisites and Electives. All elective measures are adopted as written under Appendix A4 unless otherwise indicated in this Section. 16.14.140 Section A4.104 SITE PRESERVATION. Section A4.104.1 of Appendix A4 of the California Green Building Standards Code is adopted as a Tier 1 and Tier 2 elective measure and is amended to read: A4.104.1 Supervision and education by a special inspector. Individuals with oversight authority on the project, as defined in section 16.14.120 of this code, who have been 0280100_KB2_20240523_CA Item 23: Staff Report Pg. 11 Packet Pg. 407 of 857 Item 23 * NOT YET APPROVED* Attachment A - Ordinance Amending Ch 16.14 T A trained in areas related to environmentally friendly development, shall teach green concepts to other members of the builder's staff and ensure training and written instruction has been provided to all parties associated with the development of the project. Prior to the beginning of the construction activities, the builder shall receive a written guideline and instruction specifying the green goals of the project. Note: Lack of adequate supervision and dissemination of the project goals can result in negative effects on green building projects. If the theme of green building is not carried through the project, the overall benefit can be substantially reduced by the lack of knowledge and information provided to the various entities involved with the construction of the project. 16.14.150 Section A4.105 Deconstruction and Reuse of Existing Materials. Section A4.105 of Appendix A4 of the California Green Building Standards Code is not adopted as an elective measure and is amended to read: Section A4.105.1 Chapter 5.24 of Title 5 of the Municipal Code. See Chapter 5.24 of the Municipal Code for the local deconstruction requirements. Section A4.105.2 is adopted as a Tier 1 and Tier 2 elective measure. A4.105.2 Reuse of materials. Nonhazardous materials which can be easily reused include but are not limited to the following: 1. Light fixtures 2. Plumbing fixtures 3. Doors and trim 4. Masonry 5. Electrical devices 6. Appliances 7. Foundations or portions of foundations Note: Reused material must be installed to comply the appropriate Title 24 provisions. 16.14.160 Section A4.106.8 Electric Vehicle (EV) Charging for New Construction. Sections A4.106.8 — A4.106.8.2.1 of the California Green Building Standards Code are deleted in its entirety, adopted as mandatory measures and is amended to read: A4.106.8 Electric vehicle (EV) charging for residential structures. Newly constructed single-family and multi -family residential structures, including residential structures constructed as part of a mixed -use development, shall comply with the following 0280100_KB2_20240523_CA Item 23: Staff Report Pg. 12 Packet Pg. 408 of 857 Item 23 * NOT YET APPROVED* Attachment A - Ordinance Amending Ch 16.14 T A requirements for electric vehicle supply equipment (EVSE). All parking space calculations under this section shall be rounded up to the next full space. The requirements stated in this section are in addition to those contained in Section 4.106.4 of the California Green Building Standards Code. In the event of a conflict between this section and Section 4.106.4 of the California Green Building Standards Code, the more robust EV Charging requirements shall prevail. A4.106.8.1 New single-family, duplex and townhouse dwellings. The following standards apply to newly constructed detached and attached single-family, duplex and townhouse residences. (a) In general. The property owner shall provide One (1) Level 2 electrical vehicle supply equipment (EVSE) or one (1) EV ready space (Low Power Level 2 EV Charging Receptacle is acceptable provided that the infrastructure comply with section 4.106.4.1) for each residence (except for accessory dwelling unit (ADU)). (b) Location. The proposed location of a charging station may be internal or external to the dwelling and shall be in close proximity to an on -site parking space consistent with city regulations. A4.106.8.2 New multi -family dwellings. The following standards apply to newly constructed residences in a multi -family residential structure. (a) Resident parking. The property owner shall provide at least one (1) Level 2 electrical vehicle supply equipment (EVSE) or one (1) Level 2 EV Ready space for each residential unit in the structure (Low Power Level 2 EV Charging Receptacle is acceptable for 60% of the total EV parking spaces) . (b) Guest parking. The property owner shall provide EV Capable Space, EV-Ready Space, or EVSE Installed, for at least 25% of guest parking spaces, among which at least 10% (and no fewer than one) shall be EVSE Installed. (c) Accessible spaces. Projects shall comply with the 2022 California Building Code requirements for accessible electric vehicle parking. (d) Minimum total circuit capacity. The property owner shall ensure sufficient circuit capacity, as determined by the Chief Building Official or designee, to support the EV requirements specified in (a) and (b) above. (e) Location. The EVSE, receptacles, and/or raceway required by this section shall be placed in locations allowing convenient installation of and access to EVSE. In addition, if parking is deed -restricted to individual residential units, the EVSE or receptacles required by subsection (a) shall be located such that each unit has access to its own EVSE or receptacle. Location of EVSE or receptacles shall be consistent with all city regulations. A4.106.8.3 New hotels and motels. The following standards apply to newly constructed hotels. 0280100_KB2_20240523_CA Item 23: Staff Report Pg. 13 Packet Pg. 409 of 857 Item 23 *NOT YET APPROVED* Attachment A - Ordinance Amending Ch 16.14 T A (a) In general. The property owner shall provide at least 40% EV Ready Space and at least 10% Level 2 EVSE installed fer of the total parking spaces. (b) Accessible spaces. Projects shall comply with the 2022 California Building Code requirements for accessible electric vehicle parking. (c) Minimum total circuit capacity. The property owner shall ensure sufficient circuit capacity, as determined by the Chief Building Official or designee, to support a Level 2 EVSE in every location where [V -Ready space or EVSE Installed is required. (d) Location. The EVSE and/or receptacles, required by this section shall be placed in locations allowing convenient installation of and access to EVSE. Location of EVSE or receptacles shall be consistent with all City guidelines, rules, and regulations. 16.14.170 Section A4.106.9 Bicycle Parking. Section A4.106.9 of Appendix A4 of the California Green Building Standards Code is not adopted as a Tier 1 and Tier 2 elective measure. Projects must comply with the bicycle parking requirements in the Palo Alto Municipal Code. 16.14.180 Section A4.106.10 Light Pollution Reduction. Section A4.106.10 is added and adopted as a Tier 1 and Tier 2 elective measure for all covered projects and is amended to read: A4.106.10 Light pollution reduction. Outdoor lighting systems shall be designed and installed to comply with the following: 1. The minimum requirements in the California Energy Code for Lighting Zones 1-4 as defined in Chapter 10 of the California Administrative Code; and 2. Backlight, Up light and Glare (BUG) ratings as defined in IES TM -15-11; and 3. Allowable BUG ratings not exceeding those shown in TABLE 5.106.8 [N]; or Comply with a local ordinance lawfully enacted pursuant to Section 101.7 of this code, whichever is more stringent. Projects may use an approved equal reference standard for light fixtures where BUG ratings are unavailable. Exceptions: 1. Luminaires that qualify as exceptions to the California Energy Code. 2. Emergency lighting. 3. One- and two-family dwellings. Note: The International Dark -Sky Association (IDA) and the Illuminating Engineering Society of North America (IESNA) have developed a Model Lighting Ordinance (MLO). The MLO was designed to help municipalities develop outdoor lighting standards that reduce glare, light trespass, and skyglow. The model ordinance and user guides for 0280100_KB2_20240523_CA Item 23: Staff Report Pg. 14 Packet Pg. 410 of 857 *NOT YET APPROVED* Item 23 Attachment A - Ordinance Amending Ch 16.14 T A the ordinance may be accessed at the International Dark -Sky Association web site. Division A4.2 — ENERGY EFFICIENCY 16.14.190 Section A4.203.1 Performance Approach for Newly Constructed Buildings. Section A4.203.1 of Appendix A4 of the California Green Building Standards Code is not adopted as a Tier 1 and Tier 2 elective measure. Projects shall comply with Chapter 16.17 of the Palo Alto Municipal Code (California Energy Code). Division A4.3 — WATER EFFICIENCY AND CONSERVATION 16.14.200 Section A4.304.3 Irrigation Metering Device. Section A4.304.3 of Appendix A4 of the California Green Building Standards Code is adopted as a Tier 1 and Tier 2 elective measure and is amended to read: A4.304.3 Irrigation metering device. Dedicated irrigation meters from CPAU are to be installed in all new construction and rehabilitated landscapes when the landscape is greater than 1,000 square feet. 16.14.210 Section A4.305 Water Reuse Systems. Sections A4.305.1, A4.305.2, and A4.305.3 of Appendix A4 of the California Green Building Standards Code are adopted as Tier 1 and Tier 2 elective measures and are amended to read: A4.305.1 Graywater. Alternative plumbing piping is installed to permit the discharge from the clothes washer and other fixtures (except toilets and kitchen sinks) to be used for an irrigation system in compliance with the California Plumbing Code. In the event that the whole house graywater system is installed in compliance with the California Plumbing Code, then this measure shall count as 3 electives. A4.305.2 Recycled water piping. Based on projected availability, dual water piping is installed for future use of recycled water at the following locations: 1. Interior piping for the use of recycled water is installed to serve all water closets, urinals, and floor drains. 2. Exterior piping is installed to transport recycled water from the point of connection to the structure. Recycled water systems shall be designed and installed in accordance with the California Plumbing Code. A4.305.3 Recycled water for landscape irrigation. Recycled water piping is used for landscape irrigation. 16.14.220 A4.305.4 Additions and Alterations. 0280100_KB2_20240523_CA Item 23: Staff Report Pg. 15 Packet Pg. 411 of 857 *NOT YET APPROVED* Item 23 Attachment A - Ordinance Amending Ch 16.14 T A Section A4.305.4 is added as Tier 1 and Tier 2 prerequisite and amended to read: A4.305.4 Additions and alterations. All multi -family residential additions and alterations must install recycled water infrastructure for irrigation when the landscape area exceeds 1,000 square feet. Division A4.4 — MATERIAL CONSERVATION AND RESOUCE EFFICIENCY 16.14.230 Section A4.403.1 Frost Protection Foundation Systems. Sections A4.403.1 is not adopted as a Tier 1 and Tier 2 elective measure. 16.14.240 Section A4.403.2 Reduction in cement use. Section A4.403.2 of Appendix A4 of the California Green Building Standards Code is adopted as a Mandatory measure for all Tier 1 and Tier 2 projects and is amended to read: A4.403.2 Low carbon concrete requirements. A4.403.2.1 Purpose. The purpose of this chapter is to provide practical standards and requirements for the composition of concrete, as defined herein, that maintains adequate strength and durability for the intended application and at the same time reduces greenhouse gas emissions associated with concrete composition. This code includes pathways for compliance with either reduced cement levels or lower -emission supplementary cementitious materials. A4.403.2.2 Definitions. For the application of this section the following definitions shall apply: Concrete. Concrete is any approved combination of mineral aggregates bound together into a hardened conglomerate in accordance with the requirements of this code. Environmental product declaration (EPD). EPDs present quantified environmental information on the life cycle of a product to enable comparisons between products fulfilling the same function. EPDs must conform to ISO 14025, and EN 15804 or ISO 21930, and have at least a "cradle to gate" scope (which covers product life cycle from resource extraction to the factory). Upfront embodied carbon (embodied carbon). The greenhouse gasses emitted in material extraction, transportation and manufacturing of a material corresponding to life cycle stages Al (extraction and upstream production), A2 (transportation), and A3 (manufacturing). Definition is as noted in ISO 21930 and as defined in V2.3 Product Category Rule for Concrete by NSF dated November 2023. https://d2evkimvhatgay.cloudfront. net/documents/PCR-Product-Category-Rules/PCR-Concrete-2023-deviation. pdf A4.403.2.3 Compliance. Compliance with the requirements of this chapter shall be demonstrated through any of the compliance options in Sections 4.403.2.3.2 through C111AJl8XW 0280100_KB2_20240523_CA Item 23: Staff Report Pg. 16 Packet Pg. 412 of 857 *NOT YET APPROVED* Item 23 Attachment A - Ordinance Amending Ch 16.14 T A TABLE A4.403.2.3 Cement and Embodied Carbon Limit Pathways Cement limits Embodied Carbon limits for use with any compliance method for use with an compliance method A4.403.2.3.2 to A4.403.2.3.5 A4.403-2.3-2 to A4.403.2.3.5 Minimum specified Maximum ordinary Portland cement Maximum embodied carbon compressive strength content_ lbsfydl- (2) kg CO2e/m, per EPD f.- . psi (1) up to 2500 362 260 3000 410 289 4000 456 313 5000 503 338 6000 531 356 7000 594 394 7001 and higher 657 433 u to 3000 light wei ht 512 578 4000 light weight 571 626 50001ight_ we' ht 629 675 Notes {1) For concrete strengths bet4,reen the stated values. use linear interpolation to determine cement arid.+or embodied carbon limits. (2} Portland cement of any type per ASTM C150. A4.403.2.3.1 Allowable increases. (1) Cement and Embodied Carbon Limit Allowances. Cement or Embodied Carbon limits shown in Table A4.403.2.3 can be increased by 30% for concretes demonstrated to the Building Official as requiring high early strength. Such concretes could include, but are not limited to, precast, prestressed concrete; beams and slabs above grade; and shotcrete (2) Approved Cements. The maximum cement content may be increased proportionately above the tabulated value when using an approved cement, or blended cement, demonstrated by approved EPD to have a plant -specific EPD lower than 1040 kg CO2e/metric ton. The increase in allowable cement content would be (1040 / plant=specific EPD) %. A4.403.2.3.2 Cement limit method — mix. Cement content of a concrete mix using this method shall not exceed the value shown in the Table A4.403.2.3. Use of this method is limited to concrete with specified compressive strength not exceeding 5,000 psi. A4.403.2.3.3 Cement limit method — project. Total cement content shall be based on total cement usage of all concrete mix designs within the same project. Total cement content for a project shall not exceed the value calculated according to Equation Equation A4.403.2.3.3: Cem pro; < Cem allowed 0280100_KB2_20240523_CA Item 23: Staff Report Pg. 17 Packet Pg. 413 of 857 *NOT YET APPROVED* where Item 23 Attachment A - Ordinance Amending Ch 16.14 T A Cem proj = Kern n V n and Cern allowed = Cem lim V n and n = the total number of concrete mixtures for the project Cern n = the cement content for mixture n, kg/m 3 or Ib/yd Cem lim = the maximum cement content for mixture n per Table A4.403.2.3, kg/m 3 or lb/yd 3 v n = the volume of mixture n concrete to be placed, yd 3 or m Applicant can use yd 3 or m 3 for calculation, but must keep same units throughout A4.403.2.3.4. Embodied carbon method — mix. Embodied carbon of a concrete mix, based on an approved environmental product declaration (EPD), shall not exceed the value given in Table A4.403.2.3. A4.403.2.3.5. Embodied carbon method — project. Total embodied carbon (EC proj) of all concrete mix designs within the same project shall not exceed the project limit (EC allowed) determined using Table A4.403.2.3 and Equation A4.403.2.3.5. Equation A4.403.2.3.5: EC proj < EC allowed where ECproj=IECnVnand EC allowed=IEClimVn and n = the total number of concrete mixtures for the project EC n = the embodied carbon potential for mixture n per mixture EPD, kg/m 3 EC lim = the embodied carbon potential limit for mixture n per Table A4.403.2.3, kg/m3 v n = the volume of mixture n concrete to be placed, yd 3 or m 3 Applicant can use yd 3 or m 3 for calculation, but must keep same units throughout. A4.403.2.3.6. Enforcement. As a condition prior to the issuance of every building permit involving placement of concrete, the permit applicant shall be required to submit a completed low -carbon concrete compliance form that shall be provided by and reviewed for compliance by the building department prior to issuing the permit. As a condition of such building permits, and prior to approving construction inspections following placement of concrete, the permit applicant shall be required to submit batch certificates and/or EPDs provided by the concrete provider that demonstrate compliance with the low -carbon concrete compliance form on file with the building permit. The batch certificates and/or EPDs shall be reviewed for compliance by the building department prior 0280100_KB2_20240523_CA Item 23: Staff Report Pg. 18 Packet Pg. 414 of 857 Item 23 * NOT YET APPROVED* Attachment A - Ordinance Amending Ch 16.14 T A to approving any further inspections. When deviations from compliance with this section occur, the chief building official or his designee is authorized to require evidence of equivalent carbon reductions from the portions of remaining construction of the project to demonstrate alternative compliance with the intent of this chapter. For projects involving placement of concrete by, or on behalf of, a public works, parks, or similar department the director of such department, or his/her assignee, shall maintain accurate records of the total volume (in cubic yards) of all concrete placed, as well as the total compliant volume (in cubic yards) of all concrete placed, and shall report this data annually to the governing body in a form expressing an annual compliance percentage derived from the quotient of total compliant concrete volume placed divided by total concrete volume placed. A4.403.2.3.7. Exemptions. (a) Hardship or infeasibility exemption. If an applicant for a project subject to this chapter believes that circumstances exist that make it a hardship or infeasible to meet the requirements of this chapter, the applicant may request an exemption as set forth below. In applying for an exemption, the burden is on the applicant to show hardship or infeasibility. The applicant shall identify in writing the specific requirements of the standards for compliance that the project is unable to achieve and the circumstances that make it a hardship or infeasible for the project to comply with this chapter. Circumstances that constitute hardship or infeasibility may include, but are not limited to the following: (1) There is a lack of commercially available material necessary to comply with this chapter; (2) The cost of achieving compliance is disproportionate to the overall cost of the project; (3) Compliance with certain requirements would impair the historic integrity of buildings listed on a local, state or federal list or register of historic structures as regulated by the California Historic Building Code (Title 24, Part 8). (b) Granting of exemption. If the chief building official determines that it is a hardship or infeasible for the applicant to fully meet the requirements of this chapter and that granting the requested exemption will not cause the building to fail to comply with the California Building Standards Code, the chief building official shall determine the maximum feasible threshold of compliance reasonably achievable for the project. In making this determination, the chief building official shall consider whether alternate, practical means of achieving the objectives of this chapter can be satisfied. If an exemption is granted, the applicant shall be required to comply with this chapter in all other respects and shall be required to achieve the threshold of compliance determined to be achievable by the chief building official. (c) Denial of exception. If the chief building official determines that it is reasonably possible for the applicant to fully meet the requirements of this chapter, the request shall be denied and the applicant shall be notified of the decision in writing. The project and compliance documentation shall be modified to comply with the standards for compliance. 0280100_KB2_20240523_CA Item 23: Staff Report Pg. 19 Packet Pg. 415 of 857 Item 23 *NOT YET APPROVED* Attachment A - Ordinance Amending Ch 16.14 T A 16.14.250 Section A4.408.1 Enhanced Construction Waste Reduction. Section A4.408.1 of Appendix A4 of the California Green Building Standards Code is adopted as a mandatory measure and is amended to read: A4.408.1 Enhanced construction waste reduction. Nonhazardous construction and demolition debris generated at the site is diverted to recycle or salvage in compliance with the following: Projects with a given valuation of $25,000 or more must have at least an 80 -percent reduction. Any mixed recyclables that are sent to mixed -waste recycling facilities shall include a qualified third party verified facility average diversion rate. Verification of diversion rates shall meet minimum certification eligibility guidelines, acceptable to the local enforcing agency. Exceptions: 1. Residential stand-alone mechanical, electrical or plumbing permits. 2. Commercial stand-alone mechanical, electrical or plumbing permits. A4.408.1.1 Documentation. Documentation shall be provided to the enforcing agency which demonstrates compliance with all construction and demolition waste reduction requirements. Division A4.5 — ENVIRONMENTAL QUALITY 16.14.260 Section A4.504.1 Compliance with Formaldehyde Limits. Section A4.504.1 of Appendix A5 of the California Green Building Standards Code is adopted as a Tier 1 and Tier 2 elective measure. 16.14.270 Section A4.504.3 Thermal Insulation. Section A4.504.3 of Appendix A5 of the California Green Building Standards Code is not adopted as a Tier 1 and Tier 2 prerequisite. Section A4.504.3 is adopted as a Tier 1 and Tier 2 elective measure. Part 8— Local Modifications to CHAPTER 5— NONRESIDENTIAL MANDATORY MEASURES Division 5.1 — PLANNING AND DESIGN 16.14.280 Nonresidential Projects: Chapter 5 Preface Green Building Requirements for Project Type and Scope. A Preface is added to Chapter 5 of the California Green Building Standards Code to read: Preface — Green Building Requirements for Project Type and Scope. For design and 0280100_KB2_20240523_CA Item 23: Staff Report Pg. 20 Packet Pg. 416 of 857 Item 23 * NOT YET APPROVED* Attachment A - Ordinance Amending Ch 16.14 T A construction of nonresidential projects, the City requires compliance with the mandatory measures of Chapter 5, in addition to use of Tier 1 and Tier 2 as specified in Palo Alto Municipal Code Chapter 16.14. See Section 202 for definitions on CALGreen MANDATORY, Tier 1 prerequisites and electives, and Tier 2 prerequisites and electives. All elective measures are adopted as written under Appendix A5 unless otherwise indicated in this Section. 16.14.290 Section 5.106.1.1 Local Stormwater Pollution Prevention. Section 5.106.1.1 of Chapter 5 of the California Green Building Standards Code is amended to read: 5.106.1.1 Local ordinance. Newly constructed projects and additions shall comply with additional City of Palo Alto stormwater runoff management and pollution prevention measures as applicable, and as may be amended from time to time. 16.14.295 Section 5.106.8 Light Pollution Reduction. Section 5.106.8 of Chapter 5 of the California Green Building Standards Code is amended to read: 5.106.8 Light pollution reduction. Outdoor lighting systems shall be designed and installed to comply with the following: 1. The minimum requirements in the California Energy Code for Lighting Zones 0-4 as defined in Chapter 10, Section 10-114 of the California Administrative Code; and 2. Backlight (B) ratings as defined in IES TM -15-11 (shown in Table A-1 in Chapter 8); 3. Uplight and Glare ratings as defined in California Energy Code (shown in Tables 130.2-A and 130.2-B in Chapter 8); and 4. Allowable BUG ratings not exceeding those shown in Table 5.106.8 [N]; or Comply with a local ordinance lawfully enacted pursuant to Section 101.7, whichever is more stringent. Projects may use an approved equal reference standard for light fixtures where BUG ratings are unavailable. Exceptions: 1. Luminaires that qualify as exceptions in Section 103.2(b) and 140.7 of the California Energy Code. 2. Emergency lighting. 3. Building facade meeting the requirements in Table 140.7-B of the California Energy Code, Part 6. 4. Custom lighting features as allowed by the local enforcing agency, as permitted by Section 101.8 Alternate materials, designs and methods of construction. 0280100_KB2_20240523_CA Item 23: Staff Report Pg. 21 Packet Pg. 417 of 857 Item 23 *NOT YET APPROVED* Attachment A - Ordinance Amending Ch 16.14 T A 5. Luminaires with less than 6,200 initial luminaire lumens. 16.14.300 Section 5.106.13 Full Electrification. Section 5.106 of Chapter 4 of the California Green Building Standards Code is amended to add new subsection, 5.106.13 as follows: 5.106.13 Full electrification. Full electrification is recommended for new buildings, substantial remodels, and new outdoor appliances/equipment such as fireplaces, firepits, heaters for swimming pool/spa, and similar equipment. Full electrification is required for outdoor grills, stoves, and barbecues. This subsection does not prohibit freestanding and/or portable grills, stoves, and barbecues whose source of energy is self-contained fuel canisters. Reserved 16.14.320 Reserved Division 5.3 — WATER EFFICIENCY AND CONSERVATION 16.14.330 Section 5.304.2 Invasive Species Prohibited. Section 5.304.2 of Chapter 5 of the California Green Building Standards Code is added as mandatory measure to read: 5.304.2 Invasive species prohibited. All nonresidential new construction, additions, and alterations shall not install invasive species in a landscape area of any size. 16.14.340 Section 5.306 Nonresidential Enhanced Water Budget. Section 5.306 of Chapter 5 of the California Green Building Standards Code is added as mandatory measure to read: 5.306 Nonresidential enhanced water budget. Nonresidential buildings anticipated to use more than 1,000 gallons of water a day shall complete an Enhanced Water Budget Calculator as established by the Chief Building Official or designee. 16.14.350 Section 5.307 Cooling Tower Water Use. Section 5.307 Cooling Tower Water Use is added as mandatory to read: 5.307 COOLING TOWER WATER USE 5.307.1. Cooling tower water use in high rise residential or nonresidential buildings. Cooling tower water use must meet the conditions as follows and as outlined in Palo Alto 0280100_KB2_20240523_CA Item 23: Staff Report Pg. 22 Packet Pg. 418 of 857 Item 23 *NOT YET APPROVED* Attachment A - Ordinance Amending Ch 16.14 T A Municipal Code Section 16.08.100. Projects are required to perform a potable water analysis at the site to meet the maximum concentration of parameters noted in Table 5.307.1 TABLE 5.307.1 Ca (as CaCO3) 600 ppm Total alkalinity 500 ppm SiO2 150 ppm Cr 300 ppm Conductivity 3300 Us/cm Calculate maximum number of cycles that can be achieved with these levels of concentration shall be included in the plumbing design plans. Division 5.4 — MATERIAL CONSERVATION AND RESOUCE EFFICIENCY 16.14.360 Section 5.410.4.6 Energy STAR Portfolio Manager. Section 5.410.4.6 of Chapter 5 of the California Green Building Standards is added as mandatory measure to read: 5.410.4.6 Energy STAR portfolio manager. All nonresidential projects exceeding $100,000 valuation must provide evidence of an Energy STAR Portfolio Manager project profile for both water and energy use prior to Permit Issuance, acquire an Energy STAR Portfolio Manager Rating, and submit the rating to the City of Palo Alto once the project has been occupied after 12 months. 16.14.370 Section 5.410.4.7 Performance Reviews — Energy. Section 5.410.4.7 of Chapter 5 of the California Green Building Standards is added to read: 5.410.4.7 Performance reviews — energy. All projects over 10,000 square feet. The City reserves the right to conduct a performance review, no more frequently than once every five years unless a project fails review, to evaluate the building's energy use to ensure that resources used at the building and/or site do not exceed the maximum allowance set forth in the rehabilitation or new construction design. Following the findings and recommendations of the review, the City may require adjustments to the energy usage or energy -using equipment or systems if the building is no longer compliant with the original design. Renovation or rehabilitation resulting from such audit activity shall be considered a project and shall be subject to applicable documentation submittal requirements of the City. This section is effective only for those projects for which a building permit was issued after January 1, 2009. 16.14.380 Section 5.410.4.8 Performance Reviews — Water. 0280100_KB2_20240523_CA Item 23: Staff Report Pg. 23 Packet Pg. 419 of 857 *NOT YET APPROVED* Item 23 Attachment A - Ordinance Amending Ch 16.14 T A Section 5.410.4.8 of Chapter 5 of the California Green Building Standards is added to read: 5.410.4.8 Performance reviews —water. All sites greater than one acre: The City reserves the right to conduct performance reviews, no more frequently than once every five years unless a project fails review, to evaluate water use to ensure that resources used at the building and/or site do not exceed a maximum allowance set forth in the rehabilitation or new construction design. Water use reviews may be initiated by CPAU, or as a coordinated effort between the CPAU and the Santa Clara Valley Water District (SCVWD), or as part of SCVWD's established water conservation programs. Following the findings and recommendations of the review, the City may require adjustments to irrigation usage, irrigation hardware, and/or landscape materials to reduce consumption and improve efficiency. Renovation or rehabilitation resulting from such audit activity shall be considered a project and shall be subject to applicable documentation submittal requirements of the City. 16.14.390 Section 5.506 Indoor Air Quality. Section 5.506.4 of Chapter 5 of the California Green Building Standards is added as mandatory measure to read: Section 5.506.4 Indoor air quality management plan. All commercial and multi- family projects must submit an Indoor Air Quality Management Plan (IAQ) with building permit application in accordance with the Sheet Metal and Air Conditioning Contractors National Association (SMACNA IAQ) Guidelines for Occupied Buildings Under Construction, 2nd edition ANSI/SMACNA 008-2008. Part 9 —Local Modifications to APPENDIX AS — NONRESIDENTIAL VOLUNTARY MEASURES Division A5.1 — PLANNING AND DESIGN 16.14.400 Section A5.106.5.3 Electric Vehicle (EV) Charging for New Construction. Section A5.106.5.3 -A5.106.5.3.4 of the California Green Building Standards Code are deleted in its entirety, adopted as mandatory measures and is amended to read: A5.106.5.3 Electric vehicle (EV) charging for nonresidential structures. New non- residential structures shall comply with the following requirements for electric vehicle supply equipment (EVSE). All parking space calculations under this section shall be rounded up to the next full space. The requirements stated in this section are in addition to those contained in Section 5.106.5.3 of the California Green Building Standards Code. In the event of a conflict between this section and Section 5.106.5.3, the more robust EV Charging requirements shall prevail. A5.106.5.3.5 Nonresidential structures other than hotels. The following standards apply to newly constructed nonresidential structures other than hotels. 0280100_KB2_20240523_CA Item 23: Staff Report Pg. 24 Packet Pg. 420 of 857 *NOT YET APPROVED* Item 23 Attachment A - Ordinance Amending Ch 16.14 T A In general. For building with 10 to 20 parking spaces, the property owner shall provide at least 20% EV Capable or EVSE-Ready space, and at least 20% Level 2 EVSE installed of the total parking spaces. For building with over 20 parking spaces, the property owner shall provide at least 15% EV Capable or EVSE-Ready space, and at least 15% EVSE installed for of the total parking spaces Accessible spaces. Projects shall comply with the 2022 California Building Code requirements for accessible electric vehicle parking. Minimum total circuit capacity. The property owner shall ensure sufficient circuit capacity, as determined by the Chief Building Official or designee , to support a Level 2 EVSE in every location where EVSE Capable space, EVSE-Ready space or EVSE Installed is required. Location. The EVSE, receptacles, and/or raceway required by this section shall be placed in locations allowing convenient installation of and access to EVSE. Location of EVSE or receptacles shall be consistent with all city regulations. Division A5.4 — ENERGY EFFICIENCY 16.14.410 Section A5.203.1 Performance Approach for Newly Constructed Buildings. Section A5.203.1 of Appendix A5 of the California Green Building Standards Code is not adopted as a Tier 1 and Tier 2 elective measure. Projects shall comply with Chapter 16.17 of the Palo Alto Municipal Code (California Energy Code). Division A5.4 — MATERIAL CONSERVATION AND RESOUCE EFFICIENCY 16.14.420 Section A5.405.5 Cement and Concrete. Section A5.405.5 of Appendix A5 of the California Green Building Standards Code is adopted as a Mandatory measure for Tier 1 and Tier 2 projects and is amended to read: A5.405.5 Cement and concrete. Use cement and concrete made with recycled products and complying with the following sections and requirements per PAMC Chapter 16.14.240. 16.14.430 Section A5.408 Construction Waste Reduction, Disposal and Recycling. Section A5.408 of Appendix A5 of the California Green Building Standards Code is adopted as a Mandatory measure for Tier 2 projects and is amended to read: A5.408.3.1 Waste enhanced construction waste reduction. (80% construction waste reduction) as a mandatory requirement for all nonresidential construction, including new construction, additions, and alterations, as long as the construction has a valuation of $25,000 or more. Nonresidential projects with a lower valuation shall remain subject to 0280100_KB2_20240523_CA Item 23: Staff Report Pg. 25 Packet Pg. 421 of 857 *NOT YET APPROVED* Item 23 Attachment A - Ordinance Amending Ch 16.14 T A California Green Building Standards Code Chapter 5 mandatory measures. Exceptions: 1. Residential stand-alone mechanical, electrical or plumbing permits. 2. Commercial stand-alone mechanical, electrical or plumbing permits. A5.408.3.1.1 - Deleted A5.408.3.1.2 Documentation. Documentation shall be provided to the enforcing agency which demonstrates compliance with all construction and demolition waste reduction requirements. SECTION 3. The Council adopts the findings for local amendments to the California Green Building Standards Code, 2022 Edition, attached hereto as Exhibit "A" and incorporated herein by reference. SECTION 4. If any section, subsection, clause or phrase of this Ordinance is for any reason held to be invalid, such decision shall not affect the validity of the remaining portion or sections of the Ordinance. The Council hereby declares that it should have adopted the Ordinance and each section, subsection, sentence, clause or phrase thereof irrespective of the fact that any one or more sections, subsections, sentences, clauses or phrases be declared invalid. SECTION 5. The Council finds that this project is exempt from the provisions of the California Environmental Quality Act ("CEQA"), pursuant to Section 15061 of the CEQA Guidelines, because it can be seen with certainty that there is no possibility that the amendments herein adopted will have a significant effect on the environment and Section 15308, because the amendments herein adopted is an action taken by the City to assure the maintenance, restoration, enhancement, or protection of the environment. // // // // // 0280100_KB2_20240523_CA Item 23: Staff Report Pg. 26 Packet Pg. 422 of 857 *NOT YET APPROVED* Item 23 Attachment A - Ordinance Amending Ch 16.14 T A SECTION 6. This Ordinance shall be effective on the thirty-first day after the date of its adoption. INTRODUCED: PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: City Clerk APPROVED AS TO FORM: Chief Assistant City Attorney 0280100_KB2_20240523_CA Mayor APPROVED: City Manager Director of Planning and Development Services Director of Administrative Services Item 23: Staff Report Pg. 27 Packet Pg. 423 of 857 *NOT YET APPROVED* Exhibit A Item 23 Attachment A - Ordinance Amending Ch 16.14 T A FINDINGS FOR LOCAL AMENDMENTS TO CALIFORNIA GREEN BUILDING STANDARD CODE TITLE 24, PART 11 Section 17958 of the California Health and Safety Code provides that the City may make changes to the provisions of the California Building Standards Code. Sections 17958.5 and 17958.7 of the Health and Safety Code require that for each proposed local change to those provisions of the California Building Standards Code which regulate buildings used for human habitation, the City Council must make findings supporting its determination that each such local change is reasonably necessary because of local climatic, geological, or topographical conditions. Local building regulations having the effect of amending the uniform codes, which were adopted by the City prior to November 23, 1970, were unaffected by the regulations of Sections 17958, 17958.5 and 17958.7 of the Health and Safety Code. Therefore, amendments to the uniform codes which were adopted by the City Council prior to November 23, 1970 and have been carried through from year to year without significant change, need no required findings. Also, amendments to provisions not regulating buildings used for human habitation do not require findings. Code: California Green Building Standard Code, Title 24, Part 11 Chapter(s), Sections(s), Appendices Title Add Deleted Amended Justification (See below of keys) 101.4 Appendices ✓ A 202 Definitions ✓ A 301 Voluntary Tiers Added ✓ C, E 301.1 Scope ✓ C, E 301.1.1 Residential additions and alterations ✓ C, E 301.2 Low-rise and high-rise residential buildings ✓ C, E 301.2.1 Low -Rise residential new construction — Tier 2 adopted ✓ C, E 301.3 Nonresidential additions and alterations ✓ C, E 301.3.3 No -residential new construction —Tier 2 ✓ C, E 301.6 Special inspector requirements ✓ C, E 301.7 Low -carbon concrete requirements for Tier 1 and Tier 2 projects ✓ C, E 4.306 Swimming pool and spa covers ✓ C, E 4.509 Heat pump water heater ✓ 702.2 Green building special inspection ✓ C, E A4.104.1 Supervision and education by a special inspector ✓ C, E A4.105.1 Chapter 5.24 of Title 5 of the Municipal Code ✓ C, E 0280100_KB2_20240523_CA Item 23: Staff Report Pg. 28 Packet Pg. 424 of 857 *NOT YET APPROVED* Item 23 Attachment A - Ordinance Amending Ch 16.14 T A A4.105.2 Reuse of materials ✓ C, E A4.106.8 Electric vehicle (EV) charging for residential structures C, E A4.106.8.1 New single-family, duplex and townhouse dwellings ✓ C, E A4.106.8.2 New multi -family dwellings. ✓ C, E A4.106.8.3 New hotels and motels ✓ C, E A4.106.9 Bicycle Parking ✓ C, E A4.106.10 Light pollution reduction ✓ C, E A4.203.1 Performance Approach for Newly Constructed Buildings ✓ C, E A4.304.3 Irrigation metering device ✓ C, E A4.305.1 Graywater ✓ C, E A4.305.2 Recycled water piping ✓ C, E A4.305.3 Recycled water for landscape irrigation ✓ C, E A4.305.4 Additions and alterations ✓ C, E A4.403.1 Frost Protection Foundation Systems ✓ C A4.403.2 Reduction in cement use ✓ C, E A4.403.2.1 Purpose ✓ C, E A4.403.2.2 Definitions ✓ C, E A4.403.2.3 Compliance ✓ C, E Table A4.403.2.3 Cement and Embodied Carbon Limit Pathways ✓ C, E A4.403.2.3.1 Allowable increases ✓ C, E A4.403.2.3.2 Cement limit method - mix ✓ C, E A4.403.2.3.3 Cement limit method - project ✓ C, E A4.403.2.3.4 Embodied carbon method - mix ✓ C, E A4.403.2.3.5 Embodied carbon method - project ✓ C, E A4.403.2.3.6 Enforcement ✓ A A4.403.2.3.7 Exemptions ✓ A A4.408.1 Enhanced construction waste reduction ✓ C, E A4.408.1.1 Documentation ✓ A A4.504.1 Compliance with Formaldehyde Limits ✓ C, E A4.504.3 Thermal Insulation ✓ C, E 5.106.1.1 Local Storm Water Pollution Prevention ✓ C, E 5.106.1.1 Local ordinance ✓ C, E 5.106.8 Light pollution reduction ✓ C, E 5.304.2 Invasive species prohibited ✓ C 5.306 Nonresidential enhanced water budget ✓ C, E 5.307.1 Cooling tower water use in high-rise residential or nonresidential buildings ✓ C, E 0280100_KB2_20240523_CA Item 23: Staff Report Pg. 29 Packet Pg. 425 of 857 *NOT YET APPROVED* Item 23 Attachment A - Ordinance Amending Ch 16.14 T A 5.410.4.6 Energy STAR portfolio manager ✓ C, E 5.410.4.7 Performance reviews —energy ✓ C, E 5.410.4.8 Performance reviews —water ✓ C, E 5.506.4 Indoor air quality management plan ✓ E A5.106.5.3 Electric vehicle (EV) charging for nonresidential structures ✓ C, E A5.106.5.3.5 Nonresidential structures other than hotels ✓ C, E A5.203.1 Performance Approach for Newly Constructed Buildings ✓ C, E A5.405.5 Cement and concrete ✓ C, E A5.408.3.1 Waste enhanced construction waste reduction ✓ C, E A5.408.3.1.1 Enhanced construction waste reduction — Tier ✓ A A5.408.3.1.2 _2 Documentation ✓ A Key to Justification for Amendments to Title 24 of the California Code of Regulations A This is an administrative amendment to clarify and establish civil and administrative procedures, regulations, or rules to enforce and administer the activities by the Palo Alto Building Inspection Department. These administrative amendments do not need to meet HSC 18941.5/17958/13869 per HSC 18909(c). C This amendment is justified on the basis of a local climatic condition. The seasonal climatic conditions during the late summer and fall create severe fire hazards to the public health and welfare in the City. The hot, dry weather frequently results in wild land fires on the brush covered slopes west of Interstate 280. The aforementioned conditions combined with the geological characteristics of the hills within the City create hazardous conditions for which departure from California Building Standards Code is required. Natural gas combustion and gas appliances emit a wide range of air pollutants, such as carbon monoxide (CO), nitrogen oxides (NOx, including nitrogen dioxide (NO2)), particulate matter (PM), and formaldehyde, which according to a UCLA Study, have been linked to various acute and chronic health effects, and additionally exceed levels set by national and California -based ambient air quality standards. The burning of fossil fuels used in the generation of electric power and heating of buildings contributes to climate change, which could result in rises in sea level, including in San Francisco Bay, that could put at risk Palo Alto homes and businesses, public facilities, and Highway 101 (Bayshore Freeway), particularly the mapped Flood Hazard areas of the City. Energy efficiency is a key component in reducing GHG emissions, and construction of more energy efficient buildings can help Palo Alto reduce its share of the GHG emissions that contribute to climate change. All -electric new buildings benefit the health, safety, and welfare, of Palo Alto and its residents. Requiring all -electric construction, without gas infrastructure will reduce the amount of greenhouse gas produced in Palo Alto and will contribute to reducing the impact of climate change and the associated risks. Due to decrease in annual 0280100_KB2_20240523_CA Item 23: Staff Report Pg. 30 Packet Pg. 426 of 857 Item 23 * NOT YET APPROVED* Attachment A - Ordinance Amending Ch 16.14 T A rain fall, Palo Alto experiences the effect of drought and water saving more than some other communities in California. Embodied carbon of concrete is a significant contributor to greenhouse gas emissions and climate change, and this amendment includes a requirement to use low -carbon concrete. Providing additional capacity for electric vehicle use reduces use of gasoline which is a major contributor to climate change. E Green building enhances the public health and welfare by promoting the environmental and economic health of the City through the design, construction, maintenance, operation and deconstruction of buildings and sites by incorporating green practices into all development. The green provisions in this Chapter are designed to achieve the following goals: (a) Increase energy efficiency in buildings; (b) Reduce the use of natural gas in buildings which improves indoor environmental quality and health; (c) Reduce the use of natural gas which will reduce the natural gas infrastructure and fire risk over time; (d) Reduce the embodied carbon of concrete which reduces greenhouse gas emissions; (e) Increase water and resource conservation; (f) Reduce waste generated by construction and demolition projects; (g) Provide durable buildings that are efficient and economical to own and operate; (h) Promote the health and productivity of residents, workers, and visitors to the city; (i) Recognize and conserve the energy embodied in existing buildings; (j) Increase capacity for use of electric vehicles which reduces greenhouse gas emissions and improves air quality; (k) Encourage alternative transportation; and (I) Reduce disturbance of natural ecosystems. G This amendment is justified on the basis of a local geological condition. The City of Palo Alto is subject to earthquake hazard caused by its proximity to San Andreas fault. This fault runs from Hollister, through the Santa Cruz Mountains, epicenter of the 1989 Loma Prieta earthquake, then on up the San Francisco Peninsula, then offshore at Daly City near Mussel Rock. This is the approximate location of the epicenter of the 1906 San Francisco earthquake. The other fault is Hayward Fault. This fault is about 74 mi long, situated mainly along the western base of the hills on the east side of San Francisco Bay. Both of these faults are considered major Northern California earthquake faults which may experience rupture at any time. Thus, because the City is within a seismic area which includes these earthquake faults, the modifications and changes cited herein are designed to better limit property damage as a result of seismic activity and to establish criteria for 0280100_KB2_20240523_CA Item 23: Staff Report Pg. 31 Packet Pg. 427 of 857 Item 23 * NOT YET APPROVED* Attachment A - Ordinance Amending Ch 16.14 T A repair of damaged properties following a local emergency. Reduction or eliminating of natural gas infrastructure overtime will reduce maintenance costs and fire risk in difficult geological conditions. T The City of Palo Alto topography includes hillsides with narrow and winding access, which makes timely response by fire suppression vehicles difficult. Palo Alto is contiguous with the San Francisco Bay, resulting in a natural receptor for storm and waste water run-off. Also, the City of Palo Alto is located in an area that is potentially susceptible to liquefaction during a major earthquake. The surface condition consists mostly of stiff to dense sandy clay, which is highly plastic and expansive in nature. The aforementioned conditions within the City create hazardous conditions for which departure from California Building Standards Code is warranted. In addition, the reduction or elimination of natural gas infrastructure reduces the likelihood of fire or environmental damage should they become disrupted due to challenging topographic conditions during construction or repair. 0280100_KB2_20240523_CA Item 23: Staff Report Pg. 32 Packet Pg. 428 of 857 *NOT YET APPROVED* Item 23 Attachment B - Ordinance Amending Ch 16.17 T B Ordinance No. XXXX Ordinance of the Council of the City of Palo Alto Amending Chapter 16.17 (California Energy Code, California Code of Regulations, Title 24, Part 6) of the Palo Alto Municipal Code to Adopt the 2022 California Energy Code, Along With Local Amendments Thereto, to Increase Energy Efficiency Standards for Buildings, Mandate Electric -Ready Requirements, and Incentivize All -Electric New Construction. The Council of the City of Palo Alto does ORDAIN as follows: SECTION 1. Findings and Declarations. (a) The City of Palo Alto adopted a Sustainability and Climate Action Plan, or S/CAP, to meet the City's stated goal of "80 x 30": reducing greenhouse gas emissions 80% below 1990 levels by 2030. (b) The S/CAP outlines goals and key actions in eight areas, one of which is energy and more specifically, energy efficiency and electrification. The goals for the energy area of the S/CAP are to reduce GHG emissions from the direct use of natural gas in Palo Alto's building sector by at least 60% below 1990 levels (116,400 MT CO2e reduction) and to modernize the electric grid to support increased electric demand to accommodate state- of-the-art technology. (c) One key action the City is taking to accomplish those goals is to use codes and ordinances - such as the energy reach code, green building ordinance, zoning code, or other mandates - to facilitate electrification in both existing buildings and new construction projects where feasible. (d) The purpose of this ordinance is to formally adopt California Code of Regulations, Title 24, Part 11, 2022 California Green Building Standards Code, with local amendments in furtherance of the City of Palo Alto's S/CAP goals. (e) California Health and Safety Code sections 17958.5 and 17958.7 requires that the City, in order to make changes or modifications in the requirements contained in the California Green Building Standards on the basis of local conditions, make express finding that such modifications or changes are reasonably necessary because of local climatic, geological or topographical conditions. (f) The required findings are attached to this ordinance as Exhibit A. SECTION 2. Chapter 16.17 (California Energy Code, California Code of Regulations, Title 24, Part 6) of the Palo Alto Municipal Code is hereby amended by repealing in its entirety existing Chapter 16.17 and adopting a new Chapter 16.17 to read as follows: 0280100_KB2_20230523_CA Item 23: Staff Report Pg. 33 Packet Pg. 429 of 857 *NOT YET APPROVED* Item 23 Attachment B - Ordinance Amending Ch 16.17 T B CHAPTER 16.17 CALIFORNIA ENERGY CODE, CALIFORNIA CODE OF REGULATIONS, TITLE 24, PART 6 Sections 16.17.010 2022 California Energy Code, Title 24, Part 6 adopted. 16.17.020 Cross - References to California Energy Code 16.17.030 Local Amendments 16.17.040 Administration & Enforcement of 2022 California Energy Code 16.17.050 Violations — Penalties 16.17.060 Section 100.1 Definitions and Rules of Construction 16.17.070 Section 110.10 Mandatory Requirements for Solar Ready Buildings 16.17.080 Subchapter 4 Nonresidential, High -Rise Residential, and Hotel/Motel Occupancies — Mandatory Requirements for Lighting Systems and Equipment, and Electrical Power Distribution Systems 16.17.090 Section 130.6 Electric Readiness Requirements for Systems Using Gas or Propane 16.17.100 Subchapter 5 Nonresidential and Hotel/Motel Occupancies — Performance and Prescriptive Compliance Approaches for Achieving Efficiency 16.17.110 Section 140.1 Performance Approach: Energy Budgets 16.17.120 Subchapter 7 Single-family Residential Building — Mandatory Features and Devices 16.17.130 Subchapter 8 Single-family Residential Buildings — Performance and Prescriptive Compliance Approaches 16.17.140 Subchapter 10 Multifamily Buildings — Mandatory Requirements 16.17.150 Section 160.9 Mandatory Requirements for Electric Ready Buildings 16.17.160 Subchapter 11 Multifamily Buildings — Performance and Prescriptive Compliance Approaches 16.17.170 Infeasibility Exemption 16.17.180 Appeal 16.17.010 2022 California Energy Code, Title 24, Part 6 adopted. The California Energy Code, 2022 Edition, Title 24, Part 6 of the California Code of Regulations together with those omissions, amendments, exceptions and additions thereto, is adopted and hereby incorporated in this Chapter by reference and made a part hereof the same as if fully set forth herein. Except as amended herein, all requirements of the California Energy Code, 2022 Edition, Title 24, Part 6 of the California Code of Regulations shall apply. 0280100_KB2_20230523_CA Item 23: Staff Report Pg. 34 Packet Pg. 430 of 857 Item 23 * NOT YET APPROVED* Attachment B - Ordinance Amending Ch 16.17 T B Unless superseded and expressly repealed, references in City of Palo Alto forms, documents and regulations to the chapters and sections of the former editions of the California Code of Regulations, Title 24, shall be construed to apply to the corresponding provisions contained within the California Code of Regulations, Title 24, 2022. Ordinance No. 5571 of the City of Palo Alto and all other ordinances or parts of ordinances in conflict herewith are hereby suspended and expressly repealed. One copy of the California Energy Code, 2022 Edition, has been filed for use and examination of the public in the Office of the Chief Building Official of the City of Palo Alto. 16.17.020 Cross - References to California Energy Code The provisions of this Chapter contain cross-references to the provisions of the California Energy Code, 2022 Edition, in order to facilitate reference and comparison to those provisions. 16.17.030 Local Amendments The provisions of this Chapter shall constitute local amendments to the cross-referenced provisions of the California Energy Code, 2022 Edition, and shall be deemed to replace the cross- referenced sections of said Code with the respective provisions set forth in this Chapter. 16.17.040 Administration & Enforcement of 2022 California Energy Code Administration and enforcement of this code shall be governed by Chapter 1, Division II of the 2022 California Building Code as amended by Palo Alto Municipal Code Chapter 16.04. 16.17.050 Violations - Penalties It is unlawful for any person to violate any provision or to fail to comply with any of the requirements of this Chapter or any permits, conditions, or variances granted under this Chapter. Violators shall be subject to any penalty or penalties authorized by law, including but not limited to: administrative enforcement pursuant to Chapters 1.12 and 1.16 of the Palo Alto Municipal Code; and criminal enforcement pursuant to Chapter 1.08 of the Palo Alto Municipal Code. Each separate day or any portion thereof during which any violation of this Chapter occurs or continues shall be deemed to constitute a separate offense. When the chief building official determines that a violation of this Chapter has occurred, the chief building official may record a notice of pendency of code violation with the Office of the County Recorder stating the address and owner of the property involved. When the violation has been corrected, the chief building official shall issue and record a release of the notice of pendency of code violation. 16.17.060 Section 100.1 Definitions and Rules of Construction Section 100.1(b) of Subchapter 1 of the California Energy Code is amended by adding the following definitions: CERTIFIED ENERGY ANALYST is a person registered as a Certified Energy Analyst with the California Association of Building Energy Consultants as of the date of submission of a Certificate of Compliance as required under section 10-103 of Building Energy Efficiency 0280100_KB2_20230523_CA Item 23: Staff Report Pg. 35 Packet Pg. 431 of 857 Item 23 *NOT YET APPROVED* Attachment B - Ordinance Amending Ch 16.17 T B Standards for residential and nonresidential buildings. ELECTRIC EQUIPMENT OR APPLIANCE means one or more devices that use electric energy to serve the needs for heating and cooling, water heating, cooking, and electric vehicle charging. In addition, ancillary equipment such as an electric panel, photovoltaic equipment, and energy storage systems that are deployed to support such devices shall be considered Electric Equipment or Appliance. ELECTRIC HEATING APPLIANCE is a device that produces heat energy to create a warm environment by the application of electric power to resistance elements, refrigerant compressors, or dissimilar material junctions, as defined in the California Mechanical Code. NET FREE AREA (NFA) is the total unobstructed area of the air gaps between louver and grille slats in a vent through which air can pass. The narrowest distance between two slats, perpendicular to the surface of both slats is the air gap height. The narrowest width of the gap is the air gap width. The NFA is the air gap height multiplied by the air gap width multiplied by the total number of air gaps between slats in the vent. SUBSTANTIAL REMODEL (or "50-50-50" RULE) is any project or projects that affects the removal or replacement of 50% or more of the linear length of the existing exterior walls of the building, and/or 50% or more of the linear length of the existing exterior wall plate height is raised, and/or 50% or more of the existing roof framing area is removed or replaced, over a 3 -year period. Any permit(s) applied for will trigger a review of a 3 -year history of the project. This review will result in determining if a substantial remodel has occurred. The Chief Building Official or designee shall make the final determination regarding the application if a conflict occurs. 16.17.070 Section 110.10 MANDATORY REQUIREMENTS FOR SOLAR READY BUILDINGS Section 110.10 of Subchapter 2 of the California Energy Code is amended by adding Section 110.10 (f) to read: (f) Existing tree canopies. In the event of a conflict between the provisions of this Code, the Solar Shade Act of 2009, and the Palo Alto Tree Ordinance (Chapter 8.10), the most protective of existing tree canopies shall prevail. 16.17.080 SUBCHAPTER 4 NONRESIDENTIAL AND HOTEL/MOTEL OCCUPANCIES — MANDATORY REQUIREMENTS FOR LIGHTING SYSTEMS AND EQUIPMENT, AND ELECTRICAL POWER DISTRIBUTION SYSTEMS SECTION 130.0 LIGHTING SYSTEMS AND EQUIPMENT, AND ELECTRICAL POWER DISTRIBUTION SYSTEMS — GENERAL. 0280100_KB2_20230523_CA Item 23: Staff Report Pg. 36 Packet Pg. 432 of 857 *NOT YET APPROVED* Item 23 Attachment B - Ordinance Amending Ch 16.17 T B Section 130.0 (a) of Subchapter 4 of the California Energy Code is amended to read: (a) The design and installation of all lighting systems and equipment in nonresidential and hotel/motel buildings, outdoor lighting, and electrical power distribution systems within the scope of Section 100.0(a), shall comply with the applicable provisions of Sections 130.0 through 130.6. NOTE: The requirements of Sections 130.0 through 130.6 apply to newly constructed buildings and substantial remodels. Section 141.0 specifies which requirements of Sections 130.0 through 130.6 also apply to additions and alterations to existing buildings. 16.17.090 SECTION 130.6 ELECTRIC READINESS REQUIREMENTS FOR SYSTEMS USING GAS OR PROPANE Subchapter 4 of the California Energy Code is amended to add Section 130.6 to be numbered, entitled, and to read: 130.6 ELECTRIC READINESS REQUIREMENTS FOR SYSTEMS USING GAS OR PROPANE Where nonresidential systems using gas or propane are installed, the construction drawings shall indicate electrical infrastructure and physical space accommodating the future installation of an electric appliance in the following ways, as certified by a registered design professional or licensed electrical contractor. a) Branch circuit wiring, electrically isolated and designed to serve all electric heating appliances in accordance with manufacturer requirements and the California Electrical Code, including the appropriate voltage, phase, minimum amperage, and an electrical receptacle or junction box within five feet of the appliance that is accessible with no obstructions. Appropriately sized conduit may be installed in lieu of conductors; and b) Labeling of both ends of the unused conductors or conduit shall be with "For Future Electrical Appliance"; and c) Reserved circuit breakers in the electrical panel for each branch circuit, appropriately labeled (e.g. "Reserved for Future Electric Range"), and positioned on the opposite end of the panel supply conductor connection; and d) Connected subpanels, panelboards, switchboards, busbars, and transformers shall be sized to serve the future electric heating appliances. The electrical capacity requirements shall be adjusted for demand factors in accordance with the California Electrical Code; and e) Physical space for future electric appliances, including equipment footprint, and if needed a pathway reserved for routing of ductwork to heat pump evaporator(s), shall be depicted on the construction drawings. The footprint necessary for future electric appliances may overlap with non-structural partitions and with the location of currently designed combustion equipment. 0280100_KB2_20230523_CA Item 23: Staff Report Pg. 37 Packet Pg. 433 of 857 *NOT YET APPROVED* Item 23 Attachment B - Ordinance Amending Ch 16.17 T B 16.17.100 SUBCHAPTER 5 NONRESIDENTIAL AND HOTEL/MOTEL OCCUPANCIES - PERFORMANCE AND PRESCRIPTIVE COMPLIANCE APPROACHES FOR ACHIEVING EFFICIENCY SECTION 140.0 PERFORMANCE AND PRESCRIPTIVE COMPLIANCE APPROACHES Section 140.0 of Subchapter 5 of the California Energy Code is amended to read: Nonresidential and hotel/motel buildings shall comply with all of the following: a) The requirements of Sections 100.0 through 110.12 applicable to the building project (mandatory measures for all buildings). b) The requirements of Sections 120.0 through 130.6 (mandatory measures for nonresidential and high-rise residential and hotel/motel buildings). c) Either the performance compliance approach (energy budgets) specified in Section 140.1 or the prescriptive compliance approach specified in Section 140.2 for the Climate Zone in which the building will be located. Climate zones are shown in FIGURE 100.1-A. NOTE to Section 140.0(c): The Commission periodically updates, publishes, and makes available to interested persons and local enforcement agencies precise descriptions of the Climate Zones, which is available by zip code boundaries depicted in the Reference Joint Appendices along with a list of the communities in each zone. 16.17.110 SECTION 140.1 PERFORMANCE APPROACH: ENERGY BUDGETS Section 140.1 of Subchapter 5 of the California Energy Code is amended to read: Sections 140.1 (a) — (c) are adopted without modification. A newly constructed building or substantial remodel complies with the performance approach provided that: 1. The time -dependent valuation (TDV) energy budget calculated for the Proposed Design Building under Subsection (b) is no greater than the TDV energy budget calculated for the Standard Design Building under Subsection (a), and 2. The source energy budget calculated for the proposed design building under Subsection (b) has a source energy compliance margin, relative to the energy budget calculated for the standard design building under Subsection (a), of at least the value specified for the corresponding occupancy type in Table 140.1-A below. 0280100_KB2_20230523_CA Item 23: Staff Report Pg. 38 Packet Pg. 434 of 857 *NOT YET APPROVED* Item 23 Attachment B - Ordinance Amending Ch 16.17 T B TABLE 140.1-A NONRESIDENTIAL BUILDING SOURCE ENERGY COMPLIANCE MARGINS Occupancy Type Source Energy Compliance Margins Office/Mercantile 10% Hotel/Motel 7% Restaurants 12% Industrial/ Manufacturing 0% All other Nonresidential Occupancies 9% Exception 1 to Section 140.1 Item 2: A source energy compliance margin of 0 percent or greater is required when nonresidential occupancies are designed with single zone space -conditioning systems complying with Section 140.4(a)2. 3. Certificate of Compliance. The Certificate of Compliance shall be prepared and signed by a Certified Energy Analyst and the energy budget for the Proposed Design shall be no greater than the Standard Design Building. 16.17.120 SUBCHAPTER 7 SINGLE-FAMILY RESIDENTIAL BUILDING — MANDATORY FEATURES AND DEVICES Section 150.0 MANDATORY FEATURES AND DEVICES Section 150.0 of Subchapter 7 of the California Energy Code is amended to read: Single-family residential buildings shall comply with the applicable requirements of Sections 150(a) through 150.0(v). NOTE: The requirements of Sections 150.0 (a) through (v) apply to newly constructed buildings and substantial remodels. Sections 150.2(a) and 150.2(b) specify which requirements of Sections 150.0(a) through 150.0(r) also apply to additions or alterations. The electric readiness requirements of Sections 150.0 (n), (t), (u) and (v) applyto residential remodels or additions when the applicable system is included in the remodel. Subsections 150.0 (a) — (s) are adopted without modification. (t) Heat pump space heater ready. Systems using gas or propane furnace to serve individual dwelling units shall include the following: 1. A dedicated 240 volt branch circuit wiring shall be installed within 3 feet from the furnace and accessible to the furnace with no obstructions. The branch circuit conductors shall be rated at 30 amps minimum. The blank cover shall 0280100_KB2_20230523_CA Item 23: Staff Report Pg. 39 Packet Pg. 435 of 857 *NOT YET APPROVED* Item 23 Attachment B - Ordinance Amending Ch 16.17 T B be identified as "240V ready." All electrical components shall be installed in accordance with the California Electrical Code. 2. The main electrical service panel shall have a reserved space to allow for the installation of a double pole circuit breaker for a future heat pump space heater installation. The reserved space shall be permanently marked as "For Future 240V use." 3. A designated exterior location for a future heat pump compressor unit. Subsections 150.0 (u) — (v) are adopted without modification. 16.17.130 SUBCHAPTER 8 SINGLE-FAMILY RESIDENTIAL BUILDINGS - PERFORMANCE AND PRESCRIPTIVE COMPLIANCE APPROACHES SECTION 150.1 PERFORMANCE AND PRESCRIPTIVE COMPLIANCE APPROACHES FOR SINGLE- FAMILY RESIDENTIAL BUILDINGS Section 150.1 of Subchapter 8 of the California Energy Code is amended to read: Section (a) is adopted without modification. (b) Performance Standards. A building complies with the performance standards if the energy consumption calculated for the proposed design building is no greater than the energy budget calculated for the standard design building using Commission -certified compliance software as specified by the Alternative Calculation Methods Approval Manual, as specified in sub -sections 1, 2 and 3 below. 1. Newly Constructed Buildings and substantial remodels. The Energy Budget for newly constructed buildings is expressed in terms of the Energy Design Ratings, which are based on source energy and time -dependent valuation (TDV) energy. The Energy Design Rating 1 (EDR1) is based on source energy. The Energy Design Rating 2 (EDR2) is based on TDV energy and has two components, the Energy Efficiency Design Rating, and the Solar Electric Generation and Demand Flexibility Design Rating. The total Energy Design Rating shall account for both the Energy Efficiency Design Rating and the Solar Electric Generation and Demand Flexibility Design Rating. The proposed building shall separately comply with the Source Energy Design Rating, Energy Efficiency Design Rating and the Total Energy Design Rating. A building complies with the performance approach if the TDV energy budget calculated for the proposed design building is no greater than the TDV energy budget calculated for the Standard Design Building AND Source Energy compliance margin of at least 8 points, relative to the Source Energy Design Rating 1 calculated for the Standard Design building. Exception 1 to Section 150.1(b)1. A community shared solar electric generation 0280100_KB2_20230523_CA Item 23: Staff Report Pg. 40 Packet Pg. 436 of 857 Item 23 * NOT YET APPROVED* Attachment B - Ordinance Amending Ch 16.17 T B system, or other renewable electric generation system, and/or community shared battery storage system, which provides dedicated power, utility energy reduction credits, or payments for energy bill reductions, to the permitted building and is approved by the Energy Commission as specified in Title 24, Part 1, Section 10- 115, may offset part or all of the solar electric generation system Energy Design Rating required to comply with the Standards, as calculated according to methods established by the Commission in the Residential ACM Reference Manual. Exception 2 to Section 150.1(b)1. A newly constructed building that does not require a PV system in accordance with Section 150.1(c)14 needs a Source Energy compliance margin of at least 2 points, relative to the Source Energy Design Rating 1 calculated for the Standard Design building. 2. Additions and Alterations to Existing Buildings. The Energy Budget for additions and alterations is expressed in terms of TDV energy. 3. Compliance demonstration requirements for performance standards. Section 150.1 (b) 3A of Subchapter 8 of the California Energy Code amended to add subsection is Certificate of Compliance. The Certificate of Compliance is prepared and signed by a Certified Energy Analyst and the Total Energy Design Rating of the Proposed Design shall be no greater than the Standard Design Building. Section (c) is adopted without modification. 16.17.140 SUBCHAPTER 10 MULTIFAMILY BUILDINGS - MANDATORY REQUIREMENTS SECTION 160.4 MANDATORY REQUIREMENTS FOR WATER HEATING SYSTEMS Section 160.4 (a) of Subchapter 10 of the California Energy Code is deleted: Sections (b) — (f) are adopted without amendments. 16.17.150 SECTION 160.9 MANDATORY REQUIREMENTS FOR ELECTRIC READY BUILDINGS Section 160.9 of Subchapter 10 of the California Energy Code is amended to read: Mandatory requirements for electric -ready buildings apply to newly constructed buildings and substantial remodels. Section 160.9 Sections (a) — (c) are adopted without amendments. Sections (d) - (f) are added to read: (d) Systems using gas or propane water heaters to serve individual dwelling units shall 0280100_KB2_20230523_CA Item 23: Staff Report Pg. 41 Packet Pg. 437 of 857 Item 23 * NOT YET APPROVED* Attachment B - Ordinance Amending Ch 16.17 T B include the following components: 1. A dedicated 125 volt, 20 amp electrical receptacle that is connected to the electric panel with a 120/240 volt 3 conductor, copper branch circuit rated to 30 amps, within 3 feet from the water heater and accessible to the water heater with no obstructions. In addition, all of the following: A. Both ends of the unused conductor shall be labeled with the word "spare" and be electrically isolated; and B. A reserved single pole circuit breaker space in the electrical panel adjacent to the circuit breaker for the branch circuit in A above and labeled with the words "Future 240V Use"; All electrical components shall be installed in accordance with the California Electrical Code. 2. A condensate drain that is no more than 2 inches higher than the base of the installed water heater, and allows natural draining without pump assistance, All plumbing components shall be installed in accordance with the California Plumbing Code. 3. The construction drawings shall indicate the location of the future heat pump water heater. The reserved location shall have minimum interior dimensions of 39"x39"x96", 4. A ventilation method meeting one of the following: A. The location reserved for the future heat pump water heater shall have a minimum volume of 700 cu. ft., B. The location reserved for the future heat pump water heater shall vent to a communicating space in the same pressure boundary via permanent openings with a minimum total net free area of 250 sq. in., so that the total combined volume connected via permanent openings is 700 cu. ft. or larger. The permanent openings shall be: i. Fully louvered doors with fixed louvers consisting of a single layer of fixed flat slats; or ii. Two permanent fixed openings, consisting of a single layer of fixed flat slat louvers or grilles, one commencing within 12 inches from the top of the enclosure and one commencing within 12 inches from the bottom of the enclosure. C. The location reserved for the future heat pump water heater shall include two 8" capped ducts, venting to the building exterior. i. All ducts connections and building penetrations shall be sealed. ii. Exhaust air ducts and all ducts which cross pressure boundaries shall be insulated to a minimum insulation level of R-6. 0280100_KB2_20230523_CA Item 23: Staff Report Pg. 42 Packet Pg. 438 of 857 Item 23 *NOT YET APPROVED* Attachment B - Ordinance Amending Ch 16.17 T B iii. Airflow from termination points shall be diverted away from each other. All mechanical components shall be installed in accordance with the California Mechanical Code. (e) Central Heat Pump Water Heater Electric Ready. Water heating systems using gas or propane to serve multiple dwelling units shall meet the requirements of 160.9(f) and include the following for the future heat pump: 1. The system input capacity of the gas or propane water heating system shall be determined as the sum of the input gas or propane capacity of all water heating devices associated with each gas or propane water heating system. 2. Space reserved shall include: A. Heat Pump. The minimum space reserved shall include space for service clearances, air flow clearances, and keep outs and shall meet one of the following: If the system input capacity of the gas water heating system is less than 200,000 BTU/HR, the minimum space reserved for the heat pump shall be 2.0 square feet per input 10,000 Btu/ HR of the gas or propane water heating system, and the minimum linear dimension of the space reserved shall be 48 linear inches. ii. If the system input capacity of the gas water heating system is greater than or equal to 200,000 BTU/HR, the minimum space reserved for the heat pump shall be 3.6 square feet per input 10,000 Btu/ HR of the gas or propane water heating system, and the minimum linear dimension of the space reserved shall be 84 linear inches. iii. The space reserved shall be the space required for a heat pump water heater system that meets the total building hot water demand as calculated and documented by the responsible person associated with the project. B. Tanks. The minimum space reserved shall include space for service clearances and keep outs and shall meet one of the following: i. If the system input capacity of the gas water heating system is less than 200,000 BTU/HR, the minimum space reserved for the storage and temperature maintenance tanks shall be 4.4 square feet per input 10,000 BTU/HR. of the gas or propane water heating system. ii. If the system input capacity of the gas water heating system is greater than or equal to 200,000 BTU/HR, the minimum physical space reserved for the storage and temperature maintenance tanks shall be 3.1 square feet per input 10,000 BTU/HR. of the gas or propane water heating system. 0280100_KB2_20230523_CA Item 23: Staff Report Pg. 43 Packet Pg. 439 of 857 Item 23 * NOT YET APPROVED* Attachment B - Ordinance Amending Ch 16.17 T B iii. The space reserved shall be the space required for a heat pump water heater system that meets the total building hot water demand as calculated and documented by the responsible person associated with the project. 3. Ventilation shall be provided by meeting one of the following: A. Physical space reserved for the heat pump shall be located outside, or B. A pathway shall be reserved for future routing of supply and exhaust air via ductwork from the reserved heat pump location to an appropriate outdoor location. Penetrations through the building envelope for louvers and ducts shall be planned and identified for future use. The reserved pathway and penetrations through the building envelope shall be sized to meet one of the following: If the system input capacity of the gas water heating system is less than 200,000 BTU/HR, the minimum air flow rate shall be 70 CFM per input 10,000 BTU/HR of the gas or propane water heating system and the total external static pressure drop of ductwork and louvers shall not exceed 0.17" when the future heat pump water heater is installed. ii. If the system input capacity of the gas water heating system is greater than or equal to 200,000 BTU/HR, the minimum air flow rate shall be 420 CFM per input 10,000 BTU/HR of the gas or propane water heating system and the total external static pressure drop of ductwork and louvers shall not exceed 0.17" when the future heat pump water heater is installed. iii. The reserved pathway and penetrations shall be sized to serve a heat pump water heater system that meets the total building hot water demand as calculated and documented by the responsible person associated with the project. All mechanical components shall be installed in accordance with the California Mechanical Code. 4. Condensate drainage piping. An approved receptacle that is sized in accordance with the California Plumbing Code to receive the condensate drainage shall be installed within 3 feet of the reserved heat pump location, or piping shall be installed from within 3 feet of the reserved heat pump location to an approved discharge location that is sized in accordance with the California Plumbing Code, and meets one of the following: A. If the system input capacity of the gas water heating system is less than 200,000 BTU/HR, condensate drainage shall be sized for 0.2 tons of refrigeration capacity per input 10,000 BTU/HR. B. If the system input capacity of the gas water heating system is greater than or equal to 200,000 BTU/HR, condensate drainage shall be sized for 0280100_KB2_20230523_CA Item 23: Staff Report Pg. 44 Packet Pg. 440 of 857 *NOT YET APPROVED* Item 23 Attachment B - Ordinance Amending Ch 16.17 T B 0.7 tons of refrigeration capacity per input 10,000 BTU/HR. C. Condensate drainage shall be sized to serve a heat pump water heater system that meets the total building hot water demand as calculated and documented by the responsible person associated with the project. All plumbing components shall be installed in accordance with the California Plumbing Code. 5. Electrical A. Physical space shall be reserved on the bus system of the main switchboard or on the bus system of a distribution board to serve the future heat pump water heater system including the heat pump and temperature maintenance tanks. In addition, the physical space reserved shall be capable of providing adequate power to the future heat pump water heater as follows: i. Heat Pump. For the Heat Pump, the physical space reserved shall comply with one of the following: A. If the system input capacity of the gas water heating system is less than 200,000 BTU/HR, provide 0.1 kVA per input 10,000 BTU/HR. B. If the system input capacity of the gas water heating system is greater than or equal to 200,000 BTU/HR, provide 1.1 kVA per input 10,000 Btu/HR. C. The physical space reserved supplies sufficient electrical power required to power a heat pump water heater system that meets the total building hot water demand as calculated and documented by the responsible person associated with the project. All electric components shall be installed in accordance with the California Electrical Code. ii. Temperature Maintenance Tank. For the Temperature Maintenance Tank, the physical space reserved shall comply with one of the following: A. If the system input capacity of the gas water heating system is less than 200,000 BTU/HR, provide 1.0 kVA per input 10,000 BTU/HR. B. If the system input capacity of the gas water heating system is greater than or equal to 200,000 BTU/HR, provide 0.6 kVA per input 10,000 BTU/HR. C. The physical space reserved supplies sufficient electrical power required to power a heat pump water heater system 0280100_KB2_20230523_CA Item 23: Staff Report Pg. 45 Packet Pg. 441 of 857 *NOT YET APPROVED* Item 23 Attachment B - Ordinance Amending Ch 16.17 T B that meets the total building hot water demand as calculated and documented by the responsible person associated with the project. (f) The building electrical system shall be sized to meet the future electric requirements of the electric ready equipment specified in sections 160.9 (a) - (e). To meet this requirement the building main service conduit, the electrical system to the point specified in each subsection, and any on -site distribution transformers shall have sufficient capacity to supply full rated amperage at each electric ready appliance in accordance with the California Electric Code. 16.17.160 SUBCHAPTER 11 MULTIFAMILY BUILDINGS - PERFORMANCE AND PRESCRIPTIVE COMPLIANCE APPROACHES SECTION 170.1 PERFORMANCE APPROACH Section 170.1 of Subchapter 11 of the California Energy Code is amended to read: Subsections 170.1 (a) — (c) are adopted without modification. A newly constructed building or substantial remodel complies with the performance approach if the TDV energy budget calculated for the proposed design building under Subsection (b) is no greater than the TDV energy budget calculated for the Standard Design Building under Subsection (a). Additionally, 1. Low -Rise Multifamily: The energy budget, expressed in terms of source energy, of a newly constructed low-rise multifamily building (less than four habitable stories) shall be at least 9% lower than that of the Standard Design Building. 2. High -Rise Multifamily: Newly Constructed high-rise multifamily buildings (greater than four habitable stories) shall be at least 1% lower than that of the Standard Design Building. 3. Compliance demonstration requirements for performance standards. Section 170.1(d)1 is modified to add subsection is as follows: i. Certificate of Compliance. The Certificate of Compliance is prepared and signed by a Certified Energy Analyst and the Total Energy Design Rating of the Proposed Design shall be no greater than the Standard Design Building. 16.17.170 Infeasibility Exemption. (a) Exemption. If an applicant for a Covered Project believes that circumstances exist that makes it infeasible to meet the requirements of this Chapter, the applicant may request an exemption as set forth below. In applying for an exemption, the burden is on the Applicant to show infeasibility. 0280100_KB2_20230523_CA Item 23: Staff Report Pg. 46 Packet Pg. 442 of 857 Item 23 * NOT YET APPROVED* Attachment B - Ordinance Amending Ch 16.17 T B (b) Application. If an applicant for a Covered Project believes such circumstances exist, the applicant may apply for an exemption at the time of application submittal in accordance with the Planning and Development Services administrative guidelines. The applicant shall indicate the maximum threshold of compliance the energy compliance design professional believes is feasible for the covered project and the circumstances that make it infeasible to fully comply with this Chapter. Circumstances that constitute infeasibility include, but are not limited to the following: (1) There is conflict with the compatibility of the currently adopted California Building Standards Code; (2) There is a lack of commercially available materials and technologies to comply with the requirements of this Chapter; Applying the requirements of this Chapter would effectuate an unconstitutional taking of property or otherwise have an unconstitutional application to the property. (c) Granting of Exemption. If the Director of Planning and Development Services, or designee, determines that it is infeasible for the applicant to fully meet the requirements of this Chapter based on the information provided, the Director, or designee, shall determine the maximum feasible threshold of compliance reasonably achievable for the project. The decision of the Director, or designee, shall be provided to the applicant in writing. If an exemption is granted, the applicant shall be required to comply with this Chapter in all other respects and shall be required to achieve, in accordance with this Chapter, the threshold of compliance determined to be achievable by the Director or designee. (d) Denial of Exemption. If the Director of Planning and Development Services or designee determines that it is reasonably possible for the applicant to fully meet the requirements of this Chapter, the request shall be denied, and the Director or designee shall so notify the applicant in writing. The project and compliance documentation shall be modified to comply with this Chapter prior to further review of any pending planning or building application. (e) Council Review of Exemption. For any covered project that requires review and action by the City Council, the Council shall act to grant or deny the exemption, based on the criteria outlined above, after recommendation by the Director of Planning and Development Services. 16.17.180 Appeal. (a) Any aggrieved Applicant may appeal the determination of the Director of Planning and Development Services or designee regarding the granting or denial of an exemption pursuant to 16.17.170. (b) Any appeal must be filed in writing with the Planning and Development Services 0280100_KB2_20230523_CA Item 23: Staff Report Pg. 47 Packet Pg. 443 of 857 *NOT YET APPROVED* Item 23 Attachment B - Ordinance Amending Ch 16.17 T B Department not later than fourteen (14) days after the date of the determination by the Director. The appeal shall state the alleged error or reason for the appeal. (c) The appeal shall be processed and considered by the City Council in accordance with the provisions of Section 18.77.070 (f) of the City of Palo Alto Municipal Code. SECTION 3. The Council adopts the findings for local amendments to the California Green Building Standards Code, 2022 Edition, attached hereto as Exhibit "A" and incorporated herein by reference. SECTION 4. If any section, subsection, clause or phrase of this Ordinance is for any reason held to be invalid, such decision shall not affect the validity of the remaining portion or sections of the Ordinance. The Council hereby declares that it should have adopted the Ordinance and each section, subsection, sentence, clause or phrase thereof irrespective of the fact that any one or more sections, subsections, sentences, clauses or phrases be declared invalid. SECTION 5. The Council finds that this ordinance is exempt from the provisions of the California Environmental Quality Act ("CEQA"), pursuant to Section 15061 of the CEQA Guidelines, because it can be seen with certainty that there is no possibility that the amendments herein adopted will have a significant effect on the environment and Section 15308, because the amendments herein adopted is an action taken by the City to assure the maintenance, restoration, enhancement, or protection of the environment . // // // // // // // // // // // 0280100_KB2_20230523_CA Item 23: Staff Report Pg. 48 Packet Pg. 444 of 857 *NOT YET APPROVED* Item 23 Attachment B - Ordinance Amending Ch 16.17 T B SECTION 6. This Ordinance shall be effective on the thirty-first day after the date of its adoption. INTRODUCED: PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: City Clerk APPROVED AS TO FORM: Chief Assistant City Attorney Mayor APPROVED: City Manager Director of Planning and Development Services Director of Administrative Services 0280100_KB2_20230523_CA Item 23: Staff Report Pg. 49 Packet Pg. 445 of 857 Item 23 *NOT YET APPROVED* Attachment B - Ordinance Amending Ch 16.17 T B Exhibit A FINDINGS FOR LOCAL AMENDMENTS TO CALIFORNIA ENERGY CODE, 2022 EDITION TITLE 24, PART 6 Section 17958 of the California Health and Safety Code provides that the City may make changes to the provisions of the California Building Standards Code. Sections 17958.5 and 17958.7 of the Health and Safety Code require that for each proposed local change to those provisions of the California Building Standards Code which regulate buildings used for human habitation, the City Council must make findings supporting its determination that each such local change is reasonably necessary because of local climatic, geological, or topographical conditions. Regarding the Energy Code, local jurisdictions have the authority to adopt local energy efficiency ordinances —or reach codes —that exceed the minimum standards defined by Title 24 (as established by Public Resources Code Section 25402.1(h)2 and Section 10-106 of the Building Energy Efficiency Standards, provided the City Council finds that the requirements of the proposed ordinance are cost-effective and do not result in buildings consuming more energy than is permitted by Title 24. Local building regulations having the effect of amending the uniform codes, which were adopted by the City prior to November 23, 1970, were unaffected by the regulations of Sections 17958, 17958.5 and 17958.7 of the Health and Safety Code. Therefore, amendments to the uniform codes which were adopted by the City Council prior to November 23, 1970 and have been carried through from year to year without significant change, need no required findings. Also, amendments to provisions not regulating buildings used for human habitation do not require findings. Code: California Energy Code, Title 24, Part 6 Chapter(s), Title Add Deleted Amended Justification Sections(s), (See below of keys) Appendices 100.1 Definitions and Rules of Construction ✓ C & E 110.10 (f) Existing tree canopies 130.0 Lighting Systems and Equipment, and ✓ C & E Electrical Power Distribution Systems - General 130.6 Electric Readiness Requirements for ✓ ✓ C & E Systems Using Gas or Propane 140.0 Performance and Prescriptive Compliance ✓ C & E Approaches 140.1 Performance Approach: Energy Budgets ✓ C & E 150.0 Mandatory Features and Devices ✓ C & E 150.1 Performance and Prescriptive Compliance ✓ C & E Approaches for Single -Family Residential Buildings 0280100_KB2_20230523_CA Item 23: Staff Report Pg. 50 Packet Pg. 446 of 857 *NOT YET APPROVED* Item 23 Attachment B - Ordinance Amending Ch 16.17 T B 150.1 (b) 3A i Certificate of Compliance ✓ 160.4 (a) Mandatory Requirements for Water Heating Systems ✓ C & E 160.9 Mandatory Requirements for Electric Ready Buildings ✓ C & E 170.1 Performance Approach ✓ C & E Infeasibility Exemption ✓ A Appeal ✓ A 0280100_KB2_20230523_CA Item 23: Staff Report Pg. 51 Packet Pg. 447 of 857 *NOT YET APPROVED* Item 23 Attachment B - Ordinance Amending Ch 16.17 T B Key to Justification for Amendments to Title 24 of the California Code of Regulations A This is an administrative amendment to clarify and establish civil and administrative procedures, regulations, or rules to enforce and administer the activities by the Palo Alto Building Inspection Department. These administrative amendments do not need to meet HSC 18941.5/17958/13869 per HSC 18909(c). C This amendment is justified on the basis of a local climatic condition. The seasonal climatic conditions during the late summer and fall create severe fire hazards to the public health and welfare in the City. The hot, dry weather frequently results in wild land fires on the brush covered slopes west of Interstate 280. The aforementioned conditions combined with the geological characteristics of the hills within the City create hazardous conditions for which departure from California Energy Code is required. Failure to address and significantly reduce greenhouse gas (GHG) emissions could result in rises in sea level, including in San Francisco Bay, that could put at risk Palo Alto homes and businesses, public facilities, and Highway 101 (Bayshore Freeway), particularly the mapped Flood Hazard areas of the City. Energy efficiency is a key component in reducing GHG emissions, and the construction of more energy efficient buildings can help Palo Alto reduce its share of the GHG emissions that contribute to climate change. The burning of fossil fuels used in the generation of electric power and heating of buildings contributes to climate change, which could result in rises in sea level, including in San Francisco Bay, that could put at risk Palo Alto homes and businesses 1 public facilities, and Highway 101. Due to a decrease in annual rainfall, Palo Alto experiences the effect of drought and water saving more than some other communities in California. E Energy efficiency enhances the public health and welfare by promoting the environmental and economic health of the City through the design, construction, maintenance, operation, and deconstruction of buildings and sites by incorporating green practices into all development. The provisions in this Chapter are designed to achieve the following goals: (a) Increase energy efficiency in buildings; (b) Increase resource conservation; (c) Provide durable buildings that are efficient and economical to own and operate; (d) Promote the health and productivity of residents, workers, and visitors to the city; (e) Recognize and conserve the energy embodied in existing buildings; and (f) Reduce disturbance of natural ecosystems. G This amendment is justified on the basis of a local geological condition. The City of Palo Alto is subject to earthquake hazards caused by its proximity to San Andreas fault. This fault runs from Hollister, through the Santa Cruz Mountains, epicenter of the 1989 Loma Prieta earthquake, then on up the San Francisco Peninsula, then offshore at Daly City near Mussel Rock. This is the approximate location of the epicenter of the 1906 San Francisco earthquake. The other fault is the Hayward Fault. This fault is about 74 mi long, situated 0280100_KB2_20230523_CA Item 23: Staff Report Pg. 52 Packet Pg. 448 of 857 Item 23 * NOT YET APPROVED* Attachment B - Ordinance Amending Ch 16.17 T B mainly along the western base of the hills on the east side of San Francisco Bay. Both of these faults are considered major Northern California earthquake faults which may experience rupture at any time. Thus, because the City is within a seismic area that includes these earthquake faults, the modifications and changes cited herein are designed to better limit property damage as a result of seismic activity and to establish criteria for repair of damaged properties following a local emergency. T The City of Palo Alto topography includes hillsides with narrow and winding access, which makes timely response by fire suppression vehicles difficult. Palo Alto is contiguous with the San Francisco Bay, resulting in a natural receptor for storm and waste water run-off. Also the City of Palo Alto is located in an area that is potentially susceptible to liquefaction during a major earthquake. The surface condition consists mostly of stiff to dense sandy clay, which is highly plastic and expansive in nature. The aforementioned conditions within the City create hazardous conditions for which departure from California Building Standards Codes is warranted. 0280100_KB2_20230523_CA Item 23: Staff Report Pg. 53 Packet Pg. 449 of 857 Item 24 Item 24 Staff Report City Council Staff Report From: City Manager CITY O F Report Type: CONSENT CALENDAR PALO Lead Department: Utilities ALTO Meeting Date: June 17, 2024 Staff Report: 2403-2713 TITLE Adoption of a Resolution Approving an Initial Study/Mitigated Negative Declaration for Citywide Implementation of Fiber -to -the -Premises Project (FTTP), Including the Mitigation, Monitoring and Reporting Program; Approval of Purchase Order No. 4524000496 With Thermo Bond Buildings in an Amount Not to Exceed of $339,076 for the Design, Build and Delivery of a Modular Building "Fiber Hut"; Authorization for the City Manager or Their Designee to Negotiate and Execute Change Orders in the Amount Not -to -Exceed of $31,384 for Related Additional but Unforeseen Work That may Develop During the Project, for a Total Not -to -Exceed Amount of $370,460 with Thermo Bond Buildings. RECOMMENDATION Staff recommends that Council take the following actions regarding Fiber -to -the -Premises (FTTP) Capital Improvement Project (CIP) (FO -24000): 1) Adopt the Resolution (Attachment A) Approving the Final Initial Study/Mitigated Negative Declaration for the Fiber to the Premises Project, (SCH # 20240500071), Including the Mitigation, Monitoring and Reporting Plan (Attachment B) 2) Approve and Authorize the City Manager or their designee to execute Purchase Order No. 4524000496 with Thermo Bond Buildings (Attachment C) in the amount of $339,076 for design, build, and delivery of a Modular Building "Fiber Hut" Including Ancillary Equipment to House Fiber Networking Equipment and to Serve as an Aggregation Site for FTTP; and 3) Authorize the City Manager or their designee to negotiate and execute one or more change orders to the purchase order with Thermo Bond Buildings for related additional but unforeseen work which may develop during the project in the amount of $31,384; for a total not -to -exceed contract amount of $370,460. 1 SCH # 2024050007 https://www.cityofpaloalto.org/files/assets/public/v/1/city-manager/communications- office/palo-alto-fiber/mnd-final-docs/final-initial-study-mitigated-negative-declaration.pdf Item 24: Staff Report Pg. 1 Packet Pg. 450 of 857 Item 24 Item 24 Staff Report EXECUTIVE SUMMARY The COVID-19 pandemic emphasized the need for reliable, high-speed, and affordable internet, which is addressed by the Fiber -to -the -Premises "FTTP" Project (FO -24000). Through the FTTP project, the City will provide broadband high-speed internet directly to Palo Alto homes and businesses. The City, acting as the lead agency, prepared an Initial Study/Mitigated Negative Declaration for citywide implementation of the FTTP Project. The IS/MND evaluates the complete buildout of all phases of the project, and includes a Mitigation Monitoring and Reporting Plan to reduce the environmental impacts associated with the Project to a less than significant level. However, the project will be built out in phases, and to date, Council has authorized only the Phase 1 buildout which includes the pilot area. Staff will return to Council for approval of each phase. At this time, staff is seeking approval of a purchase order for the design, build, and delivery of a fiber hut. The modular building, the "fiber hut", will be critical to the fiber infrastructure, housing essential fiber equipment for FTTP and serving as a local aggregation site. The fiber hut will be built to City's specifications measuring approximately 11 feet wide by 20 feet long by 10 feet high and will be located at the Colorado Substation. The fiber hut will have an air-conditioning unit mounted on the side of the hut, a fiber-optic cable underground access vault, and a backup generator. Staff is also seeing authorization for change order funding in the event related additional but unforeseen work develops. BACKGROUND On December 19, 2022, City Council directed staff to proceed with the Fiber Expansion Plan to implement the Fiber Rebuild project and Phase 1 of the Fiber -to -the -Premises (FTTP) project. In Phase 1, FTTP would be built out in selected areas of the city, and expanded gradually (Staff Report ID 148002). Construction of the new fiber backbone in the Fiber Rebuild project and last mile infrastructure to provide FTTP broadband internet to the community in the FTTP project will be a significant undertaking for the City. On June 19, 2023, Council approved the FY 2024 CIP Budget with both the new FTTP project, and Grid Modernization for Electrification Project. The approval of the electrification project accelerated efforts to align electrification and fiber construction, which impacted the Fiber Expansion Plan. Staff was directed to explore opportunities to align the grid modernization project and projects under the Fiber Expansion Plan to help minimize utility engineering pole make-ready work, pole replacements, noise disruption, and construction activity in neighborhoods. 2 Staff Report ID 14800 https://www.cityofpaloalto.org/files/assets/public/v/1/agendas-minutes- reports/reports/city-ma nager-reports-cm rs/2022/12-19-2022-id-14800. pdf Item 24: Staff Report Pg. 2 Packet Pg. 451 of 857 Item 24 Item 24 Staff Report On December 18, 20233, to execute on Council's direction, staff informed Council that a pilot would be deployed to evaluate how alignment of fiber and grid modernization projects may help control project costs, minimize construction impacts to the community, and prevent major delays. Activities essential to the roll -out of the pilot were highlighted as well, such as the California Environmental Quality Act (CEQA) determination and purchase of a fiber hut. ANALYSIS Fiber -to -the -Premises consists of the construction of a fiber optic backbone and fiber distribution infrastructure to provide communication services throughout the City of Palo Alto. FTTP would provide municipal high-speed internet service to residences and businesses in Palo Alto. The proposed project includes the following main components: 1. Installation of approximately 194 miles of fiber optic cables (consisting of about 90 miles of below -ground installation and 104 miles of aerial installation using existing utility poles); 2. Installation of approximately two local aggregation sites either inside modular communications shelters (i.e., fiber huts) or enclosed within existing commercial buildings; 3. Installation of approximately 4,200 underground utility vaults and 147 aboveground utility cabinets; and, 4. Fiber internet connections directly to subscribing customers' homes and/or businesses ("subscribers") The fiber hut is a critical element of the FTTP network design because it serves as the local aggregation site for up to 15,000 customers. A fiber hut is usually a modular building (approximately 11'W x 20'L x 10'H) containing communications equipment, racks, power, fire suppression, and fiber terminations that connects to fiber distribution cabinets throughout the neighborhoods. Huts may also contain backup generators and HVAC systems to maintain equipment within its operating environmental specifications, and equipment for electrical needs. The Colorado substation was selected as an ideal location due to its proximity to the area it serves and its current use for utilities. Fiber hut vendors are specialized to design and install these modular buildings customized to the needs of the fiber network design. As a result, the City works closely with the vendor on the requirements and hut designs are finalized upon vendor selection. Procurement Process City staff posted a formal request for proposals on February 28, 2024 on the City of Palo Alto's e - procurement website (OpenGov). 3 December 18, 2023 https://www.cityofpaloalto.org/files/assets/public/v/1/agendas-minutes- reports/reports/city-ma nager-reports-cm rs/2023/12-11-2023-id-2309-2094. pdf Item 24: Staff Report Pg. 3 Packet Pg. 452 of 857 Item 24 Item 24 Staff Report Due to the limited number of suppliers and extended lead time (24 — 52 weeks), the City requested quotes for both new and refurbished fiber huts. The City received two (2) bids. Cell Site proposed a refurbished hut at a lower price ("$50k less) but staff had concerns about the durability of the hut due to its age (21 years), previous climate wear and tear, and limited warranty. Thermo Bond proposed a new hut based on the City's specifications including the alternate bid items (DC power distribution system and AC inverter) which are required to provide power and air conditioning to the hut. Staff recommends the new fiber hut from Thermo Bond since the hut may potentially be in place for several decades to enable municipal fiber internet service up to 15,000 customers. Entitlement Process A minor architectural review application is required for the proposed hut. Once a design is developed, City of Palo Alto Utilities would submit a Minor Architectural Review application to Planning for staff review and the Director's approval. FISCAL/RESOURCE IMPACT Funding for this contract is available in the Fiscal Year 2024 Capital Improvement Plan budget for the Fiber -To -The -Premises "FTTP" Capital Project (FO -24000). Additional services of $31,384 is requested for any unforeseen shipping and crane -off loading services which will depend on the carrier, location and site layout. The purchase order pricing is not currently guaranteed for these services. Any unused amount for additional services will be returned to the FTTP CIP project. STAKEHOLDER ENGAGEMENT Staff continues to engage with the community on the FTTP and Grid Modernization Projects primarily through the City's Finance Committee and Utilities Advisory Commission discussions which are open to the public to participate and share feedback. On November 7, 2023, the Finance Committee was updated on the Fiber Master Plan, which included the pilot program area to align FTTP with the Electric grid modernization project. The Finance Committee provided feedback on timeline, costs, and alignment of FTTP to grid modernization (Staff Report #2309-20824). In addition, staff continues to share updates through the Palo Alto Fiber project webpage5, City communications channels such as social media6, Medium.com blog7 and interactive Palo Alto Fiber Hub8. 4 Finance Committee staff report 2309-2082, https://www.citvofpaloalto.org/files/assets/public/v/1/agendas- minutes-reports/reports/city-manager-reports-cmrs/2023/11-7-2023 2309-2082-mini-packet.pdf 5 Palo Alto Fiber Webpage, https://www.cityofpaloalto.org/paloaltofiber 6 City Social Media Channels, https://www.cityofpaloaIto.org/connect 7 Palo Alto Connect, https://medium.com/@paloaltoconnect 8 Palo Alto Fiber Hub, https://fiber-palo-alto.hub.arcgis.com/ Item 24: Staff Report Pg. 4 Packet Pg. 453 of 857 Item 24 Item 24 Staff Report ENVIRONMENTAL REVIEW The FTTP Project has been assessed in accordance with the authority and criteria contained in the California Environmental Quality Act (CEQA), the State CEQA Guidelines, and the environmental regulations of the City. An Initial Study -Mitigated Negative Declaration has been prepared and was circulated for a 30 -day public review beginning on May 1, 2024, and ending on May 31, 2024. A final IS/MND that incorporated revisions, as appropriate, based on public comments was published on June 6, 2024. The analysis in the IS/MND includes evaluation of the fiber hut. The IS/MND concludes that no significant and unavoidable impacts are anticipated for the proposed project. Mitigation is incorporated to mitigate potential impacts on air quality, biological resources, cultural resources, geology and soils, hazards and hazardous materials, hydrology and water quality, Transportation, and tribal cultural resources to a less than significant level as detailed in the Resolution in Attachment A and the related Mitigation Monitoring and Reporting Plan (MMRP) (Attachment B). The City received five comments letters on the proposed project during the MND circulation period. These comments were from one member of the public and four responsible agencies for the proposed project: Caltrans, Valley Water, Santa Clara County, and California Department of Fish and Wildlife (CDFW). Comments from the member of the public were not related to the environmental analysis. Comments from the responsible agencies primarily indicated the permits that would be required for work in certain areas for which they have jurisdiction. Comments from CDFW recommended additional measures for the protection of Crotch's Bumble Bee, California Ridgeway's Rail and Black Rail. While the City concluded that impacts on these species would be less than significant, the city has agreed to implement these additional measures to further reduce impacts on those species. This is detailed further in the Final MND. An e-mail has been sent to each commenter responding to their comments and, where applicable, indicating where their comments have been addressed in the Final MND. A link to the Final IS/MND and MMRP are included in the City of Palo Alto Fiber webpage9 ATTACHMENTS Attachment A: Resolution Approving the IS/MND for the FTTP Project Attachment B: Mitigation Monitoring and Reporting Plan Attachment C: Purchase Order 4524000496 with Thermo Bond Buildings APPROVED BY: Dean Batchelor, Director of Utilities Staff: Dave Yuan, Strategic Business Manager 'City of Palo Alto Fiber Webpage, https://www.cityofpaloalto.org/paloaltofiber Item 24: Staff Report Pg. 5 Packet Pg. 454 of 857 Item 24 Attachment A - *NOT YET APPROVED* Resolution Adopting the nt A Fiber to the Premises Resolution No. Project Resolution of the Council of the City of Palo Alto Adopting the Fiber to the Premises Project Mitigated Negative Declaration for which an Initial Study was Prepared, in accordance with the California Environmental Quality Act and Adopting a Related Mitigation, Monitoring and Reporting Program A. Prior to the adoption of this Resolution, the City of Palo Alto prepared an Initial Study and approved for circulation a Mitigated Negative Declaration for the Fiber to the Premises Project, (the "Initial Study/Mitigated Negative Declaration") all in accordance with the requirements of the California Environmental Quality Act of 1970, together with state and local guidelines implementing said Act, all as amended to date (collectively "CEQA"). B. The Fiber to the Premises Project analyzed under the Initial Study/Mitigated Negative Declaration would involve the installation of approximately 194 miles of fiber optic cables, both below ground and aerial, installation of approximately 4200 underground utility vaults and 147 aboveground utility cabinets, and installation of approximately two local aggregation sties either inside modular communication shelters ("fiber huts") or enclosed within existing commercial buildings. A more detailed description of the Project is set forth in the Initial Study/Mitigated Negative Declaration. C. The draft Initial Study/Mitigated Negative Declaration was made available for public comment from May 1, 2024 through May 31, 2024. D. The City of Palo Alto considered the comments received during the public review period and prepared a final Initial Study/Mitigated Negative Declaration, published June 6, 2024. The Initial Study/Mitigated Negative Declaration concluded that implementation of the Project could result in a number of significant effects on the environment and identified mitigation measures that would reduce each of those significant effects to a less -than -significant level. F. In connection with the approval of a project involving the preparation of an initial study/mitigated negative declaration that identifies one or more significant environmental effects, CEQA requires the decision -making body of the lead agency to incorporate feasible mitigation measures that would reduce those significant environmental effects to a less -than - significant level. G. Whenever a lead agency approves a project requiring the implementation of measures to mitigate or avoid significant effects on the environment, CEQA also requires the lead agency to adopt a mitigation monitoring and reporting program to ensure compliance with the mitigation measures during project implementation, and such a mitigation monitoring and 027060524 1 Item 24: Staff Report Pg. 6 Packet Pg. 455 of 857 Item 24 Attachment A - *NOT YET APPROVED* Int A Resolution Adopting the Fiber to the Premises reporting program has been prepared for the Project for consideration by tiL Project body of the City of Palo Alto as lead agency for the Project (the "Mitigation Monitoring and Reporting Program" or "MMRP"). H. The City of Palo Alto is the lead agency on the Project, and the City Council is the decision -making body for the proposed approval of the Project. I. The City Council has reviewed and considered the Initial Study/Mitigated Negative Declaration and related Mitigation Monitoring and Reporting Program for the Project, together with comments received on the Initial Study/Mitigated Negative Declaration, and intends to take actions on the Project in compliance with CEQA and state and local guidelines implementing CEQA. J. The Initial Study/Mitigated Negative Declaration and related Mitigation Monitoring and Reporting Program for the Project are on file at the City of Palo Alto Development Center, 285 Hamilton Avenue -- Ground Floor Palo Alto, CA 94301, and are available for inspection by any interested person at that location, and are, by this reference, incorporated into this Resolution as if fully set forth herein. The Council of the City of Palo Alto does hereby RESOLVE as follows: SECTION 1. THE CITY COUNCIL does hereby make the following findings: (1) it has independently reviewed and analyzed the Initial Study/Mitigated Negative Declaration and other information in the record and has considered the information contained therein, prior to acting upon or approving the Project, (2) the Initial Study/Mitigated Negative Declaration prepared for the Project has been completed in compliance with CEQA and is consistent with state and local guidelines implementing CEQA, and (3) the Initial Study/Mitigated Negative Declaration represents the independent judgment and analysis of the City of Palo Alto, as lead agency for the Project. The City Council designates the Director of Planning and Development Services, at 250 Hamilton Avenue, 5th Floor, Palo Alto, CA 94301, as the custodian of documents and records of proceedings on which this decision is based. // // // // // // 027060524 L Item 24: Staff Report Pg. 7 Packet Pg. 456 of 857 Item 24 Attachment A - *NOT YET APPROVED* Resolution Adopting the ntA Fiber to the Premises SECTION 2. THE CITY COUNCIL does hereby find that based upon Project f proceedings before it and all information received that there is no substantial evidence that the Project will have a significant effect on the environment and does hereby adopt the Mitigated Negative Declaration and related Mitigation Monitoring and Reporting Program prepared for the Project. The Initial Study/Mitigated Negative Declaration is available for viewing at City of Palo Alto Development Center, 285 Hamilton Avenue -- Ground Floor, Palo Alto, CA 94301. INTRODUCED AND PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: City Clerk APPROVED AS TO FORM: Assistant City Attorney Mayor APPROVED: City Manager Director of Planning and Development Services Director of Utilities 027060524 J Item 24: Staff Report Pg. 8 Packet Pg. 457 of 857 Item 24 Attachment B - Mitigation Monitoring and Reporting Plan CITY OF PALO ALTO PROJECT NAME APPLICANT MITIGATION MONITORING + REPORTING PROGRAM Fiber -to -the -Premises Project City of Palo Alto Public Works Utilities Division 250 Hamilton Avenue Palo Alto, California 94301 SCH NUMBER DATE 2024050007 May 31, 2024 The Initial Study - Mitigated Negative Declaration (IS-MND) for the Fiber -to -the -Premises Project identifies mitigation measures that will be implemented to reduce the environmental impacts associated with the project. California Environmental Quality Act (CEQA) Section 21081.6 requires a public agency to adopt a monitoring and reporting program for assessing and ensuring compliance with any required mitigation measures applied to proposed development. As stated in section 21081.6(a)(1) of the Public Resources Code, "... the public agency shall adopt a reporting or monitoring program for the changes made to the project or conditions of project approval, adopted in order to mitigate or avoid significant effects on the environment." Section 21081.6 also provides general guidelines for implementing mitigation monitoring programs and indicates that specific reporting and/or monitoring requirements, to be enforced during project implementation, shall be defined as part of adopting a Mitigated Negative Declaration. The mitigation monitoring table lists those mitigation measures that would be included as conditions of approval for the project. To ensure that the mitigation measures are properly implemented, a monitoring program has been devised which identifies the timing and responsibility for monitoring each measure. Item 24: Staff Report Pg. 9 Packet Pg. 458 of 857 Item 24 Attachment B - Mitigation Monitoring and Reporting Plan CITY OF PALO ALTO MITIGATION MONITORING + REPORTING PROGRAM Mitigation Measure Responsible for Timing of Oversight of Number Mitigation Measure Text Implementation Compliance Implementation AIR QUALITY AIR -2a As part of the City's development approval process, the City shall Applicant or During City of Palo Alto require applicants for future development projects to comply with the designee/ construction Planning current BAAQMD basic control measures for reducing construction Construction Department emissions of PM10 (Table 8-1, Basic Construction Mitigation Measures contractor Recommended for All Proposed Projects, of the BAAQMD CEQA Guidelines). BIOLOGICAL RESOURCES BIO-1 If project activities are within 200 feet of rail habitat (tidal and brackish Applicant or Prior to and City of Palo Alto marshes with unrestricted daily tidal flows) during the nesting season designee/ during Planning (February 1 to August 31), then pre -construction call back rail surveys Construction construction Department shall be required prior to initiation of project activities. If rails are contractor detected through surveys, then project activities shall not occur within 100 feet of an identified detection location. If the activity occurs where the project site is across a major channel or slough from the project site greater than 100 feet in distance the activity may continue. If bird activity is surveyed or discovered within the buffer limits immediate consultation with CDFW shall be required. If a rail is observed within the project area during project construction or maintenance work shall be stopped immediately by a qualified biologist and the rail species shall be allowed to leave the area on its own. If the rail species does not leave the area, then no work shall commence until CDFW has determined how to proceed with work activities. Examples of how CDFW may determine work activities proceed include installation of a temporary noise barrier to reduce construction noise or postponing construction in the area until outside of the nesting season. Daily monitoring surveys of project site within 200 feet of rail habitat shall occur for rail until project construction is complete. Item 24: Staff Report Pg. 10 Packet Pg. 459 of 857 Item 24 Attachment B - Mitigation Monitoring and Reporting Plan Mitigation Measure Responsible for Timing of Oversight of Number Mitigation Measure Text Implementation Compliance Impiementatio� BIO-2 Prior to initiating construction activities west of Interstate 280 that involve ground disturbance off existing roadway surfaces, sidewalks, maintained lawns and landscaping, or existing utility pads, a qualified biologist or botanist shall conduct a protocol -level survey of the proposed disturbance area to confirm the absence of special -status plant species. The survey shall cover the entire area of ground disturbance and shall occur when above ground plant material is evident and when identifying features, such as flowers and fruit, are identifiable. Multiple site visits during the survey season may be necessary to make observations during the appropriate phenological stage of all special - status plant species. Protocols for Surveying and Evaluating Impacts to Special Status Native Plant Populations and Sensitive Natural Communities (CDFW 2018) shall be used to develop appropriate protocol -level surveys. If special -status plant species are detected during the survey, the biologist or botanist shall establish a buffer around the plant or plants in which no construction or ground disturbance shall occur. The buffer size or distance shall be at the discretion of the biologist or botanist based upon review of site -specific conditions (e.g. special -status plants located downstream or in lower elevational areas in relation to the impact location, special -status plants being down wind of earth moving activities, and other conditions). Prior construction or issuance of construction permits (whichever occurs first) in the applicable areas west of Interstate 280, the biologist or botanist shall submit a report indicating the results of the survey and designated buffer zones to the satisfaction of the City of Palo Alto. Additionally, prior to construction or issuance of construction permits (whichever occurs first) a review of protocol -level survey results shall be conducted to establish appropriate compensatory mitigation ratios specific to each special -status plant species. Compensatory mitigation ratios shall be developed based on the biological factors specific to each species and should be sufficient to compensate for the loss of those species. Compensatory mitigation ratios shall be approved by CDFW unless CDFW delegates approval to the City of Palo Alto. BIO-3 Prior to initiating construction activities west of Interstate 280 that involve ground disturbance off existing roadway surfaces, sidewalks, maintained lawns and landscaping, or existing utility pads, a habitat assessment shall be conducted by a qualified entomologist with knowledge of the life history and ecological requirements of Crotch's bumble bee (Bombus crotchii). The habitat assessment shall include suitable nesting, overwintering, and foraging habitats within the project area. Potential nest habitat (February through October) could include that of other Bombus species such as bare ground, thatched grasses, Applicant or designee/ Construction contractor Applicant or designee/ Construction contractor Prior to issuance of construction permits and during construction Prior to issuance of construction permits and during construction City of Palo Alto Planning Department City of Palo Alto Planning Department City of Palo Alto • Mitigation Monitoring + Reporting Program ° a g e 1 3 Item 24: Staff Report Pg. 11 Packet Pg. 460 of 857 Item 24 Attachment B - Mitigation Monitoring and Reporting Plan Mitigation Measure Responsible for Timing of Oversight of Mitigation Measure Text Number Implementation Compliance Implementation abandoned rodent burrows or bird nests, brush piles, rock piles, and fallen logs. Overwintering habitat (November through January) could include that of other Bombus species such as soft and disturbed soil or under leaf litter or other debris. The habitat assessment shall be conducted during peak bloom period for floral resources on which Crotch's bumble bee feed, and shall be based on guidance provided within Survey Considerations for California Endangered Species Act (CESA) Candidate Bumble Bee Species (CDFW 2023). If the habitat assessment identifies suitable nesting, foraging, or overwintering habitat within the work area, a qualified entomologist familiar with the species behavior and life history shall perform a minimum of three on -site surveys within the identified habitat prior to vegetation removal and/or grading to determine the presence/absence of Crotch bumble bees. Each survey shall ideally be spaced 2- to 4 weeks apart during the Colony Active Period (April --August) (CDFW 2023). Surveys shall occur during the day (at least an hour after sunrise and at least two hours before sunset, though ideally between 9:00 a.m. to - 1:00 p.m.) on warm, but not hot, sunny days (65 to 90 degrees Fahrenheit), with low wind (less than 8 miles per hour). The entomologist shall take photos of bumble bees or bumble bee resources observed during the surveys and during the initial habitat assessment. Where bumble bees have been identified by the qualified entomologist during the on -site surveys, ground disturbing activities shall be restricted to the period when bumble bees are active (during the flight period of listed bee species). No ground disturbance shall occur from November 1st to February 15th to accommodate the overwintering period. If Crotch's bumble bee nests are observed on site or 'take' could occur, a 50 -foot avoidance buffer shall be installed and CDFW shall be notified to determine next steps for relocation and/or avoidance. If no Crotch bumble bees are found during the multiple rounds of focused surveys, but the habitat assessment identified suitable nesting, foraging, or overwintering habitat within the work area, a biological monitor shall be onsite during vegetation removal or ground disturbing activities that take place during the Queen and Gyne Flight Period and Colony Active Period (April —August). BIO-4 Prior to the issuance of tree removal, tree trimming, or other Applicant or Prior to tree City of Palo Alto construction and activities or the issuance of project permits (whichever designee/ and Planning comes first), the project applicant shall schedule all construction Construction vegetation Department activities to avoid the nesting season. The nesting season for most birds, contractor removal of including most raptors in the San Francisco Bay area, extends from issuance of February 1st through August 31st (inclusive). Construction activities construction permits City of Palo Alto • Mitigation Monitoring + Reporting Program P a g e 1 4 Item 24: Staff Report Pg. 12 Packet Pg. 461 of 857 Item 24 Attachment B - Mitigation Monitoring and Reporting Plan Mitigation Measure Responsible for Timing of Oversight of Mitigation Measure Text Number Implementation Compliance Implementation include site disturbance such as, but not limited to, tree trimming or removal, trenching, boring, and drilling. If construction activities cannot be scheduled between September 1st and January 31st (inclusive), pre -construction surveys for nesting birds shall be completed by a qualified ornithologist or biologist to ensure that no active nests shall be disturbed during construction activities. This survey shall be completed no more than 14 days prior to the initiation of construction activities during the early part of the breeding season (February 1st through April 30th inclusive) and no more than 30 days prior to the initiation of these activities during the late part of the breeding season (May 1st through August 31st inclusive). During this survey, the ornithologist/ biologist shall inspect all trees and other possible nesting habitats on -site and within 250 feet of the site for nests. If an active nest is found within 250 feet of the project area to be disturbed by construction, the ornithologist/biologist, in consultation with the California Department of Fish and Wildlife, shall determine the extent of a construction free buffer zone to be established around the nest, (typically 250 feet for raptors and 100 feet for other birds), to ensure that raptor or migratory bird nests shall not be disturbed during project construction. Prior to tree removal, or issuance of construction permits (whichever occurs first), the ornithologist/biologist shall submit a report indicating the results of the survey and designated buffer zones to the satisfaction of the City of Palo Alto. BIO-5 Prior to the trimming or removal of trees, a bat survey shall be Applicant or performed by a qualified biologist between March 1 and July 31. If bat designee/ roosts are identified, the bats shall be safely flushed from the sites Construction where roosting habitat is planned to be removed prior to roosting contractor season (typically May to August) and prior to the onset of construction activities. If maternity roosts are identified during the maternity roosting season (typically May to September) they shall remain undisturbed until a qualified biologist has determined the young bats are no longer roosting. If roosting is found to occur onsite, replacement roost habitat (e.g., bat boxes) shall be provided to offset roosting sites removed. If no bat roosts are detected, then no further action is required if the trees are removed prior to the next breeding season. If removal is delayed, an additional survey shall be conducted 30 days prior to removal to ensure that a new colony has not established itself. If impacts to roosts cannot be avoided or activities may cause roost abandonment, the bats shall be excluded from the roosting site before (whichever comes first) Buffers, if applicable, to continue during construction through nesting season Prior to City of Palo Alto trimming or Planning removing Department trees and during construction City of Palo Alto • Mitigation Monitoring + Reporting Program ° a g e 1 5 Item 24: Staff Report Pg. 13 Packet Pg. 462 of 857 Item 24 Attachment B - Mitigation Monitoring and Reporting Plan Mitigation Measure Responsible for Timing of Oversight of Mitigation Measure Text Number Implementation Compliance Implementation the roost is removed/impacted. Exclusionary materials, including, but not limited to, expandable foam and steel wool, shall be applied selectively and as needed until bats have relocated. Bats shall be excluded from the directly affected work areas prior to April 15 of the construction year, and exclusionary devices shall be removed between August 31 and April 15. Exclusion shall occur at dusk to allow bats to exit during the darker hours. BIO-6 If a stream crossing cannot be avoided through colocation with existing Applicant or infrastructure and requires the use of horizontal directional drilling, the designee/ following measures shall be incorporated into drilling procedures to Construction avoid or reduce impacts to receiving waters from bentonite release. In contractor addition, the project applicant shall obtain the necessary agency approvals for horizontal directional drilling activity, which may include additional controls/conditions. 1. Horizontal directional drilling staging areas and mud pits shall be located no closer than 20 feet to riparian zones, wetlands, creeks, and other surface waters. 2. A horizontal directional drilling foreman shall be present at all times during drilling operations, regardless of where the drilling occurs. 3. Geotechnical borings in the horizontal directional drilling affected areas shall be performed as part of the construction scope prior to the start of drilling operations. Geotechnical bore data shall provide information defining proper pipe depth as dictated by the soil strata characterization. 4. All horizontal directional drilling operations for the proposed project shall be guided by a tracking system consistent with best industry practices. The alignment shall be surveyed on foot by a team of personnel. Temporary surveyor stakes shall be placed strategically along the alignment to anchor the tracker wires. The alignment shall be accessed throughout the drilling operation to monitor for bentonite mud loss. 5. The drill rig operator shall monitor the equipment for loss of drilling lubricant pressure and volume. Members of the drill crew shall also monitor the alignment of the drill and visually inspect for indications of mud loss. 6. The drill rig operator shall monitor the bore hole to keep it free from obstructions that would inhibit the return of drilling lubricant to the rig. Prior to and City of Palo Alto during Planning construction Department City of Palo Alto • Mitigation Monitoring + Reporting Program 16 Item 24: Staff Report Pg. 14 Packet Pg. 463 of 857 Item 24 Attachment B - Mitigation Monitoring and Reporting Plan Mitigation Measure Responsible for Timing of Oversight of Mitigation Measure Text Number Implementation Compliance Implementation 7. Unless drilling operations are within 1 hour of completion, drilling shall be limited to the operation times of dawn to 30 minutes prior to dusk. CULTURAL RESOURCES CUL-1 An archaeological monitor having either a B.S. or B.A. in archaeology or Applicant or related field with at least 1 year of field experience shall be present designee/ during ground disturbing within the work locations listed below. The Construction monitor shall work under the direct supervision of a qualified contractor archaeologist having either a M.S. or MB.A. in archaeology or related field with at least 10 years of experience and demonstrated competence in archaeological research, fieldwork, reporting, and curation. The qualified archaeologist shall be on -site at the pre -construction meeting to discuss monitoring protocols. The archaeological monitor shall be present full-time during ground disturbance within site locations listed below, including but not limited to grading, trenching, utilities, and off - site easements. If, after excavation begins, the qualified archaeologist determines that the sediments is not likely to produce archaeological resources, monitoring efforts shall be decreased. The monitor shall be empowered to temporarily halt or redirect grading efforts if paleontological resources are discovered. In the event of an archaeological discovery the monitor shall flag the area and notify the construction crew immediately. No further disturbance in the flagged area shall occur until the qualified archaeologist has cleared the area and announced that construction can resume. In consultation with the qualified archaeologist, the monitor shall quickly assess the nature and significance of the find. If the specimen is not significant it shall be quickly mapped, documented, removed, and the area cleared. If the discovery is potentially significant the qualified archaeologist shall notify the construction crew and City of Palo Alto immediately. In consultation with the City the qualified archaeologist shall develop a plan of mitigation which will likely include full-time monitoring, salvage excavation, scientific removal of the find, removal of sediment from around the specimen (in the laboratory), research to identify and categorize the find, curation of the find in a local qualified repository, and preparation of a report summarizing the find. A Native American representative registered with the Native American Heritage Commission for the City of Palo Alto and that is traditionally and culturally affiliated with the project area shall be invited to work alongside the qualified archaeologist and have the same powers as the qualified archaeologist. Prior to and City of Palo Alto during Planning construction Department City of Palo Alto • Mitigation Monitoring + Reporting Program 17 Item 24: Staff Report Pg. 15 Packet Pg. 464 of 857 Item 24 Attachment B - Mitigation Monitoring and Reporting Plan Mitigation Measure Responsible for Timing of Oversight of Mitigation Measure Text Number Implementation Compliance Implementation The above mitigation activities shall be applied during construction in the following areas: • Within the rights -of -ways and adjacent to the rights -of -ways of West Charleston Avenue and Park Boulevard between West Charleston Avenue and Edlee Avenue. • The area between Oregon Expressway south to Moreno Avenue between Ross Road and Middlefield Road. • Within the right-of-way and adjacent to the right-of-way of Bryant Street within one block north and south of its intersection with University Avenue. • Within the right-of-way and adjacent to the right-of-way of University Avenue within one block east and west of its intersection with Bryant Street. If cultural resources are uncovered during construction anywhere in the project area, work shall be halted until the qualified archaeologist can assess the significance of the find and then apply the actions described in this mitigation measure, as applicable. CUL-2 Prior to the initiation of any site preparation and/or start of Applicant or Prior to and City of Palo Alto construction, the City of Palo Alto Public Works Utilities Division and/or designee/ during Planning its construction contractor(s) shall ensure that all project construction Construction construction Department workers receive training overseen by a qualified archaeologist who is contractor experienced in teaching nonspecialists, to ensure that forepersons and field supervisors can recognize archaeological resources in the event that any are discovered during construction. The City of Palo Alto Public Works Utilities Division and/or its construction contractor(s) shall keep a log or register to document that all construction workers have received the training. If potential archaeological resources are observed or reported by construction workers, the actions described in Mitigation Measure CUL-1 shall be applied to the resource or resources, as applicable. GEOLOGY AND SOILS GEO-1 If vertebrate fossils are discovered during construction, all work within Applicant or During City of Palo Alto 50 feet of the site shall stop immediately and the construction contract designee/ construction Planning shall immediately notify the City of Palo Alto. Before work resumes, a Construction Department qualified professional paleontologist shall assess the nature and contractor importance of the find and recommend appropriate treatment. Treatment may include, but is not limited to, preparation and recovery of fossil materials so that they can be housed in an appropriate museum or university collection and may also include preparation of a report for City of Palo Alto • Mitigation Monitoring + Reporting Program P a g e 1 8 Item 24: Staff Report Pg. 16 Packet Pg. 465 of 857 Mitigation Measure Mitigation Measure Text Number publication describing the finds. The project applicant shall be responsible for implementing the recommendations of the qualified paleontologist. A report of all findings shall be submitted to the City HAZARDS AND HAZARDOUS MATERIALS HAZ-1 A Soil Management and Transportation Plan (SMTP) shall be created for the project to assist construction workers in identifying potentially hazardous materials and guide the handling, storage, and transportation of materials excavated during fiber-optic infrastructure installation. The SMTP will detail the necessary actions to comply with applicable hazardous materials regulations, some of which include Health and Safety Code Section 25100 et seq. and Section 25163 et seq., 22 CCR 66263.10 et seq., 13 CCR 1160 et seq., California Vehicle Code Sections 12804 et seq., and 31300 et seq. The SMTP shall establish criteria for reuse of excavated materials or off -site transport for disposal at appropriate State -approved facilities. The SMTP shall be reviewed and approved by the City prior to the issuance of construction permits. Examples of the types of measures that the plan could include are: • Requirements for field screening to identify potentially contaminated soil; • Dust mitigation measures for earth moving activities that may include wetting and other forms of material stabilization; • Procedures for stockpiling and stockpile management to isolate apparently contaminated materials and minimize migration of those materials from stockpile areas; • Procedures for stockpile sampling and analysis to characterize the soil for appropriate transport and disposal; and • Identification of appropriate disposal facilities. HYDROLOGY AND WATER QUALITY HYD-1 Fuels and other fluids used for the operation of construction equipment, shall not be staged or stored within areas that the Federal Emergency Management Agency have mapped as special flood hazard areas. Likewise, equipment staging and storage shall not occur within areas subject to inundation from tsunami or seiche, as mapped by the California Department of Conservation. Bentonite mud and mud pits used for horizontal directional drilling shall be exempt from this mitigation measure because bentonite is non-toxic. Permanent project features containing fluids, such as the proposed fiber hut at Colorado Substation, but be raised such that they are above inundation elevations. Item 24 Attachment B - Mitigation Monitoring and Reporting Plan Responsible for Timing of Oversight of Implementation Compliance Implementation Applicant or Prior to City of Palo Alto designee/ issuance of Planning Construction construction Department contractor permits SMTP to be implemented during construction Applicant or During City of Palo Alto designee/ construction Planning Construction and operation Department contractor City of Palo Alto • Mitigation Monitoring + Reporting Program P a g e 1 9 Item 24: Staff Report Pg. 17 Packet Pg. 466 of 857 Mitigation Measure Mitigation Measure Text Number TRANSPORTATION TRA-1 Prior to project construction, the project applicant or its construction contractors shall coordinate with the applicable traffic regulatory agency (City of Palo Alto, County of Santa Clara, and Caltrans) regarding planned improvements near the fiber-optic facility to limit interference with the implementation of roadway improvements or trenching in nearly completed facilities. At a minimum, coordination shall include the following: • Circulation and detour plans shall be developed by the applicant to minimize impacts to local street circulation, including the use of signage and flagging to guide vehicles through and/or around the construction zone. Circulation and detour plans must be approved by the City prior to construction. • To minimize disturbances to traffic, throughout project construction, the construction staging areas shall be provided by the applicant and its contractors in locations that are not within travel lanes or paved shoulders of existing public roads. Construction staging areas shall not be located at transit stops or facilities. A traffic plan shall be prepared by the applicant that incorporates all of the above measures and any additional measures required by the City of Palo Alto. The project applicant shall provide the traffic plan to the City for review as part of the construction permit submittal. Both parties shall ensure that revisions are agreed upon and the final traffic plan is approved by both the applicant and the City of Palo Alto prior to the issuance of construction permits and the start of construction activities. TRIBAL CULTURAL RESOURCES TCR-1 In the event that cultural resources of Native American origin are identified during implementation of the proposed project, all earth - disturbing work within 50 feet of the find shall be temporarily suspended or redirected until an archaeologist and culturally affiliated Native American representative have evaluated the nature and significance of the find. If the City, in consultation with local Native Americans, determines that the resource is a tribal cultural resource and thus significant under CEQA, a mitigation plan shall be prepared and implemented in accordance with state guidelines and in consultation with local Native American group(s). The plan shall include avoidance of Item 24 Attachment B - Mitigation Monitoring and Reporting Plan Responsible for Timing of Oversight of Implementation Compliance Implementation Applicant or Prior to City of Palo Alto designee/ issuance of Planning Construction construction Department contractor permits and during construction Applicant or During City of Palo Alto designee/ construction Planning Construction Department contractor City of Palo Alto • Mitigation Monitoring + Reporting Program P a g e 1 10 Item 24: Staff Report Pg. 18 Packet Pg. 467 of 857 Mitigation Measure Number Mitigation Measure Text the resource or, if avoidance of the resource is infeasible, the plan shall outline the appropriate treatment of the resource in coordination with the culturally affiliated local Native American tribal representative and, if applicable, a qualified archaeologist. Examples of appropriate mitigation for tribal cultural resources include, but are not limited to, protecting the cultural character and integrity of the resource, protecting traditional use of the resource, protecting the confidentiality of the resource, or heritage recovery. Regardless of the plan developed, the City of Palo Alto shall maintain the confidentially of the resource. Item 24 Attachment B - Mitigation Monitoring and Reporting Plan Responsible for Timing of Oversight of Implementation Compliance Implementation City of Palo Alto • Mitigation Monitoring + Reporting Program P a g e 1 11 Item 24: Staff Report Pg. 19 Packet Pg. 468 of 857 Vendor Address City of Palo Alto Purchasing and Contract Administration P.O.Box 10250 Palo Alto CA 94303 Tel:(650)329-2271 Fax:(650)329-2468 THERMO BOND BUILDINGS LLC 1001 W MAIN ST ELK POINT SD 57025 Tel: 605-952-0070 Ship Tn. Utilities Department City of Palo Alto 250 Hamilton Avenue Palo Alto CA 94301 Rill Tn. Utilities Department City of Palo Alto 250 Hamilton Avenue Palo Alto CA 94301 Item 24 Attachment C - Purchase Order 4524000496 with Thermo Bonds Purchase Order P.O. NUMBER MUST APPEAR ON ALL INVOICES, PACKAGES, SHIPPING PAPERS AND CORRESPONDENCE PERTAINING TO THIS ORDER PO Number 4524000496 Date 06/03/2024 Vendor No. 108224 Payment Terms Payment Due 30 days FOB Point F.O.B. Palo Alto Ship via Vendor to ship bestway Required Date 11/18/2024 Buyer/Phone Renee Howard / 650-496-5900 Email renee.howard@cityofpaloalto.org DELIVERIES ACCEPTED ONLY BETWEEN 7:00 AM & 3:00 PM UNLESS OTHER ARRANGEMENTS ARE INDICATED HEREIN Item Material/Description Quantity UM Net Price Net Amount Award in accordance with Proposal No. 2401-30 dated March 14, 2024 and Staff Report 2403-2713 approved on June 18, 2024. PO NTE: $313,844.00 Upon notification of items shipping staff will advise the delivery address for all items. 0010 Fiber Hut 276,510 USE 1.00 276,510.00 Purchase and delivery of Fiber Hut for Fiber to the Premise project. - 11 #-6 "x20#x9# Shelter $204,375 Optional add on items: Generator 25kw diesel engine $43,335 Inverter - (1) 4K 120VAC inverter N + 1 $8,100 - DC Plant $20,700 500A Max Capacity 48VDC Plant configured for 300A N+ 1 100AH Lithium battery pack Project Manager: Dave Yuan (650) 329-2522 (MA Chief Procurement Officer THIS P.O. IS SUBJECT TO THE TERMS AND CONDITIONS STATED BELOW AND ON THE LAST PAGE SPECIFICATIONS - Any specification and /or drawings referred to and/or attached hereto are expressly made a part of this Purchase Order. DELIVERY - Please notify the City promptly if delivery cannot be made on or before the date specified. If partial shipment is authorized, so indicate on all documents. Complete packing lists must accompany each shipment. INVOICE - A separate invoice is required for each order. Send to address indicated above. Item 24: Staff Report Pg. 20 l Packet Pg. 469 of 857 City of Palo Alto Purchasing and Contract Administration P.O.Box 10250 Palo Alto CA 94303 Lf> oR�1 Tel:(650)329-2271 Fax:(650)329-2468 Vendor Address THERMO BOND BUILDINGS LLC 1001 W MAIN ST ELK POINT SD 57025 Tel: 605-952-0070 Ship Tn. Utilities Department City of Palo Alto 250 Hamilton Avenue Palo Alto CA 94301 Rill Tn. Utilities Department City of Palo Alto 250 Hamilton Avenue Palo Alto CA 94301 Item 24 Attachment C - Purchase Order 4524000496 with Thermo Bonds Purchase Order P.O. NUMBER MUST APPEAR ON ALL INVOICES, PACKAGES, SHIPPING PAPERS AND CORRESPONDENCE PERTAINING TO THIS ORDER PO Number 4524000496 Date 06/03/2024 Vendor No. 108224 Payment Terms Payment Due 30 days FOB Point F.O.B. Palo Alto Ship via Vendor to ship bestway Required Date 11/18/2024 Buyer/Phone Renee Howard / 650-496-5900 Email renee.howard a citvofpaloalto.o DELIVERIES ACCEPTED ONLY BETWEEN 7:00 AM & 3:00 PM UNLESS OTHER ARRANGEMENTS ARE INDICATED HEREIN Page 2 of 2 Item Material/Description Quantity UM Net Price Net Amount Email: dave.yuan@cityofpaloalto.org TOTAI NTE: $313,844.00 0020 Shipping (Estimated) 21,999 USE 1.00 21,999.00 0030 Crane Off Loading (Estimated) 15,335 USE 1.00 15,335.00 Sub-Total ------------------------- 313,844.00 Sales Tax 25,231.54 ** ORDERING VIA EMAIL * * * * * * PRICE HAS BEEN QUOTED * * * * (,;1M Al AAAIA A Total 339,075.54 vVL�NW • ' '-'47'W V ' Chief Procurement Officer THIS P.O. IS SUBJECT TO THE TERMS AND CONDITIONS STATED BELOW AND ON THE LAST PAGE SPECIFICATIONS - Any specification and /or drawings referred to and/or attached hereto are expressly made a part of this Purchase Order. DELIVERY - Please notify the City promptly if delivery cannot be made on or before the date specified. If partial shipment is authorized, so indicate on all documents. Complete packing lists must accompany each shipment. INVOICE - A separate invoice is required for each order. Send to address indicated above. Item 24: Staff Report Pg. 21 1 Packet Pg. 470 of 857 TERMS AND CONDITIONS OF PURCHASE Item 24 Attachment C - Purchase ACCEPTANCE/AGREEMENT: City of Palo Alto (City) reserves the right to reject any and all quotations, to waive any informalities, and, unless otherwise specified by Seller, to accept any item in a quotation. By accepting or filing this Purchase Order (P.O.), Seller agrees to the terms and conditions herein which shall prevail over any inconsistent provision in any form or other paper submitted by Seller. All shipments or services performed shall be deemed to have been made pursuant hereto. No other terms are acceptable. This P.O., including all specifications and drawings, shall constitute the entire agreement between the parties unless modified in writing by City. CITY'S PROPERTY: Seller agrees that the information, tools, jigs, dies, or materials, and drawings, patterns, and specification supplied or paid for by City shall be and remain City property and shall be held by Seller for City unless directed otherwise. Seller shall account for such items and keep them protected, insured, and in good working conditions without expense to City. DELIVERY: The terms of delivery are as stated on the reverse side hereof. The obligation of Seller to meet the delivery dates, specifications, and quantities set forth herein is of the essence of this P.O. No boxing, packing, or cartage charge will be allowed unless authorized by this P.O. Deliveries are to be made both in quantities and at times specified herein or, if not, such quantities and times are specified pursuant to City's written instruction. Items not delivered may be canceled without penalty to City. Shipments in greater or lesser quantity that ordered may be returned at Seller's expense unless written authorization is issued by City. PRICES: The price which Seller charges in filling this P.O. shall not be higher than Seller's most recent quote or charge to City for such materials, supplies, services and/or installations unless City expressly agrees otherwise in writing. Notwithstanding the prices set forth the P.O. City shall receive the benefit of any general reduction in the price of any item(s) listed herein which may be made by Seller at any time prior to the last delivery of goods or services covered by this P.O. TERMINATION: City shall have the right to terminate this P.O. or any part thereof upon ten (10) days notice in writing to Seller. (1) Without ca...P City may terminate all or any part of this P.O. without cause. Any claim by Seller for damages due to termination without cause must be submitted to City within thirty (30) days after effective date of termination. (2) For f:ai cP If Seller fails to make any delivery in accordance with the agreed delivery date, delivery schedule, or otherwise fails to observe or comply with any of the other instructions, terms, conditions or warranties applicable to this P.O., City may, in addition to any other right or remedy provided by this P.O. or by law, terminate all or any part of this P.O. in writing without any liability of City with respect to Seller at any time during the term of this P.O. In the event of termination for cause, City may purchase supplies or services elsewhere on such terms or in such manner as City may deem appropriate and Seller shall be liable to City for any cost and other expenses incurred by City, which is charged to City. CHANGES: City shall have the right at any time by written notice via P.O. Change Order to Seller to make changes in the specifications, the quantity of items called for, delivery schedules, and requirements covering testing, packaging, or destination. Any claim by Seller for adjustment under this clause shall be deemed waived unless made in writing with then (10) days after receipt by Seller of notice of such change. Price increases or extensions of time for delivery shall not be binding on City unless evidenced by a P.O. Change Order issued by City's Purchasing Manager. INSPECTION: City shall have the right to inspect and approve or reject any materials, supplies, services and/or installations upon arrival of notice of completion prior to payment without regard to the manner of shipment, completion, or any shipping or price terms contained in this P.O. All materials, supplies, services and/or installations must be furnished as specified. (1) Defective, damaged, and nonconforming materials and/or supplies may be returned for credit or refund, at Seller's expense. City may charge Seller for all expenses of unpacking, examining, repacking and reshipping of such materials and/or supplies. (2) Defective, incorrect and nonconforming services and/or installations may be returned for credit or refund, at Seller's expense. All of the nhnww nofwithvranding,prior payw r t hhy Tity WARRANTY: Seller expressly warrants that all /or Order 4524000496 with installations covered by this P.O. shall: (1) conform to the specifications, drawing Thermo Bonds .2 specified by City or if none are so specified, to Seller's standard specification or the standards of the ASTM or ANSI or other national standard organizations; (2) be new and unless specified to the contrary on the face hereof, will be free from defects in material and workmanship and will be free of all liens and encumbrances and will conform to any affirmation of facts made on the container or label; (3) be adequately contained, packaged, marked, labeled and/or provided in compliance with all applicable federal and state laws and regulations (including materials deemed hazardous); (4) be performed within the rules and regulations of the Occupational Safety and Health Act of 1970 (as amended); (5) be produced or transferred or disposed of as required by federal and state laws and regulation under the conditions of the Toxic Substances Control Act; the Hazardous Materials Control and Hazardous Waste Regulations; and other toxic laws and programs. Seller further expressly agrees to protect, indemnify, and hold harmless City, its employees and agents for any loss, damage, fine, liability, fee (including reasonable charges and fees) or expense arising in connection with or resulting from Seller's failure to furnish materials or supplies or perform services that conform with any warranty contained herein. (6) have good marketable title. GOVERNING LAW: This P.O. shall be governed by the laws of the State of California. INDEPENDENT CONTRACTOR, INSURANCE: Seller certifies, by acceptance, that he/she is an independent contractor. Seller shall protect, defend, and indemnify and hold City harmless against all damages, liability, claims, losses and expenses (including attorney's fees) arising out of , or resulting in any way from Seller's negligence in providing the goods or services purchased hereunder or from any act or omission of Seller, its agents, employees, or subcontractors, Seller shall maintain such public liability insurance, including contractual liability, automobile and general public liability, (including non -owned automobile liability) Worker's Compensation, and employer's liability insurance as well adequately protect City against such damage, liabilities, claims, losses, and expenses (including attorney's fees). Seller agrees to submit certificates of insurance, evidencing its insurance coverage when requested by City. EQUAL OPPORTUNITY CLAUSE: By acceptance of this P.O., Seller certifies it is in compliance with the Equal Opportunity Clause required by Executive Order 11246, as amended, and the Palo Alto Municipal Code, as amended, including Affirmative Action Compliance Programs for Veterans; Handicapped; and Minority Business, and other equal opportunity programs. FORCE MAJEURE: City may delay delivery or acceptance occasioned by causes beyond its control. Seller shall hold such materials, supplies, services and or installations at the direction of City and shall deliver them when the cause affecting the delay has been removed. City shall be responsible only for Seller's direct additional costs in holding the goods or delaying performance of this P.O. and City's request. Seller shall also be excused if delivery is delayed by unforeseen events beyond its reasonable control, provided Seller notifies City as soon as they occur. City may cancel this P.O. if such delay exceeds thirty (30) days from the original delivery date. Seller shall use its best efforts to grant preference to this P.O. over those of other customers, which were placed after this P.O. AUTHORITY OF AGENT OR FACTOR: Seller represents that, whenever it executes this P.O. on behalf of a third party as an agent or factor, it shall disclose the existence of the agency or factor relationship to City. Seller shall be deemed to have the legal authority to enter into this P.O. with City on behalf of the third party. INTERPRETATION OF CONTRACT DOCUMENTS: In the event of a conflict between the terms of this P.O. and the attached specification with respect to any obligation of Seller, the provision which impose the greater obligations upon Seller shall prevail. CITY OF PALO ALTO PAGE 1 OF 3 GDS Rev. 06/22/2016 Item 24: Staff Report Pg. 22 Packet Pg. 471 of 857 TERMS AND CONDITIONS OF PURCHASE Item 24 Attachment C - Purchase ENVIRONMENTALLY PREFERRED PURCHASING REQUIREMENTS: Seller agrees to comply with the City's Environmentally Preferred Purchasing Requirements. (1) Ha,ardni a Wnsrar Seller shall take -back all spent or otherwise discarded hazardous products sold to the City by the Seller if the spent or discarded products are classified as hazardous or universal wastes by State or Federal regulations. Seller shall provide convenient collection and recycling services (or disposal services if recycling technology is unavailable) for all universal wastes, which originate from the Vendor. Hazardous waste manifests or bills of lading must be provided to City staff upon request. Recycling and reuse of hazardous wastes must occur within the United States. Universal waste lists and information are available www.dtsc.ca.gov/HazardousWaste/UniversalWaste/. A hazardous waste list is available at http://www.calrecycle.ca.gov/LEA/Training/wasteclass/yep.htm. Additional information can be obtained by contacting the City of Palo Alto Hazardous Waste Department at (650) 496-6980. (2) Tarn Wasto and Pnlli ifinn Pravantinn Per Palo Alto City Council policy, the City is targeting to achieve Zero Waste by 2021. The City must also meet Municipal Regional Stormwater Permit requirements requiring no visible impact from litter via stormdrains by 2022. To that end the vendor, manufacturer and or contractor must individually or collaboratively comply with the waste reduction, reuse and recycling requirements of the City's Zero Waste and Pollution Prevention Programs. Seller acknowledges and agrees that if Seller fails to fully and satisfactorily comply with these requirements, the City will suffer, as a result of Seller's failure, substantial damages which are both extremely difficult and impracticable to ascertain. Therefore, the Seller agrees that in addition to all other damages to which the City may be entitled, in the event Seller fails to comply with the below requirements Seller shall pay City as liquidated damages the amounts specified below. The liquidated damage amount is not a penalty but considered to be a reasonable estimate of the amount of damages City will suffer as a result of such non-compliance. • Sellers shall adhere to the standard that all printed materials provided to the City that are generated from a personal computer and printer including, proposals, quotes, invoices, reports, and public education materials shall be double -sided, printed on a minimum of 30% post -consumer content paper or greater unless otherwise approved by the City's Environmental Services Division (650) 329-2117. Materials printed by a professional printing company shall be a minimum of 30% post -consumer material or greater and printed with vegetable based inks. Liquidated damages of $30 per document will be assessed by City for failure to adhere to this requirement. • All paper packaging must be Forest Stewardship Council (FSC) Certified. • All primary, secondary and shipping (tertiary) packaging be minimized to the maximum extent feasible while protecting the product being shipped. • All primary, secondary and shipping packaging shall be recyclable in the City's recycling program. A complete list of items accepted for recycling are found at www.zerowastepaloalto.org or by calling (650) 496-5910. If any portion is received that does not meet this requirement, liquidated damages of $235 or a minimum of $50 if the combined product and shipping cost is $235 or less will be assessed by City for failure to adhere to this requirement. • Expanded foam plastics (e.g., foam or cushion blocks, trays, packing 'peanuts'), such as but not limited to polystyrene (aka Styrofoam[tm]), polypropylene, or polyurethane shall not be used as primary, secondary or tertiary/shipping packaging with the following exceptions: o Primary packaging made from these materials may be used if the vendor, manufacturer, contractor individually or collaboratively does one of the following: (a) takes the material back at the City's convenience and at no cost to the City, or (b) pays the City of Palo Alto's disposal costs via payment of liquidated damages of $235, or a minimum of $50 if the combined product and shipping cost is $235 or less. o Bioplastics that meet ASTM D6400 standards for compostability may be accepted with approval from the City's Environmental Services Division subject to local municipal compost facility requirements. o If approved by the City's Environmental Services Division, a packaging requirement may be waived if no other viable packaging alternative exists. • Reusable/returnable pallets shall be used an I additional Order 4524000496 with cost to the City. Seller shall provide documents In of pallets and/or recycling of broken pallets. Liquidated d Thermo Bonds of $50 if the combined product and shipping cost is $262 or less will be assessed by City for failure to adhere to this requirement. (3) Fnorny and Wafer FffiniannvL Seller shall provide products with an ENERGY STAR, Water Sense or State of California standard rating, whichever is more efficient, when ratings exist for those products. A life cycle cost analysis shall be provided to the City upon request and shall at minimum include: first cost, operating costs, maintenance costs, and disposal costs. Contacts for additional information about City of Palo Alto Hazardous Waste, Zero Waste and Utilities programs: Hazardous Waste Program (Public Works) (650) 496-6980 Zero Waste Program (Public Works) (650) 496-5910 Watershed Protection (650) 329-2117 Energy Efficiency (650) 496-2244 (4) I^niadafad fluwups Seller agrees that failure to comply with the City's Environmentally Preferred Purchasing Requirements will result in Liquidated Damages, according to the table marked Liquidated Damages on page 3 of this P.O. CITY OF PALO ALTO PAGE 2 OF 3 GDS Rev. 06/22/2016 Item 24: Staff Report Pg. 23 Packet Pg. 472 of 857 TERMS AND CONDITIONS OF PURCHASE NONCOMPLIANCE WITH ENVIRONMENTALLY PREFERRED PURCHASING REQUIREMENTS, LIQUIDATED DAMAGES: The following table lists the events that constitute breaches of the Agreement's standard of performance warranting the imposition of liquidated the amount of liquidated damages for failure to meet the contractually required standards of performance. Item 24 Attachment C - Purchase Order 4524000496 with Thermo Bonds level, and Event of Non -Performance Acceptable Performance Level Liquidated Damage Amount (Allowed events per Fiscal Year) Recycled Paper Use Failure to use 30% recycled content paper 1 $30 per each document Recyclable Packaging Materials Failure of Seller to use secondary and shipping packaging that is recyclable in 1 $235 or a minimum of $50 if the combined product the City's recycling program. and shipping cost is $250 or less will be incurred if this is not adhered to. Expanded Foam Plastics Unapproved use of expanded foam plastics for secondary or shipping 0 $235 or a minimum of $50 if the combined product packaging and shipping cost is $235 or less Pallet Use 1 $262 or a minimum of $50 if the combined product Failure of Seller to take -back and reuse pallets, recycling only broken pallets, and shipping cost is $2 or less at no additional cost to the City. CITY OF PALO ALTO PAGE 3 OF 3 GDS Rev. 06/22/2016 Item 24: Staff Report Pg. 24 Packet Pg. 473 of 857 Item 25 Item 25 Staff Report City Council Staff Report From: City Manager CITY O F Report Type: CONSENT CALENDAR PALO Lead Department: Police ALTO Meeting Date: June 17, 2024 Report #:2405-3086 TITLE Approval of a Professional Services Contract Number C24188127 with Telecommunications Engineering Associates (TEA) in an Amount Not to Exceed $834,882 for Public Safety Radio Network Maintenance and Construction for a Period of Five (5) Years; CEQA Status: Not a Project RECOMMENDATION Staff recommends the City Council approve and authorize the City Manager or their designee to exempt solicitation and execute Contract No. C24188127 (Attachment A) with Telecommunications Engineering Associates (TEA) for a term of five (5) years and a total amount not -to -exceed (NTE) $834,882 for: 1. Public safety radio maintenance for the Police and Fire Departments for NTE $645,000 with an additional services contingency of $40,000; and 2. Services related to the design and construction of the Public Safety Building (PSB), project PE -15001, for $189,882. BACKGROUND The Silicon Valley Regional Interoperability Authority services the regional public safety radio network which includes the County of Santa Clara, its fifteen cities and towns, and all special districts. In 2010, the Palo Alto City Council approved an agreement to form the Silicon Valley Regional Interoperability Authority, a joint powers authority in partnership with other Santa Clara County municipalities and agencies to enhance and coordinate regional public safety data and radio communications systems. City Council approved a subsequent Memorandum of Understanding (MOU) in June 2015 to participate in a multi -year project with other Silicon Valley Regional Interoperability Authority members to fund and construct a county -wide digital radio communications Silicon Valley Regional Communications System (SVRCS) to layer on to the legacy analog systems each agency maintains. Item 25: Staff Report Pg. 1 Packet Pg. 474 of 857 Item 25 Item 25 Staff Report The SVRCS is a trunked digital communications system using the 700 MHz frequency spectrum currently in use in Santa Clara County. Radio sites and dispatch centers are connected through the Silicon Valley Regional Interoperability Authority EComm digital microwave system that provides connectivity to remote government radio sites. EComm is a private microwave network connecting all Public Safety Answering Points (9-1-1 centers), selected key public safety facilities and numerous radio sites throughout Santa Clara County. EComm provides secure data and voice communications to public safety agencies and other cooperating agencies for mission critical applications. The City continues to maintain one type of analog radio system for the Police Department and another type of system for the Fire Department. The analog radio systems are used for disaster recovery purposes for both the Departments in the event the digital system becomes unusable. The new Public Safety Building (PSB) is one of ten key projects included in the 2014 Council Infrastructure Plan. The PSB was identified as the plan's highest priority project. In June 2018, Council authorized a five-year contract with TEA as the City's radio system maintenance provider'. In June 2019, Council authorized Contract Amendment No. 1 with TEA to add provision of detailed information about the existing radio system infrastructure to assist in designing the radio system and equipment specifications for the new PSB2. In March 2022, Council authorized Contract Amendment No. 2 with TEA to increase the scope of services to include program verification and design review for the PSB3. ANALYSIS TEA will continue to provide professional telecommunications engineering services to maintain the three legacy channels, radio infrastructure and related equipment. All equipment covered under this agreement will be maintained by TEA and kept operational, utilizing contemporary industry standards and modern preventative maintenance techniques. An additional contingency of $40,000 is requested for unplanned replacement replace of any parts or components if required. Staff recommends entering a single source contract with TEA pursuant to PAMC 2.30.360 (d) - 1 City Council, June 25, 2018; Agenda Item #6, SR#9246, https://www.cityofpaloalto.org/files/assets/public/v/1/agendas-minutes-reports/reports/city-manager-reports- cmrs/year-archive/2018/id-9246. pdf z City Council, June 24, 2019; Agenda Item #26, SR#10352 https://www.cityofpaloalto.org/files/assets/public/v/1/agendas-minutes-reports/reports/city-manager-reports- cmrs/yea r-archive/2019/id-10352.pdf 3 City Council, March 14, 2022; Agenda Item #7, SR#13978 https://recordsportal.paloalto.gov/Weblink/DocView.aspx?id=81776 Item 25: Staff Report Pg. 2 Packet Pg. 475 of 857 Item 25 Item 25 Staff Report Contracts for goods, wholesale commodities and services, general services or professional services available from only one source, where the Procurement Officer has determined, in writing, there is no adequate substitute or equivalent provider. Examples of acceptable sole source acquisitions or purchases may include, without limitation: equipment or services for equipment, for which there is no comparable competitive product or service except that provided by the equipment manufacturer, distributor or dealer; proprietary products sold directly by the manufacturer; a component or replacement part, for which there is no commercially available substitute and which can be obtained only from the manufacturer; goods where there is only one authorized distributor in the area; and goods where compatibility with goods in use by the city is an overriding consideration. TEA is the only provider capable to provide these services to the City for several reasons. TEA has extensive knowledge of the system, City facilities, and carries the spare equipment required to maintain it and has been satisfactory in its work with the City over the past 15 years. TEA is based in San Carlos, CA, and is the only provider that can meet the service response times for on -site service. Given the design and completion timelines of the Public Safety Building, additional benefits for expediency and security include an ability to ensure safe decommission existing infrastructure without damaging the remaining equipment and compliance with the necessary City and Police Department background checks required to access the facilities in which the system is housed. TEA will charge an hourly rate of $210 for the added services, with a not -to -exceed amount of $189,882 for the services necessary to transition to the new PSB, for a new total not -to -exceed amount of the contract of $834,882. These services will be approached as Additional Services, as defined in the contract, which are assigned via written Task Order approved by the City's Project Manager as detailed in the contract. FISCAL/RESOURCE IMPACT The Contract is for the following services: 1) ongoing public safety radio maintenance for the Police and Fire Departments for $645,000, 2) replacement service contingency of $40,000 and, 3) services related to the design and construction of the Public Safety Building project (PE - 15001) for $189,882. Funding for the ongoing public safety radio maintenance and the contingency are partially funded in the proposed FY 2025 Police Department budget. If the proposed budget is not sufficient and the costs can not be absorbed in the proposed FY 2025 budget, the Department will come back to City Council at mid -year for a request of additional funding. Funding for the services related to the PSB are in the proposed FY 2025 Capital Improvement Budget under project PE -15001 and no further funding is required. Item 25: Staff Report Pg. 3 Packet Pg. 476 of 857 Item 25 Item 25 Staff Report STAKEHOLDER ENGAGEMENT This contract was reviewed and coordinated with internal departments including legal, procurement, and financial functions to ensure alignment with City policies and procedures. ENVIRONMENTAL REVIEW These services do not constitute a project for the purposes of the California Environmental Quality Act. ATTACHMENTS Attachment A: Contract with Telecommunications Engineering Associates (TEA) C24188127 APPROVED BY: Andrew Binder, Police Chief Item 25: Staff Report Pg. 4 Packet Pg. 477 of 857 Item 25 Attachment A - Contract with Telecommunications Engineering Associations CITY OF PALO ALTO CONTRACT NO. C2418812 (TEA) C24188127 AGREEMENT FOR PROFESSIONAL SERVICES BETWEEN THE CITY OF PALO ALTO AND DARYL D. JONES, INC. DBA TELECOMMUNICATIONS ENGINEERING ASSOCIATES This Agreement for Professional Services (this "Agreement") is entered into as of the 17th day of June, 2024 (the "Effective Date"), by and between the CITY OF PALO ALTO, a California chartered municipal corporation ("CITY"), and DARYL D. JONES, INC., dba TELECOMMUNICATIONS ENGINEERING ASSOCIATES, California corporation, located at 1160 Industrial Road #15, San Carlos, CA 94070 ("CONSULTANT"). The following recitals are a substantive portion of this Agreement and are fully incorporated herein by this reference: RECITALS A. CITY intends to maintain portions of the City's legacy analog radio and telecommunications systems (the "Project") and desires to engage a consultant to provide radio and telecommunication engineering services in connection with the Project (the "Services", as detailed more fully in Exhibit A). B. CONSULTANT represents that it, its employees and subconsultants, if any, possess the necessary professional expertise, qualifications, and capability, and all required licenses and/or certifications to provide the Services. C. CITY, in reliance on these representations, desires to engage CONSULTANT to provide the Services as more fully described in Exhibit A, entitled "SCOPE OF SERVICES". NOW, THEREFORE, in consideration of the recitals, covenants, terms, and conditions, in this Agreement, the parties agree as follows: SECTION 1. SCOPE OF SERVICES. CONSULTANT shall perform the Services described in Exhibit A in accordance with the terms and conditions contained in this Agreement. The performance of all Services shall be to the reasonable satisfaction of CITY. ® Optional On -Call Provision (This provision only applies if checked and only applies to on -call agreements.) CITY may elect to, but is not required to, authorize on -call Services up to the maximum compensation amount set forth in Section 4 (Not to Exceed Compensation). CONSULTANT shall provide on -call Services only by advanced, written authorization from CITY as detailed in this Section. On -call Services, if any, shall be authorized by CITY, as needed, with a Task Order assigned and approved by CITY's Project Manager, as identified in Section 13 (Project Management). Each Task Order shall be in substantially the same form as Exhibit A -I entitled "PROFESSIONAL SERVICES TASK ORDER". Each Task Order shall contain a specific scope of services, schedule of performance and Professional Services Rev. Dec.15.2020 Page 1 of 32 Item 25: Staff Report Pg. 5 Packet Pg. 478 of 857 Item 25 Attachment A - Contract with Telecommunications Engineering Associations maximum compensation amount, in accordance with the provisions (TEA) C24188127 t• Compensation for on -call Services shall be specified by CITY in the Task Order, based on whichever is lowest: the compensation structure set forth in Exhibit C, the hourly rates set forth in Exhibit C -I, or a negotiated lump sum. To accept a Task Order, CONSULTANT shall sign the Task Order and return it to CITY's Project Manager within the time specified by the Project Manager, and upon authorization by CITY (defined as counter -signature by the CITY Project Manager), the fully executed Task Order shall become part of this Agreement. The cumulative total compensation due to CONSULTANT for all Task Orders issued under this Agreement shall not exceed the amount of compensation set forth in Section 4. CONSULTANT shall only be compensated for on -call Services performed under an authorized Task Order and only up to the maximum compensation amount set forth in Section 4. Performance of and payment for any on -call Services are subject to all requirements and restrictions in this Agreement. SECTION 2. TERM. The term of this Agreement shall be from the date of its full execution through June 30, 2029 unless terminated earlier pursuant to Section 19 (Termination) of this Agreement. SECTION 3. SCHEDULE OF PERFORMANCE. Time is of the essence in the performance of Services under this Agreement. CONSULTANT shall complete the Services within the term of this Agreement and in accordance with the schedule set forth in Exhibit B, entitled "SCHEDULE OF PERFORMANCE". Any Services for which times for performance are not specified in this Agreement shall be commenced and completed by CONSULTANT in a reasonably prompt and timely manner based upon the circumstances and direction communicated to the CONSULTANT. CITY's agreement to extend the term or the schedule for performance shall not preclude recovery of damages for delay if the extension is required due to the fault of CONSULTANT. SECTION 4. NOT TO EXCEED COMPENSATION. The compensation to be paid to CONSULTANT for performance of the Services shall be based on the compensation structure detailed in Exhibit C, entitled "COMPENSATION," including any reimbursable expenses specified therein, and the maximum total compensation shall not exceed Six Hundred Forty -Five Thousand Dollars ($645,000.00). The hourly schedule of rates, if applicable, is set out in Exhibit C -I, 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. ® Optional Additional Services Provision (This provision applies only if checked and a not -to -exceed compensation amount for Additional Services is allocated below under this Section 4.) In addition to the not -to -exceed compensation specified above, CITY has set aside the not - to -exceed compensation amount of Forty Thousand Dollars ($40,000.00) for the performance of Additional Services (as defined below). The total compensation for performance of the Services, Additional Services and any reimbursable expenses specified in Exhibit C, shall not exceed Six Hundred Eighty -Five Thousand Dollars ($685,000.00), as detailed in Exhibit C. Professional Services Rev. Dec.l S, 2020 Page 2 of 32 Item 25: Staff Report Pg. 6 Packet Pg. 479 of 857 Item 25 Attachment A - Contract with Telecommunications Engineering Associations "Additional Services" means any work that is determined by CITY to (TEA) C24188127 e proper completion of the Project, but which is not included within the Scope of Services described at Exhibit A. CITY may elect to, but is not required to, authorize Additional Services up to the maximum amount of compensation set forth for Additional Services in this Section 4. CONSULTANT shall provide Additional Services only by advanced, written authorization from CITY as detailed in this Section. Additional Services, if any, shall be authorized by CITY with a Task Order assigned and authorized by CITY's Project Manager, as identified in Section 13 (Project Management). Each Task Order shall be in substantially the same form as Exhibit A -I, entitled "PROFESSIONAL SERVICES TASK ORDER". Each Task Order shall contain a specific scope of services, schedule of performance and maximum compensation amount, in accordance with the provisions of this Agreement. Compensation for Additional Services shall be specified by CITY in the Task Order, based on whichever is lowest: the compensation structure set forth in Exhibit C, the hourly rates set forth in Exhibit C -I, or a negotiated lump sum. To accept a Task Order, CONSULTANT shall sign the Task Order and return it to CITY's Project Manager within the time specified by the Project Manager, and upon authorization by CITY (defined as counter -signature by the CITY Project Manager), the fully executed Task Order shall become part of this Agreement. The cumulative total compensation to CONSULTANT for all Task Orders authorized under this Agreement shall not exceed the amount of compensation set forth for Additional Services in this Section 4. CONSULTANT shall only be compensated for Additional Services performed under an authorized Task Order and only up to the maximum amount of compensation set forth for Additional Services in this Section 4. Performance of and payment for any Additional Services are subject to all requirements and restrictions in this Agreement. SECTION 5. INVOICES. In order to request payment, CONSULTANT shall submit monthly invoices to the CITY describing the Services performed and the applicable charges (including, if applicable, an identification of personnel who performed the Services, hours worked, hourly rates, and reimbursable expenses), based upon Exhibit C or, as applicable, CONSULTANT's schedule of rates set forth in Exhibit C -l. 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. Professional Services Rev. Dec.15, 2020 Page 3 of 32 Item 25: Staff Report Pg. 7 Packet Pg. 480 of 857 Item 25 Attachment A - Contract with Telecommunications JEngineering Associations SECTION 7. COMPLIANCE WITH LAWS. CONSULTANT shall ke (TEA) C24188127 f and in compliance with all federal, state and local laws, ordinances, regulations, and orders that may affect in any manner the Project or the performance of the Services or those engaged to perform Services under this Agreement, as amended from time to time. CONSULTANT shall procure all permits and licenses, pay all charges and fees, and give all notices required by law in the performance of the Services. SECTION 8. ERRORS/OMISSIONS. CONSULTANT is solely responsible for costs, including, but not limited to, increases in the cost of Services, arising from or caused by CONSULTANT's errors and omissions, including, but not limited to, the costs of corrections such errors and omissions, any change order markup costs, or costs arising from delay caused by the errors and omissions or unreasonable delay in correcting the errors and omissions. SECTION 9. COST ESTIMATES. If this Agreement pertains to the design of a public works project, CONSULTANT shall submit estimates of probable construction costs at each phase of design submittal. If the total estimated construction cost at any submittal exceeds the CITY's stated construction budget by ten percent (10%) or more, CONSULTANT shall make recommendations to CITY for aligning the Project design with the budget, incorporate CITY approved recommendations, and revise the design to meet the Project budget, at no additional cost to CITY. SECTION 10. INDEPENDENT CONTRACTOR. CONSULTANT acknowledges and agrees that CONSULTANT and any agent or employee of CONSULTANT will act as and shall be deemed at all times to be an independent contractor and shall be wholly responsible for the manner in which CONSULTANT performs the Services requested by CITY under this Agreement. CONSULTANT and any agent or employee of CONSULTANT will not have employee status with CITY, nor be entitled to participate in any plans, arrangements, or distributions by CITY pertaining to or in connection with any retirement, health or other benefits that CITY may offer its employees. CONSULTANT will be responsible for all obligations and payments, whether imposed by federal, state or local law, including, but not limited to, FICA, income tax withholdings, workers' compensation, unemployment compensation, insurance, and other similar responsibilities related to CONSULTANT's performance of the Services, or any agent or employee of CONSULTANT providing same. Nothing in this Agreement shall be construed as creating an employment or agency relationship between CITY and CONSULTANT or any agent or employee of CONSULTANT. Any terms in this Agreement referring to direction from CITY shall be construed as providing for direction as to policy and the result of CONSULTANT's 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. Professional Services Rev. Dec.15, 2020 Page 4 of 32 Item 25: Staff Report Pg. 8 Packet Pg. 481 of 857 Item 25 Attachment A - Contract with Telecommunications Engineering Associations (TEA) C24188127 ® 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. CONSULTANT shall be responsible for directing the work of any subcontractors and for any compensation due to subcontractors. CITY assumes no responsibility whatsoever concerning compensation of subcontractors. CONSULTANT shall be fully responsible to CITY for all acts and omissions of subcontractors. CONSULTANT shall change or add subcontractors only with the prior written approval of the City Manager or designee. SECTION 13. PROJECT MANAGEMENT. CONSULTANT will assign Daryl Jones as the CONSULTANT's Project Manager to have supervisory responsibility for the performance, progress, and execution of the Services and represent CONSULTANT during the day-to-day performance of the Services. If circumstances cause the substitution of the CONSULTANT's Project Manager or any other of CONSULTANT's key personnel for any reason, the appointment of a substitute Project Manager and the assignment of any key new or replacement personnel will be subject to the prior written approval of the CITY's Project Manager. CONSULTANT, at CITY's request, shall promptly remove CONSULTANT personnel who CITY finds do not perform the Services in an acceptable manner, are uncooperative, or present a threat to the adequate or timely completion of the Services or a threat to the safety of persons or property. CITY's Project Manager is Nicole Frazier, Police Department, Technical Services Division, 275 Forest Ave., Palo Alto, CA 94301, Telephone: 650-329-2331, email: Nicole.Frazier(c3CityyotPaloAlto.org, 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 Professional Services Rev, Dee.] 5, 2020 Page 5 of 32 Item 25: Staff Report Pg. 9 Packet Pg. 482 of 857 Item 25 Attachment A - Contract with Telecommunications Engineering Associations and retain accurate books and records in accordance with generally accepted a (TEA) C24188127 S 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 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 Professional Services Rev. Dec.15, 2020 Page 6 of 32 Item 25: Staff Report Pg. 10 Packet Pg. 483 of 857 Item 25 Attachment A - Contract with Telecommunications Engineering Associations concurrently with the execution of this Agreement. The certificates will be su (TEA) C24188127 1 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 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). Professional Services Rev. Dec 15, 2020 Page 7 of 32 Item 25: Staff Report Pg. 11 Packet Pg. 484 of 857 Item 25 Attachment A - Contract with Telecommunications Engineering Associations (TEA) C24188127 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. 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 2.30.5 10 pertaining to nondiscrimination in employment. Professional Services Rev. Dec.15, 2020 Page 8 of 32 Item 25: Staff Report Pg. 12 Packet Pg. 485 of 857 Item 25 Attachment A - Contract with Telecommunications Engineering Associations (TEA) C24188127 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 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 Professional Services Rev. Dec.15, 2020 Page 9 of 32 Item 25: Staff Report Pg. 13 Packet Pg. 486 of 857 Item 25 Attachment A - Contract with Telecommunications Engineering Associations with any other covenant, term, condition, or provision of this Agreement. (TEA) C24188127 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". ® 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 Professional Services Rev. Dec.15, 2020 Page 10 of 32 Item 25: Staff Report Pg. 14 Packet Pg. 487 of 857 Item 25 Attachment A - Contract with Telecommunications Engineering Associations CONSULTANT from a third party without breach of any confidentialit (TEA) C24188127 s independently developed by employees of CONSULTANT without any use of or access to the Confidential Information; or (v) CONSULTANT has written consent to disclose signed by an authorized representative of CITY. 28.3. Notwithstanding the foregoing, CONSULTANT may disclose Confidential Information to the extent required by order of a court of competent jurisdiction or governmental body, provided that CONSULTANT will notify CITY in writing of such order immediately upon receipt and prior to any such disclosure (unless CONSULTANT is prohibited by law from doing so), to give CITY an opportunity to oppose or otherwise respond to such order. 28.4. CONSULTANT will notify City promptly upon learning of any breach in the security of its systems or unauthorized disclosure of, or access to, Confidential Information in its possession or control, and if such Confidential Information consists of Personal Information, CONSULTANT will provide information to CITY sufficient to meet the notice requirements of Civil Code Section 1798 et seq., as applicable, as amended from time to time. 28.5. Prior to or upon termination or expiration of this Agreement, CONSULTANT will honor any request from the CITY to return or securely destroy all copies of Confidential Information. All Confidential Information is and will remain the property of the CITY and nothing contained in this Agreement grants or confers any rights to such Confidential Information on CONSULTANT. 28.6. If selected in Section 30 (Exhibits), this Agreement is also subject to the terms and conditions of the Information Privacy Policy and Cybersecurity Terms and Conditions. SECTION 29. MISCELLANEOUS PROVISIONS. 29.1. This Agreement will be governed by California law, without regard to its 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. Professional Services Rev. Dec. I5, 2020 Page II of 32 Item 25: Staff Report Pg. 15 Packet Pg. 488 of 857 Item 25 Attachment A - Contract with Telecommunications Engineering Associations 29.5. If a court of competent jurisdiction finds or rules that (_(TEA) C24188127 Jis Agreement is void or unenforceable, the unaffected provisions of this Agreement will remain in full force and effect. 29.6. In the event of a conflict between the terms of this Agreement and the exhibits hereto (per Section 30) or CONSULTANT's proposal (if any), the Agreement shall control. In the event of a conflict between the exhibits hereto and CONSULTANT's proposal (if any), the exhibits shall control. 29.7. The provisions of all checked boxes in this Agreement shall apply to this Agreement; the provisions of any unchecked boxes shall not apply to this Agreement. 29.8. All section headings contained in this Agreement are for convenience and reference only and are not intended to define or limit the scope of any provision of this Agreement. 29.9. This Agreement may be signed in multiple counterparts, which, when executed by the authorized representatives of the parties, shall together constitute a single binding agreement. SECTION 30. EXHIBITS. Each of the following exhibits, if the check box for such exhibit is selected below, is hereby attached and incorporated into this Agreement by reference as though fully set forth herein: EXHIBIT A: SCOPE OF SERVICES EXHIBIT A-1 PROFESSIONAL SERVICES TASK ORDER EXHIBIT B: SCHEDULE OF PERFORMANCE EXHIBIT C: COMPENSATION EXHIBIT C-1: SCHEDULE OF RATES EXHIBIT D: INSURANCE REQUIREMENTS THIS A GREEMENT IS NOT COMPLETE UNLESS ALL SELECTED EXHIBITS ARE A TTA CHED. Professional Services Rev. Dec.15,2020 Page 12 of 32 Item 25: Staff Report Pg. 16 Packet Pg. 489 of 857 Item 25 Attachment A - Contract with Telecommunications Engineering Associations CONTRACT NO. C24188769 SIGNATURE PAGE L (TEA) C24188127 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 DARYL D. JONES, INC., dba TELECOMMUNICATIONS ENGINEERING ASSOCIATES City Manager Officer :y:1 (IS APPROVED AS TO FORM: Name: Ta ►- r - f Title: \-e S7c1 C'* City Attorney or designee / Officer 2 By: Name: Title: Professional Services Rev. Dec.15,2020 Page 13 of 32 Item 25: Staff Report Pg. 17 Packet Pg. 490 of 857 Item 25 Attachment A - Contract with Telecommunications Engineering Associations (TEA) C24188127 ACKNOWLEDGMENT A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. State of California County of San Mateo On 2� zoZ `"a before me, O"\ �%J\ct ML (insert name and title of the officer) personally appeared ' 1V`• O'neS who proved to me on the basis of sa isfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. JASON JAVIER ESCOBEDO WITNESS my nd and official seal. tj I)� COMM !� 2346520 NOTARY PUBLIC ♦ CALWFORMA L"1 SAN MATEO COUNTY } Comm Exp FEB 12. 2025 S' nature Sealf Item 25: Staff Report Pg. 18 Packet Pg. 491 of 857 Item 25 Attachment A - Contract with Telecommunications Engineering Associations EXHIBIT A (TEA) C24188127 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 (also referred to herein as "TEA") shall provide professional telecommunications engineering services to manage and maintain the CITY's radio infrastructure and console equipment. The CITY has opted for a service plan that covers all parts and equipment (excepting the items in the "Services Excluded" section below) without additional charge. In addition, all labor, including travel time will be provided for any equipment or systems problem without additional charge. CONSULTANT agrees to provide total problem resolution services under this Agreement. This includes liaison with equipment manufacturers, other vendors, the County, and the 9-1-1 System maintenance provider. CONSULTANT shall investigate all reports of system problems and work with the appropriate vendor or agency to correct it. CONSULTANT will further serve as the CITY's single point of contact for problems related to the equipment listed in Exhibit C. In addition to routine maintenance and management of telecommunications equipment, CONSULTANT will make recommendations to the CITY when equipment needs to be replaced and offer suggestions about new products and equipment, which can be used to enhance system performance. CONSULTANT agrees to provide training for CITY personnel on communications systems as necessary. CONSULTANT will assist the CITY in identifying issues when it is necessary for the CITY to make routine system design changes and enhancements to any equipment covered under this agreement. CONSULTANT will write bid specifications for base station equipment when directed to do so by the CITY. Written reports on the status of the CITY's communications systems will be provided when necessary but not less than once per year by the 15th of December. All of the above services are included in the total compensation set forth in Exhibit C and shall be at no additional cost to CITY. Further details on services included in CONSULTANT'S performance of this Agreement are provided below, as well as a section on excluded services. REQUIRED SERVICES (INCLUDED) Professional Services Rev. Dec.15, 2020 Page 14 of 32 Item 25: Staff Report Pg. 19 Packet Pg. 492 of 857 Item 25 Attachment A - Contract with Telecommunications Engineering Associations Radio Infrastructure Management Services: All communications problems u (TEA) C24188127 t are resolved effectively and efficiently. In the event of a system failure, the CONSULTANT shall respond promptly (in accordance with the specified response time requirements) and make the necessary repairs in a manner that will keep any system downtime to an absolute minimum. Maintenance and Repair Services: The CONSULTANT shall keep all equipment covered by this proposal in Exhibit C in excellent working condition, utilizing current industry standards and modern preventive maintenance techniques. All parts and labor necessary to accomplish preventive maintenance and repair will be provided without additional costs. Response Times: The CONSULTANT shall provide the CITY with a telephone number that is available for reporting problems that is answered or responded to 24 hours a day, 7 days per week, 365 days per year. All incidents in the following categories shall be responded to and resolved within the specified time. In all instances, the CONSULTANT shall make every effort to be available for immediate telephone consultation for any problem. Emergency Request: The CONSULTANT shall handle all emergency requests for service within one hour of the request being reported. Emergency requests are defined as a malfunction of equipment that has a major effect on daily operations. An example of such a malfunction would be a major failure at a dispatch console. High Priority Requests: The CONSULTANT shall handle all requests of this nature within four (4) hours of the request being reported. High Priority request are defined as a malfunction of equipment that can be temporarily resolved by a work around. An example of such a malfunction would be a secondary channel becoming inoperable and that traffic being moved to the primary channel. Non -critical Requests: The CONSULTANT shall handle all Non -critical requests within twenty- four (24) of the request being reported. Non -critical requests are defined as intermittent problems that do not have a significant operational impact. An example of an intermittent problem would be periodic static on a secondary channel. In all instances, the CONSULTANT shall make every effort to be available for immediate telephone consultation. Equipment Inventory and Handling: It shall be the joint responsibility of the CITY and CONSULTANT to maintain an accurate listing of all radio infrastructure equipment (except as otherwise provided for in this Agreement). It is understood that only equipment listed in the most current copy of the equipment itemization is covered under a fixed fee proposal. It is further understood that CONSULTANT's personnel will need to periodically possess radio equipment that belongs to the CITY. CONSULTANT agrees to exercise reasonable care for the equipment and shall be responsible for its return to the CITY. MISCELLANEOUS SERVICES (INCLUDED) It is understood that TEA may need to periodically possess radio equipment that belongs to the CITY. TEA agrees to exercise reasonable care for the equipment and shall be responsible for its Professional Services Rev. Dec.l5, 2020 Page 15 of 32 Item 25: Staff Report Pg. 20 Packet Pg. 493 of 857 return to the CITY. Item 25 Attachment A - Contract with Telecommunications Engineering Associations (TEA) C24188127 TEA is authorized by the CITY to install its own radio repeater and antenna at any CITY radio site to facilitate administrative communication between TEA personnel. All equipment and installation services will be at TEA's and expense and the CITY shall incur no additional charge. There will be no charge for rental of space of electrical power at the CITY's radio sites. TEA will maintain the CITY's FCC's radio licenses. TEA will provide radio systems training for probationary dispatchers and at two Continued Professional Training (CPT) sessions annually ADDITIONAL MAINTENANCE SERVICES (INCLUDED) During contract year one, CONSULTANT shall provide a higher -than -usual level of maintenance services, as the CITY's equipment and systems are in need of some additional maintenance care. The not -to -exceed amount for such additional maintenance services/equipment shall be Twenty Thousand Dollars ($20,000). The per -contract -year amounts detailed in Exhibit "C" ("Compensation") reflect this additional $20,000 for higher -than -usual maintenance during contract year one. PROVISION OF INFORMATION AND DOCUMENTATION ON THE CITY'S EXISTING EMERGENCY RADIO/ TELECOMMUNCATIONS SYSTEMS (INCLUDED) CONSULTANT shall provide documentation and information on the specifications and operations of the CITY's existing emergency radio and telecommunications system to the radio technology subconsultant of Ross, Drulis, Cusenberry ("RDC"), the architectural firm engaged by the CITY to design its new Public Safety Building ("PSB"). CONSULTANT will not provide any consulting on the design of such systems for the new PSB, rather, such design work will be performed by RDC's subconsultant and/or RDC. CONSULTANT's role is solely to provide information and documentation regarding the current CITY systems. SERVICES EXCLUDED The following services are not included as part of this Agreement and, if services are required of TEA, it will be handled on a time and materials basis. (Such services are also referred to in this Agreement as "Additional Services," however, Additional Services may also consist of services other than those listed below in this "Services Excluded" section.) • Antennas — Base station antennas and coaxial cables at all sites • Telephone headsets • Mobile and Portable radios a System relocation or design changes • Installation of new equipment • Batteries • Microwave System Any malfunctions or damage for problems caused by natural or manmade disaster such as flood, earthquake or fire will not be covered under this Agreement. It is understood that TEA may Professional Services Rev. Dec.15, 5, 2020 Page 16 of 32 Item 25: Staff Report Pg. 21 Packet Pg. 494 of 857 Item 25 Attachment A - Contract with Telecommunications Engineering Associations determine that a particular piece of equipment is beyond economic repair due (TEA) C24188127 If this occurs, TEA will notify the CITY, this equipment item will be excluded from maintenance under this Agreement, and the compensation will be adjusted accordingly. PROGRAM VERIFICATION AND DESIGN REVIEW SERVICES (INCLUDED) (TASK 6) Program verification and design review services (approached as Additional Services) focusing on verifying the technology systems, technical cabling and equipment infrastructure requirements for E91 I and emergency radio systems for the Public Safety Building (PSB), as detailed in Tables 1-4 (Police Telecommunications Consulting Task List) below. (Also referred to as Task 6.) Table 1 (Police Telecommunications Consulting Task List) City of Palo Alto Police Building Project Police Telecommunications Consulting Task List General Infrastructure Task TEA Consult Approx. Hours Prepare a detailed radio base station equipment inventory Y Completed 100% Prepare equipment replacement plan schedule Y Completed 100% Implementation and cutover plan Y 32 Budget preparation and cost estimate y 2 Project meetings Y 6 Space Planning & Building Matters Task TEA Consult Approx. Hours Participate with the architect and City staff on space planning N Participate with the architect and City staff on dispatch furniture design Y 6 Acoustic requirements and planning N Anti -static planning and specs N HVAC/CRAC requirements N Electrical power distribution and UPS requirements N Conduit and raceway requirements N ADA compliance issues N Participate with the architect and City staff on dispatch furniture and rack grounding and seismic mounting Y 6 Budget preparation and cost estimate N Project meetings N Communications Console Specification TEA Task Consult Approx. Hours Professional Services Rev. Dec.15, 2020 Page 17 of 32 Item 25: Staff Report Pg. 22 Packet Pg. 495 of 857 Item 25 Attachment A - Contract with Telecommunications Engineering Associations (TEA) C24188127 Basic radio console needs definition for analog channels Y Liaison W/ SVRIA and Motorola on P25 console requirements Y 96 Transmitter site -select requirements Y 2 Voter status display requirements Y 2 Monitor receiver requirements Y 4 Emergency channel marker (Code -33 beeper) requirements Y 1 Instant recall recorder interface requirements Y 2 DTMF decoder on low -band channels requirements Y 2 Simplex receiver and control base requirements Y 4 Tone encoding requirements definition (backup fire station alerting) Y 2 Building PA interface requirements Y 2 Telephone headset interface requirements Y 1 Equipment racks and seismic bracing plan review Y 4 Deinstallation and removal of old equipment plan Y 8 Communications console fault tolerance issues Y 2 Budget preparation and cost estimate Y 4 Install monitors for CAD computers Y Move and install monitors for standalone computers Y Move and install CAD and standalone computers V Project meetings Y 6 Radio System Requirements Task TEA Consult Approx. Hours Antenna requirements planning (tower) Y 10 Antenna requirements planning (lowerelevation) Y 10 Low -elevation antenna mounting requirements Y 4 Antenna coaxial cable conduit review Y 2 PD -1 UHF upgrade planning and equipment lists Y 24 PD -1 VHF upgrade planning and equipment lists Y 24 LG-2 UHF upgrade planning and equipment lists Y 24 Misc VHF Fire radio upgrade planning and equipment lists Y 16 Low -band countywide upgrade planning and equipment lists Y 8 DC -power system requirements Y 16 Equipment rack and cabinet requirements review Y 4 AC power distribution to equipment rack requirements (PDU) review Y 4 Grounding system requirements review Y 8 NOAA weather radio requirements Y 2 San Mateo County CWMA and TAC channel control bases Y 8 Liaison w/ SVRIA and Aviat on microwave requirements Y 72 Professional Services Rev. Dec.15, 2020 Page 18 of 32 Item 25: Staff Report Pg. 23 Packet Pg. 496 of 857 Item 25 Attachment A - Contract with Telecommunications Engineering Associations AT&T radio circuit relocation or disconnect planning Y (TEA) C24188127 Radio stream encoder requirements Y 2 Review interface requirements to the command vehicle Y 8 Budget preparation and cost estimate Y 4 Review Statements of Work (SOWs) for content and provide feedback Y Work with vendor on extending radio system. Coordinate installation and testing of workstations with the vendor. Y Project meetings Y 10 911 Teleohone System Planning Task TEA Consult Approx. Hours E911 equipment relocation or replacement planning review Y 24 NG-911 and cloud CPE implementation review Y 12 Review multinode system design Y 12 Electrical power for 911 telephone equip plan review Y 2 Cabling for 911 station equipment plan review Y 2 Comm center TDD and Text -to -911 plan review Y 2 Instant recall recorders plan review Y 2 Administrative telephone shsytem interface requirements Y 8 Review 7 -digit emergency lines, ringdowns and direct -connect lines Y 6 Review alt -answer arrangements Y 2 Review ECaTS relocation requirements Y 4 Review installation and cutover plan with 911 provider Y 32 Budget preparation and cost estimate Y 6 Review Statements of Work (SOWs) for content and provide feedback Y Work with vendor on extending phone system. Coordinate installation and testing of workstations with the vendor. Y Explore best options for replacement of copper lines with vendor Project meetings Y 12 Digital Transport Task TEA Consult Approx. Hours Fiber optic transport to Park Res and Dahl Res Y 6 Fiber optic transport to MSC Y 4 Police Data Communications Professional Services Rev. Dec.15, 2020 Page 19 of 32 Item 25: Staff Report Pg. 24 Packet Pg. 497 of 857 Item 25 Attachment A - Contract with Telecommunications Engineering Associations (TEA) C24188127 Task TEA Consult Approx. Hours Data communications and network wiring review N PD firewall relocation and transition plan N DOJ security requirements review Y 10 Relocation or replacement of CAD/RMS equipment review Y 4 Comm Center Ethernet wiring review Y 2 Plan for GPS Netclock and timesync requirements Y 4 Master clock display requirements Y 2 PD low -voltage wiring requirements review Y 4 Budget preparation and cost estimate review Y 2 Project meetings Y 6 City PBX and Data Network Task TEA Consult Approx. Hours Citywide VOIP PBX design and specs N Citywide TCP/IP design and specs N Citywide e911 calling requirements N Police Records telephone recording requirements N Police Records telephone requirements N Police overhead paging PBX interface requirements N Police door control PBX interface requirements N Cable entrance requirements for AT&T, Comcast & Wave N Project meetings N SVRIA and Motorola Issues Task TEA Consult Approx. Hours Review SVRIA (Motorola) rack and power requirements Y 8 Budget and cost estimate review Y 2 Project meetings Y 2 Building Security Task TEA Consult Approx. Hours Secuirty video cameras and monitors N Audio monitoring of holding cells & interview rooms N Interview room audio and video recording requirements N Access control and two-way intercom requirements N Large monitor display requirements for mapping etc N Interface between radio console and security electronics N Jail duress alarm requiremetns N Professional Services Rev. Dcc.15, 2020 Page 20 of 32 Item 25: Staff Report Pg. 25 Packet Pg. 498 of 857 Item 25 Attachment A - Contract with Telecommunications Engineering Associations Police Records duress alarm N (TEA) C24188127 Door and gate control interface requiremetns review Y 2 Budget preparation and cost estimate N Project meetings Y 2 Miscellaneous Task TEA Consult Approx. Hours PD building overhead paging (PA) review Y 4 PD overhead speakers for radio audio Y 4 Subscriber alarm monitoring equipment N In -building ERRCS Distributed Antenna System (DAS) review Y 6 Logging recorder relocation/replacement review Y 4 Uninterruptible power system review Y 2 EOC radio system interface requirements Y 4 Liaison wJ fire supporession consultant Y 1 Emergency generator alarm and fuel tank monitor review Y 1 FCC license preparation for City radio licenses (see note 3) Y 48 Review and respond to RFI requests Y 8 Site inspections and punch list Y 48 Audit existing circuits to Communications Center to determine circuits to be moved and responsible party Y Coordinate and complete the move of existing USDD fire ringdown system Y Compile list of additional wireless communications Y Project meetings Y 8 Professional Services Rcv. Dec.15, 2020 Page 21 of 32 Item 25: Staff Report Pg. 26 Packet Pg. 499 of 857 Item 25 Attachment A - Contract with Telecommunications Engineering Associations EXHIBIT A-1 L (TEA) C24188127 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 1 A below. All exhibits referenced in Item 8 are incorporated into this Task Order by this reference. CONSULTANT shall furnish the necessary facilities, professional, technical and supporting personnel required by this Task Order as described below. CONTRACT NO. OR PURCHASE ORDER REQUISITION NO. (AS APPLICABLE) IA. MASTER AGREEMENT NO. (MAY BE SAME AS CONTRACT P.O. NO. ABOVE): 1 B. TASK ORDER NO.: 2. CONSULTANT NAME: 3. PERIOD OF PERFORMANCE: START: COMPLETION: 4 TOTAL TASK ORDER PRICE: $ BALANCE REMAINING IN MASTER AGREEMENT/CONTRACT $ 5. BUDGET CODE COST CENTER COST ELEMENT WBS/CIP PHASE 6. CITY PROJECT MANAGER'S NAME & DEPARTMENT: 7. DESCRIPTION OF SCOPE OF SERVICES (Attachment A) MUST INCLUDE: • SERVICES AND DELIVERABLES TO BE PROVIDED • SCHEDULE OF PERFORMANCE • MAXIMUM COMPENSATION AMOUNT AND RATE SCHEDULE (as applicable) • REIMBURSABLE EXPENSES, if any (with "not to exceed" amount) 8. ATTACHMENTS: A: Task Order Scope of Services B (if any): I hereby authorize the performance of the I hereby acknowledge receipt and acceptance of work described in this Task Order. this Task Order and warrant that I have authority to sign on behalf of Consultant. APPROVED: APPROVED: CITY OF PALO ALTO COMPANY NAME: BY: BY: Name Name Title Title Date Date Professional Services Rev. Dec.15, 2020 Page 22 of 32 Item 25: Staff Report Pg. 27 Packet Pg. 500 of 857 EXHIBIT B SCHEDULE OF PERFORMANCE Item 25 Attachment A - Contract with Telecommunications Engineering Associations (TEA) C24188127 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. Completion Milestones Number of Days/Weeks (as specified below) from NTP Preventive Maintenance On -going Training for Police Personnel Annually Maintenance of FCC Licenses As Needed Written Status Reports Annually 5. Provision of information and As Needed documentation on the City's existing radio I telecommunications systems to City's architect, RDC, and/or its subconsultant 6. Program verification and design review On -going, as needed, per the timeline specified services focusing on verifying the technology in the City -approved Task Order (these services systems, technical cabling and equipment are approached as Additional Services as per infrastructure requirements for E91 I and Section 4, Not -to -Exceed Compensation of this emergency radio systems for the Public agreement) Safety Building PSB ❑ Optional Schedule of Performance Provision for On -Call or Additional Services Agreements. (This provision only applies if checked and only applies to on -call agreements per Section I or agreements with Additional Services per Section 4.) The schedule of performance shall be as provided in the approved Task Order, as detailed in Section 1 (Scope of Services) in the case of on -call Services, or as detailed in Section 4 in the case of Additional Services, provided in all cases that the schedule of performance shall fall within the term as provided in Section 2 (Term) of this Agreement. Professional Services Rev. Dec.15, 2020 Page 23 of 32 Item 25: Staff Report Pg. 28 Packet Pg. 501 of 857 (Version I - use for task -based compensation) EXHIBIT C COMPENSATION Item 25 Attachment A - Contract with Telecommunications Engineering Associations (TEA) C24188127 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 -I 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 NOT TO EXCEED AMOUNT Task l(Year I -Including higher -than -usual maintenance services/equipment) $145,000.00 Task 2 (Year 2) $125,000.00 Task 3 (Year 3) $125,000.00 Task 4 (Year 4) $125,000.00 Task 5 (Year 5) $125,000.00 Task 6 (Public Safety Building) $189,882.00 Sub -total for Services $834,882.00 Reimbursable Expenses (if any) $0 Total for Services and Reimbursable Expenses $834,882.00 Additional Services (if any, per Section 4) $40,000.00 Maximum Total Compensation $874,882.00 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. Professional Services Rev. Dec.15, 2020 Page 24 of 32 Item 25: Staff Report Pg. 29 Packet Pg. 502 of 857 Item 25 Attachment A - Contract with Telecommunications Engineering Associations (TEA) C24188127 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. ADDITIONAL SERVICES The CONSULTANT shall provide Additional Services (as defined in Section 4, "Not to Exceed Compensation" of this Agreement) only by advanced, written authorization from the CITY, pursuant to a Task Order (Exhibit "A -I") as detailed in Section I of this Agreement. The CONSULTANT, at the CITY's project manager's request, shall submit a detailed written proposal including a description of the scope of such services, schedule, level of effort, and CONSULTANT's proposed maximum compensation, consistent with this Agreement, including reimbursable expenses based on the rates set forth in Exhibit C-1. The Additional Services cope, schedule and maximum compensation shall be negotiated and agreed to in writing by the CITY's Project Manager and CONSULTANT prior to commencement of such services, pursuant to a Task Order (Exhibit "A-1") as detailed in Section 1 of this Agreement. Payment for Additional Services is subject to all requirements and restrictions in this Agreement. HOURLY RATE FOR ADDITIONAL SERVICES (CONSULTING) for Task 1-5 For Task 1-5, the CITY may request consulting services on radio infrastructure changes, additions and relocation. CONSULTANT will provide those services at an hourly cost of %155.00 per hour. In addition, the CITY needs to replace and relocate some antiquated radio equipment. CONSULTANT will provide quotes for these replacement/relocation projects and any long-term consulting projects. HOURLY RATES FOR ADDITIONAL SERVICES (RADIO ENGINEERING AND TELECOMMUNICATIONS TECHNICIAN) for Task 1-5 Consulting fees for work outside of the scope of the Agreement (Additional Services) will not exceed one hundred fifty-five ($155.00) dollars per hour for radio engineering and will not exceed one hundred thirty-five ($135.00) dollars per hour for telecommunications technician work. HOURLY RATES FOR ADDITIONAL SERVICES (PROGRAM VERIFICATION AND DESIGN REVIEW SERVICES) Task 6 For Task 6, the CITY may request Additional Services (as defined in Section 4, "Not to Exceed Compensation" of this Agreement) to provide program verification and design Professional Services Rev. Dec.15, 2020 Page 25 of 32 Item 25: Staff Report Pg. 30 Packet Pg. 503 of 857 Item 25 Attachment A - Contract with Telecommunications Engineering Associations review consulting services focusing on verifying the technology syste (TEA) 024188127 $ and equipment infrastructure requirements for E911 and emergency ra io systems ror the Public Safety Building as further detailed in Exhibit A. CONSULTANT's hourly rate for these Additional Services will not exceed two hundred ten ($210.00) dollars per hour. Professional Services Rev. Dec.l5, 2020 Page 26 of 32 Item 25: Staff Report Pg. 31 Packet Pg. 504 of 857 Item 25 Attachment A - Contract with Telecommunications Engineering Associations EXHIBIT C-1 (TEA) C24188127 SCHEDULE OF RATES As applicable, CONSULTANT will invoice the CITY on a monthly basis for the amount of applicable covered equipment from the list below. Notwithstanding the foregoing, or the list below, the compensation to CONSULTANT for the performance of this Agreement shall not exceed the amounts provided in Section 4, Exhibit A, and Exhibit C of this Agreement. PD -1 SYSTEM Quantity Monthly Monthly Cost Each Total T -Band duplex base station 2 $175 $350 T -band voting receiver 4 $85 $340 Motorola Digitac comparator 1 $160 $160 Transmitter site -select relay system 1 $10 $10 CTI comparator display system 0 $30 $0 Total >> $860 PD -2 SYSTEM Quantity Monthly Monthly Cost Each Total T -Band duplex base station 2 $175 $0 T -band voting receiver 4 $85 $0 Motorola Digitac comparator 1 $160 $0 Transmitter site -select relay system 1 $10 $0 CTI comparator display system 0 $30 $0 Total >> $0 FD -1 SYSTEM Quantity Monthly Monthly Cost Each Total VHF duplex base station 2 $175 $0 VHF voting receiver 3 $85 $0 Motorola Digitac comparator 1 $160 $0 Transmitter site -select relay system 1 $10 $0 CTI comparator display system 1 $30 $0 Total >> $0 FD -2 (TAC) SYSTEM Quantity Monthly Monthly Cost Each Total VHF duplex base station 2 $175 $350 VHF voting receiver 3 $85 $255 Motorola Digitac comparator 1 $160 $160 Transmitter site -select relay system 1 $10 $10 CTI comparator display system 1 $30 $30 Total >> $805 Professional Services Rev. Dec.15, 2020 Page 27 of 32 Item 25: Staff Report Pg. 32 Packet Pg. 505 of 857 Item 25 Attachment A - Contract with Telecommunications Engineering Associations (TEA) C24188127 FIRE STATION ALERTING Quantity Monthly Monthly Cost Each Total Zetron Model 25 encoder (CAD controlled) 0 $32 $0 Zetron Model 26 status control unit 2 $60 $0 Zetron Model 6 fire station transponder 7 $36 $0 TEA Station Alerting Module (SAM) 7 $20 $0 Fire station PA system - Valcom 0 $35 $0 Fire station PA system - conventional 7 $35 $0 Fire station alerting radios 7 $30 $0 Power supplies 7 $28 $0 Total >> $0 LG-1 SYSTEM Quantity Monthly Monthly Cost Each Total UHF duplex base station 2 $175 $0 UHF voting receiver 3 $85 $0 Motorola Digitac comparator 1 $160 $0 Transmitter site -select relay system 1 $10 $0 CTI comparator display system 0 $30 $0 Desk set remote control 12 $18 $0 Total >> $0 LG-2 SYSTEM Quantity Monthly Monthly Cost Each Total UHF duplex base station 2 $175 $350 UHF voting receiver 3 $85 $255 Motorola Digitac comparator 1 $160 $160 Transmitter site -select relay system 1 $10 $10 CTI comparator display system 0 $30 $0 Desk set remote control 12 $18 $0 Total >> $775 LG-3 SYSTEM Quantity Monthly Monthly Cost Each Total UHF duplex base station 2 $175 $0 UHF voting receiver 1 $85 $0 Motorola Digitac comparator 1 $160 $0 Transmitter site -select relay system 0 $10 $0 CTI comparator display system 0 $30 $0 Desk set remote control 0 $18 $0 Total >> $0 FIBER-OPTIC MULTIPLEXERS Quantity Monthly Monthly Cost Total Professional Services Rev. Dec. I5, 2020 Page 28 of 32 Item 25: Staff Report Pg. 33 Packet Pg. 506 of 857 Item 25 Attachment A - Contract with Telecommunications Engineering Associations (TEA) C24188127 Adtran Opti 6100 for Civic Center 1 $435 $435 Adtran Opti 6100 for MSC 1 $235 $235 Adtran Opti 6100 for Park Reservoir 1 $235 $235 Adtran Opti 6100 for Dahl Reservoir 1 $235 $235 48VDC power systems (excluding batteries) 4 $65 $260 Total >> $1,400 SITE -SPECIFIC EQUIPMENT Quantity Monthly Monthly Cost Each Total UHF T -band receiver multicoupler 2 $30 $60 UHF 450 receiver multicoupler 3 $30 $90 VHF receiver multicoupler 3 $30 $90 Wideband multicoupler at Civic Center 4 $30 $120 DC power system for VA Hospital site 1 $85 $85 AC power inverter for VA Hospital site 1 $45 $45 Adtran Atlas 550 mutiplexers for VA Hospital 2 $65 $130 Total >> $620 CENTRACOM GOLD ELITE CONSOLE Quantity Monthly Monthly Cost Each Total Operator position 5 $160 $0 Centracom card cage 6 $15 $0 Centracom CEB power supply 6 $95 $0 Centracom base interface module 18 $32 $0 Centracom dual receive module 6 $32 $0 Centracom OMI modules 5 $60 $0 Centracom timer module 2 $35 $0 Centracom aux relay module 10 $18 $0 Centracom RS232 module 1 $15 $0 Total >> $0 CENTRACOM II+ CONSOLE Quantity Monthly Monthly Cost (PAUCC) Each Total Operator position 2 $160 $0 Centracom card cage 3 $15 $0 Centracom CEB power supply 3 $95 $0 Centracom base interface module 3 $32 $0 Centracom dual receive module 0 $32 $0 Centracom OMI modules 2 $60 $0 Centracom timer module 2 $35 $0 Centracom aux relay module 1 $18 $0 Centracom RS232 module 1 $15 $0 Total >> $0 Professional Services Rev. Dec.15, 2020 Page 29 of 32 Item 25: Staff Report Pg. 34 Packet Pg. 507 of 857 Item 25 Attachment A - Contract with Telecommunications Engineering Associations MISCELLANEOUS EQUIP. Quantity (TEA) 024188127 Each Total CDM monitor receivers 8 $18 $144 UHF T -band control base station (MACS) 1 $85 $85 UHF T -band control base station (TAC-3) 1 $85 $85 Red -Net control base station 1 $85 $85 Law -Net control base station 1 $85 $85 T -band select control base 1 $85 $85 VHF base station (White) 1 $85 $85 VHF base station (Blue) 1 $85 $85 Antenna combining system 0 T&M Total >> $739 NORTAC SIMULCAST Quantity Monthly Monthly Cost Each Total 1/3 split between LA, PA and MV 1 $813 $813 Total >> $813 SUMMARY Monthly Total PD -1 SYSTEM $860 PD -2 SYSTEM $0 FD -1 SYSTEM $0 FD -2 (TAC) SYSTEM $805 FIRE STATION ALERTING $0 LG-1 SYSTEM $0 LG-2 SYSTEM $775 LG-3 SYSTEM $0 FIBER-OPTIC MULTIPLEXERS $1,400 SITE -SPECIFIC EQUIPMENT $620 CENTRACOM GOLD ELITE CONSOLE $0 CENTRACOM II+ CONSOLE $0 MISCELLANEOUS EQUIP. $739 NORTAC SIMULCAST $813 $6,011 $72,132 Professional Services Rev. Dec 15, 2020 Page 30 of 32 Item 25: Staff Report Pg. 35 Packet Pg. 508 of 857 EXHIBIT D INSURANCE REQUIREMENTS Item 25 Attachment A - Contract with Telecommunications Engineering Associations (TEA) C24188127 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 MINIMUM LIMITS REQUIRED TYPE OF COVERAGE REQUIREMENT EACH OCCURRENCE AGGREGATE YES WORKER'S COMPENSATION STATUTORY STATUTORY STATUTORY YES EMPLOYER'S LIABILITY STATUTORY YES GENERAL LIABILITY, INCLUDING BODILY INJURY $1,000,000 $1,000,000 PERSONAL INJURY, BROAD FORM PROPERTY DAMAGE $1,000,000 $1,000,000 PROPERTY DAMAGE BLANKET CONTRACTUAL, AND FIRE LEGAL LIABILITY BODILY INJURY & PROPERTY $1,000,000 $1,000,000 DAMAGE COMBINED. BODILY INJURY $1,000,000 $1,000,000 - EACH PERSON $1,000,000 $1,000,000 YES AUTOMOBILE LIABILITY, - EACH OCCURRENCE $1,000,000 $1,000,000 INCLUDING ALL OWNED, HIRED, PROPERTY DAMAGE $1,000,000 $1,000,000 NON -OWNED BODILY INJURY AND PROPERTY $1,000,000 $1,000,000 DAMAGE, COMBINED YES PROFESSIONAL LIABILITY, INCLUDING, ERRORS AND OMISSIONS, MALPRACTICE (WHEN ALL DAMAGES $1,000,000 APPLICABLE), AND NEGLIGENT PERFORMANCE YES TILE 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. 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 FOLLOW ING EMAIL: PURCHASINGSUPPORThCITYOFPALOALTO.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. Professional Services Rev. Dec.15, 2020 Page 31 of 32 Item 25: Staff Report Pg. 36 Packet Pg. 509 of 857 B. C. CROSS LIABILITY Item 25 Attachment A - Contract with Telecommunications Engineering Associations (TEA) C24188127 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. NOTICE OF CANCELLATION 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: P U RC H ASI NG S U P P O RT(57C IT YO FP A LOA LTO.ORG Professional Services Rev. Dec.15, 2020 Page 32 of 32 Item 25: Staff Report Pg. 37 Packet Pg. 510 of 857 Item 26 Item 26 Staff Report City Council Staff Report From: City Manager CITY O F Report Type: CONSENT CALENDAR PALO Lead Department: City Auditor ALTO Meeting Date: June 17, 2024 Report #:2406-3129 TITLE Approval of Assignment and Assumption Agreement to transfer Baker Tilly US LLP's contract to Baker Tilly Advisory Group, LP; CEQA — Not a Project RECOMMENDATION The Office of the City Auditor recommends the City Council approve the Assignment and Assumption Agreement to transfer Baker Tilly US LLP's contract with the City to Baker Tilly Advisory Group, LP. This transfer will not change any of the contract's terms or conditions. EXECUTIVE SUMMARY On February 5, 2024, Baker Tilly US, LLP announced a strategic investment from private equity firms Hellman & Friedman and Valeas Capital Partners. As part of the transaction, the firm will be restructured as two entities: Baker Tilly Advisory Group, LP will provide the firm's business advisory, tax and other services with Jeff Ferro continuing in his role as CEO. Baker Tilly US, LLP, a licensed CPA firm, will provide the firms' attest services with Jere Shawver, Managing Partner — Risk and Assurance, stepping into the new role of CEO. Baker Tilly US, LLP will operate as a separate legal entity pursuant to regulatory and independence requirements. Following the restructuring, both firms will remain partnerships, with all partners holding equity alongside Hellman & Friedman and Valeas in Baker Tilly Advisory Group, LP. BACKGROUND AND ANALYSIS About Baker Tilly US, LLP (bakertilly.com) Baker Tilly US, LLP (Baker Tilly) is a leading advisory CPA firm, providing clients with a genuine coast -to -coast and global advantage in major regions of the U.S. and in many of the world's leading financial centers — New York, London, San Francisco, Los Angeles and Chicago. Baker Tilly is an independent member of Baker Tilly International, a worldwide network of independent accounting and business advisory firms in 145 territories, with 41,000 professionals and a combined worldwide revenue of $4.7 billion. Visit bakertilly.com or join the conversation on Linkedln, Facebook and Instagram. Item 26: Staff Report Pg. 1 Packet Pg. 511 of 857 Item 26 Item 26 Staff Report About Hellman & Friedman (hf.com) Hellman & Friedman is a preeminent global private equity firm with a distinctive investment approach focused on large-scale equity investments in high quality growth businesses. H&F seeks to partner with world -class management teams where its deep sector expertise, long- term orientation and collaborative partnership approach enable companies to flourish. H&F targets outstanding businesses in select sectors including software & technology, financial services, healthcare, consumer & retail, and other business services. The firm is currently investing its tenth fund, with over $24 billion of committed capital, and has over $92 billion in assets under management as of September 30, 2023. Learn more about H&F's defining investment philosophy and approach to sustainable outcomes at www.hf.com. About Valeas Capital Partners (valeas.com) Valeas Capital Partners is a San Francisco -based mid -market private equity firm focused on growth -buyout partnerships backing industry leading management teams. Valeas is developing a concentrated portfolio of growth -oriented, tech -enabled businesses in sectors where its team has deep industry expertise. Leveraging the team's experience as both investors and operators, Valeas seeks to prioritize strong collaboration with portfolio company management teams to create lasting market leaders and value for investors. Valeas focuses on three primary sectors: healthcare, financial services and data & technology. Representative investments include: Sequoia Financial Group, Ren, CINQCare and Well. For more information, visit valeas.com. FISCAL/RESOURCE IMPACT There is no fiscal impact associated with this change. The contract not to exceed compensation remains unchanged. STAKEHOLDER ENGAGEMENT N/A ENVIRONMENTAL REVIEW This is not a project. ATTACHMENTS Attachment A: Assignment Agreement to Baker Tilly Advisory Group, LP APPROVED BY: Kate Murdock, City Auditor Item 26: Staff Report Pg. 2 Packet Pg. 512 of 857 Item 26 Attachment A - Assignment Agreement to Baker Tilly Advisory ASSIGNMENT AND ASSUMPTION AGREEMEN Group, LP THIS ASSIGNMENT AND ASSUMPTION AGREEMENT (this "Assignment") is entered into on June 1, 2024 by and between Baker Tilly US, LLP, an Illinois Limited Liability Partnership, located at 205 North Michigan Avenue, Suite 2800, Chicago, IL 60601 ("Assignor"), Baker Tilly Advisory Group, LP, a Delaware Limited Liability Partnership, located at 205 North Michigan Avenue, Chicago, IL 60601 ("Assignee"), and the City of Palo Alto, a California chartered municipal corporation ("City"). Recitals WHEREAS, Assignor is a party to the Agreement (as defined below); and WHEREAS, Assignor desires to transfer the Agreement, and Assignee desires to assume the Agreement, each on the terms and conditions set forth herein; and WHEREAS, Assignor represents and warrants that Assignee is able to fully perform all obligations that may exist under the Agreement, and WHEREAS, Assignee represents and warrants that it is able to fully perform all obligations that may exist under the Agreement, and WHEREAS, it is consistent with the City's interest to recognize the Assignee as the successor party to the Agreement, and WHEREAS, the City consents to the transfer of the Agreement based on Assignor's warranties stated herein and under the terms below; NOW, THEREFORE, in consideration of the promises and the mutual covenants contained in this Assignment, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, Assignor and Assignee agree as follows: Article 1 Definitions The following definitions apply to this Assignment: 1.1 "Agreement" means the agreement dated October 20, 2020 between Assignor and City, as amended by the first amendment dated April 18, 2022. The Agreement including any amendments are attached to this Assignment as Appendix A, and are hereby fully attached and incorporated herein by reference. 1.2 "Effective Date" means June 1, 2024. 1.3 Other terms used and not defined in this Assignment shall have the meanings assigned to such terms in the Agreement. Article 2 Transfer of Agreement 2.1 Transfer. Assignor hereby assigns, transfers and conveys to Assignee all of Assignor's rights, title, and interest in and to the Agreement and all of Assignor's duties and obligations thereunder that arise on or after the Effective Date. Page 1 of 8 Item 26: Staff Report Pg. 3 Packet Pg. 513 of 857 Item 26 Attachment A - ignment Agreement Baker Tilly Advisory 2.2 Acceptance. Assignee hereby accepts the transfer and co}. - Group,LP efi in Article 2.1 and agrees to perform all of Assignor's duties and obligations under the Agreement that arise on or after the Effective Date. 2.3 Rights to Enforce. Subject to the terms of the Agreement, this Assignment shall be binding upon, and inure to the benefit of, the parties hereto and their successors and assignees. Nothing in this Assignment, whether express or implied, shall be construed to give any person or entity (other than City and the parties hereto and their respective successors and Assignees) any legal or equitable right, remedy or claim under or in respect of this Assignment or any covenants, conditions or provisions contained herein. 2.4 Consent of City. The City consents to the transfer described in this Article 2 based on the evidence provided below, which indicates that Assignee is able to fully perform all obligations that may and will exist under the Agreement. All the evidence is attached to this Assignment as Appendix B, and is hereby fully attached and incorporated herein by reference. Further, each of Assignor and Assignee acknowledges that the written consent of City to this Assignment is required under the terms of the Agreement and that the City is an intended third party beneficiary of this Assignment. City shall have the right to enforce this Assignment. 2.4.1 A certificate from the State of California Office of the Secretary of State dated April 22, 2024. 2.4.2 A statement by the Assignee to confirm that the price and the personnel of the Agreement will remain unchanged. 2.5 Successor. The City recognizes the Assignee as the Assignor's successor in interest in and to the Agreement. The Assignee by this Assignment becomes liable for all responsibilities and entitled to all rights, titles, and interests of the Assignor in and to the Agreement that arise on or after the Effective Date. The City will treat the Assignee as if the Assignee were the original party to the Agreement. As of the Effective Date of this Assignment, the term "Contractor," as used in the Agreement, shall refer to the Assignee. The Agreement shall remain in full force and effect, except as modified by this Assignment. The Assignor, Assignee and City have each executed this Assignment, effective as of Effective Date. 2.6 Further Assurances. From and after the date of this Assignment, Assignor and Assignee 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 conveyance contemplated by this Assignment or as may be required by City. Article 3 Obligations and Liabilities 3.1 Transfer, Waiver, and Assumption. The Assignor confirms the transfer to the Assignee, and waives any claims and rights against the City that it now has or may have in the future in connection with the Agreement. The Assignee agrees to be bound by and to perform the Agreement in accordance with the conditions contained therein. The Assignee also assumes all obligations and liabilities of, and all claims against, the Assignor under the Agreement as if the Assignee were the original party to the Agreement. The Assignee ratifies all previous actions taken by the Assignor with respect to the Agreement, with the same force and effect as if the action has been taken by the Assignee. Except as expressly provided in this Assignment, nothing in it shall be construed as a waiver of any rights of the City against the Assignor. Page 2 of 8 2 Item 26: Staff Report Pg. 4 Packet Pg. 514 of 857 Item 26 Attachment A - ignment Agreement Baker Tilly Advisory 3.2 Past Payments. All payments and reimbursements previo�i,2r°Up1 �� 4 to the Assignor, and all other previous actions taken by City under the Agreement, shall be considered to have discharged those parts of City's obligations thereunder. All payments and reimbursements made by City after the date of this Assignment in the name of or to the Assignor shall have the same force and effect as if made to the Assignee, and shall constitute a complete discharge of City's obligations under the Agreement, to the extent of the amounts paid or reimbursed. The Assignor and the Assignee agree and confirm that City is not obligated to pay or reimburse either of them for, or otherwise give effect to, any costs, taxes, or other expenses, or any related increases, directly or indirectly arising out of or resulting from the transfer of this Assignment, other than those that City in the absence of this transfer would have been obligated to pay or reimburse under the terms of the Agreement. 3.3 No Release of Assignor. Neither this Assignment, nor the consent of City, shall release Assignor in whole or in part from any of its obligations or duties under the Agreement if Assignee fails to perform or observe any such obligation or duty. Assignor has entered into this Assignment and obtained such consent of City based solely upon Assignor's independent investigation of Assignee's financial condition and ability to perform under the Agreement, and Assignor assumes full responsibility for obtaining and sharing with City any further information with respect to Assignee or the conduct of its business after the date of this Assignment. Assignor waives any right to require City to (i) proceed against any person or entity including Assignee, (ii) proceed against or exhaust any security now or hereafter held in connection with the Agreement, or (iii) pursue any other remedy in City's power. Assignor waives any defense arising by reason of any disability or other defense of Assignee or any other person, or by reason of the cessation from any cause whatsoever of the liability of Assignee or any other person. Assignor shall not have and hereby waives any right of subrogation to any of the rights of City against Assignee or any other person and Assignor waives any right to enforce any remedy of Assignor against Assignee or against any other person unless and until all obligations to City under the Agreement and this Assignment have been paid and satisfied in full. Assignor waives any benefit of any right to participate in any collateral or security whatsoever now or hereafter held by City with respect to the obligations under the Agreement. Article 4 Insurance and Indemnification 4.1 Insurance Certificates. For this Assignment to be effective, Assignee shall provide to City insurance certificates and endorsements for the identical type and amount of coverage currently required under the Agreement. 4.2 City. Assignor and Assignee shall, to the fullest extent permitted by law, indemnify, defend and protect City, and hold City harmless from and against any and all liabilities, losses, damages, claims, costs or expenses (including attorneys' fees) arising out of Assignor and/or Assignee's failure to comply with any term or obligation of this Assignment or the Agreement. Defense obligations under this Section 4.2 shall be provided immediately following a tender of defense. 4.3 Assignor. Assignor shall indemnify, defend and protect Assignee, and hold Assignee harmless from and against, any and all liabilities, losses, damages, claims, costs or expenses (including attorneys' fees) arising out of (i) any failure of Assignor to convey its interest pursuant to Article 2, free and clear of all third -party liens, claims or encumbrances or (ii) any breach by Assignor of the Agreement or any other failure to perform or observe any of Page 3 of 8 3 Item 26: Staff Report Pg. 5 Packet Pg. 515 of 857 Item 26 Attachment A - ignment Agreement Baker Tilly Advisory the duties or obligations of Assignor thereunder, to the extent such breach Group, 1P •4rior to the Effective Date. 4.4 Assignee. Assignee shall indemnify, defend and protect Assignor, and hold Assignor harmless from and against, any and all liabilities, losses, damages, claims, costs or expenses (including attorneys' fees) arising out of any breach by Assignee of the Agreement or any other failure to perform or observe any of the duties or obligations thereunder assumed by Assignee pursuant to this Assignment. Article 5 General Provisions 5.1 Governing Law. This Assignment shall be governed by the laws of the State of California, without regard to its conflict of laws principles. 5.2 Headings. All section headings and captions contained in this Assignment are for reference only and shall not be considered in construing this Assignment. 5.3 Notices. All notices, consents, directions, approvals, instructions, requests and other communications regarding this Assignment or the Agreement shall be in writing, shall be addressed to the person and address set forth below and shall be (i) deposited in the U.S. mail, first class, certified with return receipt requested and with appropriate postage, (ii) hand delivered or (iii) sent via email with a return receipt. All communications sent in accordance with this Section shall become effective on the date of receipt. From time to time Assignor, Assignee or City may designate a new address for purposes of this Section by notice to the other signatories to this Assignment. If to Assignor: Baker Tilly US, LLP 205 North Michigan Avenue, Suite 2800 Chicago, IL 60601 Chris Kalafatis Managing Director, Internal Audit Chris.Kalafatisgbakertilly.com If to Assignee: Baker Tilly Advisory Group, LP 205 North Michigan Avenue, Suite 2800 Chicago, IL 60601 Chris Kalafatis Managing Director, Internal Audit Chris.Kalafatiskbakertilly.com Page 4 of 8 Item 26: Staff Report Pg. 6 Packet Pg. 516 of 857 If to City: City Manager's Office 250 Hamilton Avenue Palo Alto, CA 94301 Attn: Chantal Gaines Deputy City Manager Chantal. ag ines(cityofpaloalto.org With a copy to: Office of the City Clerk City of Palo Alto Post Office Box 10250 Palo Alto, CA 94303 Item 26 Attachment A - Assignment Agreement to Baker Tilly Advisory Group, LP 5.4 Incorporation of Recitals. The recitals set forth above are terms of this Assignment and are hereby fully incorporated herein by this reference. 5.5 Entire Agreement. This Assignment sets forth the entire agreement between Assignor and Assignee relating to the Agreement and supersedes all other oral or written provisions. 5.6 Severability. Should the application of any word, phrase, clause, sentence, paragraph and/or provision of this Assignment to any particular facts or circumstances be found by a court of competent jurisdiction to be invalid or unenforceable, then (i) the validity of other words, phrases, clauses, sentences, paragraphs and/or provisions of this Assignment shall not be affected or impaired thereby and (ii) such words, phrases, clauses, sentences, paragraphs and/or provisions shall be enforced to the maximum extent possible so as to effect the intent of Assignor, Assignee and City. (SIGNATURE BLOCK FOLLOWS ON THE NEXT PAGE.) Page 5 of 8 Item 26: Staff Report Pg. 7 Packet Pg. 517 of 857 IN WITNESS WHEREOF, Assignor and Assignee have each duly effective as of the Effective Date. BAKER TILLY US, LLP (ASSIGNOR) I3 Name Chris Kalafatis Title Managing Director, Internal Audit Item 26 Attachment A - Assignment Agreement to Baker Tilly Advisory Group, LP BAKER TILLY ADVISORY GROUP, LP (ASSIGNEE) Name Chris Kalafatis Title Managing Director, Internal Audit City hereby consents to the assignment and assumption described in Article 2 of this Assignment. CITY OF PALO ALTO (CITY) By Name Ed Shikada Title City Manager Approved as to Form: By Name Caio Arellano Title _Chief Assistant City Attorney Attachments: Appendix A: Agreement Appendix B: Documentation of Transfer Page 6 of 8 6 Item 26: Staff Report Pg. 8 Packet Pg. 518 of 857 APPENDIX A - AGREEMENT Item 26 Attachment A - Assignment Agreement to Baker Tilly Advisory Group, LP The Agreement dated October 1, 2020 between Contractor and City, as amended by: Amendment No. 1, dated April 18, 2022 is attached on the following pages as Appendix A. Page 7 of 8 Item 26: Staff Report Pg. 9 Packet Pg. 519 of 857 DocuSign Envelope ID: 0EEACA31-356D-4B22-A4AA-61AE085C688F Item 26 Attachment A - Assignment Agreement to Baker Tilly Advisory CITY OF PALO ALTO CONTRACT NO. C211793 Group, LP AGREEMENT FOR PROFESSIONAL SERVICES BETWEEN THE CITY OF PALO ALTO AND BAKER TILLY US, LLP This Agreement for Professional Services (this "Agreement") is entered into as of the 1st day of October, 2020, by and between the CITY OF PALO ALTO, a California chartered municipal corporation ("CITY"), and BAKER TILLY US, LLP, an Illinois Limited Liability Partnership, located at 205 Michigan Avenue, Suite 2800, Chicago, IL 60601 ("CONSULTANT"). RF.f TTAT,S The following recitals are a substantive portion of this Agreement. A. CITY issued request for proposals (RFP) F21-001 (Re -issue) for internal auditor services in accordance with City Charter and Municipal Code requirement ("Project") and desires to engage a consultant to provide such internal auditor services in connection with the Project ("Services"). B. CONSULTANT has represented that it has 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 Section 1 (Scope of Services) and Exhibit "A", attached to and made a part of this Agreement. D. On September 28, 2020, the Palo Alto City Council approved this Agreement and a resolution appointing Kyle O'Rourke as designated City Auditor. NOW, THEREFORE, in consideration of the recitals, covenants, terms, and conditions, in this Agreement, the parties agree: AGREEMENT SECTION 1. SCOPE OF SERVICES. CONSULTANT shall perform the Services described at Exhibit "A" (which includes without limitation the As Required Services detailed below in this Section 1) in accordance with the terms and conditions contained in this Agreement. The performance of all Services shall be to the reasonable satisfaction of CITY. CONSULTANT shall provide As Required Services associated with the scope of services described in Exhibit A, to be authorized by CITY in writing as detailed in herein. CITY may elect to, but is not required to, authorize As Required Services up to the maximum compensation amount set forth in Section 4. As Required Services, if any, shall be authorized by the CITY with a Task Order (as below) assigned and authorized by CITY's Project Manager, as identified in Section 13 (Project Management), except as otherwise provided in the last paragraph of this Section 1, below. Each Task Order shall be in substantially the same form as the attached Exhibit A-1, entitled "PROFESSIONAL SERVICES TASK ORDER". Each Task Order shall contain a specific scope of services, schedule of performance and maximum compensation amount, in accordance with the 8 Item 26: Staff Report Pg. 10 Packet Pg. 520 of 857 DocuSign Envelope ID: 0EEACA31-356D-4B22-A4AA-61AE085C688F Item 26 Attachment A - ignment Agreement Baker Tilly Advisory provisions of this Agreement, and shall be drafted and proposed by CONSULS Group, 11 fisted by CITY. Task Orders may be assigned at the task level as described in Exhibit A or associated sub -task level. Compensation for As Required Services shall be based on the compensation structure set forth in Section 4 and Exhibit B, including any authorized expenses, based on the hourly rates set forth in Exhibit B-1, or a negotiated lump sum, to be set forth in the Task Order. To accept a Task Order, CONSULTANT shall sign the Task Order and return it to the CITY's Project Manager within the time specified by the CITY's Project Manager, and upon authorization by CITY (defined as counter -signature by the CITY's Project Manager), the fully executed Task Order shall become part of this Agreement. The cumulative total compensation to CONSULTANT for all Services, and all Task Orders authorized under this Agreement, shall not exceed the amount of compensation set forth in Section 4. CONSULTANT shall only be compensated for As Required Services performed under an authorized Task Order and only up to the maximum amount of compensation set forth in Section 4. Performance of and payment for any As Required Services are subject to all requirements and restrictions in this Agreement. The Task Orders for Tasks 1, 2, 3, and 5 for Fiscal Year 2020-21 are attached and hereby approved. Any changes to herein -approved Task Orders for Tasks 1, 2, 3, and 5 may be made by subsequent review and approval by the CITY's Project Manager via amended Task Order, utilizing the Task Order approval process detailed herein. SECTION 2. TERM. The term of this Agreement shall be from October 1, 2020 through June 30, 2022, coinciding with partial Fiscal Year 2020-21 (October 1, 2020 through June 30, 2021) and full Fiscal Year 2021-22 (July 1, 2021 through June 30, 2022), unless terminated earlier pursuant to Section 19 of this Agreement. The term of this Agreement may be extended by written instrument, in accordance with Section 27.4 of this Agreement, for any period or periods not to exceed three (3) additional years. 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 Scope of Services set forth in Exhibit A and/or the timeline set forth in the relevant Task Order, as applicable. Any Services for which times for performance are not specified in this Agreement or in the relevant Task Order 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 total compensation to be paid to CONSULTANT for performance of the Services, including As Required Services (per Section 1) and any reimbursable expenses, shall not exceed five hundred and fifty thousand dollars ($550,000) in partial Fiscal Year 2020-21, and seven hundred and fifty thousand dollars ($750,000) in Fiscal Year 2021-22, for a total contract amount not to exceed one million three hundred thousand dollars ($1,300,000), as detailed in Exhibit B (Compensation). CONSULTANT agrees to complete all Services, including As Required Services and any reimbursable expenses, within this amount. The applicable rate schedule is set out at Exhibit "B- 1", entitled "SCHEDULE OF RATES," which is attached to and made a part of this Agreement. Item 26: Staff Report Pg. 11 Packet Pg. 521 of 857 DocuSign Envelope ID: 0EEACA31-356D-4B22-A4AA-61AE085C688F Item 26 Attachment A - ignment Agreement Baker Tilly Advisory Any work performed or expenses incurred for which payment would result Group, LP the maximum amount of compensation set forth herein shall be at no cost to the CITY. SECTION 5. INVOICES. In order to request payment, CONSULTANT shall submit monthly invoices 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 B, the CONSULTANT's schedule of rates (set forth in Exhibit B-1), and/or the relevant Task Order, as applicable. 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 the CITY's Project Manager at the address specified in Section 13 below (Project Management), with a copy to CITY's Accounts Payable Division, with payment subject to approval of the CITY's Project Manager. The CITY will generally process and pay invoices within thirty (30) days of receipt. SECTION 6. QUALIFICATIONS/STANDARD OF CARE. All of the Services shall be performed by CONSULTANT or under CONSULTANT's supervision. CONSULTANT represents that it possesses 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 subconsultants, if permitted, 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 of the 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. CONSULTANT shall procure all permits and licenses, pay all charges and fees, and give all notices required by law in the performance of the Services. SECTION 8. ERRORS/OMISSIONS. CONSULTANT is solely responsible for costs, including, but not limited to, increases in the cost of Services, arising from or caused by CONSULTANT's errors and omissions, including, but not limited to, the costs of corrections such errors and omissions, any change order markup costs, or costs arising from delay caused by the errors and omissions or unreasonable delay in correcting the errors and omissions. SECTION 9. COST ESTIMATES. If this Agreement pertains to the design of a public works project, CONSULTANT shall submit estimates of probable construction costs at each phase of design submittal. If the total estimated construction cost at any submittal exceeds the CITY's stated construction budget by ten percent (10%) or more, CONSULTANT shall make recommendations to CITY for aligning the PROJECT design with the budget, incorporate CITY approved recommendations, and revise the design to meet the Project budget, at no additional cost to CITY. 10 Item 26: Staff Report Pg. 12 Packet Pg. 522 of 857 DocuSign Envelope ID: 0EEACA31-356D-4B22-A4AA-61AE085C688F Item 26 Attachment A - ignment Agreement Baker Tilly Advisory SECTION 10. INDEPENDENT CONTRACTOR. CONSULTANT ac Group, LP ees 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. CONSULTANT agrees to maintain and make available to CITY, upon request and during regular business hours, accurate books and accounting records demonstrating CONSULTANT's compliance with this Section. 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 consent of the City Council. Consent to one assignment will not be deemed to be consent to any subsequent assignment. Any assignment made without the approval of the city manager will be void. SECTION 12. SUBCONTRACTING. CONSULTANT shall not subcontract any portion of the work to be performed under this Agreement without the prior written authorization of the CITY. Upon prior written authorization by CITY via Task Order, CONSULTANT shall be responsible for directing the work of any subconsultants and for any compensation due to subconsultants. CITY assumes no responsibility whatsoever concerning compensation. CONSULTANT shall be fully responsible to CITY for all acts and omissions of a subconsultant. CONSULTANT shall change or add subconsultants only with the prior approval of the CITY via Task Order. SECTION 13. PROJECT MANAGEMENT. CONSULTANT will assign Jodi Dobson as the Project Manager to have supervisory responsibility for the performance, progress, and execution of the Services and Kyle O'Rourke as the designated City Auditor to represent CONSULTANT during the day-to-day work on the Project. If circumstances cause the substitution of the Project Manager, designated City Auditor, or any other key personnel for any reason, the appointment of a substitute beyond a period of 90 days will be subject to the prior written approval of the CITY's Project Manager. Further, the City Council will interview and approve by resolution the appointment of any substitute City Auditor as specified here and in Exhibit A (Scope of Services). CONSULTANT, at CITY's request, shall promptly remove personnel who CITY finds do not perform the Services in an acceptable manner, are uncooperative, or present a threat to the 11 Item 26: Staff Report Pg. 13 Packet Pg. 523 of 857 DocuSign Envelope ID: 0EEACA31-356D-4B22-A4AA-61AE085C688F Item 26 Attachment A - Assignment Agreement Baker Tilly Advisory adequate or timely completion of the Project or a threat to the safety of pers Group, LP CITY's Project Manager is the Chair of the City Council's Policy and Services Committee, or other City Council designee as identified to CONSULTANT in writing. The CITY's Project Manager will be CONSULTANT's point of contact with respect to performance, progress and execution of the Services under this Agreement. City Council may designate an alternate CITY Project Manager upon approval of the Annual Audit Plan described in Exhibit A (Scope of Services), approval of City Council appointments, or at any other time it is so acted upon by City Council. SECTION 14. OWNERSHIP OF MATERIALS. CITY shall retain all title to CITY's documents, data and other materials that are provided to CONSULTANT, including all copies thereof, and all rights to patents, copyrights, trademarks, trade secrets and other intellectual property rights inherent in such CITY materials. CITY hereby grants to CONSULTANT a limited, non-exclusive, non -transferable license to use such CITY materials in the performance of this Agreement and for CONSULTANT's internal quality assurance purposes to meet its professional standards per the American Institute of Certified Public Accountants (AICPA), Consulting Standards and for no other purpose. Pursuant to this Agreement, CONSULTANT will provide CITY with the deliverables ("Deliverables") detailed in Exhibit A (Scope of Services) and/or any approved Task Order, as applicable. Deliverables provided by the CONSULTANT shall become the property of the City. City hereby grants to CONSULTANT a limited, non-exclusive, non- transferable license to use such Deliverables for CONSULTANT's internal quality assurance purposes to meet its professional standards per the AICPA, Consulting Standards, and for no other purpose without the prior written consent of the City Manager. All programs, working papers, files, and other materials used or made by the CONSULTANT pursuant to this Agreement in researching and preparing any Deliverable to be provided to the CITY hereunder shall remain the property of the CONSULTANT (except as otherwise provided for in this Section). The City will have access to such materials upon request. The CONSULTANT shall comply with the confidentiality provisions of this Agreement and shall not disclose to any third party the contents of such programs, working papers, files, or any other materials or Deliverables without prior written approval of the City Manager. SECTION 15. AUDITS. CONSULTANT will permit CITY to audit, at any reasonable time during the term of this Agreement and for three (3) years thereafter, CONSULTANT's records pertaining to matters covered by this Agreement. CONSULTANT further agrees to maintain and retain such records for at least three (3) years after the expiration or earlier termination of this Agreement. SECTION 16. INDEMNITY. 16.1. To the fullest extent permitted by law, CONSULTANT shall indemnify, defend and hold harmless CITY, its Council members, officers, employees and agents (each an "Indemnified Party") from and against any and all third -party demands, claims, or liability of any nature, including death or injury to any person, property damage or any other loss, including all costs and expenses of whatever nature including attorney's fees, experts fees, court costs and disbursements ("Claims") resulting from, arising out of or in any manner related to the negligence, recklessness, or willful misconduct of CONSULTANT, its officers, employees, agents or contractors under this Agreement, regardless of whether or not it is caused in part by an 12 Item 26: Staff Report Pg. 14 Packet Pg. 524 of 857 DocuSign Envelope ID: 0EEACA31-356D-4B22-A4AA-61AE085C688F Item 26 Attachment A - Assignment Agreement to Baker Tilly Advisory Indemnified Party. Group, LP 16.2. Notwithstanding the above, nothing in this Section 16 shall be construed to require CONSULTANT to indemnify an Indemnified Party from Claims arising from the active negligence, sole negligence or willful misconduct of an Indemnified Party. 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 16.A. LIMITATION OF LIABILITY. 16.A.1. NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT, IN NO EVENT SHALL CONSULTANT BE LIABLE TO CITY, REGARDLESS OF WHETHER ANY CLAIM IS BASED ON CONTRACT OR TORT, FOR SPECIAL, CONSEQUENTIAL, INDIRECT OR INCIDENTAL DAMAGES OR FOR ANY LOSS OF PROFIT OR LOSS OF BUSINESS BY CITY, EVEN IF CONSULTANT HAS BEEN ADVISED OF THE POSSIBILITY OF ANY SUCH POTENTIAL CLAIM, LOSS OR DAMAGE. EXCEPT AS PROVIDED IN THE IMMEDIATELY FOLLOWING SENTENCE, IN NO EVENT SHALL THE TOTAL AGGREGATE LIABILITY UNDER THIS AGREEMENT OF CONSULTANT TO CITY EXCEED THE DOLLAR AMOUNT PROVIDED FOR IN SECTION 4 ("NOT TO EXCEED COMPENSATION") OF THIS AGREEMENT. CONSULTANT'S LIABILITY LIMIT SET FORTH HEREIN SHALL NOT APPLY TO (1) DAMAGES CAUSED BY CONSULTANT'S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, (2) CONSULTANT'S OBLIGATIONS TO INDEMNIFY AND DEFEND CITY PURSUANT TO SECTION 16 ("INDEMNIFICATION") OF THIS AGREEMENT, (3) LIMIT CLAIMS OR GENERAL DAMAGES THAT FALL WITHIN THE INSURANCE COVERAGE OF THIS AGREEMENT, (4) STATUTORY DAMAGES, AND (5) WRONGFUL DEATH CAUSED BY CONSULTANT. 16.A.2. CITY'S PAYMENT OBLIGATIONS UNDER THIS AGREEMENT SHALL BE LIMITED TO THE PAYMENT OF THE COMPENSATION PROVIDED FOR IN SECTION 4 ("NOT TO EXCEED COMPENSATION") OF THIS AGREEMENT. NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT, IN NO EVENT SHALL CITY BE LIABLE, REGARDLESS OF WHETHER ANY CLAIM IS BASED ON CONTRACT OR TORT, FOR ANY SPECIAL, CONSEQUENTIAL, INDIRECT OR INCIDENTAL DAMAGES, INCLUDING, BUT NOT LIMITED TO, LOST PROFITS, ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR THE SERVICES PERFORMED IN CONNECTION WITH THIS AGREEMENT. SECTION 17. WAIVERS. The waiver by either party of any breach or violation of any covenant, term, condition or provision of this Agreement, or of the provisions of any ordinance or law, will not be deemed to be a waiver of any other term, covenant, condition, provisions, ordinance or law, or of any subsequent breach or violation of the same or of any other term, covenant, condition, provision, ordinance or law. SECTION 18. INSURANCE. 13 Item 26: Staff Report Pg. 15 Packet Pg. 525 of 857 DocuSign Envelope ID: 0EEACA31-356D-4B22-A4AA-61AE085C688F Item 26 Attachment A - Assignment Agreement to Baker Tilly Advisory 18.1. CONSULTANT, at its sole cost and expense, shall o Group, LP , in full force and effect during the term of this Agreement, the insurance coverage described in Exhibit "D". 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 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. CONSULTANT shall provide the Purchasing Manager with thirty (30) days' prior written notice of any 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 promptly following 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 in accordance with the terms of Sections 16 and 16.A of this Agreement. SECTION 19. TERMINATION OR SUSPENSION OF AGREEMENT OR SERVICES. 19.1. The CITY may suspend the performance of the Services, in whole or in part, or terminate this Agreement, with or without cause, by giving ten (10) days prior written notice thereof to CONSULTANT. Upon receipt of such notice, CONSULTANT will immediately discontinue its performance of the Services. 19.2. CONSULTANT may terminate this Agreement or suspend its performance of the Services by giving thirty (30) days prior written notice thereof to CITY, but only in the event of a substantial failure of performance by CITY. 19.3. In the event of such suspension or termination, CONSULTANT will deliver to the CITY's Project Manager on or before the effective date in the notice of suspension or termination, any and all Deliverables, 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 Deliverables are the property of CITY, as detailed in Section 14 (Ownership of Materials). 19.4. Upon such suspension or termination by CITY, CONSULTANT will be 14 Item 26: Staff Report Pg. 16 Packet Pg. 526 of 857 DocuSign Envelope ID: 0EEACA31-356D-4B22-A4AA-61AE085C688F Item 26 Attachment A - Assignment Agreement to Baker Tilly Advisory paid for the Services rendered or materials delivered to CITY in accorda Group, LP of services on or before 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 which are of direct and immediate benefit to CITY as such determination may be made by the City Manager acting in the reasonable exercise of his/her discretion. The following Sections will survive any expiration or termination of this Agreement: 14, 15, 16, 16.A, 19.4, 20, 25 and 27. 19.5. No payment, partial payment, acceptance, or partial acceptance by CITY will operate as a waiver on the part of CITY of any of its rights under this Agreement. SECTION 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 and Project Manager To CONSULTANT: Attention of the project director at the address of CONSULTANT recited above SECTION 21. CONFLICT OF INTEREST. 21.1. In accepting 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 subconsultants, contractors or persons 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. 21.3. If the Project Manager determines that CONSULTANT is a "Consultant" as that term is defined by the Regulations of the Fair Political Practices Commission, CONSULTANT shall be required and agrees to file the appropriate financial disclosure documents required by the Palo Alto Municipal Code and the Political Reform Act. SECTION 22. NONDISCRIMINATION. As set forth in Palo Alto Municipal Code section 2.30.510, 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 15 Item 26: Staff Report Pg. 17 Packet Pg. 527 of 857 DocuSign Envelope ID: 0EEACA31-356D-4B22-A4AA-61AE085C688F Item 26 Attachment A - ignment Agreement Baker Tilly Advisory identity, age, religion, disability, national origin, ancestry, sexual orientation Group, LP Aetic 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. 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, incorporated by reference and may be amended from time to time. CONSULTANT shall comply with waste reduction, reuse, recycling and disposal requirements of CITY's Zero Waste Program. Zero Waste best practices include first minimizing and reducing waste; second, reusing waste and third, recycling or composting waste. In particular, CONSULTANT shall comply with the following zero waste requirements: (a) All printed materials provided by CONSULTANT to CITY generated from a personal computer and printer including but not limited to, proposals, quotes, invoices, reports, and public education materials, shall be double -sided and printed on a minimum of 30% or greater post -consumer content paper, unless otherwise approved by CITY's Project Manager. Any submitted materials printed by a professional printing company shall be a minimum of 30% or greater post - consumer material and printed with vegetable based inks. (b) Goods purchased by CONSULTANT on behalf of CITY shall be purchased in accordance with CITY's Environmental Purchasing Policy including but not limited to Extended Producer Responsibility requirements for products and packaging. A copy of this policy is on file at the Purchasing Division'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 it may be 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 25.1. This Agreement is subject to the fiscal provisions of the Charter of the City of Palo Alto and the Palo Alto Municipal Code. This Agreement will terminate without any penalty (a) at the end of any fiscal year in the event that funds are not appropriated for the following fiscal year, or (b) at any time within a fiscal year in the event that funds are only appropriated for a portion of the fiscal year and funds for this Agreement are no longer available. This section shall 16 Item 26: Staff Report Pg. 18 Packet Pg. 528 of 857 DocuSign Envelope ID: 0EEACA31-356D-4B22-A4AA-61AE085C688F Item 26 Attachment A - ignment Agreement Baker Tilly Advisory take precedence in the event of a conflict with any other covenant, term, conk. Group, l -P -fin of this Agreement. SECTION 26. PREVAILING WAGES AND DIR REGISTRATION FOR PUBLIC WORKS CONTRACTS ® 26.1 This Project is not subject to prevailing wages. CONSULTANT is not required to pay prevailing wages in the performance and implementation of the Project in accordance with SB 7 if the contract is not a public works contract, if the contract does not include a public works construction project of more than $25,000, or the contract does not include a public works alteration, demolition, repair, or maintenance (collectively, `improvement') project of more than $15,000. SECTION 27. MISCELLANEOUS PROVISIONS. 27.1. This Agreement will be governed by the laws of the State of California without regard to conflict of law provisions. 27.2. 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. 27.3. 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. 27.4. This Agreement represents the entire and integrated agreement between the parties and supersedes all prior negotiations, representations, and contracts, either written or oral. This Agreement may be amended only by a written instrument, which is signed by the parties and approved as required under the Palo Alto Municipal Code. 27.5. The covenants, terms, conditions and provisions of this Agreement will apply to, and will bind, the heirs, successors, executors, administrators, assignees, and consultants of the parties. 27.6. 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. 27.7. All exhibits, addenda, appendices, attachments, and schedules to this Agreement (collectively, "exhibits") which are referred to herein are by such reference incorporated in this Agreement and deemed part of this Agreement. 27.8 In the event of a conflict between the terms of this Agreement and the exhibits hereto or CONSULTANT's proposal (if any), the Agreement shall control. In the case of any conflict between the exhibits hereto and CONSULTANT's proposal, the exhibits shall control. 17 Item 26: Staff Report Pg. 19 Packet Pg. 529 of 857 DocuSign Envelope ID: 0EEACA31-356D-4B22-A4AA-61AE085C688F Item 26 Attachment A - Assignment Agreement to Baker Tilly Advisory Group, LP 27.9 If, pursuant to this contract with CONSULTANT, CITY shares with CONSULTANT personal information as defined in California Civil Code section 1798.81.5(d) about a California resident ("Personal Information"), CONSULTANT shall maintain reasonable and appropriate security procedures to protect that Personal Information, and shall inform City promptly following discovery that there has been a breach in the security of the system impacting or potentially impacting Personal Information, or in the security of the Personal Information, in CONSULTANT'S custody or control. CONSULTANT shall not use Personal Information for direct marketing purposes without City's express written consent. 27.10 In the performance of the services, CONSULTANT may have access to CITY's proprietary or confidential information, the disclosure of which to third parties may damage the CITY, its employees, customers or residents and/or may violate state and/or federal law. CONSULTANT will hold such information in confidence and use it only to perform this Agreement and for no other purpose. CONSULTANT shall exercise the same standard of care to protect such information as CONSULTANT uses to protect its own proprietary and/or confidential information and in no case less than a reasonable standard of care. 27.11 The individuals executing this Agreement represent and warrant that they have the legal capacity and authority to do so on behalf of their respective legal entities. 27.12 This Agreement may be signed in multiple counterparts, which, when executed by the parties, shall together constitute a single binding agreement. 18 Item 26: Staff Report Pg. 20 Packet Pg. 530 of 857 DocuSign Envelope ID: 0EEACA31-356D-4B22-A4AA-61AE085C688F Item 26 Attachment A - Assignment Agreement to Baker Tilly Advisory CONTRACT No. C21179340 SIGNATURE PAGE Group, LP IN WITNESS WHEREOF, the parties hereto have by their duly authorized representatives executed this Agreement on the date first above written. CITY OF PALO ALTO tDocuSigned by: 4 -' & Ed Shi kada City Manager (Required on contracts over $85,000) Purchasing Manager (Required on contracts over $50,000) Contracts Administrator (Required on contracts under $50,000) APPROVED AS TO FORM: Sgned by: [-Zuu�' t11y stump C 99t H or designee (Required on Contracts over $25,000) Attachments: EXHIBIT "A": SCOPE OF SERVICES BAKER TILLY US, LLP Officer 1 Docu5igned by By:1L4-4. 3 o "Sfi79Q7s`1A2E4AD Name:... Title: Partner Officer 2 (Required for Corp. or LLC) By: DocuSigned by: L' 8/ 4q 2 ❑a-���po5i�t. �7y�� Name: He/aT6fef 4er Title: Partner EXHIBIT "A-1" PROFESSIONAL SERVICES TASK ORDER EXHIBIT "B": COMPENSATION EXHIBIT "B-1": SCHEDULE OF RATES EXHIBIT "C": INSURANCE REQUIREMENTS FISCAL YEAR 2020/21 TASK ORDERS 1, 2, 3 AND 5 19 Item 26: Staff Report Pg. 21 Packet Pg. 531 of 857 DocuSign Envelope ID: 0EEACA31-356D-4B22-A4AA-61AE085C688F Item 26 Attachment A - Assignment Agreement to Baker Tilly Advisory EXHIBIT "A" Group, LP SCOPE OF SERVICES Background In accordance with City Charter and Municipal Code requirements, the Palo Alto City Council must appoint a City Auditor who serves at the will of the Council, and who executes annual Council -approved internal audit plans through the Office of the City Auditor. Mission of the Office of the City Auditor The mission of the office of the city auditor is to promote honest, efficient, effective, economical, and fully accountable and transparent city government. This mission is fulfilled by conducting annual performance audits and financial/operational analyses of city departments, programs, services or activities. These audits are intended 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. Internal Auditor Scope of Services This section contains the scope of internal audit services to be performed by CONSULTANT as required by the City Charter and Municipal Code, including the required duties of, and audit tasks performed by, the CONSULTANT'S City Auditor. Service Requirements of the City Auditor The City Auditor shall: • Ensure that city departments and officers responsible for accounting and financial management activities comply with statutory requirements and accounting standards. • Perform internal audits of all the fiscal transactions and operations of the City, in accordance with annual audit plans approved and directed by the City Council, that include: o Conducting performance audits of city departments, programs, services or activities, o Examination and analysis of fiscal procedures and expenditures, o Provision of other analyses of financial and operational data, and o Periodic unscheduled audits. As Required Internal Audit Tasks The following 6 tasks represent the core services to be provided by CONSULTANT. These As Required Services must be authorized by CITY's representative through the approval of Task Orders prepared by CONSULTANT, in further accordance with Section 4 of this Agreement (Not To Exceed Compensation) and Exhibit A-1 thereto (Professional Services Task Order). 20 Item 26: Staff Report Pg. 22 Packet Pg. 532 of 857 DocuSign Envelope ID: 0EEACA31-356D-4B22-A4AA-61AE085C688F Task 1. Citywide Risk Assessment: Item 26 Attachment A - Assignment Agreement to Baker Tilly Advisory Group, LP Beginning with year 1 and continuing at a minimum every other year thereafter, prepare a citywide risk assessment following the same review and approval requirements described in Task 2. The risk assessment process will be the primary determinant of subsequent audit activity. Task 2. Preparation of Annual Audit Plan: Prepare an annual audit plan for review by the City Manager and appropriate City Council committee(s), and approval by the City Council, that identifies preliminary objectives of each audit to be performed, the schedule for each audit, and the estimated not to exceed resources and costs for each audit. The City Auditor shall consult with the City Attorney as necessary when developing audit plans. The annual audit plan will be largely based on the risk assessment required in Task 1. Task 3. Selection of External Financial Auditor and Annual Audit Coordination: Coordinate the annual external financial audit in each year of the contract term. Pursuant to the City Charter, the City Auditor shall oversee the selection process for the annual external financial auditor. The City anticipates conducting a Request for Proposals for this purpose in early 2021. Task 4. Execute Annual Audit Plan: Conduct a minimum number of internal audits in accordance with each approved annual audit plan based on the risk assessments. Each internal audit will commence only upon the City's approval of a Task Order (which may be at the task or sub -task level) as required by this Agreement. Each internal audit requires the preparation of a written report for review by the City Manager, City Attorney and appropriate Council committee, and review/approval by the City Council as required. Task 5. Preparation of Quarterly Reports, Annual Status Report, Provision of City Hotline, and Other Ongoing Office Administrative Functions: Prepare and issue quarterly reports describing the status and progress toward audit completion, to be provided as information reports to the City Council and reviewed by the appropriate committee, unless other reporting methods are directed by Council. Prepare and issue an annual report in the first quarter of each fiscal year on the status of recommendations made in completed audits, to be provided as an information report to the City Council and reviewed by the appropriate committee, unless other reporting methods are directed by Council. Maintain and respond to the City's employee "hotline" function provided through voicemail, email or written submissions. Coordinate referrals as appropriate to other City offices, departments or divisions and incorporate relevant referrals into future risk assessments, audit plans or audit activity as appropriate. 21 Item 26: Staff Report Pg. 23 Packet Pg. 533 of 857 DocuSign Envelope ID: 0EEACA31-356D-4B22-A4AA-61AE085C688F Item 26 Attachment A - Assignment Agreement to Baker Tilly Advisory Group, LP Task 6. Evaluation and Benchmarking Undergo a peer evaluation following the guidelines of the Association of Local Government Auditors every two years (i.e., at the end of the initial contract term, then every other year thereafter throughout the contract term), or as required by the City Council, so that performance of the internal audit function can be objectively assessed. Prepare a cost per audit analysis following the first completed fiscal year, to be submitted at the beginning of the second fiscal year and every year thereafter throughout the contract term, that includes benchmark agencies determined by the CITY, and obtain independent third -party certification of data accuracy. The cost per audit analysis will be used to evaluate the cost effectiveness of services provided by the CONSULTANT. This evaluation will be incorporated into ongoing performance assessments as required and will help ensure that fees for service provision throughout the duration of the Agreement are objectively determined and mutually agreed upon. Last, the City Council will perform periodic Closed Session performance evaluations with the designated City Auditor as allowed by law and performed with the other City Council appointees (the City Manager, City Attorney and City Clerk). The appointed City Auditor will have a 6 -month evaluation, and then annually thereafter throughout the initial contract term and any extensions granted by the City Council. Internal Auditor Services — Designation of City Auditor, Minimum Experience Requirements and Auditing Standards Consistent with City Charter and Municipal Code provisions, the City Council must appoint a City Auditor who serves at the will of the Council, and who executes annual Council -approved internal audit plans through the Office of the City auditor. Designation of City Auditor The CONSULTANT has designated Kyle O'Rourke to fulfil the role of City Auditor, whose designation received City Council approval and appointment, and whose appointment is subject to at -will modification by the Council. In accepting this appointment and its associated responsibilities and requirements, the CONSULTANT agrees to the following stipulations and reserved rights of the CITY in the event the City Auditor vacates the appointment for whatever reason: CONSULTANT must designate a temporary replacement not to exceed 3 months if the City Auditor vacates the appointment without enough time for Council to appoint a replacement. Any subsequent appointment of a City Auditor be conducted in the manner specified by the City Council, subject to applicable laws. Continued appointment of the City Auditor is based on and subject to acceptable performance. 22 Item 26: Staff Report Pg. 24 Packet Pg. 534 of 857 DocuSign Envelope ID: 0EEACA31-356D-4B22-A4AA-61AE085C688F Item 26 Attachment A - Assignment Agreement Baker Tilly Advisory During the term of this Agreement, CONSULTANT may propose an al Group, LP for Council consideration should it become necessary to do so. Minimum Experience Requirements The CONSULTANT and City Auditor must have at least 5 years of experience performing internal audit services to local, state, federal or quasi -public entities, with a focus on performance auditing. Auditing Standards The appointed City Auditor must be a Certified Public Accountant (CPA) or Certified Internal Auditor (CIA) in good standing and must maintain such certification at all time during the term of the Agreement. All staff members of CONSULTANT assigned to internal auditor services under this Agreement must be able to conduct or assist in conducting internal audits in accordance with Government Accounting Standards, as established by the Comptroller General of the United States, Governmental Accountability Office. Maintenance of Independent Contractor Status Proposers must maintain independent contractor status at all times during the Agreement term. Best Value Service Provision The City Council has awarded this contract to the CONSULTANT based on its ability to deliver cost effective and efficient internal auditor services that represent the best possible value in exchange for public funds. Continued service provision is dependent on a number of evaluative factors to help determine that the CITY receives the best possible value for internal audit services during the term of this Agreement. These include, but are not limited to, acceptable pricing; cost effective and service provision provided by the City Auditor and CONSULTANT; and favorable City Auditor performance evaluations. Additionally, budget constraints and economic conditions are factors that shall be considered in determining acceptable pricing and funding. 23 Item 26: Staff Report Pg. 25 Packet Pg. 535 of 857 DocuSign Envelope ID: 0EEACA31-356D-4B22-A4AA-61AE085C688F Item 26 Attachment A - Assignment Agreement to Baker Tilly Advisory EXHIBIT "A-1" Group, LP 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 1 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. OR PURCHASE ORDER REQUISITION NO. (AS APPLICABLE) 1A. 1 B. 2. 3. 4 61 6 7 8 MASTER AGREEMENT NO. (MAYBE SAME AS CONTRACT /P.O. NO. ABOVE): TASK ORDER NO.: CONSULTANT NAME: PERIOD OF PERFORMANCE: START: COMPLETION: TOTAL TASK ORDER PRICE: $ BALANCE REMAINING IN MASTER AGREEMENT/CONTRACT $ BUDGET CODE COST CENTER COST ELEMENT WBS/CIP PHASE CITY PROJECT MANAGER'S NAME & DEPARTMENT: 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) ATTACHMENTS: A: Task Order Scope of Services B (if any): I hereby authorize the performance of the work described in this Task Order. APPROVED: CITY OF PALO ALTO BY: Name Title Date I hereby acknowledge receipt and acceptance of this Task Order and warrant that I have authority to sign on behalf of Consultant. APPROVED: COMPANY NAME: BY: Name Title Date 24 Item 26: Staff Report Pg. 26 Packet Pg. 536 of 857 DocuSign Envelope ID: 0EEACA31-356D-4B22-A4AA-61AE085C688F EXHIBIT "B" COMPENSATION Item 26 Attachment A - Assignment Agreement to Baker Tilly Advisory Group, LP The CITY agrees to compensate the CONSULTANT for the Services (including As Required 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 hourly rate schedule attached as Exhibit B-1 up to the not to exceed budget amount for each task set forth below. CONSULTANT shall perform the tasks and categories of work as outlined and budgeted below. The CITY's Project Manager may approve in writing the transfer of budget amounts between any of the tasks or categories listed below provided the total compensation for Services, including As Required Services and any reimbursable expenses do not exceed the amounts set forth in Section 4 of this Agreement. Budget Schedule FY 2020-21 FY 2021-22 Totals Task 1: Citywide Risk Assessment $65,000.00 $25,000.00 $90,000.00 Task 2: Preparation of Annual Audit $15,000.00 $15,000.00 $30,000.00 Plan Task 3: Selection of External Financial Auditor and Annual Audit $30,000.00 $20,000.00 $50,000.00 Coordination Task 4: Execute Annual Audit Plan $390,000.00 $600,000.00 $990,000.00 Task 5: Preparation of Quarterly Reports, Annual Status Report, Provision of City Hotline, and Other $50,000.00 $50,000.00 $100,000.00 Ongoing Office Administrative Functions Task 6: Evaluation and Benchmarking $0.00 $40,000.00 $40,000.00 Totals $550,000.00 $750,000.00 $1,300,000.00 REIMBURSABLE EXPENSES The administrative, overhead, secretarial time or secretarial overtime, word processing, photocopying, in-house printing, computing, telecommunications, insurance and other ordinary business expenses are included within the scope of payment for Services and are not reimbursable expenses. CITY shall reimburse CONSULTANT for the following reimbursable expenses at cost: 25 Item 26: Staff Report Pg. 27 Packet Pg. 537 of 857 DocuSign Envelope ID: 0EEACA31-356D-4B22-A4AA-61AE085C688F Item 26 Attachment A - Assignment Agreement to Baker Tilly Advisory Group, LP Travel to or from the San Francisco Bay area, including transportation and meals, will be reimbursed at actual cost. Any and all such reimbursable expenses shall be identified by CONSULTANT as separate line items on the applicable Task Order. Consultant travel and meal expenses are not subject to the City's Travel Policy. CONSULTANT shall identify a fixed "not to exceed" figure for anticipated reimbursable expenses, subject to the City of Palo Alto's approval of such Task Order. Should CONSULTANT'S actual incurred expenses exceed the "not to exceed" figure, CONSULTANT and the CITY shall meet in good faith to determine the extent to which CONSULTANT shall be reimbursed by the CITY for the excess. All requests for payment of expenses exceeding $25.00 shall be accompanied by appropriate backup documentation and information, including without limitation prior City approval as part of the associated Task Order. 26 Item 26: Staff Report Pg. 28 Packet Pg. 538 of 857 DocuSign Envelope ID: 0EEACA31-356D-4B22-A4AA-61AE085C688F Item 26 Attachment A - Assignment Agreement to Baker Tilly Advisory Group, LP EXHIBIT "B-1" SCHEDULE OF RATES Compensation for services rendered under this Agreement shall be calculated based on the following hourly rate schedule, which shall remain fixed during the term of the Agreement. Hourly rates for any subsequent renewal term or terms shall be negotiated to the mutual agreement of the parties. Staff level Hourly rate Partner/Director $345 City Auditor/Senior Manager $245 Manager $210 Senior Consultant $185 Consultant $130 27 Item 26: Staff Report Pg. 29 Packet Pg. 539 of 857 DocuSign Envelope ID: 0EEACA31-356D-4B22-A4AA-61AE085C688F Item 26 Attachment A - Assignment Agreement to Baker Tilly Advisory EXHIBIT "C" Group, LP INSURANCE REQUIREMENTS CONTRACTORS 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, BELOW: MINIMUM LIMITS REQUIRED TYPE OF COVERAGE REQUIREMENT EACH OCCURRENCE AGGREGATE YES WORKER'S COMPENSATION STATUTORY YES EMPLOYER'S LIABILITY STATUTORY BODILY INJURY $1,000,000 $1,000,000 YES GENERAL LIABILITY, INCLUDING PERSONAL INJURY, BROAD FORM PROPERTY DAMAGE $1,000,000 $1,000,000 PROPERTY DAMAGE BLANKET CONTRACTUAL, AND FIRE LEGAL BODILY INJURY & PROPERTY $1,000,000 $1,000,000 LIABILITY DAMAGE COMBINED. BODILY INJURY $1,000,000 $1,000,000 EACH PERSON $1,000,000 $1,000,000 - EACH OCCURRENCE $1,000,000 $1,000,000 YES AUTOMOBILE LIABILITY, INCLUDING ALL OWNED, HIRED, NON -OWNED PROPERTY DAMAGE $1,000,000 $1,000,000 BODILY INJURY AND PROPERTY $1,000,000 $1,000,000 DAMAGE, COMBINED 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: CONTRACTOR, 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 CONTRACTOR 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. INSURANCE COVERAGE MUST INCLUDE: A. A CONTRACTUAL LIABILITY ENDORSEMENT PROVIDING INSURANCE COVERAGE FOR CONTRACTOR'S AGREEMENT TO INDEMNIFY CITY. II. CONTACTOR MUST SUBMIT CERTIFICATES(S) OF INSURANCE EVIDENCING REQUIRED COVERAGE AT THE FOLLOWING URL: https://www.planetbids.com/portal/portal.cfin?CompanyID=25569. 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. 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 28 Item 26: Staff Report Pg. 30 Packet Pg. 540 of 857 DocuSign Envelope ID: 0EEACA31-356D-4B22-A4AA-61AE085C688F Item 26 Attachment A - Assignment Agreement to Baker Tilly Advisory THE COMPANY UNDER THIS POLICY. Group, LP C. NOTICE OF CANCELLATION 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. VENDORS ARE REQUIRED TO FILE THEIR EVIDENCE OF INSURANCE AND ANY OTHER RELATED NOTICES WITH THE CITY OF PALO ALTO AT THE FOLLOWING URL: HTTPS://WWW.PLANETBIDS.COM/PORTAL/PORTAL.CFM?COMPANYID=25569 W.PLANETBIDS.COM/PORTAL/PORTAL.CFM?COMPANYID=25569 OR HTTP://WWW.CITYOFPALOALTO.ORG/GOV/DEPTS/ASD/PLANET BIDS HOW TO.ASP 29 Item 26: Staff Report Pg. 31 Packet Pg. 541 of 857 DocuSign Envelope ID: 0EEACA31-356D-4B22-A4AA-61AE085C688F Item 26 Attachment A - Assignment Agreement to Baker Tilly Advisory PROFESSIONAL SERVICES TASK ORDER Group, LP TASK ORDER 1— FY21 Consultant shall perform the Services detailed below in accordance with all the terms and conditions of the Agreement referenced in Item 1 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) IA. MASTER AGREEMENT NO. (MAYBE SAME AS CONTRACT /P.O. NO. ABOVE): 1B. TASK ORDER NO.: FY21-001 2. CONSULTANT NAME: Baker Tilly US, LLP 3. PERIOD OF PERFORMANCE: START: October 1, 2020 COMPLETION: January 15, 2021 4 TOTAL TASK ORDER PRICE: $65,000 BALANCE REMAINING IN MASTER AGREEMENT/CONTRACT $1,235,000 5. BUDGET CODE COST CENTER COST ELEMENT WBS/CIP PHASE 6. CITY PROJECT MANAGER'S NAME & DEPARTMENT: Alison Cormack, 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 AO ALTO ocu igned y: BY: 1L &., V 6%aLL Name 6 3E FFIdLk Title Chair, Policy and Services Date 10/8/2020 I hereby acknowledge receipt and acceptance of this Task Order and warrant that I have authority to sign on behalf of Consultant. APPROVED: Baker Tilly US, LLP COMPANY N�4.MbocuigneR BY: JAG �o(raoa► Name L17pn Title Partner Date 10/1/2020 30 Item 26: Staff Report Pg. 32 Packet Pg. 542 of 857 DocuSign Envelope ID: 0EEACA31-356D-4B22-A4AA-61AE085C688F Item 26 Attachment A - Assignment Agreement to Baker Tilly Advisory Attachment A Group, LP DESCRIPTION OF SCOPE OF SERVICES Introduction Attachment A, the Description of Scope of Services, contains the following four (4) elements: • 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 Baker Tilly's approach to conducting the Citywide Risk Assessment involves four (4) primary steps: • Step 1: Project Planning & Management • Step 2: Information Gathering • Step 3: Analysis • Step 4: Reporting Step 1— Project Planning & Management This step includes those tasks necessary to solidify mutual understanding of the risk assessment scope, objectives, deliverables, and timing as well as ensuring that appropriate client and consultant resources are available and well -coordinated. Tasks include: Finalize project design — The first project activities will be to: o Identify communication channels and reporting relationships and responsibilities of project staff o Review and confirm project timelines o Review and confirm deliverables Arrange logistics/administrative support — Matters to be addressed include schedules for interviews and data collection, contact persons in the departments, any other logistical matters, etc. Conduct kick-off meeting with key project stakeholders Step 2 — Information Gathering This step involves gathering information, through various means, that will enable the project team to understand the various risks facing the City. Tasks include: • Request and review background information — the project team will develop an information request(s) in order to obtain various background information from the City. The request will include, but not be limited to: 31 Item 26: Staff Report Pg. 33 Packet Pg. 543 of 857 DocuSign Envelope ID: 0EEACA31-356D-4B22-A4AA-61AE085C688F Item 26 Attachment A - Assignment Agreement to Baker Tilly Advisory o Strategic plan(s) Group, LP o Financial reports, including the most recent City Budget and Comprehensive Annual Financial Report (CAFR) o Operational policies and procedures o Municipal code o Consulting reports o Other relevant information and reports Conduct interviews with City Council and management o Risk assessment interviews, aimed at understanding City functions and identifying risks, will be conducted with City Council members as well as department and division Conduct research into key risks in order to identify relevant information to assess risks Overall, the project team will consider the following risk types: • Strategic • Financial • Operational • Technology • Compliance • Reputational • Political Step 3 — Risk Analysis In Step 3, the project team will develop a risk matrix consisting of auditable areas (also referred to as an audit or risk universe). The risk matrix will include the following risk categories: • Environment, Strategy, and Governance — risks that have an organization wide impact and are not subject to a specific department or function (e.g., ethics) • Significant Projects and Initiatives — risks associated with large projects (e.g., capital projects, technology implementation) or City initiatives (e.g., employee engagement initiative). Function Specific Risks — risks associated with a specific department or function (e.g., procurement policy compliance) After assembling a risk matrix, the project team will assess the likelihood and impact of potential adverse events in order to quantitatively score each auditable area for purposes of prioritizing audit activities. Step 4 — Reporting In Step 4, the project team will finalize the draft Risk Matrix and prepare a draft Risk Assessment Report. The project team will ask for input (general completeness, risk scoring) on the Risk Matrix from key project stakeholders. Upon finalization of the Risk Matrix, the project team will finalize the Risk Assessment Report. 32 Item 26: Staff Report Pg. 34 Packet Pg. 544 of 857 DocuSign Envelope ID: 0EEACA31-356D-4B22-A4AA-61AE085C688F Item 26 Attachment A - Assignment Agreement to Baker Tilly Advisory Deliverables: Group, LP The following deliverables will be prepared as part of this engagement: • Risk Matrix • Risk Assessment Report • Presentation of Results to City Council (note that this may be combined with presentation of the Task 2 Annual Audit Plan) Schedule of Performance Anticipated Start Date: October 1, 2020 Anticipated End Date: January 15, 2021 Maximum Compensation Amount and Rate Schedule The not -to -exceed maximum, inclusive of reimbursable expenses (as summarized below) for this Task is $65,000. The not -to -exceed budget is based on an estimate of 320 total project hours, of which 80 are estimated to be completed by the City Auditor. Reimbursable Expenses If circumstances allow, Baker Tilly anticipates planning one on -site fieldwork week. Given this possibility, Baker Tilly could incur reimbursable expenses for this Task. The not -to -exceed maximum for reimbursable expenses for this Task is $1,800. The following summarizes anticipated reimbursable expenses: • Round-trip Airfare — $400 • Rental Car - $400 • Hotel accommodation - $700 (3 nights) • Food and incidentals — $300 Note that, if current restrictions associated with COVID- 19 continue, an on -site visit may not be possible. The project team will work with the City to consider circumstances at the time. 33 Item 26: Staff Report Pg. 35 Packet Pg. 545 of 857 DocuSign Envelope ID: 0EEACA31-356D-4B22-A4AA-61AE085C688F Item 26 Attachment A - Assignment Agreement to Baker Tilly Advisory PROFESSIONAL SERVICES TASK ORDER Group, LP TASK ORDER 2— FY21 Consultant shall perform the Services detailed below in accordance with all the terms and conditions of the Agreement referenced in Item 1 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) IA. MASTER AGREEMENT NO. (MAYBE SAME AS CONTRACT /P.O. NO. ABOVE): 1B. TASK ORDER NO.: FY21-002 2. CONSULTANT NAME: Baker Tilly US, LLP 3. PERIOD OF PERFORMANCE: START: October 1, 2020 COMPLETION: January 15, 2021 4 TOTAL TASK ORDER PRICE: $15,000 BALANCE REMAINING IN MASTER AGREEMENT/CONTRACT $1,220,000 5. BUDGET CODE COST CENTER COST ELEMENT WBS/CIP PHASE 6. CITY PROJECT MANAGER'S NAME & DEPARTMENT: Alison Cormack, 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 P4,LO. A, O BY: S0V O.(k Name ii Title chair, Policy and Services Date 10/8/2020 I hereby acknowledge receipt and acceptance of this Task Order and warrant that I have authority to sign on behalf of Consultant. APPROVED: Baker Tilly US, LLP COMPANYpoI�.�MF b BY: I f% Name _1-AA%17d�lt ,k 3n Title Partner Date 10/1/2020 34 Item 26: Staff Report Pg. 36 Packet Pg. 546 of 857 DocuSign Envelope ID: 0EEACA31-356D-4B22-A4AA-61AE085C688F Item 26 Attachment A - Assignment Agreement to Baker Tilly Advisory Attachment A Group, LP DESCRIPTION OF SCOPE OF SERVICES Introduction Attachment A, the Description of Scope of Services, contains the following four (4) elements: • 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 Baker Tilly's approach to preparing the Annual Audit Plan involves two (2) primary steps: • Step 1: Consultation with City Council and Management • Step 2: Reporting Step 1— Consultation with City Council and Management The Risk Matrix and Risk Assessment Report will serve as the primary drivers of the Annual Audit Plan. The project team will initiate discussions over Risk Assessment results, potential audit activities, and audit coverage with City Council and Management. The purpose of those conversations will be to understand the priorities of City Council, and to develop a Draft Annual Audit Plan. The Draft Annual Audit Plan will identify the following components for each audit activity: • Audit activity type — audit or consulting activity • Audit objectives and scope • Anticipated budget — both in terms of hours and budget • Anticipated timeline Step 2 — Reporting The project team will present the Draft Annual Audit Plan to the City Council in order to obtain input on each potential audit activity. Upon refining the plan, the project team will finalize the Annual Audit Plan for presentation to City Council. Deliverables: The following deliverable will be prepared as part of this engagement: • Annual Audit Plan 35 Item 26: Staff Report Pg. 37 Packet Pg. 547 of 857 DocuSign Envelope ID: 0EEACA31-356D-4B22-A4AA-61AE085C688F Schedule of Performance Anticipated Start Date: October 1, 2020 Anticipated End Date: January 15, 2021 Maximum Compensation Amount and Rate Schedule Item 26 Attachment A - Assignment Agreement to Baker Tilly Advisory Group, LP The not -to -exceed maximum, inclusive of reimbursable expenses (as summarized below) for this Task is $15,000. The not -to -exceed budget is based on an estimate of 60 total project hours, of which 20 are estimated to be completed by the City Auditor. Reimbursable Expenses Baker Tilly does not anticipate incurring reimbursable expenses for this Task. 36 Item 26: Staff Report Pg. 38 Packet Pg. 548 of 857 DocuSign Envelope ID: 0EEACA31-356D-4B22-A4AA-61AE085C688F Item 26 Attachment A - Assignment Agreement to Baker Tilly Advisory PROFESSIONAL SERVICES TASK ORDER Group, LP TASK ORDER 3— FY21 Consultant shall perform the Services detailed below in accordance with all the terms and conditions of the Agreement referenced in Item 1 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) IA. MASTER AGREEMENT NO. (MAYBE SAME AS CONTRACT /P.O. NO. ABOVE): 1B. TASK ORDER NO.: FY21-003 2. CONSULTANT NAME: Baker Tilly US, LLP 3. PERIOD OF PERFORMANCE: START: October 1, 2020 COMPLETION: June 30, 2021 4 TOTAL TASK ORDER PRICE: $30,000 BALANCE REMAINING IN MASTER AGREEMENT/CONTRACT $1,190,000 5. BUDGET CODE COST CENTER COST ELEMENT WBS/CIP PHASE 6. CITY PROJECT MANAGER'S NAME & DEPARTMENT: Alison Cormack, 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 9I,JO BY: I 1(1561&. (,VIt Name +255%13181BI8? Title Chair, Policy and Services Date 10/8/2020 I hereby acknowledge receipt and acceptance of this Task Order and warrant that I have authority to sign on behalf of Consultant. APPROVED: Baker Tilly US, LLP COMPANY NA NN ; BY: Name'1A54QQA"2PAP.son Title Partner Date 10/1/2020 37 Item 26: Staff Report Pg. 39 Packet Pg. 549 of 857 DocuSign Envelope ID: 0EEACA31-356D-4B22-A4AA-61AE085C688F Item 26 Attachment A - Assignment Agreement to Baker Tilly Advisory Attachment A Group, LP DESCRIPTION OF SCOPE OF SERVICES Introduction Attachment A, the Description of Scope of Services, contains the following four (4) elements: • 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 Baker Tilly's approach to preparing the Annual Audit Plan involves one (1) primary step in FY21. • Step 1: Selection of the Financial Auditor Step 1 —Selection of the Financial Auditor In FY20, the project team will assist in the selection of the Financial Auditor. In order to accomplish this task, the project team will: • Meet with management to understand the nature of the existing agreement with the Financial Auditors • Work with the Purchasing Department to develop a strategy for selection, including developing the solicitation, formulating the selection committee, evaluating proposals, finalizing selection, and developing a contract document • Review the prior solicitation materials with the Purchasing Department, Administrative Services Department, and Legal Department to identify necessary updates and other considerations • Assist the Purchasing Department in finalizing the solicitation materials • Coordinate activities of the selection committee • Coordinate contract review between the selected vendor and the Legal Department • Periodically report on the status of the selection to the City Council • Assist, as needed and required, in City Council presentations related to the selection Deliverables: The final deliverable associated with this Task consists of a final contract with the selected Financial Audit vendor. 38 Item 26: Staff Report Pg. 40 Packet Pg. 550 of 857 DocuSign Envelope ID: 0EEACA31-356D-4B22-A4AA-61AE085C688F Item 26 Attachment A - Assignment Agreement to Baker Tilly Advisory Group, LP Schedule of Performance Anticipated Start Date: October 1, 2020 Anticipated End Date: June 30, 2021 Maximum Compensation Amount and Rate Schedule The not -to -exceed maximum, inclusive of reimbursable expenses (as summarized below) for this Task is $30,000. The not -to -exceed budget is based on an estimate of 130 total project hours, of which 40 are estimated to be completed by the City Auditor. Reimbursable Expenses Baker Tilly anticipates incurring reimbursable expenses for this Task. The expenses will be incurred to attend the City Council meeting for final selection of the Financial Auditor. The not -to -exceed maximum for reimbursable expenses for this Task is $1,300. The following summarizes anticipated reimbursable expenses: • Round-trip Airfare — $400 • Rental Car - $250 • Hotel accommodation - $450 (2 nights) • Food and incidentals — $200 Note that, if current restrictions associated with COVID- 19 continue, the final presentation may take place virtually. The project team will work with the City to consider circumstances at the time. 39 Item 26: Staff Report Pg. 41 Packet Pg. 551 of 857 DocuSign Envelope ID: 0EEACA31-356D-4B22-A4AA-61AE085C688F Item 26 Attachment A - Assignment Agreement to Baker Tilly Advisory PROFESSIONAL SERVICES TASK ORDER Group, LP TASK ORDER 5— FY21 Consultant shall perform the Services detailed below in accordance with all the terms and conditions of the Agreement referenced in Item 1 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) IA. MASTER AGREEMENT NO. (MAYBE SAME AS CONTRACT /P.O. NO. ABOVE): 1B. TASK ORDER NO.: FY21-005 2. CONSULTANT NAME: Baker Tilly US, LLP 3. PERIOD OF PERFORMANCE: START: October 1, 2020 COMPLETION: June 30, 2021 4 TOTAL TASK ORDER PRICE: $50,000 BALANCE REMAINING IN MASTER AGREEMENT/CONTRACT $1,140,000 5. BUDGET CODE COST CENTER COST ELEMENT WBS/CIP PHASE 6. CITY PROJECT MANAGER'S NAME & DEPARTMENT: Alison Cormack, 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 BY: Q�tSbIA CbVWtALIE Name Title Chair, Policy and Services Date 10/8/2020 I hereby acknowledge receipt and acceptance of this Task Order and warrant that I have authority to sign on behalf of Consultant. APPROVED: Baker Tilly US, LLP COMP Eby. BY: L' (rl°y' Name 1A5 2 on Title Partner 10/1/2020 Date 40 Item 26: Staff Report Pg. 42 Packet Pg. 552 of 857 DocuSign Envelope ID: 0EEACA31-356D-4B22-A4AA-61AE085C688F Item 26 Attachment A - Assignment Agreement to Baker Tilly Advisory Attachment A Group, LP DESCRIPTION OF SCOPE OF SERVICES Introduction Attachment A, the Description of Scope of Services, contains the following four (4) elements: • 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 Baker Tilly will provide the following services in Task 5: • Quarterly Reports • Annual Status Report • Provision of the City Hotline • Office Administrative Functions Deliverables: The following deliverable will be prepared as part of this engagement: • Quarterly Reports (2 in FY21) • Annual Status Report Schedule of Performance Anticipated Start Date: October 1, 2020 Anticipated End Date: June 30, 2021 Maximum Compensation Amount and Rate Schedule The not -to -exceed maximum, inclusive of reimbursable expenses (as summarized below) for this Task is $50,000 The not -to -exceed budget is based on an estimate of 250 total project hours, of which 80 are estimated to be completed by the City Auditor. Reimbursable Expenses Baker Tilly anticipates incurring reimbursable expenses for this Task. The expenses will be incurred to present Quarterly Reports to City Council. 41 Item 26: Staff Report Pg. 43 Packet Pg. 553 of 857 DocuSign Envelope ID: 0EEACA31-356D-4B22-A4AA-61AE085C688F Item 26 Attachment A - Assignment Agreement to Baker Tilly Advisory Group, LP The not -to -exceed maximum for reimbursable expenses for this Task is $2,800. The following summarizes anticipated reimbursable expenses: • Round-trip Airfare — $900 • Rental Car — $500 • Hotel accommodation - $900 (4 nights) • Food and incidentals — $500 Note that, if current restrictions associated with COVID- 19 continue, the final presentation may take place virtually. The project team will work with the City to consider circumstances at the time. 42 Item 26: Staff Report Pg. 44 Packet Pg. 554 of 857 DocuSign Envelope ID: E06F7622-10E3-4D93-BD3E-AC3B32BBE1A1 Item 26 Attachment A - Assignment Agreement to Baker Tilly Advisory AMENDMENT NO. 1 TO CONTRACT NO. C21179340 Group, LP BETWEEN THE CITY OF PALO ALTO AND BAKER TILLY US, LLP This Amendment No. 1 (this "Amendment") to Contract No. C21179340 (the "Contract" as defined below) is entered into as of April 18, 2022, by and between the CITY OF PALO ALTO, a California chartered municipal corporation ("CITY"), and BAKER TILLY US, LLP, an Illinois Limited Liability Partnership, located at 205 Michigan Avenue, Suite 2800, Chicago, IL 60601 ("CONSULTANT"). CITY and CONSULTANT are referred to collectively as the "Parties" in this Amendment. RECITALS A. The Contract (as defined below) was entered into by and between the Parties hereto for the provision of performing internal auditor services in accordance with City Charter and Municipal Code requirements, as detailed therein. B. The Parties now wish to amend the Contract in order to extend by an additional three years the Contract term in which Services will be provided and, therefore, increase compensation by Two Million One Hundred Twenty -Six Thousand Two Hundred and Fifty Dollars ($2,126,250), from an original not -to -exceed amount of One Million Three Hundred Thousand Dollars ($1,300,000) to a new total not -to -exceed amount of Three Million Four Hundred Twenty - Six Thousand Two Hundred and Fifty Dollars ($3,426,250), 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" shall mean Contract No. C21179861 between CONSULTANT and CITY, dated October 1, 2020. b. Other Terms. Capitalized terms used and 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 October 1, 2020 through June 30, 2025, unless terminated earlier pursuant to Section 19 of this Agreement." Vers.: Aug. 5, 2019 Page 1 of 7 49 Item 26: Staff Report Pg. 45 Packet Pg. 555 of 857 DocuSign Envelope ID: E06F7622-10E3-4D93-BD3E-AC3B32BBE1A1 Item 26 Attachment A - Assignment Agreement to Baker Tilly Advisory Group, LP SECTION 3. Section 4, "COMPENSATION FOR ORIGINAL TERM," of the Contract is hereby amended to read as follows: "The total compensation to be paid to CONSULTANT for performance of the Services, including As Required Services (per Section 1) and any reimbursable expenses, shall not exceed Three Million Four Hundred Twenty -Six Thousand Two Hundred and Fifty dollars ($3,426,250), as detailed in Exhibit B (Compensation). CONSULTANT agrees to complete all Services, including As Required Services and any reimbursable expenses, within this amount. The applicable rate schedule is set out at Exhibit "B-1", entitled "SCHEDULE OF RATES," which is attached to and made a part of this Agreement. Any work performed or expenses incurred for which payment would result in a total exceeding the maximum amount of compensation set forth herein shall be at no cost to the CITY." SECTION 4. The following exhibit(s) to the Contract are hereby amended or added, as indicated below, to read as set forth in the attachment(s) to this Amendment, which are hereby incorporated in full into this Amendment and into the Contract by this reference: a. Exhibit "B" entitled "COMPENSATION", AMENDED, REPLACES PREVIOUS. b. Exhibit "B-1" entitled "SCHEDULE OF RATES", 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.) Vers.: Aug. 5, 2019 Page 2of7 50 Item 26: Staff Report Pg. 46 Packet Pg. 556 of 857 DocuSign Envelope ID: E06F7622-10E3-4D93-BD3E-AC3B32BBE1A1 Item 26 Attachment A - Assignment Agreement to Baker Tilly Advisory SIGNATURES OF THE PARTIES Group, LP 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 1DocuSigned by: E444 l:r IVFarrfgef APPROVED AS TO FORM: DocuSigned by: gS(t, Cf A hey or designee BAKER TILLY US, LLP Officer 1 DocuSigned by B D50516C698C2406... Kyle O'Rourke Name: Title: Principal, Public sector Advisory Officer 2 BcDocuSigned by: (yew '-5C05F15AF6D7440_. Kate Crowley Name: Title: Principal Attachments: EXHIBIT B: COMPENSATION (AMENDED, REPLACES PREVIOUS) EXHIBIT B-1: SCHEDULE OF RATES (AMENDED, REPLACES PREVIOUS) Vers.: Aug. 5, 2019 Page 3of7 51 Item 26: Staff Report Pg. 47 Packet Pg. 557 of 857 DocuSign Envelope ID: E06F7622-10E3-4D93-BD3E-AC3B32BBE1A1 EXHIBIT "B" COMPENSATION (AMENDED, REPLACES PREVIOUS) Item 26 Attachment A - Assignment Agreement to Baker Tilly Advisory Group, LP The CITY agrees to compensate the CONSULTANT for the Services (including As Required 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 hourly rate schedule attached as Exhibit B-1 up to the not to exceed budget amount for each task set forth below. CONSULTANT shall perform the tasks and categories of work as outlined and budgeted below. The CITY's Project Manager may approve in writing the transfer of budget amounts between any of the tasks or categories listed below provided the total compensation for Services, including As Required Services and any reimbursable expenses do not exceed the amounts set forth in Section 4 of this Agreement. BUDGET SCHEDULE FOR FY 2020-21 AND FY 2021-22 Budget Schedule FY 2020-21 FY 2021-22 Subtotals Task 1: Citywide Risk Assessment $65,000.00 $25,000.00 $90,000.00 Task 2: Preparation of Annual Audit $15,000.00 $15,000.00 $30,000.00 Plan Task 3: Selection of External Financial Auditor and Annual Audit $30,000.00 $20,000.00 $50,000.00 Coordination Task 4: Execute Annual Audit Plan $390,000.00 $600,000.00 $990,000.00 Task 5: Preparation of Quarterly Reports, Annual Status Report, Provision of City Hotline, and Other $50,000.00 $50,000.00 $100,000.00 Ongoing Office Administrative Functions Task 6: Evaluation and Benchmarking $0.00 $40,000.00 $40,000.00 Subtotals (FY 2020-21 & FY 2021-22) $550,000.00 $750,000.00 $1,300,000.00 (CONTINUED ON THE NEXT PAGE.) Vers.: Aug. 5, 2019 Page 4 of 7 52 Item 26: Staff Report Pg. 48 Packet Pg. 558 of 857 DocuSign Envelope ID: E06F7622-10E3-4D93-BD3E-AC3B32BBE1A1 Item 26 Attachment A - Assignment Agreement to Baker Tilly Advisory Group, LP BUDGET SCHEDULE FOR FY 2022-23, FY 2023-24 AND FY 2024-25 Budget Schedule FY 2022-23 FY 2023-24 FY 2024-25 Subtotals Task 1: Citywide Risk $55,000 $35,000 $55,000 $145,000 Assessment Task 2: Preparation of $10,500.00 $10,500.00 $10,500.00 $31,500.00 Annual Audit Plan Task 3: Selection of External Financial Auditor and $15,000 $15,000 $25,000 $55,000 Annual Audit Coordination Task 4: Execute Annual $547,250 $582,250 $537,250 $1,666,750 Audit Plan Task 5: Preparation of Quarterly Reports, Annual Status Report, Provision of $60,000 $60,000 $60,000 $180,000 City Hotline, and Other Ongoing Office Administrative Functions Task 6: Evaluation and $21,000.00 $6,000 $21,000.00 $48,000 Benchmarking Subtotals (FY 2022-23, $708,750.00 $708,750.00 $708,750.00 $2,126,250.00 FY 2023-24 & FY 2024-25) TOTAL NOT TO EXCEED AMOUNT ACROSS ALL FISCAL YEARS: Budget Schedule FY 2020-21 and FY 2021-22 Subtotal: $1,300,000.00 Budget Schedule FY 2022-23, FY 2023-24 and FY 2024-25 Subtotal: $2,126,250.00 TOTAL NOT -TO -EXCEED AMOUNT OF THIS AGREEMENT: $3,426,250.00 REIMBURSABLE EXPENSES The administrative, overhead, secretarial time or secretarial overtime, word processing, photocopying, in-house printing, computing, telecommunications, insurance and other ordinary business expenses are included within the scope of payment for Services and are not reimbursable expenses. CITY shall reimburse CONSULTANT for the following reimbursable expenses at cost: Travel to or from the San Francisco Bay area, including transportation and meals, will be reimbursed at actual cost. Any and all such reimbursable expenses shall be identified by CONSULTANT as separate line items on the applicable Task Order. Consultant travel and meal expenses are not subject to the City's Travel Policy. CONSULTANT shall identify a fixed "not to Vers.: Aug. 5, 2019 Page 5 of 7 53 Item 26: Staff Report Pg. 49 Packet Pg. 559 of 857 DocuSign Envelope ID: E06F7622-10E3-4D93-BD3E-AC3B32BBE1A1 Item 26 Attachment A - Assignment Agreement to Baker Tilly Advisory exceed" figure for anticipated reimbursable expenses, subject to the City o Group, LP val of such Task Order. Should CONSULTANT'S actual incurred expenses exceed the "not to exceed" figure, CONSULTANT and the CITY shall meet in good faith to determine the extent to which CONSULTANT shall be reimbursed by the CITY for the excess. All requests for payment of expenses exceeding $25.00 shall be accompanied by appropriate backup documentation and information, including without limitation prior City approval as part of the associated Task Order. Vers.: Aug. 5, 2019 Page 6 of 7 54 Item 26: Staff Report Pg. 50 Packet Pg. 560 of 857 DocuSign Envelope ID: E06F7622-10E3-4D93-BD3E-AC3B32BBE1A1 Item 26 Attachment A - Assignment Agreement to Baker Tilly Advisory Group, LP EXHIBIT "B-1" SCHEDULE OF RATES (AMENDED, REPLACES PREVIOUS) Compensation for Services rendered under this Agreement shall be calculated based on the following hourly rate schedule for the fiscal year in which the Services are rendered, which shall remain fixed during the applicable period of fiscal years specified below. Hourly rates for any subsequent renewal term or terms shall be negotiated to the mutual agreement of the parties. SCHEDULE OF RATES FOR FY 2020-21 AND FY 2021-22 Staff level Hourly rate Partner/Director $345 City Auditor/Senior Manager $245 Manager $210 Senior Consultant $185 Consultant $130 SCHEDULE OF RATES FOR FY 2022-23, FY 2023-24 AND FY 2024-25 Staff Level Partner/Director $362.00 City Auditor / Senior Manager $257.00 Manager $220.00 Senior Consultant $194.00 Consultant $136.00 Vers.: Aug. 5, 2019 Page 7 of 7 55 Item 26: Staff Report Pg. 51 Packet Pg. 561 of 857 Item 26 Attachment A - Assignment Agreement to Baker Tilly Advisory Group, LP APPENDIX B - DOCUMENTATION OF TRANSFER The evidence listed in Article 2 of this Assignment: 2.4.1: STATE OF CALIFORNIA OFFICE OF THE SECRETARY OF STATE CERTIFICATION OF REGISTRATION OUT-OF-STATE LIMITED PARTNERSHIP, dated April 22, 2024 And 2.4.2: NOTICE OF BAKER TILLY ORGANIZATIONAL RESTRUCTURING from Baker Tilly US, LLP Page 8 of 8 56 Item 26: Staff Report Pg. 52 Packet Pg. 562 of 857 STATE OF CALIFORNIA Office of the Secretary of State CERTIFICATE OF REGISTRATION OUT-OF-STATE LIMITED PARTNERSHIP California Secretary of State 1500 11th Street Sacramento, California 95814 (916) 657-5448 Limited Partnership Name Limited Partnership Name Baker Tilly Advisory Group, LP Jurisdiction Limited Partnership is Formed in DELAWARE III 11111 11111 11111 Iii 11111111111111 Item 26 w AttachmentA- - 461906539 assignment Agreement to Only Baker Tilly Advisory LO Group, LP Ol File No.: 202461906539 0 iA Date Filed: 4/22/2024 N N N O N Authority Statement This Limited Partnership currently has powers and privileges to conduct business in the state, foreign country or other jurisdiction entered above. Street Address of Principal Office of LP Principal Address Mailing Address of LP Mailing Address Attention 205 NORTH MICHIGAN AVE CHICAGO, IL 60601 205 NORTH MICHIGAN AVE CHICAGO, IL 60601 Street Address of Office in Jurisdiction of Formation of LP Street Address of Home Jurisdiction Office None Agent for Service of Process California Registered Corporate Agent (1505) General Partners CORPORATION SERVICE COMPANY WHICH WILL DO BUSINESS IN CALIFORNIA AS CSC - LAWYERS INCORPORATING SERV Registered Corporate 1505 Agent General Partner Name General Partner Address Baker Tilly Advisory Group GP, LLC 205 NORTH MICHIGAN AVE CHICAGO, IL 60601 Electronic Signature I declare that I am the person who signed this instrument, which is my act and deed. I further declare the information is true and correct, and I am authorized to sign. Charles Droege, COO on behalf of Baker Tilly Advisory Group GP, LLC, GENERAL PARTNER General Partner Signature 04/22/2024 Date 57 Item 26: Staff Report Pg. 53 Packet Pg. 563 of 857 Page 1 of 2 Delaware The First State Item 26 Attachment A - Assignment Agreement to Baker Tilly Advisory Group, LP I, JEFFREY W. BULLOCK, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO HEREBY CERTIFY "BAKER TILLY ADVISORY GROUP, LP" IS DULY FORMED UNDER THE LAWS OF THE STATE OF DELAWARE AND IS IN GOOD STANDING AND HAS A LEGAL EXISTENCE SO FAR AS THE RECORDS OF THIS OFFICE SHOW, AS OF THE NINETEENTH DAY OF APRIL, A.D. 2024. AND I DO HEREBY FURTHER CERTIFY THAT THE SAID "BAKER TILLY ADVISORY GROUP, LP" WAS FORMED ON THE THIRTIETH DAY OF JANUARY, A.D. 2024. AND I DO HEREBY FURTHER CERTIFY THAT THE ANNUAL TAXES HAVE BEEN ASSESSED TO DATE. 2949822 8300 °7 SR# 20241533586 You may verify this certificate online at corp.delaware.gov/authver.shtml J.a..q WV. t.rwc k 86—twy d Exu. Authentication: 203292552 Date: 04-19-24 58 Item 26: Staff Report Pg. 54 Packet Pg. 564 of 857 Page 2 of 2 Dear Valued Client, Email not displaying ooTecYly" View it in your browses In June, Baker Tilly will begin an exciting new chapter with its strategic investment from Hellman & Friedman and Valeas Capital Partners, one that supports our vision and is poised to amplify the talent of our people who serve you. Little will change with our day-to-day interactions with , cu You will have the same terms and conditions in your service agreements and the same great team to serve you. What may change is the legal entity tied to your service agreement. To ensure compliance with regulatory and independence requirements. our organization will restructure into two entities. All assurance services will continue to be performed by Baker Tilly US, LLP (BTUS). while all tax and advisory services will be provided by Baker Tilly Advisory Group. LP (BTAG). Here is how this might affect you: • Any tax or advisory agreements you have in place with BTUS will be reassigned to BTAG. • Any assurance agreements will remain assigned to BTUS. • If your contract with us requires us to obtain your written consent to reassign. we will notify you (or already have) with a separate letter via U.S. mail. There is nothing else you need to do for this. If you have any questions, please reach out to your Baker Tilly partner. We look forward to harnessing even more fruitful opportunities to enhance and protect your value, now, for tomorrow. Sincerely. Baker Tilly US, LLP Item 27 Item 27 Staff Report City Council Staff Report Report Type: CONSENT CALENDAR CITY O F Lead Department: Police PALO a LTO Meeting Date: June 17, 2024 Report #:2406-3138 TITLE Approval of: (1) Contract No. C24187724 with LensLock, Inc (Lenslock) for replacement of the police public contact audio/video system for a five (5) year term in an amount not to exceed $1,128,225; and (2) Police Audio/Video Technology Surveillance Use Policy; CEQA status — categorically exempt. BACKGROUND This report will be a special late packet release on Thursday, June 13, 2024. APPROVED BY: Andrew Binder, Chief of Police Item 27: Staff Report Pg. 1 Packet Pg. 566 of 857 Item 28 Item 28 Staff Report 0 CITY OF PALO ALTO City Council Staff Report From: City Manager Report Type: ACTION ITEMS Lead Department: Administrative Services Meeting Date: June 17, 2024 Report #:2406-3140 TITLE PUBLIC HEARING: Adoption of Budget Ordinance for Fiscal Year 2025, Including the Operating and Capital Budgets and Municipal Fee Schedule; Adoption of a Resolution determining the Appropriations Limit for Fiscal Year 2025; Acceptance of Updates to the Retiree Healthcare Actuarial Report; and Approval of Contributions for Retiree Healthcare Benefits RECOMMENDATION The Finance Committee and Staff recommends that the City Council: 1. Adopt the Fiscal Year 2025 Budget Ordinance (Attachment A), which includes: a. City Manager's Fiscal Year 2025 Proposed Operating and Capital Budgets, previously distributed at the May 6 City Council Meeting (Attachment A, Exhibit 1) b. Amendments to the City Manager's Fiscal Year 2025 Proposed Operating Budget (Attachment A, Exhibit 2) c. Amendments to the City Manager's Fiscal Year 2025 Proposed Capital Budget (Attachment A, Exhibit 3) d. Fiscal Year 2025 City Table of Organization (Attachment A, Exhibit 4); and e. Fiscal Year 2025 Municipal Fee Changes (Attachment A, Exhibit 5) including Impact and In -Lieu Fees (Exhibit 6) 2. Accept the Fiscal Year 2025 - 2029 Capital Improvement Plan 3. Adopt a Resolution determining the Appropriations Limit for Fiscal Year 2025 (Attachment B) 4. Accept the June 30, 2023 biennial actuarial valuation of Palo Alto's Retiree Healthcare Plan and approve funding of the Actuarial Determined Calculation (ADC) for Fiscal Year 2025 and Fiscal Year 2026 with a two-year phase -in of the adjusted assumptions using the staff recommended funding level of $19.4 million and affirm the continued practice of transmitting amounts at a lower 5.75 percent discount rate as an additional discretionary payment to the City's California Employers' Retiree Benefit Trust (CERBT) Fund (Attachment D) EXECUTIVE SUMMARY The FY 2025 Adopted Budget will be $1.1 billion including the FY 2025 capital budget of $441.8 million and $1.7 billion over the 2025-2029 five-year Capital Improvement Plan (CIP). This is an Item 28: Staff Report Pg. 1 Packet Pg. 567 of 857 Item 28 Item 28 Staff Report increase of approximately $82.1 million over the proposed budget, mainly due to reappropriation of funding for continuing capital projects as well as funding added for Council Priorities as part of the budget review by the Finance Committee and Council. This budget recommends citywide staffing levels to increase by 29.00 full-time equivalent positions (FTE) from the FY 2024 adopted level for a total authorized staffing of 1,092.10 FTE in FY 2025. This is a net increase of 9.00 FTE from the proposed budget to address Council Priorities and associated administrative support. This memorandum provides all necessary documents and transactions for the City Council adoption of the Fiscal Year (FY) 2025 Operating Budget, Capital Budget, and Municipal Fee schedule effective July 1, 2025, unless otherwise regulated. This action reflects two months of public dialogue by the Council and Finance Committee and provides a summary of all changes to the City Manager's FY 2025 Proposed Budget received by the Council on May 6, 2024. The necessary supporting documents for formal adoption by the City Council include the FY 2025 Budget Ordinance and the Table of Organization, and Resolution for Appropriations Limit for FY 2025. On May 2151 the Finance Committee "Committee" (CMR 2402-26641) unanimously recommended the City Council adopt the FY 2025 budget inclusive of the Final Recommended Changes section of this memorandum. On June 41h the Finance Committee amended their recommendation to decrease the Real Property Investments Reserve by $1.5 million to $1.0 million in FY 2025 and ongoing; fund the Budget Stabilization Reserve at the 18.5% level of expenses in FY 2025; and increase the Uncertainty Reserve with remaining savings in FY 2025 for use in the FY 2026 Budget planning process. All changes to the Proposed Budget recommended by the Finance Committee are detailed for the FY 2025 Operating Budget, by fund and by department, in Attachment A Exhibits 2 through 6. Through the recommended budget actions, the community can expect continued high quality of services in Fiscal Year 2025, with a focus on building and strengthening services throughout the City. In addition, this budget invests in organizational resilience through continued workforce recruitment and retention efforts, furthers innovative service delivery and advances Council Priorities and related workplans. The City continues to make infrastructure a priority through capital project investments in FY2025 and through the 2025-20209 Capital Improvement Plan (CIP). The FY 2025 budget includes projects to maintain current infrastructure such as streets, sidewalks, and facilities as well as enterprise funded capital needs such as electric, gas, and water distribution networks and 1 May 21, 2024, Finance Committee, Discussion on the Fiscal Year (FY) 2025 Budget Wrap -Up and Recommended FY 2025 Budget including the FY 2025 Municipal Fee Schedule for City Council Adoption; https://cityofpaloaIto.primegov.com/api/compilemeetingattachmenthistory/historyattachment /?h istorvld=543c404f-2b05-4cbb-b9df-75ffb768545d Item 28: Staff Report Pg. 2 Packet Pg. 568 of 857 Item 28 Item 28 Staff Report substantial improvements at the Wastewater Quality Control Plant. The 2025-2029 CIP also includes projects to upgrade the City's infrastructure such as electric vehicle charging, electric grid modernization, and upgrading the fiber network to allow for Fiber to the Premises (FTTP). To balance the budget for FY 2025, one-time funding from the Council appropriated Uncertainty Reserve, the Development Services Reserve, and the Budget Stabilization Reserve will be used to fund service priorities. A total of $3.3 million in General Fund expenditures has been added to FY 2025 proposed funding levels to support a number of Council priority programs that are listed later in the report. In addition, during the Budget Hearings, certain items did not require additional funding at the time of budget adoption but were recommended as part of staff's workplan for FY 2025. These items are listed later in the report and as a path forward staff will provide additional work throughout FY 2025, including the Ability Path request which will be considered during the FY 2025 Mid -Year Budget Review. FY 2025 Review Process: Segmentation of Certain Stanford -related Matters The California Political Reform Act (PRA) requires City officials to recuse themselves from matters where it is foreseeable that the City's decisions may have a material impact on a person or entity that is a "financial interest" to that official, and allows the City to segment multi -part items, such as the City's budget, so that the parts of the item that are the subject of the recusal are separated from the remaining parts of the item. This year, Council Member Veenker, who provides legal services to Stanford University on life sciences patent matters, will be recusing herself from certain Stanford -related elements of the budget. Those elements are listed in Attachment C. Council must consider and resolve the Attachment C items first. Once these items have been resolved, Council Member Veenker will rejoin and the Council will review and approve the remaining sections of the FY 2025 Operating and Capital Budgets and the Municipal Fee Schedule. Also included in this staff report is the approval of the FY 2025 Appropriations (GANN) Limit that is required under Article XIIIB to the California State Constitution, as amended by proposition 98 in 1988 and Proposition 111 in 1990 (Attachment B). The appropriations limit for Fiscal Year 2025 is $219.74 million for funds subject to the appropriation limits. The City's Fiscal Year 2025 budgeted appropriations are estimated to be $46.64 million under the limit (Attachment B, Exhibit 1). Links to the meetings with the Finance Committee and the City Council, as well as the memoranda, presentations, and additional information provided for discussion can be found on the City's website under the FY 2025 Budget Process section. BACKGROUND Per the Municipal Code, the City Manager is charged with proposing a budget that provides a clear and complete financial plan for all City activities proposed for the coming budget cycle, or fiscal year. The FY 2025 Proposed Operating and Capital Budgets were released April 26, 2024 and transmitted to the City Council at their meeting on May 6, 2024. These documents represent Item 28: Staff Report Pg. 3 Packet Pg. 569 of 857 Item 28 Item 28 Staff Report the planned expenditures and revenues for FY 2025 for the various fund types that constitute the City's Budget: General Fund, Capital Fund, Enterprise Funds, Internal Service Funds, Special Revenue Funds, and Debt Service Funds. The budget documents contain an overview section with descriptions of each of these fund types and detailed information of the revenues and expenses for each fund as well as for each individual department. The FY 2025 Proposed Operating and Capital Budgets May 6, 2024 Council Study Session presentation provided an overview of the budget for review and discussion, including Citywide budget strategies, assumptions used in budget development, and a summary of service investments. As part of this discussion, the City Council provided guidance to the Finance Committee for their review of the budget documents during hearings on May 7, 8, 21, and June 4. The Finance Committee review of operating and capital budgets is structured around public hearings conducted prior to the City Council adoption to complete a detailed review of the budget documents and to incorporate opportunities for community input into the decision - making process. These meeting proceedings are organized by service area and include department presentations to highlight areas of emphasis for their respective department and fund(s). Department by department, the Finance Committee reviews individual budget sections for tentative approval of the budget, potential amendments, and requests for additional information to aid in their review. At the conclusion of these hearings (Budget Wrap-up), the Finance Committee is ultimately tasked to provide recommendations to amend the Proposed Operating and Capital Budgets and Municipal Fee Schedule for City Council consideration. These amendments, and additional information recommended for City Council review, are included in this adoption memorandum. In addition to the regular schedule, staff held an additional study session on May 13 to check -in with the City Council for their feedback before the final budget wrap meetings on May 21 and June 4. In addition, a Community Information Session was held on May 15 to directly address questions from residents in the community. The City Council adoption of the City Manager's FY 2025 Proposed Operating and Capital Budgets and FY 2025 Municipal Fee Schedule, including the amendments summarized in the Budget Wrap-up Memorandum on May 21, 2024 (CMR 2402-2664), will represent the ratification of the amendments that were approved by vote through the budget hearings. These amendments include all changes to the Municipal Fee Schedule and the Table of Organization. A comprehensive list of meeting materials issued during Finance Committee budget hearings is available on the City website2. DISCUSSION The report is organized by the following sections: • Background and Discussion: Summary of FY 2025 budget process and overall balancing strategies organized by fund type, including funding of Council Priorities and Objectives. 2 City's Budget Website: https://www.cityofpaloalto.org/Departments/Administrative-Services/City- Budget Item 28: Staff Report Pg. 4 Packet Pg. 570 of 857 Item 28 Item 28 Staff Report • FY2025 Final Recommended Changes: A summary of final direction given by the Finance Committee on May 21st and June 4th and additional recommended technical and staff adjustments organized by fund type. • Table of Organization: A summary of additional changes to the Table of Organization because of adjustments made to the proposed budget that was released on May 6, 2024. • Municipal Fee Schedule: A summary of the changes in the review and recommendations to Council for the FY 2025 Municipal Fee Schedule for incorporation in the FY 2025 Proposed Budget (CMR 2402-25873). • FY 2025 Utility Rate Changes: A brief overview of the rate changes reviewed by the Utilities Advisory Commission and Finance Committee and the final decision the City Council will make on June 17, 2024 (CMR 2404-2842); each of these rate changes are included in the FY 2025 budget assumptions. • Attachments: Attached to this report are several documents as outlined and referenced throughout the recommendation language and the report. In addition, links to all the materials presented throughout the budget process to the City Council such as staff reports, At Places Memorandums, presentations made during the budget hearings, and transcripts from City Council Budget Hearings are included. The FY 2025 Proposed Budget outlined a two-year budget balancing strategy, bringing financial planning through June 30, 2026 and recommends using one-time surpluses to bridge near -term shortfalls in FY 2025 and partially offset shortfalls in FY 2026 while investing in priority services, infrastructure, and saving for long-term liabilities. In addition, the strategy also recommends limiting ongoing costs to mitigate the potential for greater future deficits. Overall, the enhancements reflected in this FY 2025 Budget will build and strengthen services throughout the City, support continued workforce recruitment and retention efforts, and advance City Council priority initiatives. While there are continued unknowns and uncertainties ahead, the FY 2025 Budget offers the Council, community, and staff reason for optimism that 2025 will continue progress to address community priorities and continue robust City services that the community expects through balanced financial strategies. FY 2025 FINAL RECOMMENDED CHANGES This section reviews amendments to the FY 2025 Proposed Operating and Capital Budgets presented to the City Council on May 6, including final adjustments recommended by the Finance s May 8, 2024, Finance Committee, FY2025 Proposed Municipal Fee Schedule; https://cityofpaloa Ito. primegov.com/Porta l/viewer?id=0&type=7&u id=bd4434c1-37fa-440d-8e01- 71 711771 h7ar1 Item 28: Staff Report Pg. 5 Packet Pg. 571 of 857 Item 28 Item 28 Staff Report Committee and technical adjustments recommended by staff. A comprehensive list of these adjustments is included in Attachment A, Exhibit 2 for changes to the FY 2025 Operating Budget, and Attachment A, Exhibit 3 for changes to the FY 2025 Capital Budget. Changes to the Table of Organization are discussed later in this memorandum, and an updated Table of Organization is included in Attachment A, Exhibit 4. Overall for operating and capital budgets, this reflects an $84.5 million, or 8.2%, increase compared to the FY 2025 Proposed Budget. This includes an increase from the FY 2025 Proposed Budget of 9.00 FTE full-time staff (8.00 FTE in the General Fund and 1.00 FTE in Enterprise Funds) and a reduction of 0.96 FTE part-time staff (-1.92 FTE in the General Fund and +0.96 in the Enterprise Fund), resulting in an overall workforce of 1,092.10 full-time positions (602.57 FTE in the General Fund). OPERATING BUDGET —General Fund Overall, the City's General Fund is recommended to have $287.6 million in revenues and $306.9 million in expenses. To balance the budget for FY 2025, one-time funding from the Council appropriated Uncertainty Reserve, the Development Services Reserve, and the Budget Stabilization Reserve will be used to fund service priorities. A total of $3.3 million in expenditures has been added to FY 2025 proposed funding levels to support a number of Council priority programs that are listed below in Table 1. Uncertainty Reserve As part of the FY 2025 Proposed Budget, Staff recommended using $6.9 million of the $9.6 million Uncertainty Reserve to balance FY 2025, leaving $4.7 million in the Uncertainty Reserve, including using $2.0 million from the Budget Stabilization Reserve (BSR) to increase the Uncertainty Reserve for anticipated needs in FY 2026. As a result of actions taken by the Finance Committee, there are additional savings of $1.5 million (including $0.6 million from the BSR) that will be added back into the Uncertainty Reserve and bring it up to $6.2 million. In total, $2.6 million from the BSR will be used to set aside funding in the Uncertainty Reserve. The Uncertainty Reserve of $6.2 million is recommended to fund the FY 2026 projected gross deficit of approximately $11.0 million, leaving a projected net deficit of $4.8 million. Budget Stabilization Reserve The FY 2025 Proposed Budget recommended using $2.0 million from the BSR to provide additional funding in the Uncertainty Reserve, leaving the BSR at $55.0 million or 18.8% of General Fund Expenditures for FY 2025. As part of the budget actions recommended for adoption by the Finance Committee, the BSR will be reduced by $0.6 million to $54.4 million or the 18.5% target level of the Council's recommended range of 15-20% of General Fund Expenditures. The BSR calculation excludes reserves such as the Uncertainty Reserve and the Utility Transfer Legal Cost Reserve to avoid unintentional inflation of BSR needs. Item 28: Staff Report Pg. 6 Packet Pg. 572 of 857 Item 28 Item 28 Staff Report Finance Committee Recommended Adjustments Throughout budget hearings in May, the Finance Committee engaged in several meetings to review proposed budget documents and recommend tentative adjustments. Table 1 provides an overview of these adjustments at various touchpoints in the budget process. TABLE 1: FY 2025 General Fund Recommended Adjustments FY 2025 Ongoing FY 2025 General Fund Revenue or Revenue or Recommended Adjustments Savings/ Savings/ Dept Description (Cost) (Cost) NON Beginning Balance — City Council Priorities Reserve I $- I $- NON Increase Gas Transfer to General Fund in FY25 to 14.5% (from 1,958,000 916,000 11.9%) & in FY26 to 18% (previously scheduled in FY27) NON Increase JMZ ticket prices from $10 to $14, during peak 350,000 350,000 periods NON I Use BSR to balance FY 2025 — Reduce BSR to 18.5% I 605,000 OOT Review an alternative service approach for PA Link with 223,000 60,000 reduced net costs (proposed FY2025 budget funds $0.9M) CSD Account for Los Altos & Los Altos Hills contribution for animal I 198,000 198,000 control services Report #2403-2827 FIR Upstaff Fire Engine 62 with 3 Sworn Staff instead of Overtime 14,000 23,000 Subtotal Sources (Revenue) $3,347,000 $1,547,000 NON Other Post Employment Benefit (OPEB) 2 -Year Phase -In (1,650,000) (3,300,000) NON Increase Uncertainty Reserve to $6.2M for Future Needs (1,470,000) - CSD JMZ additional staffing, new ticketing system and promotion (509,000) (702,000) CIP California Avenue Interim Improvements (450,000) - CIP Additional funding for Roth Building Rehabilitation (PF-23001) (300,000) (500,000) (revise terms and conditions of the tenant work letter) $1M total including $0.2M interest earnings previously appropriated NON Establish Citywide Special Events & Programming ($265k total (246,000) (235,000) program) [Requested UNAFF $45k, 3rd Thursdays $40k, Neighbors Abroad $30k (already in FY25 Proposed Budget), Magical Bridge $150k, Environmental Volunteers Foothills Nature Preserve Program $11k one-time] Item 28: Staff Report Pg. 7 Packet Pg. 573 of 857 Item 28 Item 28 Staff Report FY 2025 Ongoing FY 2025 General Fund Revenue or Revenue or Recommended Adjustments Savings/ Savings/ Description (Cost) (Cost) NON Palo Alto Transportation Management Association (PATMA) (175,000) (175,000) increase to $400,000 Citywide PWD Public Services Streets 311 Requests to support catch-up and (100,000) (107,000) keep -up FIR Upstaff Fire Engine 62 with 3 Sworn Staff instead of Overtime (74,000) (120,000) NON Car -free Streetscape Design for Ramona Street (50,000) - CSD Administrative Support for new Citywide Special Events & - (125,000) Programming (1 FTE) CIP Study of artificial turf replacement with grass at up to 4 fields - - (recommend use of current CIP to fund a study) OOT Review an alternative service approach for PA Link with 177,000 340,000 reduced net costs (proposed FY2025 budget funds $0.9M) NON Reduce Real Property Investment Reserve to $1.OM Annually Subtotal Uses (Expense) 1,500,000 ($3,347,000) 1,500,000 ($3,424,000) Potential Fund Remaining (Deficit)/Surplus $- ($1,877,000) Item 28: Staff Report Pg. 8 Packet Pg. 574 of 857 Item 28 Item 28 Staff Report OPERATING BUDGET — Enterprise Funds Electric Fund — Associate Sustainability Program Administrator This action adds 1.0 FTE Associate Sustainability Program Administrator to the Utilities Resource Management Division. Responsibilities of this position include tracking sales and marketing results, engaging in direct customer calls related to both sales and customer experience, and assisting with customer experience improvement for various programs, starting with the heat pump water heater program. This fulfills the Council's Climate Action priority by supporting programs to drive gas appliance conversion to electricity and electric vehicle adoption, both of which reduce emissions supporting the City's green electricity portfolio. Gas Fund —Equity Transfer to General Fund and Rate Adjustments Consistent with Council direction, this action increases the Gas Fund equity transfer to the General Fund from 11.9% to 14.5%, an increase of $2.0 million. This is accompanied by an increase to retail revenues by $2.0 million, supported by an increase to the gas rate in FY 2025 from 9.0% in the proposed budget to 12.5%. Water Fund — Water System Operations Staffing and Rate Adjustments Staff recommends removing the Water System Operations Staffing Proposal from the FY 2025 Proposed Budget to allow time for discussions with the Service Employee International Union (SEIU). The proposal sought to reclassify four Water System Operator II's and two Senior Water System Operators into four Utilities Install/Repairers and two Utility Install/Repairer Leads, respectively. Staff also recommends a technical adjustment to retail revenues based on the FY 2025 Water Fund Financial Plan, which decreases overall target revenue to $52.8 million. This target incorporates the SFPUC proposed rate of $5.55 per CCF, which has since increased to $5.67 per CCF. Due to this increase, staff originally proposed an increase of 10% to rates; however, the Finance Committee recommended a 9.5% increase instead with the remaining 0.5% rate to be offset by operations reserves. OPERATING BUDGET — Other Funds Gas Tax Fund — Gas Tax Revenue Adjustment This action is a technical update to increase Gas Tax revenue estimates for Palo Alto based on the California Department of Finance's May 2024 updates for estimated Highway Users Tax Account (HUTA) and Road Maintenance and Rehabilitation Account (RMRA) taxes for FY 2025. This also increases the transfer to the Streets Maintenance capital project (PE -86070), which is discussed below in the Capital Budget section of this report. General Benefits Fund — Healthcare and Pension Pass -through Expenses Item 28: Staff Report Pg. 9 Packet Pg. 575 of 857 Item 28 Item 28 Staff Report The General Benefits Fund acts as a pass -through to pay the City's pension and healthcare costs. These costs are allocated in the various funds across the City where staff are budgeted with the corresponding revenue budgeted in the General Benefits Fund. As staff were added to the budget as part of the FY 2025 Proposed Budget and actions recommended by Finance Committee, the costs were allocated to the funds across the City, but the corresponding revenue in the General Benefits Fund was not included. This net neutral technical action is usually done as part of the adoption memo in the General Benefits Fund and will increase the estimate for charges to other funds by $1.6 million and increase expenses for pension and healthcare costs by $1.6 million to keep the fund in alignment with staffing levels. Parks Development Impact Fee Fund — Transfer Adjustment A $1,851 reduction in the transfer to the Capital Improvement Fund is recommended to align with recommended adjustments to capital project reappropriations from FY 2024 to FY 2025. Retiree Healthcare Fund — Other Post -Employment Benefits (OPEB) Actuarial Valuation On June 4, 2024, the Finance Committee unanimously recommended approval of the June 30, 2023 actuarial valuation of Palo Alto's Retiree Healthcare Plan (CMR 2402-2673) included in Attachment D. This report is completed biannually to provide an actuarial valuation detailing the latest status of the City of Palo Alto's Retiree Healthcare plans for employees and retirees. The analysis is used to determine the City's retiree healthcare liability and the annual Actuarial Determined Contribution (ADC) to the trust. In addition, the report details funding status, results of assumptions such as discount rate (DR), healthcare plan premiums, and projected future healthcare costs. During the June 4, 2024 meeting, the Finance Committee recommended a two- year phase -in of the financial impacts of the June 30, 2023 valuation. The Finance Committee also affirmed the continued practice of transmitting amounts at a lower 5.75 percent discount rate as an additional discretionary payment to the City's California Employers' Retiree Benefit Trust (CERBT) Fund. This recommendation supports financial flexibility for the provision of services citywide while continuing to proactively prefund long-term obligations in alignment with the City Council's Retiree Benefits Funding Policy. This action results in an FY 2025 Adjusted ADC of $19.4 million citywide (approximately $12.2 million in the General Fund), a $2.6 million ($1.7 million in the General Fund) increase from the $16.8 million ADC from the June 30, 2021 valuation used to develop the FY 2025 Proposed Operating Budget. A detailed list of impacts by department and fund can be found in Attachment D, Exhibit 1. University Avenue Fund — Palo Alto Transportation Management Authority (PATMA) Finance Committee recommends $200,000 in additional funding for the Palo Alto Transportation Management Association (PATMA), increasing the total funding allocation from $200,000 to $400,000, with $25,000 funded by the University Avenue Parking Fund and $175,000 supported by the General Fund, to maintain current service levels. This brings the funding level to $200,000 from each fund. Previously, PATMA spent down reserves to maintain service levels and has exhausted those funds. Additional information can be found in the PATMA annual report (Report #2403-27614). Item 28: Staff Report Pg. 10 Packet Pg. 576 of 857 Item 28 Item 28 Staff Report CAPITAL BUDGET The City's Capital Improvement Plan reflects a $441.8 million FY 2025 budget, and a $1.7 billion plan over the five-year CIP (FY 2025 -FY 2029). Of this, the Capital Improvement Fund FY 2025 budget reflects expected expense of $124.7 million and $845.8 million over the five-year CIP. Capital Reappropriations The Municipal Code requires City Council authorization to reappropriate funds for capital projects from one fiscal year to the next. The FY 2025 budget process continues this procedure, and the FY 2025 Proposed Capital Budget included approximately $147.1 million in reappropriated funds for project expenditures across all funds. In the time since the FY 2025 Proposed Budget figures, Staff refined the FY 2024 estimated project activity levels and provided further updates to increase the reappropriations by $81.6 million, to $228.7 million across all funds. The additional reappropriation adjustments are summarized in Attachment A, Exhibit 3. Other Capital Project Adjustments In addition to the reappropriations from FY 2024 to FY 2025, several capital projects need to be adjusted based on updated information that became available after the release of the FY 2025 Proposed Capital Budget or as a result of actions recommended in this memorandum. These adjustments are discussed below and summarized in Attachment A, Exhibit 2. Capital Improvement Fund - Baylands Boardwalk Piling Repair (PE -24000) — The FY 2025 Proposed Budget includes $660,615. An additional $203,000 is needed in FY 2025 because bids received in early May were higher than the engineer's estimate. A contract for repairs will be going to City Council on June 18, 2024, and if it is not awarded at the start of FY 2025, the Baylands Boardwalk will need to be closed. - California Avenue Streetscape Update (PL -23000) — The California Avenue interim improvements are within the 2024 City Council Priority objectives. Description and funding are specified as part of Supplemental Report #2405-29695. Finance Committee recommends a $450,000 transfer from the General Fund to the Capital fund to support street paving adjustments, signage, planters, and site furniture. - Roth Building Rehabilitation (PF-23001) — The Palo Alto Museum (PAM) requested reimbursement of $1 million for inflationary cost increases. Because $0.2 million of 4 April 24, 2024; Finance Committee; Receive and Discuss the Palo Alto Transportation Management Association (PATMA) 2023 Annual Report, Strategic Plan, and Commute Survey; https://recordsportal.paloalto.gov/Weblink/DocView.aspx?id=64493 5 May 7, 2024; Finance Committee; Supplemental Report: Additional Funding Proposal Options for FY 2025 Budget Process Consideration; https://recordsportal.paloalto.gov/Weblink/DocView.aspx?id=64538 Item 28: Staff Report Pg. 11 Packet Pg. 577 of 857 Item 28 Item 28 Staff Report interest earnings from Transfer Development Rights funding and other funding to support the project had already been allocated to the project in FY 2024 as part of the Mid -Year Review (Report #2311-22336), Finance Committee recommends increased funding of $0.8 million: $0.3 million in FY 2025, funded by a transfer from the General Fund to the Capital Improvement Fund; and $0.5 million in FY 2026. Street Maintenance (PE -86070) — The budget is recommended to be increased by $79,378 annually to align with the California Department of Finance's May 2024 estimates for FY 2024-25 Gas Tax revenue. (;ac Fiinrl Gas System, Customer Connections (GS -80017) —The FY 2025 Proposed Budget included a technical error which added $147,200 to the project. The recommended correction would reduce the cost of the project from $847,200 to the appropriate amount of $700,000. Gas Main Replacements #25 (GS -15000) — To mitigate further rate increases related to the increased Gas Fund equity transfer from 11.9% to 14.5%, and to maintain a sufficient reserve balance, staff recommends reducing the FY2025 budget for this project by $0.7 million. There is an upcoming grant that will restore this capital project funding. TABLE OF ORGANIZATION During budget hearings and in subsequent City Council meetings, the Finance Committee and City Council recommended staffing adjustments of 9.00 FTE (net). A more detailed description of these actions is included in Attachment A, Exhibit 2, and an updated Table of Organization is included in Attachment A, Exhibit 4: • Add 3.00 Fire Fighter EMTs to the Fire Department • Add 1.00 Program Assistant I to the Community Services Department • Add 4.00 Animal Caretakers to the Community Services Department • Add 1.00 Associate Sustainability Program Administrator to the Utilities Department • Add 4.00 Water System Operator II to the Utilities Department • Add 2.00 Senior Water Systems Operator to the Utilities Department • Delete 4.00 Utilities Install/Repair from the Utilities Department • Delete 2.00 Utilities Install/Repair-Leads from the Utilities Department MUNICIPAL FEE SCHEDULE On May 8, 2024, the Finance Committee reviewed the FY 2025 Proposed Municipal Fee Schedule 6 February 12, 2024; City Council Item #11: https://cityofpaIoaIto.primegov.com/Portal/Meeting?meetingTemplate Id=13351 Item 28: Staff Report Pg. 12 Packet Pg. 578 of 857 Item 28 Item 28 Staff Report and recommended approval as outlined in CMR 2402-25871 and further amended on May 21, 2024 (CMR 2402-2664). Attachment A, Exhibit 5 provides a summary of all recommended changes as reviewed by the City Council on May 8, 2024. Additionally, Exhibit 6 provides a summary of changes to Impact and In -Lieu Fees. Affordable Housing Fee Waiver As part of this amendment, a new fee was introduced to waive City staff costs associated with processing one hundred percent (100%) affordable housing planning applications under the Housing Element Program Implementation 3.1 for Fee Waivers and Adjustments. The objective of the fee waiver is to support the production of affordable housing in Palo Alto. Approval of this fee is expected to reduce planning application costs by approximately $5,000 to $20,000 per affordable housing project that is processed for a planning entitlement. Due to the low volume of one hundred percent affordable housing applications, staff anticipates minimal revenue impact in FY 2025. FISCAL YEAR 2025 RATE CHANGES An overview of the rate changes was reviewed and approved by the Utilities Advisory Commission (UAC) and Finance Committee in April 2024. These rate changes are included in the FY 2025 budget assumptions. This section references those changes for informational purposes only; a separate report recommending final rate changes will be considered by the City Council on June 17, 2024 (CMR 2404-2842). • 9.0% rate change for Electric (recommended by UAC and Finance Committee); • 2.6% CPI increase for Fiber (recommended by UAC and Finance Committee); • 12.5% rate increase for Gas (recommended by UAC at 9% and Finance Committee at 12.5%); • 0.0% rate change for Refuse; • 2.6% CPI increase for Stormwater (recommended by UAC and Finance Committee); • 15.0% rate change for Wastewater (recommended by UAC and Finance Committee); and • 9.5% rate change for Water (recommended by UAC at 10% and Finance Committee at 9.5%) The proposed rate changes will allow Palo Alto to invest in utility infrastructure, gradually increase reserves to guideline levels, and to support community goals. As utility infrastructure ages, investment is needed to maintain the reliability of the electric, gas, stormwater, wastewater, and water utilities. These rate increases will support the maintenance and replacement of infrastructure including rebuilding Palo Alto's wastewater treatment plant (Regional Water Quality Control Plant). Investment in modernizing the electric grid will allow the City to achieve the Council's Sustainability and Climate Action goals. 7 5/8/2024, Finance Committee, FY2025 Municipal Fee Schedule Amendments; https://cityofpaloaIto.primegov.com/Portal/viewer?id=2114&type=0 Item 28: Staff Report Pg. 13 Packet Pg. 579 of 857 Item 28 Item 28 Staff Report The Finance Committee tentatively approved the rate changes listed above including the following modifications from the Proposed Budget: the 12.5% increase for Gas resulted from changing the Gas Equity Transfer to the General Fund from 11.9% to 14.5% of FY 2023 gross revenue; and lowering the distribution rate increase to maintain an overall expected bill impact of 9.5% percent increase for Water through the use of additional rate stabilization reserve funds in FY 2025. In addition, the Finance Committee tentatively approved the 9.0% increase for the median residential electric customer which is a result of a cost of service analysis (COSA) for the City's electric rates to ensure that electric rates continue to represent the Utility's cost to serve customers; the 15.0% increase for Wastewater Collection due to increasing Capital costs in Wastewater Collection and at the Regional Water Quality Control Plant; the 2.6% CPI increase for Fiber customers on the EDF-1 rate in accordance with the original dark fiber leasing agreement; and 2.6% CPI increase for Stormwater, consistent with the 2017 Storm Water Management Fee ballot measure, to keep fund revenues consistent with inflationary cost increases and to provide sufficient funds for planned Stormwater Management capital and operating expenditures. STAFF WORKPLAN During the Budget Hearings, certain items did not require additional funding at the time of budget adoption but were recommended as part of staff's workplan for FY 2025. The list below is reflective of the items from the Budget Hearings that staff will provide additional work throughout FY 2025. - Ability Path (Request $250,000) The Committee on June 4t" requested that the Ability Path request be considered during the FY 2025 Mid -Year budget Review. - Analyze Fire Emergency Medical Response Fee Adjustments (Ongoing Revenue TBD) The Committee requested an analysis of Fire Emergency Medical Response Fees to offset the costs of City medical response costs. In FY 2025, the Citywide Cost Allocation Plan and Municipal Fee Study will be fully reviewed, including further analysis of Fire EMS response fees for appropriate alignment to cost recovery levels. Such draft fees will be presented to the Committee and Council for review and approval and take effect in July 2025. - Fire Emergency Medical Response; Supplemental Resources (Estimated costs: $1,000,000 - $4,000,000 Ongoing) The Committee requested staff analyze different EMS models and associated fiscal impacts that would improve the City's capacity to cover ambulance call volume during peak hours. During the budget hearings, the Committee reviewed this contract option, and recommended the consideration of two different model options to establish a supplemental ambulance unit. One model is an activation through staffing, which can be accomplished through either traditional sworn staffing (i.e. Firefighters) or civilian staffing (i.e. Single Role). This staffing approach would require labor discussions, includes staffing engines at Fire Stations 2 and 4, and with a multi -year phased -in implementation ultimately costing approximately $3.2 million to $4.0 million annually. The second model is an activation through third -party contract services, which would require a robust Item 28: Staff Report Pg. 14 Packet Pg. 580 of 857 Item 28 Item 28 Staff Report procurement solicitation (i.e. REP process), with an informal quotation of $1.0 million annually. This is an essential service that needs to be implemented correctly, and accordingly, staff proposes to analyze this during FY 2025 and provide the Committee and Council with an in-depth analysis of the two models, fiscal impacts, and feasibility and implementation. Budgetary appropriation would follow such analysis and Council authorization. Review Parks Restroom Prioritization (Specifically Pardee Park (Ongoing capital project costs TBD) The Committee requested staff to review parks restroom prioritization with a focus on Pardee Park. Several considerations influence the prioritization of park restroom projects. The Parks, Trails, Natural Open Space and Recreation Master Plan (2017) states, "The City will actively pursue adding park restrooms in parks that are approximately 2 acres or larger, have amenities that encourage visitors to stay in the park, have a high level of use and have no nearby restrooms." Using those criteria, the following potential locations were included in the Master Plan: Bol Park, Bowden Park, Eleanor Pardee Park, Johnson Park, Ramos Park, Robles Park, and Terman Park. These are further prioritized by the level of community support, existing amenities in the park that may draw large crowds, timing with other projects in the same park, and other factors such as access to utilities. Additionally, restrooms in other parks may be prioritized above those identified in the Master Plan if a need arises due to an increase in park visitation from adding new amenities such as playgrounds or pickleball courts. The 2025-2029 Capital Improvement Plan includes funding in the Park Restroom Installation project (PG -19000) for the installation of restrooms in City parks every other year. A restroom at Mitchell Park is scheduled for installation in FY 2024, while specific parks have not yet been identified for restroom installations in FY 2026 and FY 2028. Staff recommends adding Eleanor Pardee Park to the workplan in FY 2026 and evaluating the workplan for FY 2028 in line with the Foothills Nature Preserve Restroom Replacement project (PE -26000) to align with staff workload capacity to install park restrooms. CSD staff can do some initial outreach starting in Fall 2024 for Eleanor Pardee Park given the previous opposition to restrooms at that location in 2007 and 2013, with the goal of funding it in the FY 2026 Capital budget. - Active Recruitment Digital Marketing Services (Contract Services) On May 7, 2024, the Committee directed staff to analyze a pilot recruitment digital marketing services for talent attraction to support organizational resilience. While the original estimate is $250,000, later reduced to $50,000 placeholder, staff at this time proposes this as an FY 2025 work plan item to analyze a pilot program in collaboration with city departments and contract vendor(s). No budget appropriation is requested at this time, but should a need arise, staff will update Council at FY 2025 mid -year. - Establish Organizational Development & Safety Division ($135,000 Ongoing; 50% GF/50% ISF Item 28: Staff Report Pg. 15 Packet Pg. 581 of 857 Item 28 Item 28 Staff Report On May 7, 2024, the Committee added 1.0 FTE focused on organizational development and safety division with Human Resources. Staff proposes this to be a FY 2025 work plan item to allow time to analyze and align with the risk function transition currently underway between Human Resources and Administrative Services. Funding for this position would be split equally between the General Fund and the General Liability Fund, but no appropriation is requested for FY 2025. Explore financial, outreach, and policy processes for adding East Palo Alto to resident rates for the golf course (Ongoing revenue reduction TBD) The Committee directed staff to explore providing the discounted residents rates for Palo Alto golf to East Palo Alto (EPA) residents. Staff proposes this to be a FY 2025 work plan and estimates any fiscal impact, if significant, may be incorporated into the FY 2025 mid- year budget update. Increasing Revenue -Generating CSD Programming to Meet Demand (Ongoing cost & revenue TBD) The Committee directed staff to analyze flexibility in increasing CSD classes to meet demand. This will likely entail a review of class demand, procurement, and facility capacity. Staff proposes this to be a FY 2025 work plan, and no budget adjustment is requested at this time. APPROPRIATIONS LIMIT FOR FISCAL YEAR 2025 California voters approved an initiative on November 6, 1979 that added Article XIIIB to the State Constitution, as amended by Proposition 98 in 1988 and Proposition 111 in 1990. The provisions of this article place limits on the amount of revenue that can be appropriated by all entities of government. The appropriation limit is adjusted annually on the basis of population and per capita income changes provided annually by the California Department of Finance. Based on Article XIIIB, the City of Palo Alto can use the larger of two measurements of population growth, (county or city population growth) in the appropriations limit calculation. For Fiscal Year 2025, the City is using the 2023-2024 percent change in population growth of the County of Santa Clara in the calculation. The City typically uses the highest factor in order to provide maximum appropriation flexibility. The appropriations limit for Fiscal Year 2025 is $219.74 million for funds subject to the appropriation limits. The City's Fiscal Year 2025 budgeted appropriations are estimated to be $46.64 million under the limit (Attachment B, Exhibit 1). As required by State law, documentation used to compute the appropriations limit has been made available to the public at least fifteen days prior to the Council meeting at which the appropriations limit is being adopted, and notice was published of the availability of these materials. Item 28: Staff Report Pg. 16 Packet Pg. 582 of 857 Item 28 Item 28 Staff Report RESOURCE IMPACT This report summarizes and seeks the City Council approval of the FY 2025 Operating and Capital Budgets, the supporting fee schedules, and table of organization in order to support the projections and appropriations included. The approval of the City Manager's FY 2025 Capital and Operating Budget, as recommended to be amended in this report, would result in a projected General Fund Budget Stabilization Reserve of $54.4 million. At recommended expense levels of $294.2 million, after adjusting for reserves such as the Uncertainty Reserve and the Utility Transfer Legal Cost Reserve, the BSR is at 18.5%, the Council's target in the recommended range of 15-20% of General Fund Expenditures. Exclusion reserve funding has been done to avoid unintentional inflation of the BSR. The projected changes to the fund balance for all other funds including Enterprise Funds, Internal Services Funds, Special Revenue Funds, and Capital Funds are outlined in Attachment A and accompanying exhibits and impacts to fund balance summarized in Table 2. TABLE 2: Resource Impact (Non -General Funds with Fund Balance Change) Fund Balance Fund Type Fund Name Change Capital Capital Improvement Fund -$6.3M Cubberley Infrastructure Fund -$1.0M Enterprise Airport Fund -$12k Electric Fund -$9.2M Fiber Fund -$6.4M Gas Fund -$4.1M Refuse Fund -$48k Stormwater Management Fund -$5.9M Utilities Administration Fund +$3k Wastewater Collection Fund +$35k Wastewater Treatment Fund -$7.3M Water Fund -$6.OM Internal Service General Benefits Fund +$0.3M Printing and Mailing Fund -$5k Technology Fund -$1.3M Vehicle Fund +$0.3M Special California Avenue Parking Permit Revenue Fund -$1k Parks Development Impact Fee Fund +$2k Residential Parking Permit Fund -$1k University Avenue Parking Permit Fund -$27k Item 28: Staff Report Pg. 17 Packet Pg. 583 of 857 Item 28 Item 28 Staff Report STAKEHOLDER ENGAGEMENT The budget process is structured around public hearings conducted before City Council adoption to complete a detailed review of the budget documents and incorporate opportunities for community input in the decision -making process. The community was encouraged to engage with the budget process through scheduled public meetings with the Finance Committee and City Council, a community informational session with City staff, and direct emails to the City Manager and City Council. Additionally, the City maintains a dedicated webpage for meeting materials and other budget information ENVIRONMENTAL REVIEW Adoption of the City budget and associated actions is not a project under California Environmental Quality Act (CEQA) Guidelines Section 15378(b)(5) (organizational or administrative activities that will not result in direct or indirect physical changes in the environment). Attachments: Attachment A - FY 2025 Budget Adoption Ordinance Attachment A, Exhibit 1 - City Manager's Fiscal Year 2025 Proposed Operating & Capital Budgets & Municipal Fee Attachment A, Exhibit 2 and 3 - Amendments to the City Manager's Fiscal Year 2025 Proposed Operating and Capital Budgets Attachment A, Exhibit 4 - Table of Organization Attachment A, Exhibit 5 - Fiscal Year 2025 Municipal Fee Changes Attachment A, Exhibit 6 - Impact and In -Lieu Municipal Fees Attachment B - FY 2025 City Appropriations Limit Resolution Attachment B, Exhibit 1 - Appropriations Limit Calculation Attachment C - FY 2025 Summary of Stanford Investments Attachment D - June 30, 2023 OPEB Actuarial Valuation Report (CMR 2402-2673) Attachment D, Exhibit 1 - Central OPEB Adjustments in Various Funds Attachment E - Planning and Transportation Commission Letter of the 2025-2029 Capital Improvement Plan to the City's Comprehensive Plan APPROVED BY: Lauren Lai, Administrative Services Director 8 City's Budget Website: www.citVofpaloalto.org/budget Item 28: Staff Report Pg. 18 Packet Pg. 584 of 857 Item 28 Attachment A - FY 2025 Budget Adoption TA Ordinance.pdf ORDINANCE OF THE COUNCIL OF THE CITY OF PALO ALTO ADOPTING THE BUDGET FOR FISCAL YEAR 2025 SECTION 1. The Council of the City of Palo Alto finds and determines as follows: A. Pursuant to the provisions of Section 6(g) of Article IV of the Charter of the City of Palo Alto and Chapter 2.28 of the Palo Alto Municipal Code, the City Manager has prepared and submitted to the City Council, by letter of transmittal, a budget proposal for Fiscal Year 2025; and B. Pursuant to the provisions of Section 12 of Article III of the Charter, the Council did, on June 17, 2024, hold public hearings on the budget after publication of notice in accordance with Section 2.28.070 of the Palo Alto Municipal Code; and C. In accordance with the provisions of Chapter 8 of Division 1, of Title 7, commencing with Section 66016 of the Government Code, as applicable, the Council did on June 17, 2024, hold a public hearing on the proposed amendments to the Municipal Fee Schedule, after publication of notice and after availability of the data supporting the amendments was made available to the public at least 10 days prior to the hearing. SECTION 2. Pursuant to Chapter 2.28 of the Palo Alto Municipal Code, the following documents, collectively referred to as "the budget" are hereby approved and adopted for Fiscal Year 2025: (a) The budget document (Exhibit "1") containing the proposed operating and capital budgets submitted on May 6, 2024, by the City Manager for Fiscal Year 2025, entitled "City of Palo Alto - City Manager's Fiscal Year 2025 Proposed Budget" covering General Government Funds, Enterprise Funds, Special Revenue Funds, and Internal Service Funds, a copy of which is on file in the Department of Administrative Services, to which copy reference is hereby made concerning the full particulars thereof, and by such reference is made a part hereof; and (b) The Amendments to the City Manager's Fiscal Year 2025 Proposed Budget, attached hereto as Exhibit "2"and Exhibit "3" and made a part hereof; and (c) Changes and revised pages in the Table of Organization, as displayed on pages 503 through 524 in "Exhibit 1," and amended in Exhibit "4" made a part hereof; and 1 Item 28: Staff Report Pg. 19 Packet Pg. 585 of 857 Item 28 Attachment A - FY 2025 Budget Adoption Ordinance.pdf ATTACHMENT A (d) Fee changes of the Municipal Fee Schedule attached hereto as Exhibit "5" including changes to Impact and In -Lieu Fees attached hereto as Exhibit "6". SECTION 3. The sums set forth in the budget for the various departments of the City, as herein amended, are hereby appropriated to the uses and purposes set forth therein. SECTION 4. All expenditures made on behalf of the City, directly or through any agency, except those required by state law, shall be made in accordance with the authorization contained in this ordinance and the budget as herein amended. SECTION 5. Appropriations for the Fiscal Year 2024 that are encumbered by approved purchase orders and contracts for which goods or services have not been received or contract completed, and/or for which all payments have not been made, by the last day of the Fiscal Year 2024 shall be carried forward and added to the fund or department appropriations for Fiscal Year 2025. SECTION 6. The City Manager is authorized and directed to make changes in the department and fund totals and summary pages of the budget necessary to reflect the amendments enumerated and aggregated in the budget as shown in Exhibit "2" and Exhibit "3" and the Fiscal Year 2024 appropriations carried forward as provided in Section 5. SECTION 7. As specified in Section 2.04.320 of the Palo Alto Municipal Code, a majority vote of the City Council is required to adopt this ordinance. SECTION 8. As specified in Section 2.28.140(b) of the Palo Alto Municipal Code, the Council of the City of Palo Alto hereby delegates the authority to invest the City's funds to the Director of Administrative Services, as Treasurer, in accordance with the City's Investment Policy for Fiscal Year 2025. SECTION 9. The Council of the City of Palo Alto adopts the changes to the Municipal Fee Schedule as set forth in Exhibit "5" including changes to Impact and In -Lieu Fees in Exhibit "6".The amount of the new or increased fees and charges is no more than necessary to cover the reasonable costs of the governmental activity, and the manner in which those costs are allocated to a payer bears a fair and reasonable relationship to the payer's burden on, or benefits received from, the governmental activity. All new and increased fees shall go into effect immediately; provided that pursuant to Government Code Section 66017, all Planning & Community Environment Department fees relating to a "development project" as defined in Government Code Section 66000 shall become effective sixty (60) days from the date of adoption. SECTION 10. Fees in the Municipal Fee Schedule are for government services provided directly to the payor that are not provided to those not charged. The amount of this fee does not Item 28: Staff Report Pg. 20 Packet Pg. 586 of 857 Item 28 Attachment A - FY 2025 Budget Adoption Ordinance.pdf ATTACHMENT A exceed the reasonable costs to the City of providing the services. Consequently, pursuant to Art. XIII C, Section 1(e)(2), such fees are not a tax. SECTION 11. As provided in Section 2.04.330 of the Palo Alto Municipal Code, this ordinance shall become effective upon adoption. SECTION 12. The Council of the City of Palo Alto hereby finds that this is not a project under the California Environmental Quality Act and, therefore, no environmental impact assessment is necessary. INTRODUCED AND PASSED: Enter Date Here AYES: NOES: ABSENT: ABSTENTIONS: NOT PARTICIPATING: ATTEST: City Clerk Mayor APPROVED AS TO FORM: City Manager City Attorney Director of Administrative Services 3 Item 28: Staff Report Pg. 21 Packet Pg. 587 of 857 Item 28 Attachment A Exhibit 1- C I TY O F ,EXHIBITI City Manager's Fiscal Year PALO ALTO 2025 Proposed Operating & Capital Budgets & Municipal Fee.pdf Fiscal Year 2025 City Manager's Proposed Operating & Capital Budgets and Municipal Fees These documents were originally distributed on May 6, 2024. Printed copies of the Proposed Budgets are available upon request for $52 per book (FY 2025 fee). Printed copies of the Municipal Fees are available upon request for $10 per book. These documents may be viewed at any City of Palo Alto Library or the City's website: www.cityofpaloaIto.org/Departments/Administrative-Services/City- Budget Changes to the Municipal Fee Schedule were distributed in the Finance Committee Packet on May 8, 2024. The City Manager's Staff Report (#2402-2587) can be viewed on the City's website: https://recordsporta 1. paloalto.gov/Webli n k/DocView.aspx?id=64547 In addition, various at places memorandum and presentations were presented throughout the Finance Committee Hearings in May 2024 to provide additional information. These documents can be found on the City's budget website under "FY 2025 Budget Process": www.cityofpaloalto.org/Departments/Administrative- Services/City-Budget Item 28: Staff Report Pg. 22 Packet Pg. 588 of 857 Item 28 EXHIBIT 2 • • • Attachment A Exhibit 2 • •I. and 3 -Amendments to the City Manager's Fiscal FTE Year 2025 Proposed xpenses Department Adjustment Operating and Capital justment GENERAL FUND (102 & 103) Budgets.pdf Community Services Ticketing Revenue/ JMZ Staffing and Programming Augmentation 3.08 $ 350,000 $ 509,026 Consistent with Finance Committee's direction, this action augments the Junior Museum and Zoo (JMZ) staffing by adding 1.0 Program Assistant I for Guest Services, and converting four Zoological Assistants (allocated at .48 FTE each) to four full-time Animal Caretakers. The conversion for the four positions will take effect in January. Additionally, the plan allocates $211,000 for a new JMZ ticketing system and increases revenue, reflecting peak hour ticket pricing. The costs will be partially offset by revenue from an increase to the ticket prices from $10 to $14 during peak operations. (Ongoing Net Costs: $352,000) Community Services Los Altos and Los Altos Hills Animal Care Revenue $ 198,338 $ This action increases revenue from Los Altos and Los Altos Hills in accordance with the latest contract renewal (CMR 2403-2827), effective July 1, 2024, for providing animal care and control services. (Ongoing Savings: $198,000) Fire Revenue from Stanford University/ Upstaff Fire Engine 62 with three Sworn Staff instead of Overtime Consistent with Finance Committee's direction, this action adds 3.00 Firefighter EMTs to fill one Daily shift position at Fire Engine 62. These staff will increase fire response capability by converting the squad vehicle at Fire Station 2 to a full Fire Engine through sworn staff rather than on overtime. The addition of these staff will be partially offset with revenue from Stanford University per the fire services agreement between the University and the City. (Ongoing Net Costs: $97,000) Non -Departmental Transfer to the Capital Improvement Fund for California Avenue Interim Improvements In support of City Council priority objectives, this action transfers $450,000 to the Capital Improvement Fund for street paving adjustments, signage, planters, and site furniture in the California Avenue Streetscape Update project (PL -23000). (Ongoing Costs: $0) Non -Departmental Transfer to the Capital Improvement Fund for Roth Building Rehabilitation This action transfers $300,000 to the Capital Improvement Fund to reimburse the Palo Alto Museum (PAM) for inflationary cost increases related to the Roth Building Rehabilitation project (PF- 23001). (Ongoing Costs: $500,000, FY 2026 only) 3.00 $ 14,078 $ 74,093 $ - $ 450,000 $ - $ 300,000 Item 28: Staff Report Pg. 23 Packet Pg. 589 of 857 Item 28 EXHIBIT 2 • • • Attachment A Exhibit 2 • •I. and 3 -Amendments to the City Manager's Fiscal FTE Year 2025 Proposed xpenses Department Adjustment Operating and Capital justment GENERAL FUND (102 & 103) Budgets.pdf Non -Departmental Ramona Car -Free Streetscape Design $ - $ 50,000 This action provides $50,000 in one-time funding to begin engagement with stakeholders about the future of Ramona Street as a car -free street. Funding will be used to onboard consultant resources that will be responsible for conducting stakeholder engagement, designing alternatives, considering legal strategies for permanent status as a car -free street, and addressing potential impacts for Ramona as a historic district. (Ongoing Costs: $0) Non -Departmental City Wide Special Event Funding Consolidation $ - $ 246,000 Consistent with Finance Committee Direction, this action adds funding for the following citywide events and programming: UNAFF ($45k), 3rd Thursdays ($40k), and Magical Bridge ($150k) as well as one-time funding for Environmental Volunteers Foothills Nature Preserve ($11k). During deliberations, Neighbors Abroad was also considered, but funding for this program is already included in the FY 2025 budget. (Ongoing Costs: $235,000) Non -Departmental Uncertainty Reserve $ - $ 1,470,442 As a result of actions taken by the Finance Committee, funding of approximately $1.5 million is available to increase the Uncertainty Reserve for use during the FY 2026 Budget process. This action will increase the remaining funds in the Uncertainty Reserve to $6.2 million. (Ongoing Costs: $0, $6.2 million one-time reserve) Non -Departmental Real Property Investment Reserve $ - $ (1,500,000) Consistent with Finance Committee Direction on June 4, 2024, this action reduces the Real Property Investment Reserve from $2.5 million to $1.0 million annually. (Ongoing Savings: $1,500,000) Office of Revenue from Stanford University/ Palo Alto Link $ 223,000 $ (177,000) Transportation This action reduces the net City cost of providing Palo Alto Link services by $400,000 through a combination of reduced service levels (including reduction of service hours and areas, and limitation of ridership) and increased revenue (including fare increases and additional support from Stanford). (Ongoing Net Savings: $400,000) Office of Palo Alto Transportation Management Authority (PATMA) $ - $ 175,000 Transportation This ongoing action increases the allocation for PATMA by $200,000, from $200,000 to $400,000, to maintain current service levels, with $25,000 funded by the University Avenue Parking Fund and $175,000 supported by the General Fund. Previously, PATMA spent down reserves to maintain service levels and has exhausted those funds. (Ongoing Costs: $175,000) Public Works Public Services Streets & Sidewalks 311 Service Requests Staffing 0.96 $ - $ 100,199 This ongoing action adds two hourly (0.46 FTE each) General Laborer positions to support work orders generated from Palo Alto 311 streets and sidewalks service requests and address an existing backlog. (Ongoing Costs: $107,000) Item 28: Staff Report Pg. 24 Packet Pg. 590 of 857 Item 28 EXHIBIT 2 • • • Attachment A Exhibit 2 • •I. and 3 -Amendments to the City Manager's Fiscal FTE Year 2025 Proposed xpenses Department Adjustment Operating and Capital justment GENERAL FUND (102 & 103) Budgets.pdf Utilities Gas Fund Equity Transfer $ 1,958,000 $ Consistent with Council direction, this action increases the Gas Fund equity transfer to the General Fund from 11.9% to 14.5%, an increase of approximately $2.0 million. This is accompanied by an increase to retail revenues in the Gas Fund by approximately $2.0 million, supported by an increase to the gas rate in FY 2025 from 9.0% in the proposed budget to 12.5%. (Ongoing Savings: $916,000, FY 2026 Only) Various Other Post -Employment Benefits (OPEB) Actuarial Valuation $ - $ 1,650,657 A detailed list of impacts by department and fund can be found in Attachment D, Exhibit 1. (Ongoing costs: $3,300,000) Fund Balance Adjustment to Fund Balance (Budget Stabilization Reserve) $ - $ (605,000) This action adjusts the fund balance to offset adjustments recommended in this report. GENERAL FUND (102 & 103) SUBTOTAL 7.04 $ 2,743,416 $ 2,743,416 Item 28: Staff Report Pg. 25 Packet Pg. 591 of 857 Item 28 EXHIBIT 2 • • • Attachment A Exhibit 2 • • 1 ' ' 1 and 3 - Amendments to the City Manager's Fiscal FTE Year 2025 Proposed xpenses Department Adjustment Operating and Capital justment CAPITAL IMPROVEMENT FUNDS Budgets.pdf CAPITAL IMPROVEMENT FUND (471) Capital Capital Improvement Project Amendments to Proposed $ (1,851) $ 6,088,590 Reappropriations This action reflects the impact from adjustments to capital projects as a result of funds recommended to be reappropriated from FY 2024 to FY 2025, as outlined in Attachment A, Exhibit 3. Projects with other recommended adjustments are detailed below. Capital Transfer from Gas Tax Fund/Street Maintenance (PE -86070) $ 79,378 $ 79,378 This action increases the transfer from the Gas Tax Fund and the Street Maintenance project's budget by $79,378 annually to align with the California Department of Finance's May 2024 updates for estimated 2024-25 Gas Tax Revenue. Capital Baylands Boardwalk Piling Repair (PE -24000) $ - $ 203,000 To avoid boardwalk closure, this action increases the project's budget by $203,000 to support repair work for which bids were higher than the engineer's estimate. Capital Transfer from the General Fund/ California Avenue Streetscape $ 450,000 $ 450,000 Update (PL -23000) In support of City Council priority objectives, this action increases the project's budget by $450,000 for street paving adjustments, signage, planters, and site furniture, offset with a transfer from the General Fund in the same amount. Capital Transfer from the General Fund/ Roth Building Rehabilitation (PF- $ 300,000 $ 300,000 23001) This action provides a $300,000 reimbursement to the Palo Alto Museum (PAM) for inflationary cost increases, offset with a transfer from the General Fund in the same amount. (Ongoing Costs: $500,000, FY 2026 only) Various Other Post -Employment Benefits (OPEB) Actuarial Valuation $ - $ 54,109 A detailed list of impacts by department and fund can be found in Attachment D, Exhibit 1. (Ongoing Costs: $108,000) Fund Balance Adjustment to Fund Balance (Infrastructure Reserve) $ - $ (6,347,550) This action adjusts the fund balance to offset adjustments recommended in this report. CAPITAL IMPROVEMENT FUND (471) SUBTOTAL 0.00 $ 827,527 $ 827,527 Item 28: Staff Report Pg. 26 Packet Pg. 592 of 857 Item 28 EXHIBIT 2 • • • Attachment A Exhibit 2 • • 1 ' ' 1 and 3 - Amendments to the City Manager's Fiscal FTE Year 2025 Proposed xpenses Department Adjustment Operating and Capital justment CAPITAL IMPROVEMENT FUNDS Budgets.pdf CUBBERLEY INFRASTRUCTURE FUND (472) Capital Capital Improvement Project Amendments to Proposed Reappropriations This action reflects the impact from adjustments to capital projects as a result of funds recommended to be reappropriated from FY 2024 to FY 2025, as outlined in Attachment A, Exhibit 3. Projects with other recommended adjustments are detailed below. $ $ 1,031,944 Fund Balance Adjustment to Fund Balance $ - $ (1,031,944) This action adjusts the fund balance to offset adjustments recommended in this report. CUBBERLEY INFRASTRUCTURE FUND (472) SUBTOTAL 0.00 $ - $ - Item 28: Staff Report Pg. 27 Packet Pg. 593 of 857 Item 28 EXHIBIT 2 • • • Attachment A Exhibit 2 • •I. 1 11F1I.1Mi]and 3 - Amendments to the City Manager's Fiscal FTE Year 2025 Proposed penses Department Adjustment Operating and Capital ustment ENTERPRISE FUNDS Budgets.pdf AIRPORT FUND (530) Capital Capital Improvement Project Amendments to Proposed Reappropriations This action reflects the impact from adjustments to capital projects as a result of funds recommended to be reappropriated from FY 2024 to FY 2025, as outlined in Attachment A, Exhibit 3. Projects with other recommended adjustments are detailed below. $ 22,500 $ 25,000 Various Other Post -Employment Benefits (OPEB) Actuarial Valuation $ - $ 9,345 A detailed list of impacts by department and fund can be found in Attachment D, Exhibit 1. (Ongoing Costs: $18,000) Fund Balance Adjustment to Fund Balance $ - $ (11,845) This action adjusts the fund balance to offset adjustments recommended in this report. AIRPORT FUND (530) SUBTOTAL 0.00 $ 22,500 $ 22,500 UTILITIES ADMINISTRATION FUND (521) Various Other Post -Employment Benefits (OPEB) Actuarial Valuation $ - $ (3,364) A detailed list of impacts by department and fund can be found in Attachment D, Exhibit 1. (Ongoing Savings: $7,000) Fund Balance Adjustment to Fund Balance $ - $ 3,364 This action adjusts the fund balance to offset adjustments recommended in this report. UTILITIES ADMINISTRATION FUND (521) SUBTOTAL 0.00 $ - $ - ELECTRIC FUND (513 & 523 Capital Capital Improvement Project Amendments to Proposed $ - $ 8,727,930 Reappropriations This action reflects the impact from adjustments to capital projects as a result of funds recommended to be reappropriated from FY 2024 to FY 2025, as outlined in Attachment A, Exhibit 3. Projects with other recommended adjustments are detailed below. Utilities Associate Sustainability Program Administrator 1.00 $ - $ 148,819 This action adds 1.0 FTE Associate Sustainability Program Administrator to the Utilities Resource Management Division. This fulfills the Council's Climate Action priority by supporting programs to drive gas appliance conversion to electricity and electric vehicle adoption, both of which reduce emissions supporting the City's green electricity portfolio. (Ongoing Costs: $155,000) Various Other Post -Employment Benefits (OPEB) Actuarial Valuation $ - $ 277,742 A detailed list of impacts by department and fund can be found in Attachment D, Exhibit 1. (Ongoing Costs: $556,000) Fund Balance Adjustment to Fund Balance $ - $ (9,154,491) This action adjusts the fund balance to offset adjustments recommended in this report. ELECTRIC FUND (513 & 523) SUBTOTAL 1.00 $ - $ Item 28: Staff Report Pg. 28 Packet Pg. 594 of 857 Item 28 EXHIBIT 2 • • • Attachment A Exhibit 2 • •I. 1 11F1I.1Mi]and 3 - Amendments to the City Manager's Fiscal FTE Year 2025 Proposed penses Department Adjustment Operating and Capital ustment ENTERPRISE FUNDS Budgets.pdf FIBER FUND (533) Capital Capital Improvement Project Amendments to Proposed $ - $ 6,355,164 Reappropriations This action reflects the impact from adjustments to capital projects as a result of funds recommended to be reappropriated from FY 2024 to FY 2025, as outlined in Attachment A, Exhibit 3. Projects with other recommended adjustments are detailed below. Various Other Post -Employment Benefits (OPEB) Actuarial Valuation A detailed list of impacts by department and fund can be found in Attachment D, Exhibit 1. (Ongoing Savings: $6,000) Fund Balance Adjustment to Fund Balance This action adjusts the fund balance to offset adjustments recommended in this report. $ - $ (3,028) $ - $ (6,352,136) FIBER FUND (533) SUBTOTAL 0.00 $ - $ - GAS FUND (514 & 524) Capital Capital Improvement Project Amendments to Proposed Reappropriations This action reflects the impact from adjustments to capital projects as a result of funds recommended to be reappropriated from FY 2024 to FY 2025, as outlined in Attachment A, Exhibit 3. Projects with other recommended adjustments are detailed below. Capital Gas Main Replacements #25 (GS -15000) To mitigate further rate increases related to the Gas Fund equity transfer and to maintain a sufficient reserve balance, this action reduces the project's FY 2025 budget by $735,000. Utilities Gas Fund Equity Transfer Consistent with Council direction, this action increases the Gas Fund equity transfer to the General Fund from 11.9% to 14.5%, an increase of approximately $2.0 million. This is offset by an increase to retail revenues by approximately $2.0 million, supported by an increase to the gas rate in FY 2025 from 9.0% in the proposed budget to 12.5%. (Ongoing Costs: $916,000, FY 2026 Only) Utilities Water System Operations Staffing This action removes the Water System Operations Staffing Proposal from the FY 2025 Proposed Budget to allow time for discussions with the Service Employee International Union (SEIU). The proposal sought to reclassify four Water System Operator II's and two Senior Water System Operators into four Utilities Install/Repairers and two Utility Install/Repairer Leads, respectively. (Ongoing Costs: $10,000) $ $ 4,690,727 $ - $ (735,000) $ 1,958,000 $ 1,958,000 0.00 $ - $ 5,359 Item 28: Staff Report Pg. 29 Packet Pg. 595 of 857 Item 28 EXHIBIT 2 • • • Attachment A Exhibit 2 • •I. 1 11F1I.1Mi]and 3 - Amendments to the City Manager's Fiscal FTE Year 2025 Proposed penses Department Adjustment Operating and Capital ustment ENTERPRISE FUNDS Budgets.pdf Various Other Post -Employment Benefits (OPEB) Actuarial Valuation $ - $ 136,926 A detailed list of impacts by department and fund can be found in Attachment D, Exhibit 1. (Ongoing Costs: $274,000) Fund Balance Adjustment to Fund Balance $ - $ (4,098,012) This action adjusts the fund balance to offset adjustments recommended in this report. GAS FUND (514 & 524) SUBTOTAL 0.00 $ 1,958,000 $ 1,958,000 REFUSE FUND (525) Various Other Post -Employment Benefits (OPEB) Actuarial Valuation $ - $ 47,695 A detailed list of impacts by department and fund can be found in Attachment D, Exhibit 1. (Ongoing Costs: $96,000) Fund Balance Adjustment to Fund Balance $ - $ (47,695) This action adjusts the fund balance to offset adjustments REFUSE FUND (525) SUBTOTAL 0.00 $ - $ - STORMWATER MANAGEMENT FUND (528) Capital Capital Improvement Project Amendments to Proposed $ Reappropriations This action reflects the impact from adjustments to capital projects as a result of funds recommended to be reappropriated from FY 2024 to FY 2025, as outlined in Attachment A, Exhibit 3. Projects with other recommended adjustments are detailed below. Various Other Post -Employment Benefits (OPEB) Actuarial Valuation $ A detailed list of impacts by department and fund can be found in Attachment D, Exhibit 1. (Ongoing Costs: $72,000) $ 5,822,454 $ 36,272 Fund Balance Adjustment to Fund Balance $ - $ (5,858,726) This action adjusts the fund balance to offset adjustments recommended in this report. STORMWATER MANAGEMENT FUND (528) SUBTOTAL 0.00 $ - $ - WASTEWATER COLLECTION FUND (527) Capital Capital Improvement Project Amendments to Proposed $ - $ 40,000 Reappropriations This action reflects the impact from adjustments to capital projects as a result of funds recommended to be reappropriated from FY 2024 to FY 2025, as outlined in Attachment A, Exhibit 3. Projects with other recommended adjustments are detailed below. Various Other Post -Employment Benefits (OPEB) Actuarial Valuation $ - $ (74,921) A detailed list of impacts by department and fund can be found in Attachment D, Exhibit 1. (Ongoing Savings: $150,000) Item 28: Staff Report Pg. 30 Packet Pg. 596 of 857 Item 28 EXHIBIT 2 • • • Attachment A Exhibit 2 • •I. 1 11F1I.1Mi]and 3 - Amendments to the City Manager's Fiscal FTE Year 2025 Proposed penses Department Adjustment Operating and Capital ustment ENTERPRISE FUNDS Budgets.pdf Fund Balance Adjustment to Fund Balance $ - $ 34,921 This action adjusts the fund balance to offset adjustments recommended in this report. WASTEWATER COLLECTION FUND (527) SUBTOTAL 0.00 $ - $ - WASTEWATER TREATMENT FUND (526) Capital Capital Improvement Project Amendments to Proposed Reappropriations This action reflects the impact from adjustments to capital projects as a result of funds recommended to be reappropriated from FY 2024 to FY 2025, as outlined in Attachment A, Exhibit 3. Projects with other recommended adjustments are detailed below. Various Other Post -Employment Benefits (OPEB) Actuarial Valuation A detailed list of impacts by department and fund can be found in Attachment D, Exhibit 1. (Ongoing Costs: $590,000) $ 35,169,981 $ 42,178,642 $ $ 295,490 Fund Balance Adjustment to Fund Balance $ - $ (7,304,151) This action adjusts the fund balance to offset adjustments recommended in this report. WASTEWATER TREATMENT FUND (526) SUBTOTAL 0.00 $ 35,169,981 $ 35,169,981 WATER FUND (522) Capital Capital Improvement Project Amendments to Proposed Reappropriations This action reflects the impact from adjustments to capital projects as a result of funds recommended to be reappropriated from FY 2024 to FY 2025, as outlined in Attachment A, Exhibit 3. Projects with other recommended adjustments are detailed below. $ $ 5,632,547 Utilities Water System Operations Staffing 0.00 $ - $ (43,098) This action removes the Water System Operations Staffing Proposal from the FY 2025 Proposed Budget to allow time for discussions with the Service Employee International Union (SEIU). The proposal sought to reclassify four Water System Operator II's and two Senior Water System Operators into four Utilities Install/Repairers and two Utility Install/Repairer Leads, respectively. (Ongoing Savings: $50,000) Utilities Water Rates Decrease In accordance with the FY 2025 Water Fund Financial Plan, this action reduces the annual water rate increase from 10.0% to 9.5%, reducing revenue by $297,381. (Ongoing Savings: $0) Various Other Post -Employment Benefits (OPEB) Actuarial Valuation A detailed list of impacts by department and fund can be found in Attachment D, Exhibit 1. (Ongoing Costs: $152,000) $ (297,381) $ - $ - $ 75,809 Fund Balance Adjustment to Fund Balance $ - $ (5,962,639) This action adjusts the fund balance to offset adjustments recommended in this report. WATER FUND (522) SUBTOTAL 0.00 $ (297,381) $ (297,381) Item 28: Staff Report Pg. 31 Packet Pg. 597 of 857 0 Department SPECIAL REVENUE FUNDS PARKS DEVELOPMENT IMPACT FEE FUND (210 HIBIT 2 Item 28 Attachment A Exhibit 2 and 3 - Amendments to the City Manager's Fiscal Year 2025 Proposed Operating and Capital penses Budgets.pdf ustment Non- Transfer to Capital Improvement Fund $ - $ (1,851) Departmental This action reduces the transfer to the Capital Improvement Fund as a result of recommended adjustments to capital project reappropriations from FY 2024 to FY 2025. Fund Balance Adjustment to Fund Balance $ - $ 1,851 This action adjusts the fund balance to offset the actions recommended in this report. PARKS DEVELOPMENT IMPACT FEE FUND (210) SUBTOTAL $ - $ - GAS TAX FUND (231) Non- Gas Tax Revenue Increase/ Transfer to Capital Improvement $ 79,378 $ 79,378 Departmental Fund for Street Maintenance (PE -86070) This action increases Gas Tax revenue estimates and increases transfers to the CIP for the Street Maintenance Project (PE -86070) based on the California Department of Finance's May 2024 updates for estimated 2024-25 HUTA and RMRA-SB1 taxes. GAS TAX FUND (231) SUBTOTAL $ 79,378 $ 79,378 CALIFORNIA AVENUE PARKING PERMITS FUND (237) Various Other Post -Employment Benefits (OPEB) Actuarial Valuation $ - $ 574 A detailed list of impacts by department and fund can be found in Attachment D, Exhibit 1. (Ongoing Costs: $1,000) Fund Balance Adjustment to Fund Balance $ - $ (574) This action adjusts the fund balance to offset the actions recommended in this report. CALIFORNIA AVENUE PARKING PERMITS FUND (237) SUBTOTAL $ - $ - RESIDENTIAL PARKING PERMIT PROGRAMS FUND (239 Various Other Post -Employment Benefits (OPEB) Actuarial Valuation $ - $ 1,000 A detailed list of impacts by department and fund can be found in Attachment D, Exhibit 1. (Ongoing Costs: $2,000) Fund Balance Adjustment to Fund Balance $ - $ (1,000) This action adjusts the fund balance to offset the actions recommended in this report. RESIDENTIAL PARKING PERMIT PROGRAMS FUND (239) SUBTOTAL $ - $ - Item 28: Staff Report Pg. 32 Packet Pg. 598 of 857 0 Department SPECIAL REVENUE FUNDS UNIVERSITY AVENUE PARKING PERMITS FUND [236 HIBIT 2 Item 28 Attachment A Exhibit 2 and 3 - Amendments to the City Manager's Fiscal Year 2025 Proposed Operating and Capital penses Budgets.pdf ustment Office Of Palo Alto Transportation Management Authority (PATMA) $ - $ 25,000 Transportation Funding This ongoing action increases the allocation for PATMA by $200,000, from $200,000 to $400,000, to maintain current service levels, with $25,000 funded by the University Avenue Parking Fund and $175,000 supported by the General Fund. Previously, PATMA spent down reserves to maintain service levels and has exhausted those funds. (Ongoing Costs: $25,000) Various Other Post -Employment Benefits (OPEB) Actuarial Valuation $ A detailed list of impacts by department and fund can be found in Attachment D, Exhibit 1. (Ongoing Costs: $5,000) Fund Balance Adjustment to Fund Balance $ This action adjusts the fund balance to offset the actions recommended in this report. UNIVERSITY AVENUE PARKING PERMITS FUND (236) SUBTOTAL $ Item 28: Staff Report Pg. 33 Packet Pg. 599 of 857 ATT Department INTERNAL SERVICE FUNDS GENERAL BENFITS FUND (687) Non -Departmental Charges to Other Funds / Healthcare and Pension Expense This net neutral action increases the estimate for charges to other funds by $1.6 million due to staffing increases approved as part of the FY 2025 Adopted Budget. During budget hearings, the Finance Committee recommended staffing adjustments to the FY 2025 Proposed Budget in addition to the staffing adjustments included in the FY 2025 Proposed Budget. The General Benefits Fund acts as a pass -through for pension and healthcare costs; therefore this action increases expenditures correspondingly. Non -Departmental Other Post -Employment Benefits (OPEB) Actuarial Valuation Transfer for Implied Subsidy. A detailed list of impacts by department and fund can be found in Attachment D, Exhibit 1. Item 28 IBIT 2 Attachment A Exhibit 2 and 3 - Amendments to the City Manager's Fiscal Year 2025 Proposed nses Operating and Capital tment Budgets.pdf $ 1,573,612 $ 1,573,612 $ $ (254,500) Non -Departmental Adjustment to Fund Balance $ - $ 254,500 This action adjusts the fund balance to offset adjustments recommended in this report. GENERAL BENFITS FUND (687) SUBTOTAL $ 1,573,612 $ 1,573,612 RETIREE HEALTH BENEFITS FUND (694 Various Other Post -Employment Benefits (OPEB) Actuarial Valuation On June 4, 2024, the Finance Committee approved the June 30, 2023 actuarial valuation of Palo Alto's Retiree Healthcare Plan (CMR 2402-2673). This action results in an FY 2025 Adjusted ADC of $19.4 million citywide (approximately $12.2 million in the General Fund), a $2.6 million ($1.7 million in the General Fund) increase from the $16.8 million ADC from the June 30, 2021 valuation used to develop the FY 2025 Proposed Operating Budget. A detailed list of impacts by department and fund can be found in Attachment D, Exhibit 1. Non -Departmental Other Post -Employment Benefits (OPEB) Actuarial Valuation Transfer for Implied Subsidy. A detailed list of impacts by department and fund can be found in Attachment D, Exhibit 1. $ 2,603,214 $ 2,603,214 $ (254,500) $ (254,500) RETIREE HEALTH BENEFITS FUND (694) SUBTOTAL $ 2,348,714 $ 2,348,714 Item 28: Staff Report Pg. 34 Packet Pg. 600 of 857 Department INTERNAL SERVICE FUNDS PRINTING & MAILING FUND (683) Various Other Post -Employment Benefits (OPEB) Actuarial Valuation Transfer for Implied Subsidy. A detailed list of impacts by department and fund can be found in Attachment D, Exhibit 1. (Ongoing Costs: $10,000) Fund Balance Adjustment to Fund Balance This action adjusts the fund balance to offset adjustments recommended in this report. ATT Item 28 Attachment A Exhibit 2 and 3 - Amendments to the City Manager's Fiscal Year 2025 Proposed Operating and Capital Budgets.pdf IBIT 2 ment $ - $ 5,296 $ - $ (5,296) PRINTING & MAILING FUND (683) SUBTOTAL $ - $ - TECHNOLOGY FUND (682) Capital Capital Improvement Project Amendments to Proposed $ - $ 1,274,731 Reappropriations This action reflects the impact from adjustments to capital projects as a result of funds recommended to be reappropriated from FY 2024 to FY 2025, as outlined in Attachment A, Exhibit 3. Various Other Post -Employment Benefits (OPEB) Actuarial Valuation $ - $ 71,067 A detailed list of impacts by department and fund can be found in Attachment D, Exhibit 1. (Ongoing Costs: $142,000) Fund Balance Adjustment to Fund Balance $ - $ (1,345,798) This action adjusts the fund balance to offset adjustments recommended in this report. TECHNOLOGY FUND (682) SUBTOTAL $ - $ VEHICLE REPLACEMENT & MAINTENANCE FUND (681) Capital Capital Improvement Project Amendments to Proposed $ - $ (290,553) Reappropriations This action reflects the impact from adjustments to capital projects as a result of funds recommended to be reappropriated from FY 2024 to FY 2025, as outlined in Attachment A, Exhibit 3. Projects with other recommended adjustments are detailed below. Various Other Post -Employment Benefits (OPEB) Actuarial Valuation $ - $ 20,134 A detailed list of impacts by department and fund can be found in Attachment D, Exhibit 1. (Ongoing Costs: $40,000) Fund Balance Adjustment to Fund Balance $ - $ 270,419 This action adjusts the fund balance to offset adjustments recommended in this report. VEHICLE REPLACEMENT & MAINTENANCE FUND (681) SUBTOTAL $ - $ - Item 28: Staff Report Pg. 35 Packet Pg. 601 of 857 Capital Improvement Plan FY 2024 Reappropriations to FY 2025 Item 28 Attachment A Exhibit 2 and 3 -Amendments to TA, EXHIBIT 3 Fund Number and Name Project Title Project 8 Expense Reappropriation Adjustment (Proposed) Expense Reappropriation Adjustment (A2P) Expense Reappropriation Adjustment TOTAL Re Re Ad (Pr Lne Li[ IVldnager S rl5Cdl Year 2025 Proposed Operating and Capital BudIets.pdf Revenue Reappropriation Adjustment TOTAL 471 -Capital Improvement Fund Americans With Disabilities Act Compliance PF-93009 800,000 800,000 Animal Shelter Renovation PE -19002 2,712,807 2,712,807 Art In Public Spaces AC -86017 1,637,708 1,637,708 Athletic Courts Resurfacing PG -06001 202,644 (28,617) 174,027 Baylands Comprehensive Conservation Plan PG -17000 43,100 43,100 Baylands Nature Preserve Entrance Gate OS -24000 120,000 (22,538) 97,462 Benches, Signage, Walkways, Perimeter Landscaping, and Site Amenities PG -06003 128,021 128,021 Bicycle and Pedestrian Transportation Plan Implementation PL -04010 2,900,000 2,900,000 Boulware Park Improvements PE -17005 135,764 135,764 Building Systems Improvements PF-01003 100,000 100,000 California Avenue District Gateway Signs PE -17004 123,382 123,382 Churchill Avenue Enhanced Bikeway PL -14000 2,000,000 2,000,000 City Bridge Improvements PE -20001 1,140,612 79,476 1,220,088 City Facilities Assessment PE -20002 30,000 30,000 City Facility Parking Lot Maintenance PE -09003 240,487 240,487 City Hall Space Planning PE -19000 571,373 571,373 Civic Center Electrical Upgrade & EV Charger PE -17010 1,035,399 1,035,399 Civic Center Fire Life Safety Upgrades PE -18016 147,239 (6,310) 140,929 Civic Center Waterproofing Study and Repairs PE -15020 426,969 426,969 Downtown Automated Parking Guidance Systems, Access Controls & Revenue Collection Equip. PL -15002 63,528 (6,130) 57,398 Electric Charger Infrastructure Installation PF-23000 241,799 (143,773) 98,026 Electrification of City Facilities PE -24001 491,474 491,474 Facility Interior Finishes Replacement PF-02022 20,000 20,000 Fire Station 4 Replacement PE -18004 8,107,006 (47,351) 8,059,655 Foothills Nature Preserve Boronda Lake Dock OS -18000 210,000 210,000 Foothills Nature Preserve Dam Seepage Investigation and Repairs PE -20000 75,066 75,066 Foothills Nature Preserve Improvements PE -21000 692,744 692,744 Golf Course Net and Artificial Turf Replacement PG -18000 770,000 770,000 Golf Reconfiguration & Baylands Athletic Center Improvements PG -13003 87,150 87,150 Homekey Facilities PE -24005 4,401,987 4,401,987 JMZ Renovation AC -18001 531,623 44,892 576,515 Library Automated Material Handling LB -21000 382,983 19 383,002 382,983 382,983 Lucie Stern Community Theater Mechanical Equipment Replacement PE -24002 199,834 199,834 Lucie Stern Community Theatre Fire Curtain AC -24001 200,000 200,000 Lucie Stern Community Theatre Theatrical and House Lighting System Replacement PE -24003 26,350 26,350 Mitchell Park Library Repair PE -24006 163,730 (1,654) 162,076 Municipal Service Center Lighting, Mechanical, and Electrical Improvements PF-16006 6,365,504 6,365,504 500,000 500,000 New California Avenue Area Parking Garage PE -18000 735,018 (2,758) 732,260 New Downtown Parking Garage PE -15007 5,398,600 (297,242) 5,101,358 5,398,600 5,398,600 New Public Safety Building PE -15001 1,454,374 1,454,374 Newell Road/San Francisquito Creek Bridge PE -12011 14,016,235 (359,800) 13,656,435 9,800,000 9,800,000 Off -Road Pathway Resurfacing And Repair OS -09001 244,733 244,733 Open Space Lakes And Pond Maintenance OS -00002 27,169 27,169 Open Space Trails and Amenities OS -00001 71,651 71,651 Park and Open Space Emergency Repairs PG -09002 53,687 53,687 Park Restroom Installation PG -19000 631,421 (1,851) 629,570 631,421 (1,851) 629,570 Parking District Implementation PL -15003 163,900 163,900 Performing Arts Venues Seat Replacement AC -18000 339,976 (166,990) 172,986 Rinconada Pool Family Changing Room PE -24004 200,070 200,070 Robles Park Improvements PE -18015 192,248 446,308 638,556 Roth Building Rehabilitation Phase 1 PF-23001 245,974 (7,928) 238,046 Safe Routes To School PL -00026 500,000 500,000 Sidewalk Repairs PO -89003 139,390 (139,390) - Street Lights Condition Assessment PE -13014 220,000 220,000 Street Lights Improvements PO -05054 366,950 (4,541) 362,409 Street Maintenance PE -86070 146,154 (56,466) 89,688 University Avenue Parking Improvements PF-14003 155,416 155,416 Baylands Interpretive Signage Program OS -24001 162,000 162,000 162,000 162,000 471 - Capital Improvement Fund Total 56,180,015 6,088,590 62,268,605 16,875,004 (1,851) 16,873,153 472 - Cubberley Property Cubberley Field Restroom CB -17002 137,828 510,848 648,676 Cubberley Gym HVAC Replacement CB -24000 770,000 30,000 800,000 Cubberley Repairs CB -17001 491,096 491,096 Cubberley Roof Replacements CB -16002 400,000 400,000 472 - Cubberley Property Infrastructure Fund Total 1,307,828 1,031,944 2,339,772 Item 28: Staff Report Pg. 36 Packet Pg. 602 of 857 Capital Improvement Plan FY 2024 Reappropriations to FY 2025 Item 28 Attachment A Exhibit 2 and 3 -Amendments to TA, EXHIBIT 3 Fund Number and Name Project Title Project 8 Expense Reappropriation Adjustment (Proposed) Expense Reappropriation Adjustment (A2P) Expense Reappropriation Adjustment TOTAL - Re Re Ad (Pr Lne any rvianagers nxdi Year 2025 Proposed Operating and Capital Budgets.pdf Revenue Reappropriation Adjustment TOTAL 530 - Airport Enterprise Fund Airport Access Road Reconstruction AP -24000 300,000 300,000 270,000 Airport Parking Lot Electric Vehicle Charger AP -24001 25,000 25,000 22,500 Airport Temporary Office Buildings AP -22001 358,800 358,800 Airport Zero Emission Vehicle Fleet Replacement AP -23000 156,647 156,647 156,647 156,647 Automated Weather Observation System (AWOS) AP -19000 341,839 341,839 341,839 341,839 530 -Airport Enterprise Fund 1,157,286 25,000 1,182,286 768,486 22,500 790,986 523 - Electric Fund Colorado Power Station Equipment Upgrades EL -19001 1,733,011 1,733,011 Colorado Substation Site Improvements EL -19002 1,138,294 1,138,294 Foothills Rebuild (Fire Mitigation) EL -21001 1,742,878 460,974 2,203,852 Grid Modernization for Electrification EL -24000 15,000,000 3,182,640 18,182,640 15,000,000 15,000,000 Inter -substation Line Protection Relay EL -17005 462,505 462,505 Rebuild Underground District 24 EL -10006 139,066 139,066 Smart Grid Technology Installation EL -11014 710,177 297,572 1,007,749 Substation Breaker Replacement EL -17002 1,137,480 1,209,854 2,347,334 Substation Physical Security EL -16003 2,812,575 104,014 2,916,589 523 -Electric Fund Total 21,403,110 8,727,930 30,131,040 15,000,000 15,000,000 533 - Fiber Optics Fund Fiber Optics Network - System Improvements FO -10001 400,000 400,000 Fiber Optics Network - System Rebuild FO -16000 12,314,530 30,000 12,344,530 Fiber -to -the -Premises (FTTP) FO -24000 5,925,164 5,925,164 533 - Fiber Optics Fund Total 12,314,530 6,355,164 18,669,694 524 -Gas Fund Gas Distribution System Improvements GS -11002 666,723 666,723 Gas Main Replacement - Project 24 GS -14003 567,190 131,610 698,800 Gas Main Replacement - Project 25 GS -15000 3,703,849 3,703,849 Gas Meters and Regulators GS -80019 188,545 188,545 524 - Gas Fund Total 567,190 4,690,727 5,257,917 528-Stormwater Management Corporation Way System Upgrades and Pump Station SD -21000 3,526,712 3,526,712 East Meadow Circle Connection to Adobe Creek Pump Station SD -26000 134,487 134,487 East Meadow Drive System Upgrades SD -22000 88,231 88,231 Green Stormwater Infrastructure SD -22001 1,655,538 (42,070) 1,613,468 Storm Drainage System Replacement And SD -06101 600,000 188,164 788,164 West Bayshore Road Pump Station SD -20000 1,038,809 1,038,809 West Bayshore Road Trunk Line Improvements SD -23000 888,121 888,121 528 - Stormwater Management Fund Total 2,255,538 5,822,454 8,077,992 527 - Wastewater Collection Fund Wastewater General Equipment and Tools WC -13002 40,000 40,000 527 - Wastewater Collection Fund Total 40,000 40,000 526 - Wastewater Treatment Fund Headworks Facility Replacement WQ-16002 2,638,974 372,915 3,011,889 Horizontal Levee Pilot WQ-22001 246,666 (170,431) 76,235 Joint Intercepting Sewer Rehabilitation (Phase 1) WQ-24000 3,565,030 28,890 3,593,920 3,565,030 28,890 3,593,920 Outfall Line Construction WQ-19000 10,605,800 10,605,800 Plant Repair, Retrofit, and Equipment Replacement WQ-19002 5,057,207 4,816,716 9,873,923 Primary Sedimentation Tank Rehabilitation WQ-14003 1,000,000 1,989,461 2,989,461 Secondary Treatment Upgrades WQ-19001 1,132,679 34,996,091 36,128,770 1,132,679 34,996,091 36,128,770 Local Advanced Water Purification System WQ-19003 16,981,395 145,000 17,126,395 16,981,395 145,000 17,126,395 526 - Wastewater Treatment Fund Total 41,227,751 42,178,642 83,406,393 21,679,104 35,169,981 56,849,085 522 - Water Fund Water Distribution System Improvements WS -11003 670,388 670,388 Water General Equipment/Tools WS -13002 50,000 50,000 Water Main Replacement - Project 29 WS -15002 3,089,102 3,089,102 Water Main Replacement - Project 30 WS -16001 415,000 415,000 Water Regulation Station Improvements WS -07000 18,519 18,519 Water System Supply Improvements WS -11004 2,817,000 601,706 3,418,706 Water Tank Seismic Upgrade and Rehabilitation WS -09000 737,832 737,832 Water, Gas, Wastewater Utility GIS Data WS -02014 50,000 50,000 522 - Water Fund Total 2,817,000 5,632,547 8,449,547 682 - Technology Fund City Council Chambers Upgrade TE-19001 1,770,910 (10,000) 1,760,910 Computer Aided Dispatch (CAD) Upgrade TE-23000 640,000 640,000 Enterprise Resource Planning Upgrade TE-19000 530,620 (10,620) 520,000 Infrastructure Management System TE-13004 361,874 361,874 Radio Infrastructure Replacement TE-05000 259,900 259,900 Utilities Customer Bill System Improvements TE-10001 293,477 293,477 682 -Technology Fund Total 2,561,430 1,274,731 3,836,161 681- Vehicle Replacement & Maintenance Fund Emergency Repair and Replacement VR-15001 39,662 39,662 Scheduled Vehicle and Equipment Replacement - FY VR-20000 30,000 30,000 Scheduled Vehicle and Equipment Replacement - FY VR-21000 17,351 17,351 Scheduled Vehicle and Equipment Replacement - FY VR-23000 873,477 (144,146) 729,331 Scheduled Vehicle and Equipment Replacement - FY VR-24000 4,364,538 (186,069) 4,178,469 681- Vehicle Replacement & Maintenance Fund Total 5,285,366 (290,553) 4,994,813 All Funds Total I 147,077,044 81,577,176 228,654,220 54,322,594 35,190,630 89,513,224 Item 28: Staff Report Pg. 37 Packet Pg. 603 of 857 Item 28 Attachment A Exhibit 4 - ibit 4 • Table of Organization.pdj1Jf] • FY 2024 FY 2025 FY 2025 FY 2022 FY 2023 Adopted Adopted Change FY 2025 L. Actuals Actuals Budget Budget FTE Change % General Fund Account Specialist 4.13 4.13 4.13 4.13 — —% Account Specialist -Lead 3.45 3.45 3.45 3.45 — —% Accountant 2.00 2.00 2.00 2.00 — —% Administrative Assistant 1.00 1.00 1.00 1.00 — —% Administrative Associate II 0.50 0.50 1.00 1.00 — —% Administrative Associate III 1.00 1.00 1.00 1.00 — —% Assistant Director Administrative Services 1.65 1.65 , 1.65 1.65 — —% Buyer 2.00 2.00 2.00 2.00 — —% Chief Procurement Officer 1.00 1.00 1.00 1.00 — —% Contracts Administrator 1.70 2.70 3.70 3.70 — —% Director Administrative Services/CFO 0.80 0.80 0.80 0.80 - I -% Director Office of Management and Budget 1.00 1.00 1.00 1.00 - -% Management Analyst 2.00 2.00 2.00 3.00 1.00 50.0% Manager Budget 2.00 2.00 2.00 2.00 - -% Manager Real Property 1.00 1.00 1.00 1.00 - -% Manager Revenue Collections 0.62 0.62 0.62 0.62 - -% Manager Treasury, Debt & Investments 0.60 0.60 0.60 0.60 - -% Manager, Finance 1.00 1.00 1.00 1.00 - -% Payroll Analyst 2.00 2.00 2.00 2.00 - -% Senior Accountant 3.00 3.00 3.00 3.00 — —% Senior Buyer 1.00 1.00 1.00 1.00 — —% Senior Management Analyst 2.30 2.30 2.30 2.30 — —% Storekeeper 1.00 2.00 2.00 2.00 — —% Storekeeper -Lead 0.20 0.20 0.20 0.20 — —% Item 28: Staff Report Pg. 38 Packet Pg. 604 of 857 Item 28 Attachment A Exhibit 4 - ibit 4 Table of Organization.pdf Warehouse Supervisor 0.20 0.20 0.20 0.20 —% Total Administrative Services 37.15 39.15 40.65 41.65 1.00 2.5% Assistant City Attorney 3.00 4.00 ' 4.00 4.00 —% Chief Assistant City Attorney 1.00 1.00 l 1.00 1.00 - —% City Attorney 1.00 1.00 1.00 1.00 — —% Claims Investigator 1.00 1.00 1.00 1.00 — —% Deputy City Attorney 1.00 — 0.50 0.50 — —% Legal Fellow 1.00 1.00 1.00 1.00 — —% Secretary to City Attorney 1.00 1.00 1.00 1.00 — —% Senior Management Analyst 1.00 1.00 1.00 1.00 - -% Total City Attorney 10.00 10.00 10.50 10.50 - -% Administrative Associate III 2.00 2.00 2.00 2.00 - -% Assistant City Clerk 1.00 1.00 2.00 2.00 - -% City Clerk 1.00 1.00 1.00 1.00 - -% Deputy City Clerk 1.00 1.00 - - - -% Total City Clerk 5.00 5.00 5.00 5.00 - -% Administrative Assistant 2.00 2.00 3.00 3.00 - -% Assistant City Manager 1.00 1.00 1.00 1.00 - -% Assistant to the City Manager 1.00 3.00 3.00 3.00 - -% Chief Communications Officer 1.00 1.00 1.00 1.00 - -% City Manager 1.00 1.00 1.00 1.00 - -% Deputy City Manager 1.00 1.00 1.00 1.00 - -% Item 28: Staff Report Pg. 39 Packet Pg. 605 of 857 Item 28 Attachment A Exhibit 4 - ibit 4 • Table of Organization.pdf • Executive Assistant to the City Manager 1.00 Management Fellow* — Manager Communications 1.00 Senior Management Analyst — Total City Manager 9.00 • Administrative Assistant 1.00 Animal Caretaker**,*** — Assistant Director Community Services 1.00 Building Serviceperson 1.00 Building Serviceperson-Lead 0.60 Coordinator Recreation Programs 4.00 Director Community Services 1.00 Division Manager Open Space, Parks & Golf — Inspector, Field Services 2.00 Junior Museum & Zoo Educator 3.25 Management Analyst 1.00 Management Assistant 1.00 Manager Community Services 5.00 Manager Community Services Senior Program 4.00 Manager Human Services 1.00 Park Maintenance Person 6.00 Park Maintenance -Lead 1.00 Park Ranger 5.00 Parks/Golf Crew -Lead 2.00 Producer Arts/Science Program 11.00 Program Assistant I*** 3.00 1.00 1.00 1.00 - - - - 1.00 1.00 -% 1.00 1.00 1.00 - -% 1.00 1.00 1.00 - -% 12.00 13.00 14.00 1.00 7.7% 1.00 1.00 1.00 - - 4.00 4.00 -% 1.001 2.00 2.00 1.00 2.00 2.00 0.60 2.00 2.00 4.00 5.75 5.75 - -% 1.00 1.00 1.00 - - - 1.00 1.00 - -% 2.00 2.00 2.00 - - 4.10 4.85 4.85 - -% 1.00 1.00 1.00 - - 1.00 1.00 1.00 - - 5.00 5.00 5.00 - - 4.00 4.00 4.00 - - 1.00 1.00 1.00 - - 6.00 6.00 6.00 1.00 1.00 1.00 - - 6.00 6.00 6.00 - - 2.00 2.00 2.00 - - 12.25 9.50 9.50 - - 3.00 3.75 4.75 1.00 26.7% Item 28: Staff Report Pg. 40 Packet Pg. 606 of 857 Item 28 Attachment A Exhibit 4 - ibit 4 Table of Organization.pdf Program Assistant II 4.00 4.00 4.00 4.00 Project Manager 0.10 0.10 0.10 0.10 - -% Senior Management Analyst 1.00 1.00 1.00 1.00 - -% Sprinkler System Representative 4.00 4.00 4.00 4.00 - -% Superintendent Community Services 2.00 2.00 2.00 2.00 Theater Specialist 2.00 2.00 5.00 5.00 — —% WGW Heavy Equipment Operator 0.07 0.07 0.07 0.07 Total Community Services 67.02 70.12 78.02 83.02 5.00 6.4% II 40 -Hour Captain — 0.20 0.20 - (0.20) (100.0)% 40 -Hour Training Battalion Chief 1.00 1.00 1.00 1.00 - -% 40 -Hour Training Captain 1.00 1.00 1.00 1.00 — —% Administrative Assistant 1.00 1.00 1.00 1.00 —% Administrative Associate II 2.20 2.20 2.20 3.00 0.80 36.4% Administrative Associate III — 0.20 0.20 1.00 0.80 400.0% Assistant Fire Marshal — — — 1.00 1.00 —% Battalion Chief 3.00 3.00 3.00 3.00 — —% Business Analyst 0.80 0.80 0.80 0.80 — —% Deputy Chief/Fire Marshal 0.05 — — — — —% Deputy Director Technical Services Division — 0.20 0.20 0.20 — —% Deputy Fire Chief 1.00 2.00 2.00 2.00 — —% Emergency Medical Service Director 1.00 1.00 1.00 1.00 — —% Emergency Medical Services Data Specialist 1.00 1.00 1.00 1.00 Fire Apparatus Operator 26.00 26.00 26.00 26.00 — —% Fire Captain 20.00' 20.00 20.00 20.00 — —% Fire Chief 1.00 1.00 1.00 1.00 — —% Fire Fighter*** 29.00 34.00 34.00 37.00 3.00 8.8% Item 28: Staff Report Pg. 41 Packet Pg. 607 of 857 Item 28 Attachment A Exhibit 4 - ibit 4 • Table of Organization.pdf Fire Fighter Trainee Fire Inspector Fire Marshal Geographic Information System Specialist Hazardous Materials Inspector Plans Check Engineer Senior Management Analyst Total Fire - 3.00 3.00 3.00 0.40 0.40 2.40 3.20 - 0.05 0.05 0.75 0.50 0.50 0.50 0.50 0.30 0.70 0.70 3.93 - - - 0.50 1.00 1.00 1.00 1.00 90.25 100.25 102.25 112.88 • - -% 0.80 33.3% 0.70 1,400.0% - -% 3.23 461.4% 0.50 -% - -% 10.63 10.4% Administrative Assistant - - 0.75 0.75 - -% Assistant Director Human Resources 1.00 1.00 1.00 1.00 - -% Director Human Resources/CPO 1.00 1.00 , 1.00 1.00 Human Resources Representative 2.00 2.00 4.00 4.00 Human Resources Technician 3.00 4.00 2.00 2.00 Manager Employee Benefits 1.00 1.00 1.00 1.00 Manager Employee Relations 1.00 1.00 1.00 1.00 Recruitment Division Manager - - - 1.00 1.00 -% Senior Human Resources Administrator 3.00 3.00 4.00 4.00 Senior Management Analyst 2.00 2.00 2.00 2.00 — —% Total Human Resources 14.00 15.00 16.75 17.75 1.00 6.0% Administrative Assistant — — 1.00 1.00 — —% Administrative Associate III — 1.00 — — — —% Assistant Director Library Services — 1.00 — — — —% Business Analyst 1.00 1.00 — — — —% Coordinator Library Programs 1.00 2.00 5.00 5.00 Item 28: Staff Report Pg. 42 Packet Pg. 608 of 857 Item 28 Attachment A Exhibit 4 - ibit 4 Table of Organization.pdf Director Libraries 1.00 1.00 1.00 1.00 — —% Division Head Library Services 1.00 1.00 2.00 2.00 — —% Librarian 6.00 7.00 4.00 4.00 — —% LibraryAssociate 6.00 6.00 10.00 10.00 — —% LibrarySpecialist 10.50 12.50 8.00 8.00 — —% Management Analyst 1.00 1.00 1.00 1.00 — —% Manager LibraryServices 3.00 3.00 3.00 3.00 - -% Senior Business Analyst — — 1.00 1.00 - -% Senior Librarian 6.00 6.00 8.00 8.00 - -% Supervising Librarian 4.00 4.00 5.00 5.00 — —% Total Library 40.50 46.50 49.00 49.00 — —% Director Office of Emergency Services 1.00 1.00 1.00 1.00 - I —% Office of Emergency Services Coordinator 1.00 1.00 2.00 2.00 — —% Total Office of Emergency Services 2.00 2.00 3.00 3.00 — —% Administrative Assistant 0.60 0.60 0.60 0.60 % Associate Engineer 0.35 0.35 1 0.35 0.35 — —% Associate Planner 0.40 0.40 0.40 1.40 1.00 250.0% Chief Transportation Official 0.70 0.70 0.70 0.70 — —% Coordinator Transportation Systems 0.65 0.65 0.65 - (0.65) (100.0)% Management Management Analyst 0.50 0.50 — —% Parking Operations -Lead 0.05 0.05 0.05 0.05 — —% Planner — — — 0.40 0.40 —% Project Engineer 0.25 0.25 0.25 0.25 - -% Senior Engineer 0.20 0.55 0.55 0.55 - -% Item 28: Staff Report Pg. 43 Packet Pg. 609 of 857 L TABLI Senior Management Analyst Senior Planner Traffic Engineering -Lead Transportation Planning Manager Total Office of Transportation Item 28 Attachment A Exhibit 4 - ibit 4 l.Table of Organization.pdf 1.00 1.00 1.00 5.20 5.20 6.45 1.00 - 7.45 I 1.00 40 -Hour Captain — 0.80 0.80 - (0.80) (100.0)% Administrative Assistant 1.00 1.00 1.00 1.00 — —% Administrative Associate I 1.00 1.00 — — — —% Administrative Associate II 2.80 2.80 0.80 - (0.80) (100.0)% Administrative Associate III 3.00 4.80 7.80 6.00 (1.80) (23.1)% Assistant Chief Building Official 1.00 2.00 2.00 1.00 (1.00) (50.0)% Assistant Director PCE 1.00 1.00 1.00 1.00 — —% Associate Engineer — — 0.50 0.50 — —% Associate Planner 3.25 1.25 1.25 1.25 — —% Building Inspector Specialist 6.00 8.00 — —% Building/Planning Technician 2.00 2.50 2.50 2.50 — —% Chief Building Official 1.00 1.00 1.00 1.00 % Chief Planning Official 1.00 1.00 1.00 - (1.00) (100.0)% Code Enforcement Officer — 1.00 1.00 1.00 — —% Code Enforcement -Lead 1.00 1.00 1.00 1.00 -' —% Deputy Chief/Fire Marshal 0.80 % Development Project Coordinator II 2.00 2.00 2.00 2.00 — —% Development Project Coordinator III 3.00 3.00 3.00 3.00 — —% Director Planning/Community Environment 1.00 1.00 1.00 1.00 — —% Division Manager Planning — — — 1.00 1.00 —% Engineer 0.52 0.52 0.52 0.52 - I —% Item 28: Staff Report Pg. 44 Packet Pg. 610 of 857 Item 28 Attachment A Exhibit 4 - ibit 4 Table of Organization.pdf Engineering Technician III 1.50 1.50 1.00 1.00 % Fire Inspector 1.60 1.60 1.60 0.80 (0.80) (50.0)% Fire Marshal — 0.80 0.80 0.25 (0.55) (68.8)% Hazardous Materials Inspector 1.60 3.20 3.20 0.07 (3.13) (97.8)% Industrial Waste Investigator 0.35 0.35 0.35 0.35 % Inspector, Field Services 0.68 0.68 0.68 0.68 — , —% Landscape Architect Park Planner 0.50 0.50 0.50 0.50 Manager Planning 4.00 4.00 4.00 4.00 — —% Plan Review Manager — — — 1.00 1.001 —% Planner 4.00 5.00 5.00 5.00 — —% Plans Check Engineer — 1.00 1.00 0.50 (0.50) (50.0)% Principal Planner 1.00 2.00 2.00 3.00 1.00 50.0% Project Manager — 0.50 0.50 0.50 — —% Senior Building Inspector 8.00 8.00 — —% Senior Business Analyst 1.00 1.00 1.00 — (1.00) (100.0)% Senior Engineer 0.40 0.45 0.45 0.45 — —% Senior Management Analyst 2.00 2.00 2.00 2.001 — —% Senior Plan Check Engineer 2.00 3.00 1.00 50.0% Senior Planner 3.65 4.65 7.65 8.75 1.10 14.4% Senior Program Manager — 1.00 1.00 —% Senior Technologist — — — 1.00 1.00 —% Supervisor Inspection and Surveying 0.25 0.25 0.25 0.25 — —% Supervisor of Code Enforcement — — 1.00 1.00 — —% Technologist — — — 1.00 1.00 —% Traffic Engineering -Lead 0.05 — — — — —% Transportation Planning Manager 0.05 0.05 0.05 0.05 — —% Total Planning and Development Services 54.00 65.20 71.20 67.92 (3.28) (4.6)% Item 28: Staff Report Pg. 45 Packet Pg. 611 of 857 L TABLI Item 28 Attachment A Exhibit 4 - ibit 4 l.Table of Organization.pdf Administrative Associate II 2.00 2.00 3.00 3.00 — —% Animal Control Officer 2.00 2.00 2.00 2.00 — —% Animal Control Officer -Lead 1.00 1.00 1.00' 1.00 — —% Assistant Police Chief 1.00 1.00 1.00 1.00 — —% Business Analyst 1.20 2.20 2.20 2.20 — —% Code Enforcement Officer 1.00 1.00 1.00 1.00 — —% Community Service Officer 5.63 5.63 5.63 4.69 (0.94) (16.7)% Court Liaison Officer 1.00 1.00 2.00 2.00 — —% Crime Analyst 1.00 1.00 1.00 1.00 — —% Deputy Director Technical Services Division — 0.80 0.80 0.80 — —% Forensic Coordinator — — — 1.00 1.00 —% Forensic Specialist — — — 1.00 1.00 —% Geographic Information System Specialist 0.50 0.50 0.50 0.50 — —% Police Agent 19.00 19.00 19.00 19.00 — —% Police Captain 2.00 2.00 2.00 2.00 — —% Police Chief 1.00 1.00 1.00 1.00 — —% Police Lieutenant 4.00 4.00 4.00 5.00 1.00 25.0% Police Officer 39.00 43.00 45.00 45.00 — —% Police Records Specialist II 6.00 6.00 6.00 6.00 — —% Police Records Specialist -Lead 1.00 1.00 1.00 1.00 — —% Police Sergeant 14.00 14.00 14.00 14.00 — —% Program Assistant II 1.00 1.00 1.00 1.00 — —% Property Evidence Technician 2.00 2.00 2.00 - (2.00) (100.0)% Public Safety Communications Manager — 1.00 1.00 1.00 — —% Public Safety Dispatcher 12.00 14.00 16.00 16.00 - -% Item 28: Staff Report Pg. 46 Packet Pg. 612 of 857 Item 28 Attachment A Exhibit 4 - ibit 4 Table of Organization.pdf Public Safety Dispatcher -Lead 4.00 4.00 4.00 4.00 — —% Public Safety Program Manager 1.00 1.00 1.00 1.00 - -% Senior Management Analyst 1.00 1.00 1.00 1.00 Total Police 124.33 133.13 139.13 139.19 0.06 0.0% HUI I III IIJLrdLIVU HJJIJCdI IL U.OU U.OU U.OU U.OU — —70 Administrative Associate II 2.65 2.65 2.65 2.65 Assistant Director Public Works 0.73 0.73 0.73 0.73 — —% Associate Engineer — — 0.45 0.45 — —% Building Serviceperson-Lead 1.00 1.00 1.00 1.00 — —% Building/Planning Technician — 0.50 0.50 0.50 — —% Cement Finisher 2.00 2.00 2.00 2.00 — —% Cement Finisher -Lead 0.26 0.26 0.26 0.26 — —% Coordinator Public Works Projects 1.50 1.50 1.50 1.50 — —% Director Public Works/City Engineer 1.00 1.00 1.00 1.00 — —% Electrician 0.80 0.80 0.80 0.80 — —% Engineer 0.48 0.48 0.481 0.48 — —% Engineering Technician III 1.75 1.75 1.80 1 1.80 — —% Environmental Specialist — 0.33 0.33 0.33 — —% Equipment Operator 2.46 2.46 2.46 2.46 — —% Facilities Carpenter 1.00 1.00 1.00 1.00 — —% Facilities Maintenance -Lead 1.85 1.85 1.85 1.85 — —% Facilities Painter 1.75 1.75 1.75 1.75 Facilities Technician 4.05 4.05 5.05 5.05 — —% Heavy Equipment Operator 2.10 2.10 2.10 2.10 — —% Heavy Equipment Operator -Lead 0.85 0.85 0.85 0.85 — —% Inspector, Field Services 0.11 0.11 0.11 0.11 - -% Item 28: Staff Report Pg. 47 Packet Pg. 613 of 857 Item 28 Attachment A Exhibit 4 - ibit 4 • Table of Organization.pdf • Landscape Architect Park Planner 0.60 Management Analyst 1.45 Manager Environmental Control Program — Manager Facilities 0.90 Manager Maintenance Operations 1.20 Manager Urban Forestry 1.00 Manager Watershed Protection 0.05 Project Manager 2.00 Senior Engineer 0.60 Senior Management Analyst 1.11 Supervisor Inspection and Surveying 0.10 Surveyor, Public Works 0.33 Traffic Controller Maintainer I 1.94 Traffic Controller Maintainer II 1.00 Tree Maintenance Person 1.00 Tree Trim/Line Clear 7.00 Tree Trim/Line Clear -Lead 1.00 WGW Heavy Equipment Operator 0.23 Total Public Works 48.35 Total General Fund 506.80 Enterprise Fund Accountant 0.70 Administrative Associate I — Administrative Associate II 2.15 Administrative Associate III 0.20 Airport Specialist II — 0.60 0.60 0.60 - -% 0.70 0.70 0.80 0.10 14.3% 0.33 0.33 0.33 - - 0.90 0.90 0.90 - - 1.20 1.20 1.20 1.00 1.00 1.00 0.05 0.05 0.05 2.50 2.85 2.85 0.60 0.60 0.60 1.11 1.11 1.11 0.10 0.10 0.10 0.33 0.33 0.33 1.94 1.94 1.94 1.00 1.00 1.00 - - 1.00 1.00 1.00 7.00 7.00 7.00 - - 1.00 1.00 1.00 0.23 0.23 0.23 49.26 51.11 51.21 0.10 0.2% 552.81 586.06 602.57 16.51 2.8% 0.70 0.70 0.70 - -% 1.00 1.00 1.00 - -% 2.15 2.15 2.15 - -% 0.20 0.20 0.20 - 2.50 2.50 - I —% Item 28: Staff Report Pg. 48 Packet Pg. 614 of 857 Item 28 Attachment A Exhibit 4 - ibit 4 Table of Organization.pdf Assistant Director Public Works 1.30 1.30 1.30 1.30 % Assistant Manager WQCP 2.00 2.00 2.00 2.00 — —% Associate Engineer 3.00 3.00 3.05 3.05 — —% Chemist 2.00 2.00 3.00 3.00 — —% Deputy Chief/Fire Marshal 0.07 Electrician 3.00 3.00 3.00 3.00 — —% Electrician -Lead 2.00 2.00 2.00 2.00' — —% Engineer 0.90 0.90 1.90 1.90 — —% Engineering Technician III 0.25 0.25 0.20 0.20 — —% Environmental Specialist 2.00 2.33 2.33 2.33 — —% Equipment Operator 0.54 0.54 0.54 0.54 — —% Facilities Maintenance Lead 1.00 1.00 1.00 1.00 — —% Facilities Technician 1.50 2.50 — — — —% Fire Marshal — 0.07 0.07 - (0.07) (100.0)% Hazardous Materials Inspector 0.04 0.04 0.04 - (0.04) (100.0)% Heavy Equipment Operator 0.90 0.90 0.90 0.90 — —% Heavy Equipment Operator -Lead 1.15 1.15 1.15 1.15 — — % Industrial Waste Inspector 3.00 3.00 3.00 3.00 — —% Industrial Waste Investigator 1.15 1.15 1.15 1.15 — —% LaboratoryTechnician WQC 3.00 3.00 3.00 3.00 — —% Landfill Technician 1.00 1.00 2.00 2.00 — —% Management Analyst 2.30 2.30 2.30 2.90 0.60 26.1% Manager Airport 1.00 1.00 1.00 1.00 % Manager Environmental Control Program 5.00 5.33 5.33 5.33 — —% Manager Laboratory Services 1.00 1.00 1.00 1.00 — —% Manager Maintenance Operations 1.96 1.96 1.96 1.96 — —% Manager Solid Waste 1.00 1.00 1.00 1.00 - -% Item 28: Staff Report Pg. 49 Packet Pg. 615 of 857 Manager Water Quality Control Plant Manager Watershed Protection Plant Mechanic Program Assistant I Program Assistant II Project Engineer Project Manager Senior Accountant Senior Buyer Senior Chemist Senior Engineer Senior Industrial Waste Investigator Senior Management Analyst Senior Mechanic Senior Operator WOO Senior Technologist Storekeeper Street Maintenance Assistant Street Sweeper Operator Supervisor WQCP Operations Surveyor, Public Works Technologist Traffic Controller Maintainer I WQC Plant Operator II Zero Waste Coordinator Total Public Works L TABLI Item 28 Attachment A Exhibit 4 - ibit 4 l.Table of Organization.pdf iiii1• ••- •• 1.00 1.00 1.00 1.00 - 0.95 0.95 0.95 0.95 - 7.00 7.00 7.00 7.00 - 1.00 1.00 1.00 1.00 - 2.00 2.00 2.00 2.00 - 1.83 1.83 2.83 2.83 - 1.35 1.35 1.35 1.35 0.30 0.30 0.30 0.30 1.00 1.00 1.00 1.00 2.00 2.00 2.00 2.00 3.76 3.76 3.76 3.76 - 1.00 1.00 1.00 1.00 - 0.21 0.21 0.21 0.21 - 1.00 1.00 1.00 1.00 - 6.00 6.00 6.00 6.00 - 1.00 1.00 1.00 1.00 - 1.00 1.00 1.00 1.00 - 1.00 1.00 1.63 1.63 1.63 1.63 - 3.00 3.00 3.00 3.00 0.12 0.12 0.12 0.12 - 1.00 1.00 1.00 1.00 0.06 0.06 0.06 0.06 - 16.00 16.00 16.00 16.00 1.00 1.00 1.00 1.00 - 101.32 103.98 106.98 107.47 0.49 Item 28: Staff Report Pg. 50 Packet Pg. 616 of 857 Item 28 Attachment A Exhibit 4 - ibit 4 I.Table of Organization.pdf j Account Specialist 1.00 1.00 1.00 1.00 — —% Accountant 1.30 1.30 1.30 1.30 — —% Administrative Assistant 1.00 1.00 1.00 1.00 — —% Administrative Associate II 6.00 6.00 6.00 6.00 — —% Assistant City Attorney — 1.00 2.00 2.00 — —% Assistant Director Administrative Services 0.25 0.25 0.25 0.25 — —% Assistant Director Sustainability and Climate i — — 1.00 1.00 — —% Action Assistant Director Utilities Customer Support I 1.00 1.00 2.00 2.00 — —% Services Assistant Director Utilities Engineering 1.00 1.00 1.00 1.00 — —% Assistant Director Utilities Operations 1.00 1.00 1.00 1.00 — —% Assistant Director Utilities/Resource 1.00 1.00 1.00 1.00 — —% Management Associate Sustainability Program - 1.00 1.00 2.00 1.00 100.0% Administrator`** Business Analyst 6.00 6.00 6.00 6.00 - -% Cathodic Protection Technician Assistant 1.00 1.00 1.00 1.00 - -% Cathodic Technician 1.00 1.00 1.00 1.00 - -% Cement Finisher 2.00 2.00 2.00 3.00 1.00 50.0% Contracts Administrator 0.70 0.70 0.70 0.70 % Coordinator Utilities Projects 6.00 8.00 8.00 10.00 2.00 25.0% Customer Service Representative 7.00 7.00 7.00 7.00 — —% Customer Service Specialist 2.00 2.00 2.00 2.00 — —% Customer Service Specialist -Lead 2.00 2.00 2.00 2.00 1 - -% Deputy Chief/Fire Marshal 0.08 — — — — —% Deputy City Attorney 1.00 — 0.50 0.50 — —% Director Administrative Services/CFO 0.20 0.20 0.20 0.20 —% Item 28: Staff Report Pg. 51 Packet Pg. 617 of 857 Electric Heavy Equipment Operator Electric Project Engineer Electric Underground Inspector Electric Underground Inspector -Lead Electrical Equipment Technician Electrician Assistant I Electrician -Lead Engineer Engineering Manager - Electric Engineering Manager - WGW Engineering Technician III Environmental Specialist Equipment Operator Fire Marshal Gas and Water Meter Measurement and Control Technician Gas and Water Meter Measurement and Control Technician - Lead Hazardous Materials Inspector Heavy Equipment Operator - Install/Repair Human Resources Representative Industrial Waste Investigator Inspector, WGW Utilities Field Svc Lineperson/Cable Specialist Lineperson/Cable Specialist -Lead Maintenance Mechanic -Welding Management Analyst Manager Communications L TABLI Item 28 Attachment A Exhibit 4 - ibit 4 l.Table of Organization.pdf 2.00 1.00 1.001 1.00 - 4.00 8.00 8.00 10.00 2.00 2.00 2.00 2.00 2.00 - 1.00 1.00 1.00 1.00 - 1.00 1.00 1.00 1.00 - 3.00 3.00 3.00 3.00 - - - - 1.00 1.00 4.00 4.00 5.00 5.00 - 1.00 1.00 1.00 1.00 - 1.00 1.00 1.00 1.00 - 3.00 3.00 3.00 3.00 - - 0.34 0.34 0.34 - 1.00 1.00 1.00 - - 0.08 0.08 4.00 4.00 4.00 1.00 1.00 1.00 0.06 4.00 1.00 0.50 5.00 10.00 4.00 2.00 1.00 0.01 4.01 1.01 0.51 5.01 10.01 4.01 2.01 1.01 1.01 0.06 4.00 1.00 0.50 5.00 10.00 4.00 2.00 1.00 1.00 - (0.08) 5.00 1.00 1.00. - 5.00 1.00 0.50 5.00 10.00 4.00 2.00 1.00 1.00 (0.06) 1.00 -% Item 28: Staff Report Pg. 52 Packet Pg. 618 of 857 Item 28 Attachment A Exhibit 4 - ibit 4 Table of Organization.pdf Manager Customer Service 1.00 1.00 1.00 1.00 % Manager Electric Operations 1.00 1.00 1.00 1.00 — —% Manager Environmental Control Program — 0.34 0.34 0.34 — —% Manager Information Technology — — 1.00 1.00 — —% Manager Treasury, Debt & Investments 0.40 0.40 0.40 0.40 % Manager Utilities Compliance 1.00 1.00 1.00 1.00 — —% Manager Utilities Credit & Collection 1.00 1.00 1.00 1.00 — —% Manager Utilities Operations WGW 1.00 1.00 1.00 1.00 — —% Manager Utilities Program Services 1.00 2.00 2.00 2.00, — —% Manager Utilities Strategic Business 1.00 1.00 1.00 1.00 — —% Manager Utilities Telecommunications 1.00 1.00 3.00 3.00 — —% Meter Reader 6.00 6.00 5.00 5.00 — —% Meter Reader -Lead 1.00 1.00 1.00 1.00 — —% Metering Technician 3.00 2.00 2.00 2.00 — —% Metering Technician -Lead 1.00 1.00 1.00 1.00 — —% Offset Equipment Operator 0.48 0.48 0.48 0.98 0.50 104.2% Overhead Underground Troubleman 2.00 2.00 2.00 2.00 — —% Power Engineer 1.00 — — — — —% Principal Business Analyst 1.00 1.00 1.00 1.00 — —% Principal Utilities Program Manager — 1.00 — — — —% Program Assistant I 1.50 1.50 2.00 2.00 — —% Program Assistant II 1.00 — — — — —% Project Engineer 5.00 5.00 5.00 5.00 — —% Project Manager 0.75 0.75 0.75 0.75 — —% Resource Planner 5.00 5.00 5.00 5.00 — —% Restoration Lead 1.00 1.00 1.00 1.00 - -% SCADA Technologist 2.00 - - + - - -% Item 28: Staff Report Pg. 53 Packet Pg. 619 of 857 L TABLI Item 28 Attachment A Exhibit 4 - ibit 4 l.Table of Organization.pdf Senior Accountant 0.70 0.70 0.70 0.70 - -% Senior Business Analyst 3.00 3.00 3.00 3.00 - -% Senior Electrical Engineer 5.00 5.00 5.00 5.00 - -% Senior Engineer 5.00 6.00 5.00 5.00 - -% Senior Management Analyst 0.70 0.70 0.70 0.70 - -% Senior Marketing Analyst — — 1.00 1.00 - -% Senior Mechanic 1.00 1.00 1.00 1.00 - -% Senior Resource Planner 6.50 7.00 7.00 7.00 - -% Senior Utilities Field Service Representative 1.00 1.00 1.00 1.00 - -% Senior Utilities System Operator — — 1.00 1.00 - -% Senior Water Systems Operator*`* 2.00 2.00 2.00 2.00 - -% Storekeeper 1.00 1.00 1.00 1.00 - -% Storekeeper -Lead 0.80 0.80 0.80 0.80 - -% Street Light, Traffic Signal & Fiber Technician 5.00 4.00 4.00 4.00 - -% Street Light, Traffic Signal & Fiber -Lead 2.00 2.00 2.00 2.00 - -% Substation Electrician 6.00 6.00 6.00 6.00 - -% Substation Electrician -Lead 2.00 2.00 2.00 2.00 - -% Sustainability Programs Administrator 4.00 5.00 5.00 5.00 — —% Tree Maintenance Person 1.00 1.00 1.00 1.00 — —% Utilities Chief Operating Officer 1.00 1.00 1.00 1.00 Utilities Compliance Technician 3.00 3.00 3.00 3.00, — —% Utilities Compliance Technician -Lead 1.00 1.00 1.00 1.00 — —% Utilities Credit/Collection Specialist 2.00 2.00 2.00 2.00 — —% Utilities Director 1.00 1.00 1.00 1.00 — —% Utilities Engineer Estimator 5.00 5.00 5.00 5.00 — —% Utilities Field Services Representative 5.00 5.00 5.00 5.00 Utilities Install Repair -Lead -Welding Certified 2.00 3.00 3.00 3.00 - -% Item 28: Staff Report Pg. 54 Packet Pg. 620 of 857 Item 28 Attachment A Exhibit 4 - ibit 4 Table of Organization.pdf Utilities Install Repair -Welding Certified 3.00 3.00 3.00 1 3.00 — —% Utilities Install/Repair*** 10.00 10.00 10.00 11 1 10.0% Utilities Install/Repair Assistant 1.00 1.00 1.00 1.00 — —% Utilities Install/Repair-Lead*** 5.00 4.00 4.00 4.00 — —% Utilities Key Account Representative 3.00 3.00 3.00 3.00 Utilities Locator 3.00 3.00 3.00 3.00, — —% Utilities Safety Officer 1.00 1.00 1.00 1.00 — —% Utilities Supervisor 12.00 12.00 12.00 12.00 — —% Utilities System Analyst — 2.00 2.00 2.00, — —% Utilities System Operator 5.00 6.00 5.00 5.00 — —% Utility Engineering Estimator - Lead 1.00 1.00 1.00 1.00 — —% Warehouse Supervisor 0.80 0.80 0.80 0.80 — —% Water System Operator ll*** 4.00 4.00 4.00 4.00 — —% WGW Heavy Equipment Operator 4.70 4.70 4.70 4.70 — —% Total Utilities 257.42 267.60 273.60 283.96 10.36 3.8% Total Enterprise Fund 358.74 371.58 380.58 391.43 10.85 2.9% Other Funds - .. Administrative Assistant 0.65 0.65 0.65 0.65 — —% Administrative Associate III 0.80 0.80 0.80 0.80 — —% Assistant Director Public Works 0.72 0.72 0.72 0.72 — —% Associate Engineer 1.65 1.65 1.65 1.65 — —% Associate Planner 0.35 0.35 0.35 0.35 Building Serviceperson 1.00 1.00 — — — —% Building Serviceperson-Lead 1.40 1.40 — — — —% Cement Finisher -Lead 0.74 0.74 0.74 0.74 — —% Chief Transportation Official 0.301 0.30 0.30 0.30 Item 28: Staff Report Pg. 55 Packet Pg. 621 of 857 Item 28 Attachment A Exhibit 4 - ibit 4 • Table of Organization.pdf Contracts Administrator 0.60 0.60 0.60 0.60 % Coordinator Public Works Projects 1.30 1.30 1.30 1.30 % Coordinator Transportation Systems 1.35 1.35 1.35 — (1.35) (100.0)% Management Engineer 2.10 3.10 3.10 3.10 % Engineering Technician III 0.50 0.50 0.50 0.50 — —% Facilities Technician 1.50 1.50 1.50 1.50 — —% Inspector, Field Services 1.21 1.21 1.21 1.21 — —% Landscape Architect Park Planner 0.90 0.90 0.90 0.90 — —% Management Analyst 0.95 0.95 0.80 0.90 0.10 12.5% Manager Facilities 0.10 0.10 0.10 0.10 — —% Manager Maintenance Operations 0.65 0.65 0.65 0.65 — —% Parking Operations -Lead 0.30 0.30 0.30 0.30 — —% Planner — — — 0.60 0.60 —% Project Engineer 7.92 7.92 7.92 7.92 — —% Project Manager 0.80 0.80 1.45 1.45 - -% Senior Engineer 4.04 4.64 4.64 4.64 -% Senior Management Analyst 0.60 0.60 0.75 0.75 % Senior Planner 0.80 0.80 1.55 2.30 0.75 48.4% Supervisor Inspection and Surveying 0.65 0.65 0.65 0.65 % Surveyor, Public Works 0.55 0.55 0.55 0.55 % Traffic Engineering -Lead 0.60 — — % Transportation Planning Manager 0.45 0.45 0.45 0.45 % Total Capital Project Fund 35.48 36.48 35.48 35.58 0.10 0.3% Senior Management Analyst — — 1.00 1.00 — —% Total General Liabilities Insurance Program — — 1.00 1.00 — —% Fund Item 28: Staff Report Pg. 56 Packet Pg. 622 of 857 Item 28 Attachment A Exhibit 4 - ibit 4 l.Table of Organization.pdf Manager Revenue Collections 0.10 0.10 0.10 0.10 — —% Offset Equipment Operator 1.52 1.52 1.52 2.02 0.50 32.9% Total Printing and Mailing Services 1.62 1.62 1.62 2.12 0.50 30.9% Account Specialist 1.37 1.37 1.37 1.37 — —% Account Specialist -Lead 0.55 0.55 0.55 0.55 — —% Administrative Assistant 0.25 0.25 0.25 0.25 — —% Administrative Associate II 0.20 0.20 0.20 0.20 — —% Community Service Officer 0.37 0.37 0.37 0.31 (0.06) (16.2)% Coordinator Public Works Projects 0.20 0.20 0.20 0.20 — —% Electrician I 0.20 0.20 0.201 0.20 — —% Facilities Maintenance -Lead 0.15 0.15 0.15 0.15 — —% Facilities Painter 0.25 0.25 0.25 0.25 — —% Facilities Technician 0.45 0.45 0.45 0.45 — —% Management Analyst 0.35 0.35 — — — —% Manager Community Services Senior Program 1.00 1.00 1.00 1.00 — —% Manager Maintenance Operations 0.19 0.19 0.19 0.19 — —% Manager Revenue Collections 0.28 0.28 0.28 0.28 — —% Parking Operations -Lead 0.65 0.65 0.65 0.65 - -% Senior Management Analyst — — 0.35 0.35 -% Senior Planner 0.40 0.40 0.40 0.30 (0.10) (25.0)% Street Maintenance Assistant 2.00 2.00 2.00 I 2.00 -% Street Sweeper Operator 0.37 0.37 0.37 0.37 - I —% Transportation Planning Manager 0.50 0.50 0.50 0.50 — —% Total Special Revenue Funds 9.73 9.73 9.73 9.57 (0.16) (1.6)% Item 28: Staff Report Pg. 57 Packet Pg. 623 of 857 L TABLI Item 28 Attachment A Exhibit 4 - ibit 4 l.Table of Organization.pdf Administrative Assistant 1.00 1.00 1.00 1.00 — —% Assistant Director Administrative Services 0.10 0.10 0.10 0.10 — —% Assistant Director Information Technology — — — 1.00 1.001 —% Business Analyst 1.00 1.00 1.00 1.00 — —% Desktop Technician 6.00 6.00 6.00 4.00 (2.00) (33.3)% Director Information Technology/CIO 1.00 1.00 1.00 1.00 — —% Management Analyst — — 1.00 1.00 — —% Manager Information Technology 3.00 3.00 3.00 3.00 - -% Senior Business Analyst 2.00 2.00 2.00 2.00 - -% Senior Management Analyst 1.00 1.00 1.00 1.00 - -% Senior Technologist 14.00 16.00 17.00 17.00 — —% Technologist — — — 2.00 2.00 —% Total Technology Fund 29.10 31.10 33.10 34.10 1.00 3.0% Assistant Director Public Works 0.25 0.25 0.25 0.25 — —% Assistant Fleet Manager 1.00 1.00 1.00 1.00 — —% Equipment Maintenance Service Person 1.00 1.00 2.00 2.00 — —% Fleet Services Coordinator 1.00 1.00 2.00 2.00 — —% Management Analyst 0.20 0.20 0.20 0.40 0.20 100.0% Management Assistant 1.00 1.00 1.00 1.00 — —% Manager Fleet 1.00 1.00 1.00 1.00 % Motor Equipment Mechanic II 5.00 5.00 5.00 5.00 — —% Motor Equipment Mechanic -Lead 2.00 2.00 1.00 1.00 - -% Item 28: Staff Report Pg. 58 Packet Pg. 624 of 857 Item 28 Attachment A Exhibit 4 - ibit 4 Table of Organization.pdf I Project Manager 1.00 1.00 1.00 1.00 % Senior Management Analyst 0.08 0.08 0.08 0.08 — —% Total Vehicle Replacement and 13.53 13.53 14.53 14.73 0.20 1.4% Maintenance Fund Senior Human Resources Administrator 1.00 1.00 1.00 1.00 — —% Total Workers' Compensation Program 1.00 1.00 1.00 1.00 — —% Fund Total Other Funds 90.46 93.46 96.46 98.10 1.64 1.7% Total Citywide Positions 956.00 1,017.85 1,063.10 1,092.10 29.00 2.7% I I *The FY 2024 Adopted Budget does not include City Council actions to amend staffing levels approved in the FY 2024 Mid -Year Budget Review (CMR 2311-2233). These positions appear as a base adjustment in the FY 2025 Proposed Budget. **The FY 2025 Budget includes new job classifications that require completion of appropriate review and potential discussions with bargaining groups. Proposals in this budget include estimated funding levels for financial planning purposes only and do not reflect the final terms of the proposed classifications. ***Positions approved by Finance Committee and/or City Council subsequent to the presentation of the FY 2025 Proposed Budget. Item 28: Staff Report Pg. 59 Packet Pg. 625 of 857 CITY OF PALO ALTO TITLE FY 2025 Proposed Municipal Fee Schedule At Item 28 it 5 Attachment A Exhibit 5 - Fiscal Year 2025 Municipal Fee Changes.pdf Finan ee Staff Report From: City Manager Report Type: ACTION ITEMS Lead Department: Administrative Services Meeting Date: May 8, 2024 Report #:2402-2587 RECOMMENDATION Staff recommends that the Finance Committee review amendments to the Municipal Fee Schedule for FY 2025 and make recommendations to Council for incorporation into the FY 2025 budget. This report represents the annual update to over 960 fees as part of the budget process. It highlights proposed changes to the FY 2025 Municipal Fee Schedule. These changes encompass 18 new fees across the Community Services, Planning and Development Services, and Police Departments, the deletion of 26 fees within the Community Services and Police Departments, and adjustments to 281 existing fees. It is based on the general premise of exception reporting, which is reflected in the practice of applying a General Rate Increase (GRI) to fees to keep up with the cost of service, new service delivery, and changes in cost recovery levels, and reporting out any fees that are proposed to stay the same or change by an amount other than the GRI of 5.2% for FY 2025. Recommended approval will be incorporated in the FY 2025 budget process and ultimately result in the fees for FY 2025 services. BACKGROUND The City charges fees for a variety of services provided, such as fees for photocopies, building inspection services, and room rentals. As part of the annual budget process, staff submit changes to the Municipal Fee Schedule for review, followed by final approval during City Council's budget adoption. In FY 2013, staff completed a cost of services study for most departments. Results from that study set the standards used by departments to review and calculate the City's expenditures linked to a particular fee activity to determine the fee amount and cost recovery level. These Item 28: Staff Report Pg. 60 Packet Pg. 626 of 857 At Item 28 )it Attachment A Exhibit 5 - Fiscal Year 2025 Municipal Fee expenditures represent the budgeted cost of staff time including salaries a Changes.pdf d non -salary expenditures, department and citywide cost allocations to recuperate costs for department management oversight and internal support functions (e.g. purchasing, payroll, and human resources). As part of the FY 2025 Proposed Budget, staff is recommending appropriation of funding on a one-time basis ($50,000) for a consultant to conduct a study of the cost allocation plan and municipal fee schedule. A comprehensive review and analysis to ensure the City's fees are collected appropriately and the City's processes remain aligned with current best practices. Since it was last updated by Council in FY 2019, the User Fee Cost Recovery Level Policy has served as a guide for departments to update fees by ensuring proper alignment with user cost recovery levels. This Policy will also be assessed as part of the consultant study. Table 1: Summary of Municipal Fee Cost Recovery Policy Cost Recovery Cost Recovery Policy Considerations Level Group Percentage Range Low 0% - 30% • Na intended relationship between the amount paid and the benefit received • Fee collection would not be cost effective and/or would discourage compliance with regulatory requirements • Na intent to limit the use of the service • Public at large benefits even if they are not the direct users of the service • Affordability of service to low-income residents • The service is heavily supported through donations Medium 30.1% - 70% • Services which promote healthy activities and educational enrichment to the community • Services having factors associated with the low and high cost recovery levels High 70.1% - 100%* • Individual users or participants receive most or all of the benefit of the service • Other private or public sector alternatives provide the service • The use of the service is specifically discouraged • The service is regulatory in nature "Certain types of fees, such as fines, penalties andfcr late cha-ges, or ary charge imposed for entrance to or use of. as well as tie purchase, renal. o- lease of local government proaerty, are not bound by sate laws that lim"t to full cost recovery. Item 28: Staff Report Pg. 61 Packet Pg. 627 of 857 At Item 28 it 5 Attachment A Exhibit 5 - Fiscal Year 2025 Municipal Fee This annual report brings forward amendments to the Municipal Fee Sc4 nto three categories (1) New fees, (2) Deletion of existing fees, and (3) Changed fees to attain a cost recovery level consistent with other fees or based on a market study for similar services. ANALYSIS The development of the Municipal Fee Schedule for FY 2025 reflects some department service realignments as most fees across the City have been updated to maintain cost recovery levels. The average increase of salaries and benefits from FY 2024 to FY 2025 was 5.2% and is the general rate of increase (GRI) that is applied to most fees to maintain current cost recovery levels, as directed by the policy. Fees that were updated by a factor greater or less than 5.2% to realize a higher cost recovery level, or were adjusted based on a fee study, market study, or staff recommendation are further detailed in Attachment A. NP\A/ FPPG As identified in Table 1 below, eighteen (18) new fees are recommended to be added to the FY 2025 Municipal Fee Schedule: Community Services Department (12 fees), Planning and Services Department (two fees), and Police Department (four fees). Community Services Department recommended additions: • 11 fees for veterinary services for cats and dogs • These fees are being added for enhanced clarity and to provide a more detailed breakdown of services. • One fee for camping equipment rentals • This fee is for electric warming plates and serve as an alternative to open flames for keeping food at temperature during rentals, reducing the burden of fire permits and environmental impacts. Planning and Development Services recommended additions: • One fee for the Rental Registry Program • This fee will apply to residential rentals with five or more units. Per Council's direction (CMR #2308-19041), this fee will be waived in FY 2025 and begin in FY 2026. • One fee for shelter permits • This fee will apply for elgible non -profits applying for a temporary use permit to establish a temporary shelter for the unhoused. City Council November 27, 2023 Agenda Item #16: https://cityofpaloaIto.primegov.com/Portal/Meeting?meetingTemplate Id=13307 Item 28: Staff Report Pg. 62 Packet Pg. 628 of 857 At Item 28 It 5 Attachment A Exhibit 5 - Fiscal Year 2025 Municipal Fee Changes.pdf Police Department recommended additions: • Four concealed carry weapon fees • This implements concealed carry weapon fees in response to a recent Supreme Court decision, requiring the City to take on the permitting process previously handled by the County Sheriff. Table 2. New Fees for FY 2025 Community Animal: 41bs - 20lbs (Cremation) Communal: $50.00 per pet High Services Private: $200.00 per pet Community Community Cat Package (Spay & Neuter) $55.00 per pet High Services Community Cat Package (Vaccination) $85.00 per pet High Services Community Dog Package (Vaccination) $85.00 per pet High Services Community Kitten Package (Vaccination) $125.00 per pet High Services Community Puppy Package (Vaccination) $125.00 per pet High Services Community Cryptorchid Abdominal - Fee $100.00 per pet High Services Community Medication - Injectable $15.00 - $250.00 each High Services Community Medication - Oral $15.00 - $250.00 each High Services Community Medication - Topical $15.00 - $250.00 each High Services Community Nail Trim $0.00 with surgery High Services Community Electric Warming Plates Resident Fee: $10.00-$100.00 High Services Non -Resident Fee: $11.00- $115.00 Planning and Rental Registry Fee Fees waived in FY25 High Development Planning and Temporary Use Permit - Minor, Temporary Fees waived per program High Development Shelter Provider guidelines Item 28: Staff Report Pg. 63 Packet Pg. 629 of 857 At Item 28 it 5 Attachment A Exhibit 5 - Fiscal Year 2025 Municipal Fee Changes.pdf Police Concealed Carry Weapon $130.00 per application High Department a. New (Application fee) Police Concealed Carry Weapon $522.00 per application High Department b. New (Issuance fee) Police Concealed Carry Weapon $99.00 per application High Department c. Renewal fee Police Concealed Carry Weapon $15.00 per application High Department d. Modification/Duplicate fee Deleted Fees 17 fees in the Community Services Department and nine fees in the Police Department are recommended to be deleted in the FY 2025 Municipal Fee Schedule. Each fee, and the justification for its deletion, is detailed in table 3 below. Table 3. Deletion of Fees for FY 2025 Community 48 -Hour Cancellation Fee (non-refundable) Additional fee no longer charged Services Community Antibiotic Injection Consolidated into new fee Services "Medication - Injectable" Community Canine Training Deposit Vendor recommended Services Community Common Procedures - Flushing Drains Consolidated into broader services Services such as wound care and minor surgery Community Common Procedures - Oral or Topical Treatment Split into two new fees "Medication - Services Oral" and "Medication - Topical" Community Feral/Rescue Own FeLV/FIV Test Vendor recommended Services Community Feral/Rescue Own Vaccine Vendor recommended Services Community Heartworm Testing Consolidated into "Labwork - Services Heartworm Test" Community Injectable Medication Name change to "Medication - Services Injectable" for consistency with other services Community Labwork - PCV Consolidated into "Labwork - Services PCV/TP" Community Oral Prescription Medication Name change to "Medication - Oral" Services for consistency with other services Item 28: Staff Report Pg. 64 Packet Pg. 630 of 857 Ati Item 28 jit 5 Attachment A Exhibit 5 - Fiscal Year 2025 Municipal Fee Changes.pdf Community Pregnancy Fee plus Spay Fee Vendor recommended Services Community Rat, Guinea Pig - Neuter Vendor recommended Services Community Rat, Guinea Pig - Spay Vendor recommended Services Community Special Medications Vendor recommended Services Community Trap Rental (14 day maximum) Transition from a flat and daily fee Services structure to only a flat fee. Community Permit Fees (Art Center) Permit will no longer be offered Services Police Pushcart Vendor - Additional Cart Compliance with 2018 CA State Senate Bill 946 Police Pushcart Vendor - New Compliance with 2018 CA State Senate Bill 946 Police Pushcart Vendor - Location and/or Cart Change Compliance with 2018 CA State Senate Bill 946 Police Pushcart Vendor - Renewal Compliance with 2018 CA State Senate Bill 946 Police Pushcart Vendor Employee - New Compliance with 2018 CA State Senate Bill 946 Police Pushcart Vendor Employee - Renewal Compliance with 2018 CA State Senate Bill 946 Police Solicitation for Commercial Purpose Compliance with 2018 CA State Senate Bill 946 Police Solicitor Employee (Under Master License) Compliance with 2018 CA State Senate Bill 946 Police Solicitor/Peddler Master License Compliance with 2018 CA State Senate Bill 946 Changed Fees 281 fees are recommended to be adjusted by a factor other than the 5.2% GRI to adjust for the general change in salary and benefits adjustments between FY 2024 and FY 2025. Changes to these fees as detailed in Attachment A generally reflect changes to: (1) Attain a cost recovery level consistent with other fees; (2) Align with a market study; (3) Modify the fee structure to align with current service delivery; or (4) Hold the fee flat to avoid discouraging use of the service of activity Each fee is listed by name along with the Adopted FY 2024 rate, the Proposed FY 2025 rate, the percentage change, and the fee change justification in Attachment A. Item 28: Staff Report Pg. 65 Packet Pg. 631 of 857 Parking In -Lieu fees At Item 28 it 5 Attachment A Exhibit 5 - Fiscal Year 2025 Municipal Fee Changes.pdf Palo Alto Municipal Code (PAMC) Chapter 16.57.030 requires that the Parking In -Lieu Fee be recalculated in the event the City Council approved the construction of a public parking structure. Per the Municipal Code, the fee shall be adjusted at the time the construction contract is awarded to include actual costs to date, plus the projected construction cost, and authorized contingency. A second recalculation must occur after the project is completed, based on actual design and construction costs incurred. The recalculated fee may be higher or lower than the initial fee. In December 2018, Council awarded a construction contract to Swinerton Builders (CMR 9688) for the California Avenue Area Parking Garage. The total project cost was calculated per PAMC 16.57.030 and includes design costs plus additional services, the construction bid with authorized contingency, and all other staff and administrative costs incurred. This calculation was done and approved as part of the Fiscal Year 2020 budget development process (CMR 10225). The cost per parking space was calculated at $106,171 for the Fiscal Year 2020 Adopted Municipal Fee Schedule. The California Avenue Parking Garage was completed and opened in December 2020. Staff has completed all project close-out documents and recalculated the Parking In -Lieu Fee at $105,811. After adding the appropriate construction cost indexes for the San Francisco Bay Area for Fiscal Year 2021 through Fiscal Year 2024, the revised fee was set at $130,823. Adding the respective construction cost index for FY 2025 brings the fee to $135,514. Development Impact and In -Lieu Fees In the Planning and Development Services Department, impact fees (i.e., community center, park, library, and citywide transportation impact fees) and in -lieu fees were increased by 3.6% percent to reflect the most recently published Construction Cost Index (CCI) for the San Francisco Bay Area, as calculated by the Engineering News Record. This is in accordance with Municipal Code 16.64.110, as amended on November 28, 2016 (CMR 7518), to standardize when these fees are paid, bring uniformity to the calculation in effect, bring uniformity to the annual adjustment rate, and other updates. Since these fees are governed by the applicable Municipal Code section, they are not discussed in Attachment A. FISCAL/RESOURCE IMPACT This action aligns fees with expense increases associated with these services. It works to ensure the City can maintain cost recovery levels, and is part of the FY 2025 Proposed Operating Budget POLICY IMPLICATIONS These recommendations are consistent with existing City policies. Where a fee or charge is subject to Proposition 26, the amount of the new or increased fee or charge is no more than necessary to cover the reasonable cost of the City service, and the manner in which those costs Item 28: Staff Report Pg. 66 Packet Pg. 632 of 857 Item 28 It 5 Attachment A Exhibit 5- Fiscal Year 2025 Municipal Fee are allocated to a payer bears a fair and reasonable relationship to the Changes.pdf , or benefits received from, the City service funded by the fee. Certain types of fees, such as fines, penalties and/or late charges, or charges imposed for entrance to or use of, as well as the purchase, rental, or lease of local government property, are generally not limited to the actual costs of providing service. Instead, these types of fees are more typically governed by local market rates, reasonableness, and potentially other policy factors. These types of fees may have rates that are higher than the full cost recovery level. STAKEHOLDER ENGAGEMENT Staff has coordinated internally with budget and management staff in each department citywide to develop the recommendations in this report. Conversations with the City Council throughout May and June prior to the adoption of the FY 2025 Operating and Capital Budgets and Municipal Fee Schedule allow for public participation in this annual process. ENVIRONMENTAL REVIEW Adjustment to the Municipal Fee Schedule is a governmental fiscal activity that does not involve any commitment to any specific project, and therefore does not constitute a "project" pursuant to CEQA regulation 15378(b)(4). ATTACHMENTS Attachment A: Municipal Fee Schedule Amendments for FY 2025 Changed Fees APPROVED BY: Lauren Lai, Chief Financial Officer/Director Administrative Services Item 28: Staff Report Pg. 67 Packet Pg. 633 of 857 Municipal Fee Schedule Amendments for FY 2025 Changed Fees Administrative Services Budget Book i $46.00 each i $52.00 each 13.0% Fees aligned to attain proper cost recovery level Mailing (Certified) $4.15 each $4.40 each 13.0% Fee set by outside agency Returned Payment Charge (CA Civil Code Section 1719) $25.00 each $25.00 each 0.0% Fee set by outside agency obacco Retail Permit One-time application fee $347. Annual permit fee $434. One-time application fee $347. Annual permit fee $434. 0.0% Fee set by outside agency Business Registry Fee $50.00 per business $50.00 per business 0.0% Fee set by Council policy Item 28 Attachment A Exhibit 5- Fiscal Year ACHMENT A 2025 Municipal Fee Changes.pdf City Clerk Domestic Partners Registration Fee i $38.00 each i $38.00 each 0.0% Keep fees flat due to low volume Candidate Filing Fee $25.00 each $25.00 each 0.0% To avoid discouraging use Certification Fee $11.00 each $11.00 each 0.0% To avoid discouraging use Fair Political Practices Commission Photocopies $0.10 per page $0.10 per page 0.0% Fee set by outside agency Community Services A. Animals (Olbs - 31bs) Private: $162; Communal: $116 per pet Private: $150; Communal: $50 per pet -7.0% Change title from "A. Animal: Olbs - 241bs" A. Neuter (Olbs - 50lbs) $100.00 per pet $200.00 per pet 100.0% Fee set by vendor A. Oak Grove Picnic 1 -SO People $103.00 per group $110.00 per group 6.8% Fees aligned with market rates A. Performance Day Package $1,773 each $1,773 each 0.0% Fees aligned with market rates A. Small Bucket $3.50 - $7.00 per bucket $5.00 - $8.00 per bucket 7.5% Fees aligned with market rates . Vehicle Entry - Daily Fee - Vehicle Capacity 9 passengers r less $6.00 each $6.00 each 0.0% Fee set by Council dditional hours past ten daily $268.00 per hour $268.00 per hour 0.0% Fees aligned with market rates dditional Performance $430.00 each $430.00 each 0.0% Fees aligned with market rates dditional Performance Hours Past Four per Performance $145.00 per hour $145.00 per hour 0.0% Fees aligned with market rates Attempted Spay Surgery in Previously Spayed Animal $40.00 per pet $20.00 per pet -50.0% Fee set by vendor B. Medium Bucket $7.00 - $13.00 per bucket $10.00 - $15.00 per bucket 43.0% Fees aligned with market rates B. Neuter (51lbs and 991bs) $150.00 per pet $225.00 per pet 50.0% Change title from "Neuter (51lbs and over) B. Oak Grove Picnic 51-100 People $206.00 per group $215.00 per group 4.4% Fees aligned with market rates B. Production Day Package $1,505.00 each $1,505.00 each 0.0% Fees aligned with market rates B. Vehicle Entry - Daily Fee - Vehicle Capacity 10-24 passengers $30.00 each $30.00 each 0.0% Fee set by Council Bandages $28.00 - $110.00 per pet $30.00 - $110.00 per pet 7.0% Fee set by vendor Bordatella & Parainfluenza $15.00 per pet $15.00 per pet 0.0% Change title from "Bordatella" Brachycephalic Fee $75.00 per pet $75.00 per pet 0.0% Fee set by vendor C. Animal: 21lbs - 491bs Private: $185.00; Communal: $134.00 per pet Private: $225.00; Communal: $50.00 22.0% Fee set by vendor Large Bucket $9.00 - $16.00 per bucket $13.00 - $18.00 per bucket 43.0% Fees aligned with market rates Neuter (100 lbs and over) $200.00 per pet $250.00 per pet 25.0% Fee set by vendor . Oak Grove Picnic 101-150 People $309.00 per group $325.00 per group 5.2% Fees aligned with market rates Item 28: Staff Report Pg. 68 1 Packet Pg. 634 of 857 Municipal Fee Schedule Amendments for FY 2025 Changed Fees Item 28 Attachment A Exhibit 5- Fiscal Year ACHMENT A 2025 Municipal Fee Changes.pdf Rehearsal Day Package 1,075.00 each 1,075.00 each 0.0% Fees aligned with market rates Vehicle Entry - Daily Fee - Vehicle Capacity 25 or more passengers with a group permit $60.00 each $60.00 each 0.0% Fee set by Council ats (5+ Years) $50.00 per cat $50.00 per cat 0.0% Fee set by vendor ats (6 months - 5 years) $125.00 per cat $130.00 per cat 4.0% Fee set by vendor ats (Two adopted at once) $175.00 per cat $185.00 per cat 6.0% Fee set by vendor Cats (Under 6 Months) Resident: $150.00 per cat; Non -Resident: $175.00 per cat Resident: $175.00 per cat; Non -Resident: $205.00 per cat 17.0% Fee set by vendor Classes, camps, corporate events $21.00 - $1,075.00 per event $21.00 - $1,075.00 per event 0.0% Fee set by vendor Clinic Board Fee $21.00 per pet $100.00 per pet 376.0% Fee set by vendor Common Procedures- Fluorescein Eye Stain $18.00 each $19.00 each 6.0% Fee set by vendor Common Procedures - Medical Grooming $87.00 per hour $93.00 per hour 7.0% Fee set by vendor Cryptorchid Subcutaneous - Fee $53.00 - $107.00 per pet $50 per pet -5.6% Change title from "Cryptorchid Fee" D. Animal: 50lbs - 791bs Private: $204.00 per pet; Communal: $150.00 per pet Private: $250.00 per pet; Communal: $50.00 per pet -23.0% Change title from "C. Animal: 50lbs - 751bs" D. Dark Day Package $290.00 each $290.00 each 0.0% Fees aligned with market rates D. Jumbo Bucket $11.00 - $19.00 per bucket $16.00 - $22.00 per bucket 43.0% Fees aligned with market rates D. Spay (0lbs - 50lbs) $125.00 per pet $250.00 per pet 100.0% Fee set by vendor D. Vehicle Entry - Annual Pass $0.00 - $86.00 each $0.00 - $86.00 each 0.0% Fee set by Council DA2PP $15.00 per pet $15.00 per pet 0.0% Fee set by vendor Deciduous Tooth Extraction $27.00 each $30.00 each 11.0% Fee set by vendor Dewclaw Removal $40.00 - $58.00 per dewclaw $75.00 per dewclaw 87.0% Fee set by vendor Dogs (5+ Years) $75.00 per dog $75.00 per dog 0.0% Fee set by vendor Dogs (6 months -S 5 years) Resident: $150.00 per dog; Non -Resident: $175.00 per dog Resident: $175.00 per dog; Non -Resident: $205.00 per dog 17.0% Fee set by vendor Dogs (Under 6 Months) Resident: $150.00 per dog; Non -Resident: $250.00 per dog Resident: $300.00 per dog; Non -Resident: $350.00 per dog 100.0% Fee set by vendor Dressing Room - M3 $32.00 per hour $32.00 per hour 0.0% Fees aligned with market rates E. Animal: 801bs - 991bs Private: $220.00 per pet; Non -Communal: $174.00 per pet Private: $275.00 per pet; Non -Communal: $50.00 per pet 25.0% Change title from "D. Animal: 761bs- 991bs" E. Spay (51lbs and 991bs) $175.00 per pet $300.00 per pet 71.0% Fee set by vendor Ear Cleaning $35.00 per pet $30.00 per each -14.0% Fee set by vendor Ear Mite Treatment (2 doses of Revolution) $32.00 per pet $60.00 per pet 88.0% Change title from "Ear Mite Treatment" Exotic Animals $10.00 per pet $10.00 per pet 0.0% Fee set by vendor F. Animal: 1001bs- 150lbs Private: $254.00 per pet; Non -Communal: $191.00 per pet Private: $300.00 per pet; Non -Communal: $50.00 per pet 18.0% Change title from "E. Animal: 100lbs- 150lbs" F. Cremation Services - Custom Engraved Plaque Fee $22.00 each $22.00 each 0.0% Fee set by vendor F. Spay (100 lbs and over) $225.00 per pet $350.00 per pet 56.0% Fee set by vendor Flea +/- Preventative (per dose) $28.00 per dose $30.00 - $100.00 per dose 7.0% Fee set by vendor Fluid Therapy - IV Fluids $26.00 per hour $27.00 per hour 4.0% Fee set by vendor Fluid Therapy - SQ (Cats) $41.00 each $44.00 each 7.0% Fee set by vendor Fluid Therapy - SQ (Dogs) $53.00 each $56.00 each 6.0% Fee set by vendor FVRCP $15.00 per pet $15.00 per pet 0.0% Fee set by vendor Individual Youth Sport Registration Resident: $197.00 - $395.00 per person; Non -Resident: Fee plus up to 50% Resident: $197.00 - $395.00 per person; Non -Resident: Fee plus up to 50% 0.0% To avoid discouraging use IV Catheter Placement $62.00 each $66.00 each 6.0% Fee set by vendor Item 28: Staff Report Pg. 69 1 Packet Pg. 635 of 857 Municipal Fee Schedule Amendments for FY 2025 Changed Fees Item 28 Attachment A Exhibit 5- Fiscal Year ACHMENT A 2025 Municipal Fee Changes.pdf Kitten Package (over 3 months) $100.00 per pet $100.00 per pet 0.0% Change title from "Kitten Package" Lab work - Fecal 0 & P $29.00 each $31.00 each 7.0% Change title from "Labwork - Fecal" Lab work - FeLV/FIV Test $35.00 each $37.00 each 6.0% Fee set by vendor Lab work - In -House Fungal Culture $37.00 each $39.00 each 5.0% Change title from "Labwork - Fungal Culture" Labwork - Heartworm Test $41.00 each $44.00 each 7.0% Fee set by vendor Labwork - Parvo Test $44.00 each $47.00 each 7.0% Fee set by vendor Labwork - PCV/TP $29.00 each $30.00 each 3.0% Change title from "Labwork - PCV" and "Labwork - TP" Labwork - Pre -surgical $150.00 per pet $150.00 per pet 0.0% Fee set by vendor Labwork - Reference Lab Labwork cost plus $28.00 service fee Labwork cost plus $28.00 service fee 0.0% Fee set by vendor Labwork - Skin Scraping $24.00 each $30.00 each 25.0% Fee set by vendor Labwork - Urine Dipstick $17.00 each $30.00 each 76.0% Fee set by vendor Labwork-USG $17.00 each $30.00 each 76.0% Fee set by vendor Large Animal (Horses, Cows, Pigs, etc.) Actual cost including transportation expense will be charged to house the animal at the appropriate facility Actual cost including transportation expense will be charged to house the animal at the appropriate facility 0.0% Fee set by vendor Late Fee for Spay/Neuter Pickup $25.00 per pet $50.00 per pet 100.0% Fee set by vendor Local Anesthetic $37.00 each $39.00 each 5.0% Fee set by vendor Long -Acting Topical Ear Medication $64.00 per pet $64.00 per dose 0.0% Fee set by vendor Microchip $25.00 per pet $25.00 per pet 0.0% Fee set by vendor Nail Trim $10.00 per pet $30.00 per pet 200.0% Change title from "Nail Clip" Neuter $70.00 per pet $75.00 per pet 7.0% Fee set by vendor No -Show Fee (non-refundable) $50.00 per pet $50.00 per pet 0.0% Fee set by vendor Organic Garden Clean-up/Security Deposit $100.00 - $200.00 per garden plot $100.00 - $200.00 per garden plot 0.0% Keep security deposit fee flat Organic Garden Plot $0.90 per square foot $0.90 per square foot 0.0% Fees aligned with market rates Peers Park, Mitchell Park Field House Resident: $187.00 per day; Non -Resident: $252.00 per day Resident: $209.00 per day; Non -Resident: $282.00 per day 12.0% Fees aligned with market rates Picnic Reservations - Arbor Group Site $56.00 per group $62.00 per group 12.0% Fees aligned with market rates Picnic Reservations - East Meadow Group Site $87.00 per group $97.00 per group 12.0% Fees aligned with market rates Picnic Reservations - Pine Grove Group Site $159.00 per group $178.00 per group 12.0% Fees aligned with market rates Picnic Reservations - Redwood Group Site $128.00 per group $143.00 per group 12.0% Fees aligned with market rates Picnic Reservations - Sequoia Group Site $71.00 per group $79.00 per group 12.0% Fees aligned with market rates Picnic Reservations (1-15 people) Resident: $32.00 per group; Non -Resident: $37.00 per group Resident: $35.00 per group; Non -Resident: $41.00 per group 12.0% Fees aligned with market rates Puppy Package (over 3 months) $100.00 each $100.00 each 0.0% Fees set by vendor Rabbit - Neuter Resident: $80.00 per pet; Non -Resident: $102.00 per pet Resident: $125.00 per pet; Non -Resident: $125.00 per pet 56.0% Fees set by vendor Rabbit - Spay Resident: $107.00 per pet; Non -Resident: $129.00 per pet Resident: $175.00 per pet; Non -Resident: $175.00 per pet 64.0% Fees set by vendor Rabbit Hemorrhagic Disease Vaccine $150.00 to $250.00 each $30.00 each -80.0% Fees set by vendor Rabbits $40.00 per pet $20.00 per pet -50.0% Fees set by vendor Rabies $15.00 per pet $15.00 per pet 0.0% Fees set by vendor Rabies (Actual Clinic Cost) $6.00 per pet $6.00 per pet 0.0% Fees set by vendor Rats, Hamsters, Guinea Pigs, & Mice $10.00 per pet $10.00 per pet 0.0% Fees set by vendor Rehearsal Hall Resident: $58.00 per hour; Non -Resident: $87.00 per hour Resident: $58.00 per hour; Non -Resident: $87.00 per hour 0.0% Fees aligned with market rates Item 28: Staff Report Pg. 70 1 Packet Pg. 636 of 857 Municipal Fee Schedule Amendments for FY 2025 Changed Fees Item 28 Attachment A Exhibit 5- Fiscal Year ACHMENT A 2025 Municipal Fee Changes.pdf Rescue Group (Non -Profit) - Cat Neuter $50.00 per pet $55.00 per pet 10.0% Fee set by vendor Rescue Group (Non -Profit) - Cat Spay $65.00 per pet $65.00 per pet 0.0% Fee set by vendor Rescue Group (Non -Profit) - Dog Neuter (over 50 Ibs) $107.00 per pet $175.00 per pet 64.0% Fee set by vendor Rescue Group (Non -Profit) - Dog Neuter (under 50 Ibs) $80.00 per pet $150.00 per pet 88.0% Fee set by vendor Rescue Group (Non -Profit) - Dog Spay (over 50 Ibs) $125.00 per pet $300.00 per pet 140.0% Fee set by vendor Rescue Group (Non -Profit) - Dog Spay (under 50 Ibs) $100.00 per pet $250.00 per pet 150.0% Fee set by vendor Routine Deworming (roundworms & hookworms) $31.00 each $31.00 each 0.0% Fee set by vendor Routine Deworming (roundworms & hookworms) $21.00 $30.00 42.9% Fee set by vendor Sedation/Anesthesia - Gas $93.00 for first 30 minutes; $1.70 per minute thereafter $100.00 for first 30 minutes; $1.80 per minute thereafter 7.5% Fee set by vendor Sedation/Anesthesia - IM $58.00 each $62.00 each 6.9% Fee set by vendor Sedation/Anesthesia - IV $82.00 each $88.00 each 7.3% Fee set by vendor Spay $85.00 per pet $90.00 per pet 5.9% Fee set by vendor Specialized Feeding $5.00 each $30.00 each 500.0% Fee set by vendor Surgery - Major Surgery, Preparation and Recovery $116.00 per hour $500.00 - $1,500.00 per hour 331.0% Fee set by vendor Surgery - Minor Surgery, Preparation and Recovery $44.00 each $50.00 - $500.00 each 13.6% Fee set by vendor Tapeworm Treatment (Praziquantel) $18.00 per pet $18.00 per pet 0.0% Fee set by vendor Teen Center Membership - Monthly $5.00 - $10.00 per month $5.00 - $10.00 per month 0.0% Fees aligned with market rates een Center Membership - School Year $70.00 each $70.00 each 0.0% Fees aligned with market rates Towle Camp (8 People) $30.00 per day $40.00 per day 33.3% Fees aligned with market rates Towle Camp Group (16 People) $50.00 per day $55.00 per day 10.0% Fees aligned with market rates Trap Rental - Deposit $100.00 each $75.00 each -25.0% Fee set by vendor Umbilical Hernia Repair $40.00-$87.00 per pet $40.00 - $87.00 per pet 0.0% Fee set by vendor Veterinarian Exam $172.00 per hour $80.00 per hour -53.5% Fee set by vendor Visual and Performing Arts Activities $6.00 - $2,659.00 per hour $6.00 - $2,659.00 per hour 0.0% Fees aligned with market rates Wound Care $18.00 - $62.00 per pet $30.00 - $110.00 per pet 66.7% Fee set by vendor Fire Life Support Transport Mileage $35.00 per mile r $35.00 per mile 0.0% Align fees to flat mileage amount e Support Transport Mileage $35.00 per mile $35.00 per mile 0.0% 7Advance:dLimled tration Fee - New $56.00 per incident $56.00 per incident 0.0% Keep fees flat due to recent rollout tration Fee - Renewal $42.00 per incident $42.00 per incident 0.0% tration Late Fee $20.00 per incident $20.00 per incident 0.0% tatement Fee $50.00 per incident $50.00 per incident 0.0% Returned Check Fee $25.00 per incident $25.00 per incident 0.0% Fee set by outside agency Engine Company Second Reinspection $279.00 per hour $279.00 per hour 0.0% Keep fee flat due to cost recovery level FireMed Monthly Subscription — Business, Tier 1-5 $20.00 - $1,000.00 per business $20.00 - $1,000.00 per business 0.0% Align fees with FireMed program FireMed Monthly Subscription — Residential $8.00 per household $8.00 per household 0.0% Interfacility Basic Life Support Transport Mileage $35.00 per mile $35.00 per mile 0.0% Align fee to flat mileage amount Night Transport Fee $105.00 per occurrence $105.00 per occurrence 0.0% Align fees with ambulance transport program Oxygen $179.00 per occurrence $179.00 per occurrence 0.0% Paramedic Internship Fee $1,000.00 each $1,000.00 each 0.0% To avoid discouraging use Returned Check Fee $25.00 per incident $25.00 per incident 0.0% Flat penalty type fee aligned with the alarm program Library Item 28: Staff Report Pg. 71 1 Packet Pg. 637 of 857 Municipal Fee Schedule Amendments for FY 2025 Changed Fees Item 28 Attachment A Exhibit 5- Fiscal Year ACHMENT A 2025 Municipal Fee Changes.pdf i • i • Billing Fee for Overdue Items $5.00 per item $5.00 per item 0.0% Fees set by outside agency Collection Agency Processing Fee $10.00 per item $12.00 per item 20.0% Damaged and Lost Materials - LINK+ $115.00 per item $115.00 per item 0.0% Expired Hold Fee $1.00 per item $1.00 per item 0.0% To avoid discouraging use Laser Prints - Black & White $0.15 per page $0.15 per page 0.0% Laser Prints - Color $0.50 per page $0.50 per page 0.0% Mitchell Park Library Community Room Resident Fee: $66.00 per hour Non -Resident Fee: $99.00 per hour Resident Fee: $66.00 per hour Non -Resident Fee: $99.00 per hour 0.0% Mitchell Park Library Community Room - Full Day Rental Resident Fee: $330.00 per day Non -Resident Fee: $494.00 per day Resident Fee: $330.00 per day Non -Resident Fee: $494.00 per day 0.0% Overdue Materials - In House Laptops $0.30 per hour $0.30 per hour 0.0% Photography/Filming - Space Rental Fee $100.00 - $2,000.00 per session $100.00 - $2,000.00 per session 0.0% Replacement Library Card $1.00 each $1.00 each 0.0% Rinconada Library Community Room Resident Fee: $96.00 per hour Non -Resident Fee: $143.00 per hour Resident Fee: $96.00 per hour Non -Resident Fee: $143.00 per hour 0.0% Rinconada Library Community Room - Full Day Rental Resident Fee: $478.00 per day Non -Resident Fee: $716.00 per day Resident Fee: $478.00 per day Non -Resident Fee: $716.00 per day 0.0% Room Cleaning & Damage Deposit $306.00 - $3,060.00 per deposit $306.00 - $3,060.00 per deposit 0.0% Room Cleaning Fee - Add on $80.00 - $500.00 per event $80.00 - $500.00 per event 0.0% Office of Transportation wn and SOFA Garages and Lots - One Day mit $25.00 per day, $0.00 - $25.00 per day Provide flexibility in adjustment of pricing based on market conditions. 0.0% 7Parking wn and SOFA Lots and Garages Annual Parking $900.00 per year $900.00 per year 0.0% FY 2025 pricing based on CMR #11795 wn and SOFA Lots and Garages Reduced -Price ing Permit $225.00 per year $225.00 per year 0.0% FY 2025 pricing based on CMR #11795 wn and SOFA - Wait List Registration $11.00 per occurrence $11.00 per occurrence $11.00 per occurrence 0.00 FY 2025 pricing based on CMR #11795 Bicycle Training (or other training TBD) $17.00 - $80.00 per class $17.00 - $80.00 per class 0.0% FY 2025 pricing based on CMR #11795 California Avenue Area All Garages and Lots - Daily Parking Permit $25.00 per day $0 - $25 per day 0.0% Provide flexibility in adjustment of pricing based on market conditions. California Avenue Area All Garages and Lots Annual Parking Permit $650.00 per year $650.00 per year 0.0% FY 2025 pricing based on CMR #11795 California Avenue Area All Garages and Lots Reduced -Price Annual Parking Permit $162.50 per year $162.50 per year 0.0% FY 2025 pricing based on CMR #11795 College Terrace RPP - Annual Resident Parking Permit $50.00 per year $50.00 per year 0.0% FY 2025 pricing based on CMR #11795 College Terrace RPP Daily Resident Parking Permit $5.00 per day $5.00 per day 0.0% FY 2025 pricing based on CMR #11795 Crescent Park NOP - Annual Resident Parking Permit $50.00 per year $50.00 per year 0.0% FY 2025 pricing based on CMR #11795 Crescent Park NOP Daily Resident Parking Permit $5.00 per day $5.00 per day 0.0% FY 2025 pricing based on CMR #11795 Downtown RPP - Annual Resident Parking Permit $50.00 per year $50.00 per year 0.0% FY 2025 pricing based on CMR #11795 Downtown RPP - Daily Resident Parking Permit $5.00 per day $5.00 per day 0.0% FY 2025 pricing based on CMR #11795 Downtown RPP - Reduced -Price Employee Parking Permit $131.25 each $131.25 each 0.0% FY 2025 pricing based on CMR #11795 Downtown RPP Full Price Employee Parking Permit $525.00 each $525.00 each 0.0% FY 2025 pricing based on CMR #11795 Evergreen Park - Mayfield RPP Annual Resident Parking Permit $50.00 per year $50.00 per year 0.0% FY 2025 pricing based on CMR #11795 Evergreen Park - Mayfield RPP Daily Resident Parking Permit $5.00 per day $5.00 per day 0.0% FY 2025 pricing based on CMR #11795 Evergreen Park - Mayfield RPP Full Price Employee Parking Permit $375.00 each $375.00 each 0.0% FY 2025 pricing based on CMR #11795 Evergreen Park - Mayfield RPP Reduced -Price Employee Parking Permit $93.75 each $93.75 each 0.0% FY 2025 pricing based on CMR #11795 Old Palo Alto RPP - Annual Resident Parking Permit $50.00 per year $50.00 per year 0.0% FY 2025 pricing based on CMR #11795 Old Palo Alto RPP - Daily Resident Parking Permit $5.00 per day $5.00 per day 0.0% FY 2025 pricing based on CMR #11795 Parkland Dedication Fee - Land Single Family: 531 sq. ft. per unit Multi -Family: 366 sq. ft. per unit Single Family: 531 sq. ft. per unit Multi -Family: 366 sq. ft. per unit 0.0% FY 2025 pricing based on CMR #11795 Southgate RPP - Annual Resident Parking Permit $50.00 per year $50.00 per year 0.0% FY 2025 pricing based on CMR #11795 Item 28: Staff Report Pg. 72 1 Packet Pg. 638 of 857 Municipal Fee Schedule Amendments for FY 2025 Changed Fees Item 28 Attachment A Exhibit 5- Fiscal Year ACHMENT A 2025 Municipal Fee Changes.pdf Southgate RPP - Daily Resident Parking Permit $5.00 per day $5.00 per day 0.0% FY 2025 pricing based on CMR #11795 Southgate RPP - Full Price Employee Parking Permit $375.00 each $375.00 each 0.0% FY 2025 pricing based on CMR #11795 Southgate RPP - Reduced Price Employee Parking Permit $93.75 each $93.75 each 0.0% FY 2025 pricing based on CMR #11795 Standard On -street Disabled Parking Space $1,010.00 each $1,010.00 each 0.0% FY 2025 pricing based on CMR #11795 Discounted Fare $1.00 per passenger trip $1.00 per passenger trip 0.0% To encourage further adoption and use of service Monthly Pass $65.00 per month $65.00 per month 0.0% On -Demand Transit (Palo Alto Link) $0.00 - $3.50 per passenger trip $0.00 - $3.50 per passenger trip 0.0% One -Way Fare $3.50 per passenger trip $3.50 per passenger trip 0.0% Weekly Pass $20.00 per week $20.00 per week 0.0% Plannine and Development Services I. $1.00 - $25,000.00 Permit Valuation $1.00 per unit • $1.00 per unit 0.0% Fees set by outside agency B. $25,001.00 - $50,000.00 Permit Valuation $2.00 per unit $2.00 per unit 0.0% C. $50,001.00 - $75,000.00 Permit Valuation $3.00 per unit $3.00 per unit 0.0% D. $75,001.00 - $100,000.00 Permit Valuation $4.00 per unit $4.00 per unit 0.0% E. Each $25,000.00 Increment or Fraction Thereof Above $100,000.00 $1.00 per unit $1.00 per unit 0.0% F. Minimum $1.00 per unit $1.00 per unit 0.0% SB 1186 Mandated Fee $4.00 each $4.00 each 0.0% SB 330 Fee $2,961.84 each $2,961.84 each 0.0% Strong Motion Instrument Program —Commercial $28.00 per $100,000.00 permit valuation ($0.50 minimum) $28.00 per $100,000.00 permit valuation ($0.50 minimum) 0.0% Strong Motion Instrument Program —Residential $13.00 per $100,000.00 permit valuation ($0.50 minimum) $13.00 per $100,000.00 permit valuation ($0.50 minimum) 0.0% Police r Department of Justice Fingerprint and Rolling Fee $52.00 each $57.00 each 9.6% Fees set by outside agency OPM/DOD Background Check $5.00 per application $5.00 per application 0.0% Parenting Project Materials $44.00 each $44.00 each 0.0% Maintain cost recovery level Parenting Project Program $149.00 per family $149.00 per family 0.0% Quarantine Home Inspection Fee (Animal Control) $46.00 each $46.00 each 0.0% Keep fees flat due to recent transition Report Copy Fee $15.00 each $15.00 each 0.0% Fees set by outside agency Secondhand Dealer - DOJ $300.00 per application $316.00 per application 5.3% Impoundment Fees — First Offense $35.00 per occurrence $35.00 per occurrence 0.0% Impoundment Fees —Second Offense $50.00 per occurrence $50.00 per occurrence 0.0% Impoundment Fees —Third and Subsequent Offenses $100.00 per occurrence $100.00 per occurrence 0.0% Subpoena Fee $24.00 per hour $24.00 per hour 0.0% emporary Street Closure $124.00 - $1,474.00 plus cost to provide certain services $124.00 - $1,474.00 plus cost to provide certain services 0.0% Maintain cost recovery level ehicle Repossession Receipt $15.00 each $15.00 each 0.0% Fees set by outside agency Public Works I. Pavement Condition: Poor $13.00 per square foot $14.00 per square foot 7.7% Adjustment of labor and materials costs B. Pavement Condition: Fair/At-Risk $16.00 per square foot I $17.00 per square foot 6.3% C. Pavement Condition: Good $19.00 per square foot $20.00 per square foot 5.3% D. Pavement Condition: Very Good - Excellent $27.00 per square foot $28.00 per square foot 3.7% Electric Vehicle Charger Connection $0.00 to $2.00 per connection $0.00 to $2.00 per connection 0.0% Electric Vehicle Charger Connection Overstay $0.00 to $5.00 per hour $0.00 to $5.00 per hour 0.0% Service Lateral Connection $1,681.00 each $1,756.00 each 4.5% Item 28: Staff Report Pg. 73 1 Packet Pg. 639 of 857 Item 28 Attachment A Exhibit 6 - C I T Y C O I Impact and In -Lieu PALO ALTO Municipal Fees.pdf ATTACHMENT A, EXHIBIT 6 Fiscal Year 2025 Impact and In -Lieu Municipal Fees City Council approves the following Impact and In -Lieu Municipal Fees as part of its adoption of the Fiscal Year 2025 Budget. Fees subject to the California Mitigation Fee Act will be valid 60 days after adoption. Impact/In-Lieu Fee Unit of Measure FY 2025 Amount Charleston / Arastradero Impact Fee Per residential unit $1,744.00 Charleston / Arastradero Impact Fee Per commercial sq. ft. $0.51 Citywide Transportation Impact Fee Per net new PM peak hour trip $10,103.99 Community Center Impact Fee Per net new 1,000 sq. ft. (commercial/industrial) $1,533.00 Community Center Impact Fee Per net new 1,000 sq. ft. (hotel/motel) $262.00 Community Center Impact Fee Per single family unit $5,228.71 Community Center Impact Fee Per multi -family unit $3,867.92 General Government Facilities Fee Per 1,000 sq. ft. or fraction thereof (commercial) $973.00 General Government Facilities Fee Per 1,000 sq. ft. or fraction thereof (office/institutional) $1,301.00 General Government Facilities Fee Per 1,000 sq. ft. or fraction thereof (industrial) $324.00 General Government Facilities Fee Per unit (single family) $1,744.59 General Government Facilities Fee Per unit (multi -family) $1,394.64 Housing Impact Fee Per non-residential office/R&D sq. ft. $80.00 Housing Impact Fee Per non-residential hotel, retail, other sq. ft. $27.00 Housing Impact Fee Per sq. ft. residential apartments (rentals) $26.00 Library Impact Fee Per net new 1,000 sq. ft. (commercial/industrial) $914.00 Library Impact Fee Per net new 1,000 sq. ft. (hotel/motel) $156.00 Library Impact Fee Per single family unit $3,116.25 Library Impact Fee Per multi -family unit $2,304.49 Parking In -Lieu for Downtown Assessment District Per parking space $135,514.06 Parkland Dedication Fee - In -Lieu Fee Single Family (per unit) $81,863.14 Parkland Dedication Fee - In -Lieu Fee Multi -Family (per unit) $56,425.44 Parkland Dedication Fee - Land Single Family (per unit) 531 sq. ft. Parkland Dedication Fee - Land Multi -Family (per unit) 366 sq. ft. Park Impact Fee Per net new 1,000 sq. ft. (commercial/industrial) $19,837.00 Item 28: Staff Report Pg. 74 1 Packet Pg. 640 of 857 Item 28 Attachment A Exhibit 6 - Impact and In -Lieu Municipal Fees.pdf Park Impact Fee Per net new 1,000 sq. ft. (hotel/motel) $3,377.00 Park Impact Fee Per single family unit $67,650.36 Park Impact Fee Per multi -family unit $50,034.40 Public Art Fee Applies to new commercial buildings 1% of first $132.67 including new construction, remodels, million construction additions, and reconstruction that have a valuation and 0.9% floor area of 10,000 sq. ft. or more and a of construction construction value of $200,000.00 or more, valuation for and new residential projects of five units or valuation in excess of more, with some exclusions. $132.67 million Per 1,000 sq. ft. or fraction thereof Public Safety Facilities Fee (commercial) $773.00 Per 1,000 sq. ft. or fraction thereof Public Safety Facilities Fee (office/institutional) $1,103.00 Per 1,000 sq. ft. or fraction thereof Public Safety Facilities Fee (industrial) $258.00 Public Safety Facilities Fee Per unit (single family) $1,384.31 Public Safety Facilities Fee Per unit (multi -family) $1,107.96 Item 28: Staff Report Pg. 75 I 1 Packet Pg. 641 of 857 Item 28 Attachment B - FY 2025 City Appropriations Limit Resolution.pdf ATTACHMENT B RESOLUTION NO. XXXX Resolution of the Council of the City of Palo Alto Establishing the City's Appropriations Limit for Fiscal Year 2025 WHEREAS, under Article XIIIB of the Constitution of the State of California, the City of Palo Alto (City) may not appropriate any proceeds of taxes in excess of its appropriations limit; and WHEREAS, since fiscal year 1991, the City is permitted to adjust its appropriations limit annually based on inflation and population adjustment factors; and WHEREAS, pursuant to Government Code Section 37200, the calculation of the appropriations limit and the total appropriations subject to the limit were set forth in the annual budget of the City for Fiscal Year 2025, which was adopted by ordinance of the Council on June 17, 2024; and WHEREAS, pursuant to Government Code sections 7901 and 7910, the final calculation of the appropriations limit has been determined, and the adjustment factors on which the calculation is based are a 3.62% percent change in California per capita income and a 0.02% percent change in the population growth for the County of Santa Clara; and WHEREAS, the documentation used in the determination of the appropriations limit has been made available to the general public for fifteen (15) days prior to the date of adoption of this resolution; and WHEREAS, according to the final calculation, the City's net appropriations subject to limitation are approximately $173.10 million. NOW, THEREFORE, the Council of the City of Palo Alto does RESOLVE as follows: SECTION 1. The Council of the City of Palo Alto hereby finds that, for Fiscal Year 2025, the final calculation of the appropriations limit of the City of Palo Alto has been determined in accordance with the adjustment factors referred to above, the documentation used in the determination of the calculation has been made available to the general public for the period of fifteen days as required by law, and the City's appropriations are under the appropriations limit by approximately $46.64 million. SECTION 2. The Council hereby adopts the final calculation of the appropriations limit of the City for Fiscal Year 2025, a copy of which is attached hereto as Exhibit 1. 1 Item 28: Staff Report Pg. 76 Packet Pg. 642 of 857 Item 28 Attachment B - FY 2025 City Appropriations Limit Resolution.pdf ATTACHMENT B SECTION 3. The Council finds that the adoption of this resolution does not constitute a project under the Section 15378(b)(4) of California Environmental Quality Act Guidelines because establishing the annual appropriations limit is a fiscal activity, and, therefore, no environmental assessment is necessary. INTRODUCED AND PASSED: Enter Date Here AYES: NOES: ABSENT: ABSTENTIONS: NOT PARTICIPATING: ATTEST: City Clerk APPROVED AS TO FORM: City Attorney APPROVED: Mayor City Manager Director of Administrative Services Item 28: Staff Report Pg. 77 Packet Pg. 643 of 857 Attachment B, Exhibit 1 APPROPRIATIONS LIMITATION COMPLIANCE CALCULATI FOR FISCAL YEAR 2025 ADOPTED BUDGET ($ IN MILLIONS) FY 2025 Adopted Budget Item 28 Attachment B Exhibit 1 - Appropriations Limit Calculation.pdf $ 306.63 $ 23.08 $ 12.00 $ Less: Interfund Transfers $ (38.84) $ (7.42) $ (17.04) $ - $ (63.31) Allocated Charges $ (26.95) $ (0.34) $ (0.53) $ - $ (27.82) Non -Proceeds $ (63.74) $ (129.40) $ (7.32) $ (12.14) $ (212.60) Net Appropriations Subject to Limit $ CITY OF PALO FY 2024 Per Capita Income Change (CA Department of Finance) 'r FactorA 1.0362 FY 2024 Population Change (County of Santa Clara) 0.02'r Factor B 1.0002 FY 2024 Adopted Appropriations Limit . 212.02 Factor A x Factor B 1.0364 FY 2025 Adopted Appropriations Limit $219.74 ALTONet Appropriations Subject to Limit $ 173.10 Amount Under_Limit $46.64 The City of Palo Alto remains well within its appropriations limit in FY 2025. Future year limit trends can be made based on the average change in regional population and income growth. The appropriations subject to limitation includes proceeds of taxes from the General Fund, Capital Projects Fund, and Special Revenue Funds. 2024* 1.0444 0.9975 i 1.0418 1 $ 212.02 1 $ 157.94 $ 54.08 2023* 1.0755 1.0007 1.0763 $ 203.52 $ 138.39 $ 65.13 2022* 1.0573 0.9944 1.0514 $ 189.10 $ 127.09 $ 62.01 2021 1.0373 1.0037 1.0411 $ 179.86 $ 113.06 $ 66.80 2020 1.0385 1.0033 1.0419 $ 172.75 $ 127.42 $ 45.33 2019 1.0367 1.0099 1.0470 $ 165.80 $ 114.94 $ 50.86 2018 1.0369 1.0082 1.0454 $ 158.36 $ 131.49 $ 26.87 2017 1.0537 1.0130 1.0674 $ 151.49 $ 109.51 $ 41.98 2016 1.0382 1.0113 1.0499 $ 141.92 $ 100.60 $ 41.32 2015 0.9977 1.0150 1.0127 $ 135.17 $ 82.93 $ 52.24 2014 1.0512 1.0157 1.0677 1 $ 133.48 1 $ 90.28 $ 43.20 * FY 2022-2024 Appropriation Limits restated to correct for Total Adjustment Factor calculation error in those fiscal years. On November 6, 1979, California voters approved Proposition 4, an initiative that added Article XIIIB to the state Constitution. The provisions of this article place limits on the amount of revenue that can be appropriated by all entities of government. The Appropriations Limit is based on actual appropriations during the 1978-1979 fiscal year, as increased each year using specified population and inflationary growth factors. Item 28: Staff Report Pg. 78 Packet Pg. 644 of 857 Item 28 Attachment C - FY 2025 Summary of Stanford Investments.pdf Attachment C: Summary of Stanford Related Programs and Services Dept. or Fund Project Description Operating Fire Fire Services Contract with Stanford University Stanford reimburses the City for providing Fire services to the University based on an agreement between the City and the University. Operating Office of Transp. Palo Alto Link (PAL) On Demand Transit Services Palo Alto Link services provide on -demand transit services, and Stanford provides funding for a portion of this service. Dispatch Communication Services Contract with Stanford University Operating Police Stanford reimburses the City for providing dispatcher communication services to the University based on an agreement between the City and the University. Capital PL- Quarry Road Improvements and Transit Center Access 16000 Stanford is the lead on this project, and in order to continue with it, Palo Alto voters must undedicate a portion of El Camino Park (which is owned by Stanford and leased to the City) so that the land can be used for transit center access. A ballot measure proposing this action is expected in 2024. Fire Training Facility Replacement Capital FD -24000 This project will identify an appropriate site and construct a new fire training facility in Palo Alto. The current training facility is located on the Stanford University campus and is not owned by the City. A feasibility study will be conducted to determine the facility needs as well as an appropriate and available location for the new facility. Capital I FD -25000 I Fire Equipment Replacement This project will replace variety of equipment required for different types of emergency response and training, a portion of which is funded by Stanford and used to provide services to the University. The Fire Department completed a comprehensive assessment of all current primary equipment categories, as well as estimated costs and replacement schedules. Item 28: Staff Report Pg. 79 Packet Pg. 645 of 857 Item 28 Attachment D - June 30, 2023 OPEB Actuarial Valuation Report (CMR 2402-2673).pdf CITY OF PALO ALTO Agenda Item CITY OF PALO ALTO Finance Committee Regular Meeting Tuesday, June 04, 2024 2. Accept June 30, 2023 Actuarial Valuation of Palo Alto's Retiree Healthcare and Other Post Employment Benefits and Recommend to the City Council to Approve Annual Actuarially Determined Contribution for Fiscal Year 2025 and 2026; CEQA Status — Not a Project Item 28: Staff Report Pg. 80 Packet Pg. 646 of 857 CITY OF PALO ALTO Finan Item 28 Attachment D - June 30, 2023 OPEB Actuarial Valuation Report (CMR 2402-2673).pdf ee Staff Report From: City Manager Report Type: ACTION ITEMS Lead Department: Administrative Services Meeting Date: June 4, 2024 Report #:2402-2673 TITLE Accept June 30, 2023 Actuarial Valuation of Palo Alto's Retiree Healthcare and Other Post Employment Benefits and Recommend to the City Council to Approve Annual Actuarially Determined Contribution for Fiscal Year 2025 and 2026; CEQA Status — Not a Project RECOMMENDATION Staff recommends that the Finance Committee recommend the City Council: 1. Review and accept the June 30, 2023 actuarial valuation of Palo Alto's Retiree Healthcare Plan (Attachment B); and 2. Approve funding of the annual Actuarial Determined Contribution (ADC) for Fiscal Year 2025 and Fiscal Year 2026 using a two-year phase -in of the adjusted assumptions. EXECUTIVE SUMMARY In accordance with the Governmental Accounting Standards Board (GASB), the City Council is required to review and approve the actuarial valuation for retiree healthcare plan on a bi- annual basis for the upcoming two fiscal years and approve funding of the annual Actuarial Determined Contribution (ADC). This current study presents the fund's status as of June 30, 2023 and will be used to inform the FY 2025 and FY 2026 annual operating budgets. This report was finalized after the development of the FY 2025 Proposed Budget therefore, funding levels in the FY 2025 Proposed Budget reflect the out years of the prior completed study as of June 30, 20211. The City's retiree medical trust is held by the California Employers Retirement Benefit Trust (CERBT) Fund that is managed by CaIPERS. The City continues to select CERBT's Strategy 1 asset allocation, currently projected at a 6.25% discount rate. With the adoption of the 1 Finance Committee, June 7, 2022, Agenda item #3, CMR ID 14112: https://recordsportal.paloalto.gov/Weblink/DocView.aspx?id=64042 Item 28: Staff Report Pg. 81 Packet Pg. 647 of 857 Item 28 Attachment D - June 30, 2023 OPEB Actuarial JValuation Report (CMR Retiree Benefits Funding Policy2 the City Council directed staff to calc 2402-2673).pdf discretionary payments ("prefunding") equivalent to a 5.75%discount rate and transmit amounts above payments at a 6.25% discount rate to the CERBT Fund. Through FY 2024, a total of $11.9 million in additional contributions are expected to be made to the CERBT due to this policy. The June 30, 2023, valuation includes several changes that have impacted the CERBT fund status, primarily due to healthcare and economic fluctuations resulting from the COVID-19 pandemic and continued proactive funding contributions: • Investment Returns: 2021-22 investment loss of -13.5%, compared to the 27.5% investment gains in 2020-21 (6.25% target); • Projected Payroll: Higher than projected salary growth; • Health Premiums: Higher than projected healthcare premiums; and • Pre -Funding Policy: Actuarially Determined Contribution "ADC" (full ADC payments and pre -funding) Compared to the favorable assumptions in the June 30, 2021 actuary study, these changes are advised to be taken in consideration of an uncertain environment. While the 2022-23 portfolio earnings yielded 6.4% and is within range of the 6.25% target, it is not known whether the recent change in healthcare premiums will be ongoing or an anomaly due to the significant governmental support of healthcare costs over the past two years. Because it is unknown whether these changes are the beginning of a trend, or merely a temporary anomaly, this report models short term significant rises in healthcare costs in alignment with inflation. The outyears of the June 30, 2021 valuation report were used to develop the OPEB assumptions in the FY 2025 Proposed Budget. Based on these assumptions and the attached actuary report, $5.2 million ($3.3 million General Fund) should be added to the FY 2025 Budget to maintain pre -funding levels in alignment with City Council policy. On May 21, the Finance Committee ("Committee") recommended full funding of the ADC and a 2 - year phase -in of prefunding levels in accordance with City Council policy as part of the FY 2025 Budget. This action reduces the funding need in FY 2025 to $2.6 million ($1.65 million General Fund). The below table provides a summary of the difference between the funding FY 2025 Proposed Budget in all funds between the June 30, 2021 and June 30, 2023 valuation reports. A more detailed discussion of these is included in this report. 2 City Council, February 6, 2023, Agenda Item #3, Staff Report# 2212-0513: https://recordsportal.paloalto.gov/Weblink/DocView.aspx?id=82218 Item 28: Staff Report Pg. 82 Packet Pg. 648 of 857 Item 28 Attachment D - June 30, 2023 OPEB Actuarial Valuation Report (CMR • . • 1 • 'J Is] FY25 L 2402-2673).pdf FY25 $ Change Proposed Adjusted ADC ADC (6/30/21 (6/30/23 valuation) valuation) Actuarially • Proactive contribution at $16.8M $21.9M $5.1M Determined discount rate of 5.75% Contribution • 15 -year amortization period as of June 30, 2021 (13 years remaining) *Approximately 65% of costs are allocated to the General Fund BACKGROUND The City of Palo Alto offers its employees and retirees a Retiree Healthcare benefit plan which is managed and administered by the California Public Employees' Retirement System (CaIPERS), a State of California Retiree Healthcare Trust program. Bi-annually staff contracts with an actuary firm that provides an actuarial report detailing the latest status of the City of Palo Alto's Retiree Healthcare plans for employees and retirees. The actuarial report is used to calculate the annual ADC and pre -funding based on Council policy to the trust. In addition, updates on the rate of return, funding status, and changes to the trust based on various impacts are detailed in the report. Unlike the pension actuary reports, this actuary details impacts by Fund and Department, which inform the development of the annual budget. There are four groups of benefits within the CaIPERS Retiree Healthcare benefit plans. Attachment A outlines the different benefits levels by Group. These benefit levels are negotiated and approved as part of the employee contracts. Employees and retirees have an open enrollment window in October each year in which they can make changes to their healthcare plans that take effect in January of the following year. CALPERS Projected Contribution Levels The actuary report has two components to the annual billing of the employer portion of retiree healthcare contributions that comprise the Actuarial Determined Contribution (ADC), (1) the Normal Cost (NC), and (2) the Unfunded Actuarial Accrued Liability (UAAL). • NC: This reflects a rate of contribution for the plan of retirement healthcare benefits provided to current employees based on the current set of assumptions. • EmployerAmortization of UAAL: This is an annual payment calculated to pay down an agency's unfunded accrued liability. Assuming every assumption in the actuarial valuation was accurate, an organization would eliminate its unfunded pension liability if it made these payments annually for 30 years. The City Council approved a closed period to amortize the entire net pension liability over a specific timeframe, and 22 years (before the adoption of a Retiree Benefit Funding Policy) of payments Item 28: Staff Report Pg. 83 Packet Pg. 649 of 857 Item 28 Attachment D - June 30, 2023 OPEB Actuarial Valuation Report (CMR remain as of June 30, 2021. The total liability will vary from one 2402-2673).pdf because of assumption changes and actuarial experience that is different from anticipated, such as actual investment returns that do not meet expectations. As established by the City Council, the City's CERBT Fund is invested in a Strategy 1 asset allocation at a 6.25% discount rate. With the adoption of the Retiree Benefits Funding Policy, directed staff to calculate additional discretionary payments ("prefunding") equivalent to a 5.75%discount rate and transmit amounts above payments at a 6.25% discount rate to the CERBT Fund. The City's CERBT Fund was established in May 2008 at a level of $33 million and it has grown to $173.0 million as of March 31, 2024. ANALYSIS Summary of Actuarial Report June 30, 2023 Staff contracted with Foster and Foster Actuary Consultants for this retiree healthcare actuarial report (Attachment B) to determine the City's retiree healthcare liability and the ADC for Fiscal Years 2025 and 2026. The actuarial analysis is based on current employees' accrued benefit, and retired employees as of June 30, 2023. This updated valuation includes several changes that have impacted the CERBT fund status, primarily due to healthcare and economic fluctuations resulting from the COVID-19 pandemic, inflation levels, and active employee salary growth. Most notably, investment returns for 2020-21 reached an unprecedented level of 27.5% for the period and then performance dropped to -13.5% for 2021-22. This volatile level of return had a significant impact on the overall status of the fund and is not expected to continue in future periods. Healthcare premiums are higher than anticipated due to significant current inflation levels and a return to pre -pandemic levels of utilization. Discount Rate Assumptions The City Council has taken steps to ensure long-term liability assumptions and costs for OPEB are being proactively addressed, including the adoption of a Retiree Benefit Funding Policy3 that invests at an estimated discount rate for OPEB of 6.25% and transmits additional contributions to prefund OPEB obligations at the equivalent of a 5.75% discount rate. Through FY 2024, a total of $11.9 million in additional contributions are expected. Discussed above, the ADC is impacted when actual experience differs from assumptions. One of the more significant impacts to ADC occurs when actual investment returns do not meet expectations. Chart 1 below presents historical returns since 2008-09. 3 City Council, February 6, 2023, Agenda Item #3: https://recordsportal.paloalto.gov/Weblink/DocView.aspx?id=82218 Item 28: Staff Report Pg. 84 Packet Pg. 650 of 857 Item 28 Attachment D - June 30, 2023 OPEB Actuarial Valuation Report (CMR Chart 1: Historical Returns of the OPEB Trust 2402-2673).pdf (Market Value of Plan Assets (MVA) and Expected Return) 30% 25% 20% 15% 10% 5% 0% (5%) (109/0) (15%) Market Value Expected Relic n 00.09 09'10 1011 11117 1713 13'14 13215 10.16 16'17 17'18 18219 1920 20.21 21123 ?3'?3 -22.5% 15.1% 24.4% 0.1% 11.21 18.?% -0.2% 1.1% 10.4% 7.9% 6.3% 3.6% 27.5% -13.5% 6.4% 7.75% 7.75% 7.75% 7.75% 7.75% 7.75% 7.61% 7.25% 7.25% 6.75% 6.75% 6.75% 6.75% 6.25% 6.25% Projected Unfunded Actuarial Accrued Liability This actuarial valuation includes the plan's "Funded Status." As of June 30, 2023, the CERBT Trust is funded at 56%, down 1,100 basis points from 67% in the June 30, 2021 actuarial valuation. As of June 30, 2023, the Unfunded Actuarial Accrued Liability (UAAL) was $120.5 million for all funds and $77.9 million for the General Fund. Beginning with the June 30, 2013 valuations, the City aligned its actuarial analysis to align with GASB's rules regarding the "implied subsidy". The calculation of implied subsidy requires an agency to recognize that it pays the same medical premiums for active employees as those that are retired. The implied subsidy identifies and accounts for the agency paying the same blended premium for both active employees and retirees, even though the medical cost for active employees is lower than retirees. Palo Alto had 902 active employees and 1,031 retirees as of June 30, 2023. The calculation increases the UAAL by $15.1 million or 18.9%; without the implied subsidy the UAAL for all funds would be at $76.8 million. Item 28: Staff Report Pg. 85 Packet Pg. 651 of 857 Item 28 Attachment D - June 30, 2023 OPEB Actuarial Valuation Report (CMR 2402-2673).pdf June 30, 2021 June 30, 2023 Projected June 30, 2024 Citywide — UAAL $80,027 $120,511 $140,372 General Fund — UAAL $51,522 $77,914 $91,242 Citywide Funded Ratio 67% 56% 54% Citywide UAAL % Chg. from prior valuation 50.6% 16.5% Sensitivity Analysis: Discount Rate and Amortization Period CaIPERS recognizes the varying assumptions that may impact a plan's unfunded actuarial accrued liability and therefore a retiree healthcare plan's funding status, especially the implications of the discount rate and amortization assumptions. Therefore, in addition to the actuarial assumptions used to develop this annual evaluation, the actuary includes a sensitivity analysis of the retiree healthcare plan. Table 4 below reflects the impact on UAAL resulting from a reduction in the discount rate. Table 5 reflects the impact on ADC if the UAAL is amortized over different timeframes. It should be noted that the Council has adopted a Pension Funding Policy3 seeking to reach a 90% funded level by 2036, so with 13 remaining years as of this June 30, 2023 valuation, a shorter period than the sensitivity scenarios below. As illustrated by tables four and five, these alternative assumptions cause significant impacts. For example, changing from a discount rate of 6.25% to 5.75% causes UAAL to increase by almost 15%. 6.25% (Current CERBT Strategy) 5.75% 5.25% Citywide — UAAL $120,511 $137,059 $155,266 General Fund — UAAL $77,914 $89,088 $100,923 Funded Ratio 56% 53% 50% 20 Years (Current) 18 Years Normal Cost $7,489 $7,489 UAAL Amortization* $8,933 $9,617 Total ACD $16,416 $17,105 ACD (% of payroll) 12.8% 13.4% *Includes administrative expenses Fundina for the FY 2025 Includina Actuarial Determined Contribution (A This section outlines staff's recommended funding level for OPEB obligations beginning in FY 2025 for Finance Committee review and discussion. Staff recommend accepting the assumptions in this valuation report to inform the development of the FY 2025 and FY 2026 budgets, along with long range financial plans for the outyears. This is in alignment Item 28: Staff Report Pg. 86 Packet Pg. 652 of 857 Item 28 Attachment D - June 30, 2023 OPEB Actuarial Valuation Report (CMR with the Retire Benefit Policy, including tenants such as continuing to u 2402-2673).pdf discount rate of 5.75% and an accelerated, closed amortization schedule of 15 years (as of the June 30, 2021 valuation). Staff recommends the Finance Committee continue with this funding approach that adjusts assumptions based on current data and the principles noted above. Included below is an optional two-year phase -in of the June 30, 2023 valuation results that the Finance Committee directed staff to consider, on May 21, 2024, in the development of the FY 2025 Budget for City Council adoption in June 2024. Staff have also outlined the actuarial "baseline" scenario for consideration that represents the minimal investment required but is incompliant with City policy. Funding levels may be adjusted annually based on City Council direction and policy adjustment, as long as the baseline ADC is met. Unlike the CaIPERS pension plan, additional City contributions do not go into a separate Section 115 trust; instead, they remain in the plan and are included as assets in the CERBT each subsequent year, impacting the calculation of the ADC. This treatment of prefunding contributions included in assets and effectively reduce the ADC each future year. Full ADC and Prefunding of FY2025 OPEB Obligations Staff recommend adjusting funding from the typical baseline calculation to better align with City Council policy to continue to proactively fund long-term liabilities. Recommended revisions to baseline assumptions include: • Exclude proactive contributions at a lower discount rate towards the ADC: Consistent with the pension proactive funding, this would treat the proactive contributions assuming a lower discount rate of 5.75 as if in a separate "trust" or "saving account." ADC calculations will remain at consistent levels and these proactive contributions remain additive to baseline calculations of liability. • Continue to assume a shortened amortization period of 13 remaining years: This amortization period aligns OPEB with the City's Pension Policy goals to reach a 90% funded status over 15 years as of the June 30, 2021 valuation (by FY 2036). This results in an FY 2025 Adjusted ADC of $21.9 million citywide (approximately $13.9 million in the General Fund), a $5.1 million increase from the $16.8 million ADC from the June 30, 2021 valuation used to develop the FY 2025 Proposed Operating Budget. Finance Committee Recommendation: Two -Year Phase -In On May 21, 2024 the Finance Committee recommended a two-year phase -in of the financial impacts of the June 30, 2023 valuation. This recommendation mitigates the immediate impacts of this report's expense escalation and supports financial flexibility for the provision of services citywide while continuing to proactively prefund long-term obligations in alignment with City Council policy. Item 28: Staff Report Pg. 87 Packet Pg. 653 of 857 Item 28 Attachment D - June 30, 2023 OPEB Actuarial Valuation Report (CMR 2402-2673).pdf This results in an FY 2025 Adjusted ADC of $19.4 million citywide (approximately $12.2 million in the General Fund), a $2.6 million ($1.65 million in the General Fund ) increase from the $16.8 million ADC from the June 30, 2021 valuation used to develop the FY 2025 Proposed Operating Budget. Prior Valuation Additional Normal Cost Contributions In the prior valuation period the City Council approved factoring in funding for the addition of nearly 60 full-time staff since the June 30, 2021 valuation date. Based on the average salary reported in that valuation and the variable portion of ADC, or normal cost for current employees, the retiree healthcare cost of the additional staffing was approximately $400,000 citywide ($298,000 or 74% General Fund). This associated retiree health cost was included in the FY 2023 and FY 2024 Adopted budgets in alignment with the assumptions noted above. This funding was included to proactively address the expected deviation in actuarial assumptions though as noted, were insufficient to mitigate the full impact of the changes from the FY 2023 report. Staff recommends removing this additional retiree health cost as the position additions that prompted it are now included in the June 30, 2023 valuation. The $416,000 programmed in the FY 2025 Proposed Budget for additional normal cost contributions partially offset the cost increase from the new valuation to bring it down to $5.1 million for all funds. FISCAL/RESOURCE IMPACT The FY 2025 Proposed Budget includes an ADC of $16.9 million, an increase of $2.9 million from FY 2024 Adopted levels of $14.0 million. Funding of the full ADC and two-year prefunding phase in recommended by the Finance Committee on May 21, 2024 increases the ACD in FY 2025 to $19.4 million. This recommendation by the Finance Committee will be included as an amendment to the FY 2025 Proposed Budget for City Council consideration during the adoption of the budget on June 17, 2024. Staff will incorporate this direction on an ongoing basis beginning in FY 2026. Funding for future fiscal years is subject to City Council approval through the annual budget process. STAKEHOLDER ENGAGEMENT The transmittal of the OPEB actuarial valuation as of June 30, 2023 begins conversations regarding the fiscal outlook for the City's OPEB liabilities and the appropriate contribution for the FY 2025 Actuarial Determined Contribution and prefunding levels. Initial public discussion was held with the Finance Committee on May 21, 2024, prior to City Council review and adoption of the FY 2025 Budget, scheduled for June 17, 2024. ENVIRONMENTAL REVIEW Item 28: Staff Report Pg. 88 Packet Pg. 654 of 857 Item 28 Attachment D - June 30, 2023 OPEB Actuarial Valuation Report (CMR Committee action on this item is not a project as defined by CEQA because 2402-2673).pdf approving an annual actuarially determined contribution is a fiscal activity which does not involve any commitment to any specific project which may result in a potentially significant physical impact on the environment. CEQA Guidelines section 15378(b)(4). ATTACHMENTS Attachment A: 4 Benefit Groups in the CaIPERS Retiree Healthcare Benefits Plan Attachment B: City of Palo Alto Retiree Healthcare Plan June 30, 2023 Actuarial Valuation Contributions for FY 2025 and FY 2026 APPROVED BY: Lauren Lai, Director of Administrative Services Item 28: Staff Report Pg. 89 Packet Pg. 655 of 857 Attachment A: 4 Benefit Groups in the CaIPERS Retiree Healthcare Item 28 Attachment D - June 30, 2023 OPEB Actuarial Valuation Report (CMR benefik. 2402-2673).pdf Miscellaneous Safety: Fire Safety: Police Retired before January 1, 2007; eligibility starting at Retired before March 1, Group 1 the age 50 and 5 years of service; full premium up 2009; eligibility starting at to family coverage the age of 50 and 5 years of service; full premium up to family coverage Retired between January Retired between January Retired between March 1, 1, 2007 1, 2007 2009 and April 1, 2015 and May 1, 2011; and December 1, 2011; (POA), between January 1, Group 2 eligibility starting at the eligibility starting at the 2007 and June 1, 2012 age 50 and 5 years of age 50 and 5 years of (PMA); eligibility starting at service; same as Group service; same as Group the age 50 and 5 years of 1, but premium limited to 1, but premium limited to service; same as Group 1, 2nd most expensive 2nd most expensive but premium limited to 2nd medical plan medical plan most expensive medical plan Group 3 Retired after Group 2, did not elect into Group 4, benefit same as active (Retirees) employees Group 3 Currently active, not in N/A N/A (Actives) Group 4. Flat Dollar Caps (All active Group 3 IAFF & (All active Group 3 POA & PMA equal to actives FCA elected into Group 4) elected into Group 4) Group 4 Vesting Schedule: 10 years gets 50%, 20 years gets 100%, formula amount Item 28: Staff Report Pg. 90 Packet Pg. 656 of 857 Item 28 E pnLa� Attachment D - June 30, 5u to 2023 OPEB Actuarial * *; Valuation Report (CMR �R�IF[iRN�� 2402-2673).pdf CITY OF PALO ALTO RETIREE HEALTHCARE PLAN , FOSTER & FOSTER ac:uawts arvo consunnrvis June 30, 2023 Actuarial Valuation Contributions for 2024/25 & 2025/26 Drew Ballard, FSA, EA, MAAA Cathy Wandro, ASA, MAAA Joseph Herm Foster & Foster, Inc. May 21, 2024 CONTENTS Topic Benefit Summary Implied Subsidy Participant Statistics Actuarial Assumptions Highlights Actuarial Methods Assets Results Results — Details Sensitivity Analysis Comparison to Other Agencies Actuarial Certification Exhibits Pa¢e 1 7 9 15 21 23 25 39 49 54 57 58 L:\PaloAltoCity\OPEB\2023_Val\Reports\F&F Item 28: Staff Report Pg. 91 Packet Pg. 657 of 857 BENEFIT SUMMARY Item 28 Attachment D - June 30, 2023 OPEB Actuarial • Eligibility ■ Retire directly from the City under Ca1PERS ( Valuation Report (CMR S 2402-2673).pdf of CalPERS service or disability) • Medical ■ CalPERS health plans (PEMHCA) Provider ■ CalPERS administrative fees paid by City • Retiree Medical ■ GROUP 1 Retirees: Retired < 1/1/07 (3/1/09 for PAPOA) Benefit for • Benefit = Full premium up to family coverage Current Retirees: ■ GROUP 2 Retirees: Retired after GROUP 1 and before 5/1/11(12/1/11 IAFF/FCA, 6/1/12 PMA, 4/1/15 POA) Hired < 1/1/04 • Benefit = Same as above but premium limited to 2nd most (1/1/05 SEIU, expensive Basic (non -Medicare) medical plan in PEMHCA 1/1/06 PAPOA) Region 1 (PERS Platinum in 2023 and 2024) & ■ GROUP 3 Retirees: Retired after GROUP 2 • Benefit = same amount as active employees, which may change Did Not Elect from time to time and in the future as bargaining agreements into Group 4 change (see next section for cap amounts) 1 Age 52 for Miscellaneous New Hires under PEPRA F May 21, 2024 ■ Retiree Medical Benefit for Current Actives: Hired < 1/1/04 (1/1/05 SEIU, 1/1/06 PAPOA) Did Not Elect into Group 4 BENEFIT SUMMARY ■ GROUP 3 Future Retirees: Currently active and did not elect into Group 4 • No active Group 3 POA, PMA, IAFF or FCA • Only remaining Group 3 actives in MGMT, SEIU, UMPAPA (57 active members) • Benefit = up to full premium, but limited to flat dollar caps same as active contribution Single 2 -Party Family SEIU 2023 $ 906 1,812 2,350 2024 $ 943 1,885 2,444 Mgmt/UMPAPA/ Other Groups 2023 & 2024 $ 871 1,742 2,260 r) `tom May 21, 2024 Item 28: Staff Report Pg. 92 Packet Pg. 658 of 857 BENEFIT SUMMARY Item 28 Attachment D - June 30, 2023 OPEB Actuarial ■ GROUP 4 Future Retirees: Government Code Valuation Report (CMR 3: (based on all CalPERS Service 3: 2402-2673).pdf Schedule" Service) ■ Retiree Medical Benefit for Years of Service % Years of Service % < 10 0% 13 65% Hired?1/1/04 1/1/04 10 50% 14 70% (1/1/05 SEIU, 1/1/06 PAPOA) 11 12 60% > 20 100% ■ 100% vesting for disability retirements & ■ Vesting applies to 100/90 formula amounts, which are the maximum amounts payable by the City (retirees pay any difference Employees Hired Before between these amounts and actual premiums): 2023 2024 These Dates Single $ 883 $ 983 Electing into Group 42 2 -Party 1,699 1,890 Family 2,124 2,366 ■ If have 20 years City service do not need to retire directly from City 2 All currently active POA/PMA, IAFF/FCA are Group 4. Some Mgmt/Conf and some SEIU remained in Group 3, and some elected into Group 4. Minimum 5 years City Service. May 21, 2024 3 BENEFIT SUMMARY • Dental, Vision ■ None & Medicare Part B • Surviving ■ 100% of retiree benefit continues to surviving spouse if retiree Spouse Benefit elects CalPERS pension survivor allowance • Waived Re- ■ Waived retirees/beneficiaries may re-elect coverage at a future election date • Summary of ■ None Changes Since the Prior Valuation VMay 21, 2024 Item 28: Staff Report Pg. 93 Packet Pg. 659 of 857 ■ Pay -As -You - Go ($000s) May 21, 2024 Fiscal Year 2022/23 2021/22 2020/21 2019/20 2018/19 2017/18 2016/17 2015/16 2014/15 2013/14 2012/13 2011/12 BENEFIT SUMMARY Cash $ 11,269 10,880 10,631 10,344 9,960 9,660 9,713 9,681 8,995 7,317 8,766 8,165 9 Implied Subsidy $ 3,025 2,619 2,346 2,384 2,197 2,444 2,203 1,960 1,916 Item 28 Attachment D - June 30, 2023 OPEB Actuarial Valuation Report (CMR 2402-2673).pdf $ 14,294 13,499 12,977 12,728 12,157 12,104 11,916 11,641 10,911 7,317 8,766 8,165 BENEFIT SUMMARY � w Monthly Benefit Cap Amounts Group 2023 2024 Single 2 -Party Family Single 2 -Party Family Group 14 $1,210.71 $2,421.42 $3,147.85 $1,339.70 $2,679.40 $3,483.22 Group 2 1,200.12 2,400.24 3,120.31 1,314.27 2,628.54 3,417.10 Group 3 SEIU 906.00 1,912.00 2,350.00 943.00 1,885.00 2,444.00 Group 3 Others 871.00 1,742.00 2,260.00 871.00 1,742.00 2,260.00 Group 4 (100% vest) 883.00 1,699.00 2,124.00 983.00 1,890.00 2,366.00 % Decrease from Group 1 (assumes Group 1 is in most expensive plan) Group 2 1% 1% 1% 2% 2% 2% Group 3 SEIU 25% 25% 25% 30% 30% 30% Group 3 Others 28% 28% 28% 35% 35% 35% Group 4 27% 30% 33% 27% 29% 32% 4 No cap for Group 1. Amount shown is most expensive Non -Medicare Region 1 premium. 5 UMPAPA, Mgmt, IAFF, FCA, PMA, and PAPOA. May 21, 2024 Item 28: Staff Report Pg. 94 F P� Packet Pg. 660 of 857 IMPLIED SUBSIDY Item 28 Attachment D - June 30, 2023 OPEB Actuarial ■ For PEMHCA, employer cost for allowing retirees to participate at I Valuation Report (CMR • Kaiser 2024 Region 1 plan: 2402-2673).pdf Kaiser 2024 - Single Coverage ,D 1,O W $1,600 $1,400 $1,200 E $1,000 $800 $600 $400 $200 $ 25 30 35 40 45 50 55 60 I 64 —Premium 1,021 1,021 1,021 1,021 1,021 1,021 1,021 1,021 1,021 }Male Cost by Age 371 412 487 579 696 866 1,094 1,376 1,636 }Female Cost by Age 612 780 857 876 927 1,044 1,196 1,386 1,579 Age ■ The City included the implied subsidy beginning with the June 30, 2013 valuation. May 21, 2024 7 IMPLIED SUBSIDY This page intentionally blank N -, A P� May 21, 2024 Item 28: Staff Report Pg. 95 Packet Pg. 661 of 857 PARTICIPANT STATISTICS Participant Statistics Item 28 Attachment D - June 30, 2023 OPEB Actuarial Valuation Report (CMR 6/30/15 6/30/17 6/30/19 6/ L4UL-Lb/SJ.3 • Actives • Count 955 967 930 874 902 • Average Age 45.3 45.6 44.8 45.0 44.6 • Average City Service 10.8 10.9 10.8 11.2 10.4 • Average PERS Service 11.9 11.9 11.7 12.1 11.4 • Average Salary $91,714 $90,739 $110,969 $120,207 $134,338 • Total Salary (000's) $87,586 $87,745 $103,201 $105,061 $121,173 • Retirees: • Count6 1,007 9598 974 1,009 1,031 • Average Age 68.9 68.9 70.0 70.9 71.5 • Average Retirement Age o Service 57.7 57.7 58.0 58.2 58.2 o Disability 45.6 45.9 46.1 46.3 45.8 6 Excludes all waived retirees, regardless of age, except as noted. 7 Includes 68 waived retirees over 65. 8 Excludes all waived retirees over 65; includes 38 waived under 65 retirees. cDMay 21, 2024 9 PARTICIPANT STATISTICS Historical Active and Retiree Counts9 2,500 2,000 1,500 50% 49% 50% 49% 46% 47% 52% 1,000 R 500 48%iIii{. °° 53% 6/30/09 6/30/11 6/30/13 6/30/15 6/30/17 6/30/19 6/30/21 6/30/23 ■ Active 955 923 948 955 967 I 930 874 902 ■ Retired 710 860 968 1,007 959 974 1,009 1,031 ' Retiree count is subscribers: retirees and surviving spouses May 21, 2024 Item 28: Staff Report Pg. 96 F P� Packet Pg. 662 of 857 PARTICIPANT STATISTICS Participant Statistics June 30, 2023 Item 28 Attachment D - June 30, 2023 OPEB Actuarial Valuation Report (CMR 2402-2673).pdf Group 1 Group 2 Group 3 Group 4 Total • Actives • Count n/a n/a 57 845 902 • Average Age n/a n/a 55.8 43.9 44.6 • Average Entry Age n/a n/a 31.5 34.4 34.2 • Average City Service n/a n/a 24.3 9.5 10.4 • Average PERS Service n/a n/a 24.4 10.5 11.4 • Average Salary n/a n/a $134,880 $134,302 $134,338 • Total Salary (000's)1° n/a n/a 7,688 113,485 121,173 • Benefitting Retireesll: • Count 396 280 165 190 1,031 • Average Age 79.3 70.7 65.7 61.5 71.5 • Avg Service Ret Age 57.3 57.8 59.1 59.0 58.2 • Avg Disability Ret Age 44.7 46.9 51.2 48.1 45.8 1° Based on June 30, 2023 PERSable pay rate. 11 Excludes retirees who have waived coverage, regardless of age. cDMay 21, 2024 11 PARTICIPANT STATISTICS Participant Statistics June 30, 2021 Group 1 Group 2 Group 3• Group 4 Total • Actives • Count n/a n/a 69 805 874 • Average Age n/a n/a 54.1 44.2 45.0 • Average Entry Age n/a n/a 31.5 34.0 33.8 • Average City Service n/a n/a 22.6 10.2 11.2 • Average PERS Service n/a n/a 22.8 11.2 12.1 • Average Salary n/a n/a $114,220 $120,720 $120,207 • Total Salary 000s 12 n/a n/a 7,881 97,180 105,061 • Benefitting Retireesl3: • Count 429 290 152 138 1,009 • Average Age 77.8 68.8 64.0 61.4 70.9 • Avg Service Ret Age 57.5 57.9 59.1 59.4 58.2 • Avg Disability Ret Age 45.5 46.9 51.2 49.3 46.3 12 Actual 2020/21 PERSable compensation. 13 Excludes retirees who have waived coverage, regardless of age. May 21, 2024 Item 28: Staff Report Pg. 97 F P� Packet Pg. 663 of 857 PARTICIPANT STATISTICS Data Reconciliationl4 6/30/2021 to 6/30/2023 Item 28 Attachment D - June 30, 2023 OPEB Actuarial Valuation Report (CMR 2402-2673).pdf Actives Retirees Disabled Benefic. Total ■ June 30, 2021 874 786 144 79 1,883 • New Hires/Rehires 199 - - - 199 • Disabled (8) - 8 - - • Terminated15 (100) - - - (100) • Died with Beneficiary16 - (8) (5) 13 - • Died, no Beneficiary - (25) (7) (10) (42) • Retired/covered (54) 54 - - - • Retired/waived (9) - - - (9) • Waived Retiree - (9) - (1) (10) • Adjustment/Other - 7 1 4 12 • June 30, 2023 902 805 141 85 1,933 14 Excludes retirees who have waived coverage. 15 All actives in June 30, 2021 valuation and not in June 30, 2023 valuation assumed terminated. 16 Retirees in the June 30, 2021 valuation not in the June 30, 2023 valuation assumed deceased. May 21, 2024 13 PARTICIPANT STATISTICS This page intentionally blank N -, A FPS `td May 21, 2024 Item 28: Staff Report Pg. 98 Packet Pg. 664 of 857 ACTUARIAL ASSUMPTIONS HIGHLIGHTS Item 28 Attachment D - June 30, 2023 OPEB Actuarial June 30, 2021 Valuation Valuation Report (CMR June 30,J1 2402-2673).pdf • Valuation ■ June 30, 2021 ■ June 30, 2023 Date ■ ADC for Fiscal Years ■ ADC for Fiscal Years 2022/23 & 2023/24 2024/25 & 2025/26 (end of year) (end of year) ■ 1 year lag ■ 1 year lag • Funding ■ Full Pre -funding through ■ Same Policy CalPERS trust (CERBT) Strategy #1 ■ City may contribute additional amounts based on lower discount rate • Discount Rate ■ 6.25%, net of expenses based on ■ Same CERBT Strategy #1 • General ■ 2.50% ■ Same Inflation May 21, 2024 15 ACTUARIAL ASSUMPTIONS HIGHLIGHTS June 30, 2021 Valuation June 30, 2023 Valuation • Payroll ■ Aggregate Increases: 2.75% ■ Same Increases ■ Merit Increases: CalPERS 2000- 2019 Experience Stud • Increase to ■ 1/2 of Medical Trend, not less ■ Same Group 3 Flat than assumed inflation (2.50%) Dollar Caps17 • Medical ■ Non -Medicare: 6.50% for 2023, ■ Non -Medicare: 8.50% for Trend decreasing to an ultimate rate of 2025, decreasing to an 3.75% in 2076 ultimate rate of 3.45% in 2076 ■ Medicare: 5.65% (non -Kaiser) ■ Medicare: 7.50% (non -Kaiser) and 4.60% (Kaiser) for 2023, and 6.25% (Kaiser) for 2025, decreasing to an ultimate rate of decreasing to an ultimate rate 3.75% in 2076 of 3.45% in 2076 17 Increase is for purposes of financial projection only and does not imply any obligation to increase the cap in the future. May 21, 2024 Item 28: Staff Report Pg. 99 Packet Pg. 665 of 857 ACTUARIAL ASSUMPTIONS HIGHLIGHTS Item 28 Attachment D - June 30, 2023 OPEB Actuarial June 30, 2021 Valuation Valuation Report (CMR June 30,J1 2402-2673).pdf ■ Same • Participation ■ Group 3: 98% at Retirement ■ Group 4: if eligible for City contribution: 95%; if not: 0% ■ Based on Plan experience18 • Retirement, ■ CalPERS 2000-2019 Experience ■ Same Mortality, Study Termination, ■ Society of Actuaries mortality Disability improvement scale MP -21 • Age -related ■ Included ■ Same Claims Costs ■ Due to age -risk adjusted federal for Medicare subsidies, no age -based claims Advantage costs were included for Plans Medicare Advantage plans Actual participation percentage for Group 3 since 6/30/17 is 100% for Miscellaneous (there are no active Safety members in Group 3). Actual participation percentage for Group 4 since 6/30/17 who are eligible for a City contribution is 91%. Group 4 still has limited actual experience. We recommend continued monitoring for Group 4. May 21, 2024 17 ACTUARIAL ASSUMPTIONS HIGHLIGHTS June 30, 2021 Valuation June 30, 2023 Valuation ■ Basis for ■ No experience study performed for this Plan Assumptions ■ CalPERS experience study covering 2000 to 2019 experience was (6/30/23 used Valuation) ■ Mortality improvement is a Society of Actuaries table ■ Inflation based on our estimate for the Plan's long time horizon ■ Capital market assumptions based on 2021 Foster & Foster stochastic analysis, taking into account capital market assumptions of investment advisory firms ■ Medical trends were based on expectations over the short term blended into long term medical trends developed using the Society of Actuaries Getzen Model of Long -Run Medical Cost Trends ■ Age -based claims costs are based on tables published by the Society of Actuaries and demographic data for the CalPERS health plans provided by CalPERS ■ Medical coverage and participation based in part on Plan experience VMay 21, 2024 Item 28: Staff Report Pg. 100 Packet Pg. 666 of 857 ACTUARIAL ASSUMPTIONS HIGHLIGHTS CERBT Investment Options ■ Asset Allocation Item 28 Attachment D - June 30, 2023 OPEB Actuarial Valuation Report (CMR 2402-2673).pdf Strategy 1 Strategy 2 Strategy 3 Global Equity 49% 34% 23% Long US Fixed Income 23% 41% 51% TIPS 5% 5% 9% Commodities 3% 3% 3% Global REITs 20% 17% 14% Total 100% 100% 100% CalPERS' projected 20 -year 6.0% 5.5% 5.0% 19 CaIPERS assumes 2.25% price inflation. F May 21, 2024 19 ACTUARIAL ASSUMPTIONS HIGHLIGHTS Discount Rate ■ Future expected returns • Stochastic simulations of geometric average returns over 20 years — 5,000 trials • 2.50% inflation assumption • Projections based on 8 independent Investment Advisors 2021 10 -year Capital Market Assumptions and where available, investment advisors long-term trends • Confidence levels: Strategy 1 Strategy 2 Strategy 3 50% Confidence Level 6.25% 5.75% 5.25% 55% Confidence Level 6.00% 5.50% 5.00% 60% Confidence Level 5.75% 5.25% 4.75% • Expected returns, 50' percentile: Strategy 1 Strategy 2 Strategy 3 Expected Real Rate of Return20 3.90% 3.39% 2.92% Inflation Assumption 2.50% 2.50% 2.50% Investment Expenses (0.05%) (0.05%) (0.05%) Nominal Rate of Return 6.35% 5.84% 5.37% Rounded to nearest 0.25% 6.25% 5.75% 5.25% • City currently in Strategy 1: Recommend 6.25% discount rate 20 Includes investment expenses May 21, 2024 Item 28: Staff Report Pg. 101 F P� 3. Packet Pg. 667 of 857 ACTUARIAL METHODS Item 28 Attachment D - June 30, 2023 OPEB Actuarial Method June 30, 2021 Valuation aluation Report (CMR June 30, L 2402-2673).pdf • Cost Method ■ Entry Age Normal Level % ■ Same of Pay • Unfunded Liability ■ 22 years closed period ■ 20 years closed period Amortization ■ Level % of pay (2.75% ■ Level % of pay (2.75% annual escalation) annual escalation) ■ Sensitivity analysis: ■ Sensitivity analysis: 20 & 18 years 18 years • Actuarial Asset Value ■ Market Value of Assets21 ■ Same • Future New Entrants ■ Closed group — no new participants • Implied Subsidy ■ Implied subsidy valued • Plan Continuance ■ For purposes of financial projections, the plan and benefits are assumed to continue unchanged. The calculation of this obligation does not imply that there is any legal liability to provide or continue providing the benefits valued. 21 Using Market Value of Assets to determine the ADC will result in more volatile future ADCs than if a smoothed Market Value were used. For funding purposes, market value includes accrued contributions made for a previous fiscal year. May 21, 2024 21 ACTUARIAL METHODS This page intentionally blank N -, A FPS May 21, 2024 Item 28: Staff Report Pg. 102 Packet Pg. 668 of 857 ASSETS Market Value of Plan Assets (MVA) Invested in CERBT Strategy 1 Fund (Amounts in 000's) Item 28 Attachment D - June 30, 2023 OPEB Actuarial Valuation Report (CMR 2402-2673).pdf 2019/20 2020/21 2021/22 2022/23 ■MVA (Beg. of Year) $118,497 $126,520 $164,170 $144,745 • Contributions 3,747 2,94622 2,904 2,032 • Benefit Payments23 - - - - • Admin. Expenses (59) (71) (80) (72) • Investment Return24 4,335 34,776 (22,249) 9,356 126,520 164,170 144,745 ■MVA (End of Year) 156,061 EuApprox.AnnualReturn 3.6% 27.5% (13.5)% 6.4% 22 Includes $1,358 paid on 1/10/2022; MVA shown is not the same as market value for financial reporting purposes. 23 Benefit Payments made outside of trust by City in years other than 2018/19. Refer to Slide 5 for fiscal year amounts. 24 Net of investment expenses. May 21, 2024 23 ASSETS Historical Returns JV/° 25% 20% ---------- 15% 10% 5% 0% (5%) (10%) (15%) 08/09 09/10 10/11 11/12 12/13 13/14 14/15 15/16 16/17 17/18 18/19 19/20 20/21 21/22 22/23 Market Value -22.5% 15.1% 24.4% 0.1% 11.2% 18.2% -0.2% 1.1% 10.40 7.8% 6.3% 3.6% 27.5% -13.5% 6.4% — Expected Return 7.75% 7.75% 7.75% 7.75% 7.75% 7.75% 7.61% 7.25% 7.25% 6.75% 6.75% 6.75% 6.75% 6.25% 6.25% �`I� evnro U May 21, 2024 Item 28: Staff Report Pg. 103 Packet Pg. 669 of 857 RESULTS Actuarial Obligations (Amounts in 000's) Item 28 Attachment D - June 30, 2023 OPEB Actuarial Valuation Report (CMR 2402-2673).pdf • Valuation Date 6/30/2021 6/30/2023 • Discount Rate 6.25% 6.25% • Present Value of Benefits (PVB) • Actives (future retirees) $131,926 $154,864 • Retirees 169,243 192,253 • Total 301,169 347,117 • Actuarial Accrued Liability (AAL) • Actives (future retirees) 74,954 84,319 • Retirees 169,243 192,253 • Total 244,197 276,572 • Market Value of Assets (MVA) 164,170 156,061 • Unfunded AAL (UAAL) 80,027 120,511 • Funded Ratio 67% 56% • Normal Cost25 6,316 7,614 • Pay -As -You -Go Cost (Cash) 11,190 12,827 • Pay -As -You -Go Cost (IS) 3,025 2,745 25 Includes Administration fees. F May 21, 2024 25 RESULTS Historical Funded Status (Amounts in 000's) $300,000 $250,000 $200,000 $150,000 $100,000 $50,000 $0 1/1/11 6/30/11 6/30/13 6/30/15 6/30/17 6/30/19 6/30/21 6/30/23 Retiree pay -go o Retiree AAL less pay -go o Active AAL -t-AVA --MVA I X% Funded Ratio May 21, 2024 Item 28: Staff Report Pg. 104 F P� Packet Pg. 670 of 857 RESULTS Actuarial Gain/Loss (Amounts in $000's) Item 28 Attachment D - June 30, 2023 OPEB Actuarial Valuation Report (CMR 2402-2673).pdf AAL Assets UAAL ■ Actual 6/30/21 $244,197 $164,170 $80,027 ■ Expected 6/30/23 260,018 184,228 75,790 • Experience (Gains)/Losses •Premiums/Caps different than expected 286 286 •Demographic & other (2,315) (2,315) ■ Assumption Changes increasing/(decreasing) AAL •Medical Plan election percentages changed 1,269 1,269 •Updated medical trend 17,314 17,314 ■Contribution and Benefit Payment Gain 6,131 (6,131) • Investment Loss (34,297) 34,297 ■ Total UAAL (Gain)/Loss 16,554 (28,167) 44,721 ■ Actual 6/30/23 276,572 156,061 120,511 May 21, 2024 27 RESULTS Actuarially Determined Contribution (ADC) (Amounts in 000's) 6/30/21 Valuation 6/30/23 Valuation 2022/23 2023/24 2024/25 2025/26 • Discount Rate 6.25% 6.25% • ADC-$ • Normal Cost $ 6,196 $ 6,370 $ 7,489 $ 7,674 • Administrative Expenses26 120 126 125 133 • UAAL Amortization 5,112 5,253 8,802 9,044 • Total 11,428 11,749 16,416 16,851 • Projected Payroll 110,919 113,969 127,929 131,447 • ADC — Percent of Pay • Normal Cost 5.6% 5.6% 5.9% 5.8% • Administrative Expenses 0.1% 0.1% 0.1% 0.1% • UAAL Amortization 4.6% 4.6% 6.9% 6.9% • Total 10.3% 10.3% 12.8% 12.8% 26 Includes PEMHCA and CERBT administration fees. May 21, 2024 Item 28: Staff Report Pg. 105 F P� Packet Pg. 671 of 857 RESULTS 7 Determined ( (Amounts in 000's) C) Pa Item 28 Attachment D - June 30, 2023 OPEB Actuarial Valuation Report (CMR 2402-2673).pdf 6/30/23 Valuation 2024/25 2025/26 • Discount Rate 6.25% • ADC-$ • Normal cost $ 7,489 $ 7,674 • Administrative expenses27 125 133 • UAAL amortization 8,802 9,044 • Total 16,416 16,851 • Less: Implied subsidy benefit payments 2,745 2,871 • Remaining ADC 13,671 13,980 • Less: Estimated cash benefit payments 12,827 13,565 • Total Trust contribution 844 415 (If negative, indicates a reimbursement for City out-of-pocket a ments ma be re uested. 27 Includes PEMHCA and CERBT administration fees. May 21, 2024 29 RESULTS Historical Recommended Funding Contributions (Amounts in 000's) a 1a,l1111/ $16,000 $14,000 $12,000 $10,000 $8,000 $6,000 $4,000 $2,000 $0 —- -- — - 11/12 12/13 13/14 14/15 5,674 15/16 16/17 17/18 18/19 19/20 20/21 21/22 22/23 23/24 24/25 25/26 ■ Nom,nl Cost+ Admen 4,782 5,091 5,256 5,880 6,340 6,587 7,104 7,299 6,978 7,197 6,316 6,496 7,614 7,807 ■ Amortization 7,802 7,665 7,779 8,607 8,887 10,025 10,351 8916 9,183 7,588 7,816 5,112 5,253 8,802 9,044 ADC 12,584 12,756 13,035 14,282 14,767 16,365 16,938 15,997 16,482 14,566 15,013 11,428 11.749 16,416 16,851 May 21, 2024 Item 28: Staff Report Pg. 106 Packet Pg. 672 of 857 RESULTS Amortization Bases & Payments (Amounts in 000's) Item 28 Attachment D - June 30, 2023 OPEB Actuarial Valuation Report (CMR 2402-2673).pdf 6/30/21 Valuation 6/30/23 Valuation 6/30/22 6/30/23 6/30/24 6/30/25 • Discount Rate 6.25% 2.75% 6.25% 2.75% • Payment Escalator • UAAL Balance • Amortization Payment $ 76,159 5,112 $ 75,807 5,253 $ 122,790 8,802 $ 121,662 9,044 • Amortization Period (years) 22 21 20 19 May 21, 2024 31 RESULTS 10 Year Contribution Projection (Amounts in 000's) Contribution ADC UAAL Cash Implied Trust Benefit Subsidy Pre- % of Beg. Of Fund FYE ADC28 Payment BP Funding Total Payroll Pay FY % 2025 $16,416 $12,827 $2,745 $844 $16,416 $127,929 12.8% $122,791 57% 2026 16,851 13,565 2,871 415 16,851 131,447 12.8% 121,662 59% 2027 17,318 14,286 3,017 15 17,318 135,062 12.8% 120,223 61% 2028 17,785 14,868 2,992 (75) 17,785 138,776 12.8% 118,444 62% 2029 18,276 15,590 3,089 (403) 18,276 142,593 12.8% 116,298 64% 2030 18,775 16,348 3,285 (858) 18,775 146,514 12.8% 113,755 66% 2031 19,271 16,933 3,312 (974) 19,271 150,543 12.8% 110,784 68% 2032 19,803 17,554 3,434 (1,185) 19,803 154,683 12.8% 107,350 69% 2033 20,347 18,086 3,516 (1,255) 20,347 158,937 12.8% 103,416 71% 2034 20,882 18,626 3,575 (1,319) 20,882 163,307 12.8% 98,944 73% 28 Actuarially Determined Contribution May 21, 2024 Item 28: Staff Report Pg. 107 F P� Packet Pg. 673 of 857 RESULTS Item 28 Attachment D - June 30, 2023 OPEB Actuarial ADC, Benefit and Trust Payment/Reimbursement Projecti Valuation Report (CMR (6.25% Discount Rate, 20 years level % of pay amortization) 2402-2673).pdf $30 $25 $20 $15 $10 t $5 $0 -$5 -$10 -$15 — Net Trust Payment/Reimbursement — Benefit Payments — Total ADC May 21, 2024 $140 $120 It $100 $80 $60 $40 $20 „gyp\ ,jp\ „gyp\ ,5p\ „gyp\ 33 RESULTS UAAL and Funded Ratio Projection (6.25% Discount Rate, 20 years amortization) $0 , 1 6\gyp\�lo\�p\fib\gyp\fib\gyp\ryU\U\b3p\� 6\gyp\� lo\3p\� 6\gyp\ U\P\� b\gyp\� 6\gyp\� U\P\� 6\P �3p\D \gyp\0.fo\�p\tt\gygyp\ b\gyp\A5 \gyp\ Z\N Z\O UAAL — Funded Ratio cD 120% 100% 80% C 60% 0 p 40% 20% 0% May 21, 2024 Item 28: Staff Report Pg. 108 F P� Packet Pg. 674 of 857 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% May 21, 2024 RESULTS Miscellaneous 6/30/09 6/30/11 6/30/13 6/30/15 6/30/17 6/30/19 6/30/21 6/30/23 Actives —u-Retirees 35 Item 28 Attachment D - June 30, 2023 OPEB Actuarial Valuation Report (CMR 2402-2673).pdf RESULTS r � % of Total Actuarial Accrued Liability for Actives and Retirees Safety 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 6/30/09 6/30/11 6/30/13 6/30/15 6/30/17 6/30/19 6/30/21 6/30/23 -4--Actives -Retirees May 21, 2024 Item 28: Staff Report Pg. 109 Packet Pg. 675 of 857 ________ 'TI RESULTS This chart excludes the Implied Subsidy and is provided for informational purposes i (Amounts in 000's) Item 28 Attachment D - June 30, 2023 OPEB Actuarial Valuation Report (CMR 2402-2673).pdf Cash Benefit • Present Value of Benefits $ 294,841 • Funded Status 6/30/23 • Actuarial Accrued Liability 232,822 • Actuarial Value of Assets29 156,061 • Unfunded AAL 76,761 • Funded Ratio 67.0% • ADC 2024/25 • Normal Cost 6,570 • Administrative Expenses 125 • UAAL Amortization 5,590 • Total 12,285 • ADC % of Payroll 9.6% 29 All assets allocated to the cash benefit for illustrative purposes only. May 21, 2024 37 RESULTS This page intentionally blank N -, A FPS r' May 21, 2024 Item 28: Staff Report Pg. 110 Packet Pg. 676 of 857 RESULTS - DETAILS June 30, 2023 (Amounts in 000's) Item 28 Attachment D - June 30, 2023 OPEB Actuarial Valuation Report (CMR 2402-2673).pdf Benefits Benefits Paid Paid On Before or After Age 65 Age 65 Total ■ Present Value of Benefits • Actives (future retirees) $78,087 $76,777 $154,864 • Retirees 48,369 143,884 192,253 • Total 126,456 220,661 347,117 ■ Actuarial Accrued Liability • Actives (future retirees) 40,543 43,776 84,319 • Retirees 48,369 143,884 192,253 • Total 88,912 187,660 276,572 ■ Normal Cost 2024/2530 3,872 3,741 7,614 30 Includes Administration fees. F May 21, 2024 39 RESULTS - DETAILS � w Actuarial Obligations by Group June 30, 2023 (Amounts in 000's) Group 1 Group 2 Group 3 Group 4 Total ■ Present Value of Benefits • Actives (future retirees) • Retirees • Total $ - 47,911 47,911 $ - 53,548 53,548 $12,507 36,227 48,734 $142,358 54,567 $154,864 192,253 347,117 196,925 ■ Actuarial Accrued Liability • Actives (future retirees) • Retirees • Total - 47,911 47,911 - 53,548 53,548 10,597 36,227 46,824 73,722 54,567 84,319 192,253 276,572 128,289 ■ Normal Cost 2024/2531 n/a n/a 353 7,261 7,614 ■ NC as % of Payroll n/a n/a 5.0% 6.0% 6.0% ■ Active Count n/a n/a 57 845 902 ■ Projected Payroll n/a n/a 7,128 120,801 127,929 31 Includes Administration fees. May 21, 2024 Item 28: Staff Report Pg. 111 P� Packet Pg. 677 of 857 RESULTS - DETAILS June 30, 2023 (Amounts in 000's) Item 28 Attachment D - June 30, 2023 OPEB Actuarial Valuation Report (CMR 2402-2673).pdf Cash Implied Subsid Subsidy Total ■ Present Value of Benefits • Actives (future retirees) $134,797 $20,067 $154,864 • Retirees 160,044 32,209 192,253 • Total 294,841 52,276 347,117 • Actuarial Accrued Liability • Actives (future retirees) 72,778 11,542 84,319 • Retirees 160,044 32,209 192,253 • Total 232,822 43,751 276,572 • Market Value of Assets32 131,374 24,687 156,061 • Unfunded AAL 101,448 19,064 120,511 • Normal Cost 2024/2533 6,695 919 7,614 • Pay -As -You -Go Cost 2024/25 12,827 2,745 15,572 32 Allocated in proportion to AAL for illustrative purposes. 33 Includes Administration fees. cDMay 21, 2024 41 RESULTS - DETAILS � w Actuarially Determined Contribution by Cash/Implied Subsidy 2024/25 Fiscal Year (Amounts in 000's) Cash Implied Subsidy Subsidy Total ■ ADC-$ • Normal Cost $ 6,570 $ 919 $ 7,489 • Administrative Expenses 125 - 125 • UAAL Amortization 7,424 1,378 8,802 • ADC 14,119 2,297 16,416 • Projected Payroll 127,929 127,929 127,929 • ADC - % of Payroll • Normal Cost 5.1% 0.7% 5.9% • Administrative Expenses 0.1% 0.0% 0.1% • UAAL Amortization 5.8% 1.1% 6.9% • ADC 11.0% 1.8% 12.8% VMay 21, 2024 Item 28: Staff Report Pg. 112 Packet Pg. 678 of 857 RESULTS - DETAILS Actuarial Obligations by Misc/Safety June 30, 2023 (Amounts in 000's) Item 28 Attachment D - June 30, 2023 OPEB Actuarial Valuation Report (CMR 2402-2673).pdf Misc Safety Total ■ Present Value of Benefits • Actives (future retirees) $112,057 $42,807 $154,864 • Retirees 120,219 72,034 192,253 • Total 232,276 114,841 347,117 • Actuarial Accrued Liability • Actives (future retirees) 63,059 21,260 84,319 • Retirees 120,219 72,034 192,253 • Total 183,278 93,294 276,572 • Market Value of Assets34 103,418 52,643 156,061 • Unfunded AAL 79,860 40,651 120,511 • Normal Cost 2024/2535 5,495 2,118 7,614 • Pay -As -You -Go Cost 2024/25 10,278 5,294 15,572 34 Allocated in proportion to the Actuarial Accrued Liability. 35 Includes Administration fees. cDMay 21, 2024 43 RESULTS - DETAILS Actuarially Determined Contribution by Misc/Safety 2024/25 Fiscal Year (Amounts in 000's) Misc Safety Total ■ ADC-$ • Normal Cost $ 5,412 $ 2,077 $ 7,489 • Administrative Expenses 83 42 125 • UAAL Amortization 5,848 2,954 8,802 • ADC 11,344 5,072 16,416 • Projected Payroll 101,964 25,965 127,929 • ADC - % of Payroll • Normal Cost 5.3% 8.0% 5.9% • Administrative Expenses 0.1% 0.2% 0.1% • UAAL Amortization 5.7% 11.4% 6.9% • ADC 11.1% 19.5% 12.8% P� VMay 21, 2024 Item 28: Staff Report Pg. 113 Packet Pg. 679 of 857 RESULTS - DETAILS Actuarial Obligations by Bargaining Unit June 30, 2023 (Amounts in 000's) Item 28 Attachment D - June 30, 2023 OPEB Actuarial Valuation Report (CMR 2402-2673).pdf FCA IAFF MIC PAPOA PMA SEIU UMPAPA Total ■ PVB • Actives $1,362 $20,223 $32,491 $17,294 $2,521 $72,048 $8,927 $154,864 • Retirees 2,714 34,636 52,789 25,202 2,593 65,881 8,438 192,253 • Total 4,076 54,859 85,280 42,496 5,114 137,929 17,365 347,117 ■ AAL • Actives 1,074 9,545 18,930 7,485 2,058 38,985 6,242 84,319 • Retirees 2,714 34,636 52,789 25,202 2,593 65,881 8,438 192,253 • Total 3,788 44,181 71,719 32,687 4,651 104,866 14,680 276,572 • MVA36 2,137 24,930 40,469 18,444 2,624 59,173 8,283 156,061 • UAAL 1,651 19,251 31,250 14,243 2,027 45,693 6,397 120,511 • NC 24/2537 48 928 1,617 981 102 3,583 356 7,614 • Pay -Go 205 2,624 4,315 1,771 174 5,749 734 15,572 36 Allocated in proportion to the Actuarial Accrued Liability. 37 Includes Administration fees. cDMay 21, 2024 45 RESULTS - DETAILS Actuarially Determined Contribution by Bargaining Unit 2024/25 Fiscal Year (Amounts in 000's) FCA IAFF M/C PAPOA PMA SEIU UMPAPA Total • ADC-$ • Normal Cost $ 46 $ 908 $ 1,585 $ 966 $ 99 $ 3,536 $ 350 $ 7,489 • Admin. Expenses 2 20 32 15 2 48 7 125 • UAAL Amort 119 1,393 2,265 1,045 150 3,363 468 8,802 • ADC 166 2,321 3,881 2,026 252 6,947 824 16,416 • Projected Payroll 803 10,826 34,117 11,174 1,880 59,705 9,424 127,929 • ADC-% • Normal Cost 5.7% 8.4% 4.6% 8.6% 5.3% 5.9% 3.7% 5.9% • Admin. Expenses 0.2% 0.2% 0.1% 0.1% 0.1% 0.1% 0.1% 0.1% • UAAL Amort 14.8% 12.9% 6.6% 9.3% 8.0% 5.6% 5.0% 6.9% 20.7% 13.4% • ADC 21.4% 11.4% 18.1% 11.6% 8.7% 12.8% May 21, 2024 Item 28: Staff Report Pg. 114 Packet Pg. 680 of 857 RESULTS - DETAILS 2025/26 Fiscal Year (Amounts in 000's) Item 28 Attachment D - June 30, 2023 OPEB Actuarial Valuation Report (CMR 2402-2673).pdf FCA IAFF M/C PAPOA PMA SEIU UMPAPA Total • ADC-$ • Normal Cost $ 47 $ 931 $ 1,624 $ 990 $ 102 $ 3,623 $ 358 $ 7,674 • Admin. Expenses 2 21 34 16 2 51 7 133 • UAAL Amort 122 1,431 2,327 1,073 154 3,456 481 9,044 • ADC 171 2,383 3,985 2,079 259 7,130 846 16,851 • Projected Payroll 826 11,123 35,055 11,481 1,932 61,347 9,683 131,447 • ADC-% • Normal Cost 5.7% 8.4% 4.6% 8.6% 5.3% 5.9% 3.7% 5.8% • Admin. Expenses 0.2% 0.2% 0.1% 0.1% 0.1% 0.1% 0.1% 0.1% • UAAL Amort 14.8% 12.9% 6.6% 9.3% 8.0% 5.6% 5.0% 6.9% 20.7% 13.4% • ADC 21.4% 11.4% 18.1% 11.6% 8.7% 12.8% May 21, 2024 47 RESULTS - DETAILS This page intentionally blank N -, A FPS May 21, 2024 Item 28: Staff Report Pg. 115 Packet Pg. 681 of 857 SENSITIVITY ANALYSIS Discount Rate Sensitivity (Amounts in 000's) Item 28 Attachment D - June 30, 2023 OPEB Actuarial Valuation Report (CMR 2402-2673).pdf CERBT Strategy #1 (Current) #2 #3 • Discount Rate 6.25% 5.75% 5.25% • Present Value of Benefits $347,117 $375,439 $407,741 • Funded Status 6/30/23 • Actuarial Accrued Liability 276,572 293,120 311,327 • Assets 156,061 156,061 156,061 • Unfunded AAL 120,511 137,059 155,266 • Funded Ratio 56.4% 53.2% 50.1% • ADC 2024/25 • Normal Cost 7,489 8,379 9,394 • Administrative Expenses 125 125 125 • UAAL Amortization38 8,802 9,582 10,377 • Total 16,416 18,085 19,896 • ADC % of Pa roll 12.8% 14.1% 15.6% 38 UAAL amortized over 20 years for all scenarios. May 21, 2024 49 SENSITIVITY ANALYSIS Amortization Period Sensitivity Discount Rate — 6.25%, Level % of Pay with 2.75% Payment Escalation (Amounts in 000's) Current • Amortization Period 20 Years 18 Years • Funded Status 6/30/23 • Actuarial Accrued Liability $276,572 $276,572 • Assets 156,061 156,061 • Unfunded AAL 120,511 120,511 • Total Projected Payroll 2024/25 127,929 127,929 • ADC 2024/25 • Normal Cost 7,489 7,489 • Administrative Expenses 125 125 • UAAL Amortization 8,802 9,492 • Total 16,416 17,105 • ADC % of Payroll 12.8% 13.4% P� UMay 21, 2024 Item 28: Staff Report Pg. 116 Packet Pg. 682 of 857 SENSITIVITY ANALYSIS Amortization Period Sensitivity Discount Rate — 5.75%, Level % of Pay with 2.75% Paymen (Amounts in 000's) Item 28 Attachment D - June 30, 2023 OPEB Actuarial Valuation Report (CMR 2402-2673).pdf Current • Amortization Period 20 Years 18 Years • Funded Status 6/30/23 • Actuarial Accrued Liability $293,120 $293,120 • Assets 156,061 156,061 • Unfunded AAL 137,059 137,059 • Total Projected Payroll 2024/25 127,929 127,929 • ADC 2024/25 • Normal Cost 8,379 8,379 • Administrative Expenses 125 125 • UAAL Amortization 9,582 10,371 • Total 18,085 18,875 • ADC%ofPayroll 14.1% 14.8% May 21, 2024 51 SENSITIVITY ANALYSIS Actuarial Obligations by Bargaining Unit — 5.75% June 30, 2023 (Amounts in 000's) FCA IAFF M/C PAPOA PMA SEIU UMPAPA Total ■ PVB • Actives $1,487 $22,844 $36,048 $19,489 $2,733 $80,761 $9,832 $173,194 • Retirees 2,865 36,463 55,395 26,661 2,773 69,183 8,905 202,245 • Total 4,352 59,307 91,443 46,150 5,506 149,944 18,737 375,439 ■ AAL • Actives 1,153 10,284 20,354 8,089 2,200 42,076 6,719 90,875 • Retirees 2,865 36,463 55,395 26,661 2,773 69,183 8,905 202,245 • Total 4,018 46,747 75,749 34,750 4,973 111,259 15,624 293,120 • MVA39 2,139 24,889 40,330 18,501 2,648 59,236 8,318 156,061 • UAAL 1,879 21,858 35,419 16,249 2,325 52,023 7,306 137,059 • NC 24/2540 54 1,039 1,797 1,091 115 4,007 399 8,504 • Pay -Go 205 2,624 4,315 1,771 174 5,749 734 15,572 39 Allocated in proportion to the Actuarial Accrued Liability. 40 Includes Administration fees. May 21, 2024 Item 28: Staff Report Pg. 117 F P� Packet Pg. 683 of 857 SENSITIVITY ANALYSIS 10 Year Contribution Projection — 5.75% 13 Year Amortization (Amounts in 000's) Item 28 Attachment D - June 30, 2023 OPEB Actuarial Valuation Report (CMR 2402-2673).pdf Contribution ADC UAAL Cash Implied Trust Benefit Subsidy Pre- % of Beg. Of Fund FYE ADC41 Payment BP Funding Total Payroll Pay FY % 2025 $21,996 $12,827 $2,745 $6,424 $21,996 $127,929 17.2% $140,372 54% 2026 22,551 13,565 2,871 6,115 22,551 131,447 17.2% 134,951 57% 2027 23,180 14,286 3,017 5,877 23,180 135,062 17.2% 128,847 60% 2028 23,812 14,868 2,992 5,952 23,812 138,776 17.2% 122,011 63% 2029 24,474 15,590 3,089 5,795 24,474 142,593 17.2% 114,390 67% 2030 25,147 16,348 3,285 5,514 25,147 146,514 17.2% 105,928 70% 2031 25,821 16,933 3,312 5,576 25,821 150,543 17.2% 96,567 73% 2032 26,538 17,554 3,434 5,550 26,538 154,683 17.2% 86,242 77% 2033 27,272 18,086 3,516 5,670 27,272 158,937 17.2% 74,886 80% 2034 27,999 18,626 3,575 5,798 27,999 163,307 17.1% 62,429 84% 41 Actuarially Determined Contribution May 21, 2024 53 55% 50% 45% 40% 35% O.r O 30% 25% 20% 15% 10% 5% COMPARISON TO OTHER AGENCIES Foster & Foster California OPEB Database Sample Percentile Graph — 95th Percentile • 751h Percentile 50%of 90%of results results are 50th Percentile are within within this this range range 25th Percentile - 5th Percentile May 21, 2024 Item 28: Staff Report Pg. 118 e vuo Packet Pg. 684 of 857 COMPARISON TO OTHER AGENCIES Foster & Foster California OPEB Database 40/ Normal Cost & Actuarially Determined Contribution 35% 30% 25% 8 20% _... _.. a 15% 0% 5% 0% Miscellaneous Safety NC ADC NC ADC 95th Percentile 10.9% 24.2% 12.3% 35.5% 75th Percentile 5.4% 10.8% 5.0% 15.8% 50th Percentile 2.8% 5.4% 2.6% 6.2% 25th Percentile 1.5% 2.6% 1.5% 3.3% 5th Percentile 0.7% 0.7% 0.7% 0.9% Percent of Pay ($) 5.3% 11.1% 8.0% 19.5% Percentile 74% 76% 88% 84% Discount Rate = 6.25%, Average Amortization Period = 20.0 Years May 21, 2024 55 COMPARISON TO OTHER AGENCIES Foster & Foster California OPEB Database Actuarial Accrued Liability 500% 450% 400% 350% 300% - a `e 250% _.__._. _._.__. 200% _-.___ - 150% 100% 0% Miscellaneous Safety 95th Percentile 317% 440% 75th Percentile 173% 202% 50th Percentile 87% 88% 25th Percentile 40% 48% 5th Percentile 14% 15% Percent of Pay (•) 185% 369% Percentile 79% 91% Item 28 Attachment D - June 30, 2023 OPEB Actuarial Valuation Report (CMR 2402-2673).pdf May 21, 2024 Discount Rate = 6.25% Item 28: Staff Report Pg. 119 F P"� Packet Pg. 685 of 857 ACTUARIAL CERTIFICATION This report presents the City of Palo Alto Retiree Healthcare Plan ("Plan") June 30, 2023 purpose of this valuation is to: • Determine the June 30, 2023 Benefit Obligations, • Determine the Plan's June 30, 2023 Funded Status, and • Calculate the 2024/25 and 2025/26 Actuarially Determined Contributions. Item 28 Attachment D - June 30, 2023 OPEB Actuarial Valuation Report (CMR 2402-2673).pdf The report provides information intended for funding the City's Plan, but may not be appropriate for other purposes. Future actuarial measurements may differ significantly from the current measurements presented in this report due to such factors as: plan experience differing from that anticipated by the assumptions; changes in assumptions; changes expected as part of the natural progression of the plan; and changes in plan provisions or applicable law. Actuarial models necessarily rely on the use of estimates and are sensitive to changes. Small variations in estimates may lead to significant changes in actuarial measurements. Due to the limited scope of this assignment, we did not perform an analysis of the potential range of such measurements. The valuation is based on Plan provisions, participant data, and asset information provided by the City as summarized in this report, which we relied on and did not audit. We reviewed the participant data for reasonableness. To the best of our knowledge, this report is complete and accurate and has been conducted using generally accepted actuarial principles and practices. As members of the American Academy of Actuaries meeting the Academy Qualification Standards, we certify the actuarial results and opinions herein. Respectfully submitted, Drew Ballard, FSA, MAAA, EA Foster & Foster, Inc. r� May 21, 2024 T Premiums ct)h- — Catherine A. Wandro, ASA, MAAA Foster & Foster, Inc. 57 EXHIBITS Data Summary Additional Actuarial Assumptions Results by Fund Results by GF Department Definitions Page E-1 E- 5 E-23 E-31 E-33 E-35 r May 21, 2024 Item 28: Staff Report Pg. 120 FPS Packet Pg. 686 of 857 PREMIUMS 2023 PEMHCA Monthly Premiums Region 1 Item 28 Attachment D - June 30, 2023 OPEB Actuarial Valuation Report (CMR 2402-2673).pdf Medical Plan Non -Medicare Eli ible Medicare Eli ible Single 2 -Party Family Single 2 -Party Family Anthem Select $1,128.83 $2,257.66 $2,934.96 $413.59 $827.18 $1,240.77 Anthem Traditional 1,210.71 2,421.42 3,147.85 413.59 827.18 1,240.77 Blue Shield Access+ 1,035.21 2,070.42 2,691.55 361.90 723.80 1,085.70 Blue Shield Trio 888.94 1,777.88 2,311.24 361.90 723.80 1,085.70 Health Net SmartCare 1,174.50 2,349.00 3,053.70 n/a n/a n/a Kaiser 913.74 1,827.48 2,375.72 283.25 566.50 849.75 Kaiser Summit n/a n/a n/a 336.29 672.58 1,008.87 UnitedHealthcare Alliance 1,044.07 2,088.14 2,714.58 n/a n/a n/a UnitedHealthcare Group n/a n/a n/a 299.68 599.36 899.04 UnitedHealthcare Edge n/a n/a n/a 357.70 715.40 1,073.10 Western Health Advantage 760.17 1,520.34 1,976.44 331.11 662.22 993.33 PERS Platinum 1,200.12 2,400.24 3,120.31 420.02 840.04 1,260.06 PERS Gold 825.61 1,651.22 2,146.59 392.71 785.42 1,178.13 PORAC 825.00 1,875.00 2,300.00 465.00 1,030.00 1,395.00 May 21, 2024 E-1 PREMIUMS 2024 PEMHCA Monthly Premiums Region 1 cD Medical Plan Non -Medicare Eli ible Medicare Eli ible Single 2 -Party Family Single 2 -Party Family Anthem Select $1,138.86 $2,277.72 $2,961.04 $405.83 $811.66 $1,217.49 Anthem Traditional 1,339.70 2,679.40 3,483.22 405.83 811.66 1,217.49 Blue Shield Access+ 1,076.84 2,153.68 2,799.78 392.68 785.36 1,178.04 Blue Shield Trio 946.84 1,893.68 2,461.78 392.68 785.36 1,178.04 Kaiser 1,021.41 2,042.82 2,655.67 324.79 649.58 974.37 Kaiser Summit n/a n/a n/a 386.55 773.10 1,159.65 UnitedHealthcare Alliance 1,091.13 2,182.26 2,836.94 n/a n/a n/a UnitedHealthcare Harmony 937.39 1,874.78 2,437.21 n/a n/a n/a UnitedHealthcare Group n/a n/a n/a 341.72 683.44 1,025.16 UnitedHealthcare Edge n/a n/a n/a 366.01 732.02 1,098.03 Western Health Advantage 807.23 1,614.46 2,098.80 268.62 537.24 805.86 PERS Platinum 1,314.27 2,628.54 3,417.10 448.15 896.30 1,344.45 PERS Gold 914.82 1,829.64 2,378.53 406.60 813.20 1,219.80 PORAC 931.00 2,117.00 2,651.00 465.00 1,030.00 1,395.00 r May 21, 2024 Item 28: Staff Report Pg. 121 of P� Packet Pg. 687 of 857 PREMIUMS Item 28 Attachment D - June 30, 2023 OPEB Actuarial Valuation Report (CMR 2402-2673).pdf 'remium Increases/ Decre Region 1 Medical Plan Non -Medicare Eligible Medicare Eligible 2023 2024 2023 2024 Anthem Select 11.1% 0.9% 14.8% (1.9%) Anthem Traditional (7.2%) 10.7% 14.8% (1.9%) Blue Shield Access+ (7.2%) 4.0% 2.5% 8.5% Blue Shield Trio 1.1% 6.5% 2.5% 8.5% Health Net SmartCare 1.9% n/a n/a n/a Kaiser 6.6% 11.8% (6.4%) 14.7% Kaiser Summit n/a n/a n/a 14.9% UnitedHealthcare Alliance 2.3% 4.5% n/a n/a UnitedHealthcare Group n/a n/a 1.7% 14.0% UnitedHealthcare Edge n/a n/a 3.0% 2.3% Western Health Advantage 2.6% 6.2% 5.1% (18.9%) PERS Platinum 13.5% 9.5% 10.0% 6.7% PERS Gold 17.7% 10.8% 4.1% 3.5% PORAC 3.3% 12.8% 0.9% 0.0% r May 21, 2024 E-3 PREMIUMS This page intentionally blank N -, A ID May 21, 2024 Item 28: Staff Report Pg. 122 Packet Pg. 688 of 857 DATA SUMMARY Participant Statistics by Bargaining Unit June 30, 2023 Item 28 Attachment D - June 30, 2023 OPEB Actuarial Valuation Report (CMR 2402-2673).pdf FCA IAFF M/C PAPOA PMA SEIU UMPAPA Total ■ Actives • Count 4 84 202 66 7 494 45 902 • Avg Age 48.0 39.1 46.9 38.9 48.9 44.8 50.5 44.6 • Avg City Svc 22.4 9.8 10.7 9.2 23.4 9.7 16.4 10.4 • Avg PERS Svc 22.4 10.3 12.4 10.2 24.2 10.4 17.6 11.4 • Avg Salary $190,356 $122,075 $159,976 $160,358 $254,449 $114,477 $198,351 $134,338 • Total Salary42 $761 $10,254 $32,315 $10,584 $1,781 $56,552 $8,926 $121,173 ■ Retirees43: • Count 8 147 313 96 6 432 29 1,031 • Avg Age 64.3 71.4 73.0 66.4 53.2 72.6 62.9 71.5 • Avg Service Ret Age 55.8 54.7 58.1 52.5 50.4 59.7 58.2 58.2 • Avg Disab Ret Age 50.1 48.8 50.5 41.8 n/a 46.7 n/a 45.8 42 Amount in 000's. Based on June 30, 2023 PERSable pay rate. 4s Excludes retirees who have waived coverage. May 21, 2024 E-5 DATA SUMMARY Participant Statistics by Bargaining Unit June 30, 2021 ID FCA IAFF M/C PAPOA PMA SEIU UMPAPA Total ■ Actives • Count 4 80 195 68 6 477 44 874 • Avg Age 42.6 42.5 47.3 39.8 46.9 44.8 49.1 45.0 • Avg City Svc 18.1 12.8 10.6 10.2 22.1 10.6 17.3 11.2 • Avg PERS Svc 18.1 13.3 12.2 11.2 23.1 11.2 18.1 12.1 • Avg Salary $209,498 $145,878 $134,380 $152,938 $228,619 $98,486 $172,711 $120,207 • Total Salary44 $838 $11,670 $26,204 $10,400 $1,372 $46,978 $7,599 $105,061 ■ Retirees45: • Count 6 148 307 89 5 430 24 1,009 • Avg Age 64.7 71.0 72.0 66.9 57.5 71.6 62.2 70.9 • Avg Service Ret Age 56.7 54.6 58.3 52.3 50.4 59.6 58.8 58.2 • Avg Disab Ret Age 50.1 48.8 50.5 42.0 n/a 48.0 n/a 46.3 44 Amount in 000's. Actual 2020/21 PERSable compensations. 45 Excludes retirees who have waived coverage. May 21, 2024 Item 28: Staff Report Pg. 123 of P� Packet Pg. 689 of 857 DATA SUMMARY June 30, 2023 Item 28 Attachment D - June 30, 2023 OPEB Actuarial Valuation Report (CMR 2402-2673).pdf Miscellaneous Police Fire Total • Actives • Count 738 72 92 902 • Average Age 45.6 40.3 39.9 44.6 • Average City Service 10.3 10.8 10.8 10.4 • Average PERS Service 11.3 11.8 11.2 11.4 • Average Salary $130,866 $173,099 $131,856 $134,338 • Total Salary (000's)46 $96,579 $12,463 $12,131 $121,173 • Retirees47: • Count 751 113 167 1,031 • Average Age 72.4 65.9 71.2 71.5 • Avg Service Ret Age 59.2 52.2 54.7 58.2 • Avg Disability Ret Age 47.1 41.9 48.9 45.8 46 Based on June 30, 23 PERSable payrate. 47 Excludes retirees who have waived coverage. May 21, 2024 E-7 DATA SUMMARY Participant Statistics by CalPERS Pension Category June 30, 2021 ID Miscellaneous Police Fire Total • Actives • Count 711 76 87 874 • Average Age 45.7 40.7 42.7 45.0 • Average City Service 11.0 11.0 13.2 11.2 • Average PERS Service 11.9 12.0 13.7 12.1 • Average Salary $112,031 $161,950 $150,562 $120,207 • Total Salary (000's)48 $79,654 $12,308 $13,099 $105,061 • Retirees49: • Count 739 105 165 1,009 • Average Age 71.6 66.3 70.7 70.9 • Avg Service Ret Age 59.2 52.0 54.5 58.2 • Avg Disabilit Ret A e 48.1 42.1 48.9 46.3 48 Actual 2020/21 PERSable compensations. 4Excludes retirees who have waived coverage. May 21, 2024 Item 28: Staff Report Pg. 124 of P� Packet Pg. 690 of 857 DATA SUMMARY Item 28 Attachment D - June 30, 2023 OPEB Actuarial Medical Plan Participation — June 30, 2023 Valuation Report (CMR 2402-26731.odf Medical Plan Actives All Retirees Under 65 65 or Older Total Miscellaneous/Safety M S M S M S M S Anthem Select 2% 2% 3% - 1% - 1% - Anthem Traditional 3% 1% 5% 4% 6% 5% 6% 5% Blue Shield Access+ 10% 3% 7% 3% 1% 1% 3% 2% Blue Shield Trio - - - 1% - - - - Health Net SmartCare - - 1% - - - - - Kaiser 68% 50% 43% 26% 29% 210 32% 23% Kaiser Summit - - - - 2% - 2% - UnitedHealthcare - - 1% 1% 17% 10% 13% 7% UnitedHealthcare Edge - - - - - - - - Western Health Advantage - 1% - - - - - - PERS Gold 7% 4% 4% - 1% - 1% - PERS Platinum 10% 2% 35% 16% 42% 47% 41% 34% PORAC - 37% 1% 49% 1% 16% 1% 29% Total 100% 100% 100% 100% 100% 100% 100% 100% r May 21, 2024 E-9 DATA SUMMARY Medical Plan Participation — June 30, 2021 ID Medical Plan Actives All Retirees Under 65 65 or Older Total Miscellaneous/Safety M S M S M S M S Anthem Select 6% 3% 5% 1% - - 2% - Anthem Traditional 4% 1% 9% 8% 6% 5% 6% 6% Blue Shield Access+ - - 3% 7% - - 1% 3% Health Net SmartCare 1% 1% 1% 1% - - - - Kaiser 65% 51% 40% 36% 30% 23% 32% 29% UnitedHealthcare - - 1% 2% 18% 13% 14% 8% Western Health Advantage - - 1% - - - - - PERSCare - - 4% 9% 25% 37% 20% 25% PERS Choice 22% 3% 32% 3% 21% 15% 24% 10% PERS Select 1% 1% 3% - - - 1% - PORAC - 40% 1% 32% - 8% - 19% Total 100% 100% 100% 100% 100% 100% 100% •100% May 21, 2024 Item 28: Staff Report Pg. 125 of P� Packet Pg. 691 of 857 DATA SUMMARY Active Medical Coverage — Miscellaneous Item 28 Attachment D - June 30, 2023 OPEB Actuarial Valuation Report (CMR Medical Plan Single 2 -Party Family Waive o a Anthem Select 3 3 5 - 11 Anthem Traditional 9 3 5 - 17 Blue Shield Access+ 15 18 31 - 64 Blue Shield Trio - - 1 - 1 Health Net SmartCare - - 1 - 1 Kaiser 162 90 200 - 452 Western Health Advantage - - 1 - 1 PERS Gold 13 11 20 - 44 PERS Platinum 26 12 30 - 68 PORAC 1 - - - 1 Waived - - - 78 78 Total 229 137 294 78 738 % as of June 30, 2023 31% 18% 40% 11% 100% % as of June 30, 2021 30% 22% 40% 9% 100% r May 21, 2024 E-11 DATA SUMMARY Active Medical Coverage — Safety ID Medical Plan Single 2 -Party Family Waived Total Anthem Select 1 - 2 - 3 Anthem Traditional 1 - - - 1 Blue Shield Access+ 1 - 3 - 4 Blue Shield Trio - - - - - Health Net SmartCare - - - - - Kaiser 23 15 39 - 77 Western Health Advantage - - 1 - 1 PERS Gold 5 - 1 - 6 PERS Platinum 1 1 1 - 3 PORAC 7 7 43 - 57 Waived - - - 12 12 Total 39 23 90 12 164 % as of June 30, 2023 24% 14% 55% 7% 100% % as of June 30, 2021 20% 14% 63% 2% 100% r IjMa 21, 2024 Y Item 28: Staff Report Pg. 126 Packet Pg. 692 of 857 DATA SUMMARY e5° - Item 28 Attachment D - June 30, 2023 OPEB Actuarial Valuation Report (CMR 7Anf 7C7]1 ..Ar Medical Plan Single 2-PartyFam>< <65 65+ <65 65+ <65 65+ Anthem Select 3 1 2 1 1 2 10 Anthem Traditional 7 11 2 21 - 2 43 Blue Shield Access+ 5 2 5 5 2 - 19 Health Net SmartCare 1 - - - - - 1 Kaiser 21 94 45 68 8 6 242 Kaiser Summit - 8 - 2 - 1 11 UnitedHealthcare - 64 1 32 - - 97 UnitedHealthcare Edge - 2 - 1 - - 3 Western Health Advantage - - - 1 - - 1 PERS Gold 1 1 2 2 4 - 10 PERS Platinum 19 129 32 111 10 7 308 PORAC - 3 1 1 - 1 6 Total 57 315 90 245 25 19 751 % as of June 30, 2023 8% 42% 12% 33% 3% 2% 100% % as of June 30, 2021 9% 41% 12% 32% 4% 2% 100% 50 Approximately 77% of retirees have coverage in a region 1 plan. The rest are in other state regions or out of state. IDVMay 21, 2024 E-13 DATA SUMMARY Retiree Medical Coverage51 - Safety Medical Plan Single 2 -Party Family Total <65 65+ <65 65+ <65 65+ Anthem Select - - - - - - - Anthem Traditional 1 - 1 7 3 2 14 Blue Shield Access+ 1 - 2 - 1 1 5 Health Net SmartCare - - - - - - - Kaiser 7 12 11 21 12 1 64 Kaiser Summit - - - - - - 0 UnitedHealthcare - 11 - 6 1 - 18 UnitedHealthcare Edge - - - - - - 0 Western Health Advantage - - - - - - 0 PERS Gold - - - - - - 0 PERS Platinum 7 39 6 37 5 2 96 PORAC 12 4 15 19 29 3 82 Total 28 66 35 90 52 9 280 % as of June 30, 2023 10% 24% 13% 32% 19% 3% 100% % as of June 30, 2021 9% 25% 16% 29% 19% 2% 100% 51 Approximately 70% of retirees have coverage in a Region 1 plan. The rest are in other state regions or out of state. May 21, 2024 Item 28: Staff Report Pg. 127 Packet Pg. 693 of 857 DATA SUMMARY erage DV Age — Item 28 Attachment D - June 30, 2023 OPEB Actuarial Valuation Report (CMR 2402-2673).gdf Age Single 2 -Party Family Total Under 50 - 1 - 1 50-54 2 3 4 9 55-59 12 19 9 40 60-64 43 67 12 122 65-69 63 68 11 142 70-74 73 66 5 144 75-79 76 65 3 144 80-84 59 22 - 81 85 & Over 44 24 - 68 Total 372 335 44 751 Average Age 74.5 71.2 64.0 72.4 r May 21, 2024 E-15 DATA SUMMARY Retirees Medical Coverage by Age — Police Age Single 2 -Party Family Total Under 50 3 1 6 10 50-54 - 1 7 8 55-59 3 1 6 10 60-64 9 6 9 24 65-69 3 13 5 21 70-74 10 6 - 16 75-79 3 7 - 10 80-84 3 4 - 7 85 & Over 4 3 - 7 Total 38 42 33 113 Average Age 68.1 70.5 57.5 65.9 ID rr jMay 21, 2024 Item 28: Staff Report Pg. 128 Packet Pg. 694 of 857 DATA SUMMARY Retirees Medical Coverage by Age — Fire Item 28 Attachment D - June 30, 2023 OPEB Actuarial Valuation Report (CMR 2402-2673).gdf Age Single 2 -Party Family Total Under 50 - - - - 50-54 - 1 7 8 55-59 6 10 11 27 60-64 7 15 6 28 65-69 3 14 4 21 70-74 5 11 - 16 75-79 7 12 - 19 80-84 17 9 - 26 85 & Over 11 11 - 22 Total 56 83 28 167 Average Age 76.7 71.7 59.0 71.2 r May 21, 2024 E-17 DATA SUMMARY Retirees Medical Coverage by Age — Total Age Single 2 -Party Family Total Under 50 3 2 6 11 50-54 2 5 18 25 55-59 21 30 26 77 60-64 59 88 27 174 65-69 69 95 20 184 70-74 88 83 5 176 75-79 86 84 3 173 80-84 79 35 - 114 85 & Over 59 38 460 - 105 97 Total 466 1,031 Average Age 74.3 71.2 60.6 71.5 ID r May 21, 2024 Item 28: Staff Report Pg. 129 of P� Packet Pg. 695 of 857 DATA SUMMARY Actives by Aue and Service — Miscellaneo Item 28 Attachment D - June 30, 2023 OPEB Actuarial Valuation Report (CMR 2402-2673).gdf City Service Age <1 - 5-9 10-14 15-19 20-24 > Total <25 8 4 - - - - - 12 25-29 21 26 4 - - - - 51 30-34 18 49 37 1 - - - 105 35-39 15 21 30 16 3 - - 85 40-44 7 23 35 22 10 10 1 108 45-49 8 14 23 19 19 21 1 105 50-54 2 12 18 13 13 19 13 90 55-59 1 13 14 16 13 22 10 89 60-64 5 5 9 10 10 10 15 64 >65 2 2 4 3 8 6 4 29 Total 87 169 174 100 76 88 44 738 t" May 21, 2024 E-19 DATA SUMMARY Actives by Age and Service — Police ID City Service Age <1 1-4 5-9 10-14 15-19 20-24 > 25 Total <25 - 1 - - - - - 1 25-29 1 8 1 - - - - 10 30-34 - 7 5 - - - - 12 35-39 1 1 6 2 2 - - 12 40-44 1 1 2 8 4 - - 16 45-49 - - 1 2 1 7 1 12 50-54 - - - 1 1 2 1 5 55-59 - - 1 - - - 1 2 60-64 - - 1 - - 1 - 2 >65 - - - - - - - - Total 3 18 17 13 8 10 3 72 May 21, 2024 Item 28: Staff Report Pg. 130 Packet Pg. 696 of 857 DATA SUMMARY Actives by Age and Service — Fire Item 28 Attachment D - June 30, 2023 OPEB Actuarial Valuation Report (CMR 2402-26731.odf City Service Age <1 - 5-9 10-14 15-19 20-24 > Total <25 1 2 - - - - - 3 25-29 9 11 - - - - - 20 30-34 2 7 3 - - - - 12 35-39 2 1 4 5 1 - - 13 40-44 - - 1 4 6 1 - 12 45-49 - - 2 2 3 1 - 8 50-54 - - - 2 3 10 5 20 55-59 - - - - 1 1 1 3 60-64 - - - - - 1 - 1 >65 - - - - - - - - Total 14 21 10 13 14 14 6 92 C' May 21, 2024 E-21 DATA SUMMARY Actives by Age and Service — Total ID City Service Age <1 1-4 5-9 10-14 15-19 20-24 > 25 Total <25 9 7 - - - - - 16 25-29 31 45 5 - - - - 81 30-34 20 63 45 1 - - - 129 35-39 18 23 40 23 6 - - 110 40-44 8 24 38 34 20 11 1 136 45-49 8 14 26 23 23 29 2 125 50-54 2 12 18 16 17 31 19 115 55-59 1 13 15 16 14 23 12 94 60-64 5 5 10 10 10 12 15 67 >65 2 2 4 3 8 6 4 29 Total 104 208 201 126 98 112 53 902 _^ �Ma 21, 2024 Y Item 28: Staff Report Pg. 131 Packet Pg. 697 of 857 ADDITIONAL ACTUARIAL ASSUMPTIONS Item 28 Attachment D - June 30, 2023 OPEB Actuarial V.1 —ti— P nnrt (CMR June 30, 2021 Valuation June 30, 2402-2673).pdf • Retirement ■ CalPERS 2000-2019 ■ CalPERS 2000-2019 Experience Study- Expected Experience Study - Expected retirement age for each tier retirement age for each tier Misc Fire & Police Misc Fire & Police Tier 1 2.7%@55 3%@50 Tier 1 2.7%@55 3%@50 Exp. RetAge 60.7 56.4 & 54.0 Exp. RetAge 61.2 56.1 & 53.9 Tier 2 2%@60 3%@55 Tier 2 2%@60 3%@55 Exp. RetAge 63.0 57.7 & 56.4 Exp. RetAge 63.1 57.7 & 57.2 PEPRA 2.5%@67 2.7%@57 PEPRA 2.5%@67 2.7%@57 Exp. RetAge 62.4 57.1 & 56.7 Exp. RetAge 62.5 57.2 & 56.5 • Spousal ■ 70% of covered retirees are ■ Same Coverage at assumed to cover spouses Retirement ■ Based on Plan experience • Waived Retiree ■ 0% ■ Same Re-election r May 21, 2024 E-23 ADDITIONAL ACTUARIAL ASSUMPTIONS ID June 30, 2021 Valuation June 30, 2023 Valuation ■ Medical Trend Increase from Prior Year Increase from Prior Year Post- Post- Post- Post - Calendar Pre- Medicare Medicare Pre- Medicare Medicare Year Medicare Other Kaiser Year Medicare Other Kaiser 2019-20 n/a 2021 n/a 2021 Actual Premiums 2022 n/a 2022 Actual Premiums 2023 Actual Premiums 2023 6.50% 5.65% 4.60% 2024 Actual Premiums 2025 8.50% 7.50% 6.25% 2024 6.25% 5.45% 4.45% 2026 7.90% 6.90% 5.65% 2025 6.00% 5.25% 4.60% 2027 7.35% 6.50% 5.45% 2026 5.75% 5.05% 4.45% 2028 6.75% 6.10% 5.25% 2027 5.55% 4.90% 4.35% 2029 6.20% 5.70% 5.05% 2028 5.35% 4.75% 4.25% 2030 5.60% 5.25% 4.85% 2029 5.15% 4.60% 4.20% 2031 5.05% 4.85% 4.65% 2030 4.95% 4.45% 4.05% 2032-38 4.45% 4.45% 4.45% 2031-35 4.80% 4.35% 4.00% 2039-40 4.35% 4.35% 4.35% 2036-45 4.65% 4.25% 3.95% 2041 4.30% 4.30% 4.30% 2046-55 4.50% 4.20% 3.90% 1 1 1 1 2076+ 3.45% 3.45% 3.45% 2056-65 4.35% 4.15% 3.85% 2066-75 4.05% 3.95% 3.80% 2076+ 3.75% 3.75% 3.75% VMay 21, 2024 Item 28: Staff Report Pg. 132 Packet Pg. 698 of 857 ADDITIONAL ACTUARIAL ASSUMPTIONS Item 28 Attachment D - June 30, 2023 OPEB Actuarial June 30, 2021 Valuation Valuation June 30, 2402-2673).pdf _J1 ■ Miscellaneous: Report (CMR <65 65+ ■ Medical Plan at ■ Miscellaneous: <65 65+ Retirement & Anthem Traditional 10% 5% Anthem Traditional 10% 5% Retirees Attaining Blue Shield Access+ 5% 0% Blue Shield Access+ 5% 0% age 65 Kaiser 50% 30% Kaiser 45% 30% PERS Choice 30% 20% PERS Gold 5% 0% PERSCare 5% 25% PERS Platinum 35% 45% UnitedHealthcare 0% 20% UnitedHealthcare 0% 20% ■ Safety: <65 65+ ■ Safety: <65 65+ Anthem Traditional 10% 5% Anthem Traditional 5% 5% Blue Shield Access+ 5% 0% Blue Shield Access+ 5% 0% Kaiser 40% 25% Kaiser 30% 25% PERS Choice 0% 15% PERS Gold 0% 0% PERSCare 10% 35% PERS Platinum 15% 45% PORAC 35% 10% PORAC 45% 15% UnitedHealthcare 0% 10% UnitedHealthcare 0% 10% ■ Based on Plan experience ■ Based on Plan experience r May 21, 2024 E-25 ADDITIONAL ACTUARIAL ASSUMPTIONS ID June 30, 2021 Valuation June 30, 2023 Valuation • Family Coverage ■ Misc: 15% until age 65 ■ Same at Retirement 5% age 65-75 (for future ■ Safety: 50% until age 65 retirees) 5% age 65-80 ■ Based on Plan experience • Spouse Age ■ Actives — Males 3 years older ■ Same than females ■ Retirees — Males 3 years older than females if spouse birth date not available • Surviving ■ 100% ■ Same Spouse Participation VMay 21 2024, Item 28: Staff Report Pg. 133 Packet Pg. 699 of 857 ADDITIONAL ACTUARIAL ASSUMPTIONS Item 28 Attachment D - June 30, 2023 OPEB Actuarial June 30, 2021 Valuation Valuation Report (CMR June 30, _J1 2402-2673).pdf • Medicare ■ Actives and retirees hired ■ Same Eligibility before 4/1/86: • Miscellaneous — 80% • Safety -90% ■ Actives and retirees hired on or after 4/1/86: 100% ■ Retirees before 65 with unknown hire date: 90% ■ Everyone eligible for Medicare will elect Part B coverage • Future New ■ None — Closed Group ■ Same Participants • Retirees Missing ■ No retirees missing Fund ■ Same Fund information. r May 21, 2024 E-27 ADDITIONAL ACTUARIAL ASSUMPTIONS June 30, 2021 Valuation June 30, 2023 Valuation • Retirees Missing ■ Assumed to have the same ■ Same Department department as the prior valuation ■ Liability for retirees assumed to be 75% GF allocated proportionately across all Departments • Actuarial Models U Our valuation was performed using and relying on ProVal, an actuarial model leased from Wintech. Our use of ProVal is consistent with its intended purpose. We have reviewed and understand ProVal and its operation, sensitivities and dependencies. • Data Quality ■ Our valuation used census data provided by the City and CalPERS OPEB data extract. We reviewed the data for reasonableness and resolved any questions with the City. We believe the resulting data can be relied on for all purposes of this valuation without limitation. May 21, 2024 Item 28: Staff Report Pg. 134 Packet Pg. 700 of 857 ADDITIONAL ACTUARIAL ASSUMPTIONS June 30, 2021 Valuation June 30, A Item 28 Attachment D - June 30, 2023 OPEB Actuarial Valuation Report (CMR 2402-2673).pdf ■ Sample Medical ■ Sample estimated monthly claims costs: Claims Costs Region 1 — Non -Medicare Eligible 2024 Kaiser PERS Platinum PORAC Age M F M F M F 55 $1,094 $1,196 $1,197 $1,307 $1,083 $1,184 60 1,376 1,386 1,503 1,513 1,364 1,373 65 1,704 1,633 1,858 1,780 1,691 1,619 70 1,917 1,829 2,058 1,964 1,952 1,861 75 2,158 2,053 2,292 2,181 2,235 2,125 80 2,487 2,347 2,640 2,492 2,578 2,432 85 2,790 2,634 2,959 2,795 2,893 2,731 Region 1 — Medicare Eligible Kaiser PERS Platinum PORAC Age M F M F M F 65 n/a n/a $447 $428 $408 $391 70 n/a n/a 484 463 442 423 75 n/a n/a 516 495 471 452 80 n/a n/a 532 514 486 469 85 n/a n/a 526 512 480 468 3 '`o May 21, 2024 E-29 ADDITIONAL ACTUARIAL ASSUMPTIONS This page intentionally blank N -, A k oFP� May 21, 2024 Item 28: Staff Report Pg. 135 Packet Pg. 701 of 857 RESULTS BY FUND — LI UIU w, UJ - (Amounts in 000's) Item 28 Attachment D - June 30, 2023 OPEB Actuarial Valuation Report (CMR 2402-2673).pdf FUND AAL Assets52 UAAL • Airport $ 443 $ 250 $ 193 • CIP 4,957 2,797 2,160 • Elec53 31,933 18,019 13,914 • Gas5353 12,636 7,130 5,506 • GF 178,807 100,893 77,914 • ISF — Technology 6,254 3,529 2,725 • ISF-Vehicle 2,214 1,249 965 • ISF — Printing & Mailing 125 70 55 • ISF — Workers Comp 115 65 50 • PARKING 656 371 285 • Refuse 5,246 2,960 2,286 • Storm Drain 2,344 1,324 1,020 • Water5353 10,435 5,890 4,545 • WWC53 3,028 1,708 1,320 • WWT 17,379 9,806 7,573 • Total 276,572 156,061 120,511 52 Assets allocated in proportion to AAL. 53 AAL for UTL employees allocated to Elec, Gas, Water, and WWC in proportion to each Fund's AAL May 21, 2024 E-31 RESULTS BY FUND ID Actuarially Determined Contribution (ADC) — 6.25% Discount Rate (Amounts in 000's) FUND 2024/25 2025/26 • Airport $ 61 $ 63 • CIP 440 452 • Elec53 1,764 1,811 • Gas53 781 802 • GF 10,325 10,600 • ISF — Technology 442 453 • ISF — Vehicle 148 152 • ISF - Printing & Mailing 11 11 • ISF — Workers Comp 16 17 • PARKING 76 77 • Refuse 242 248 • Storm Drain 172 177 • Water53 616 631 • WWC53 100 103 • WWT 1,222 1,254 • Total 16,416 16,851 r May 21, 2024 Item 28: Staff Report Pg. 136 Packet Pg. 702 of 857 RESULTS BY GF DEPARTMENT — LI UIU w, UJ - (Amounts in 000's) Item 28 Attachment D - June 30, 2023 OPEB Actuarial Valuation Report (CMR 2402-2673).pdf GF Department AAL Assets54 UAAL • ASD $ 9,447 $ 5,331 $ 4,116 • ATT 2,674 1,509 1,166 • AUD 141 79 61 • CLK 713 402 311 • COU 1,257 709 548 • CSD 16,738 9,445 7,293 • DSD 5,734 3,236 2,498 • FIR 50,675 28,590 22,083 • HRD 2,727 1,539 1,188 • LIB 6,637 3,746 2,892 • MGR 2,772 1,564 1,208 • PLA 6,764 3,817 2,947 • POL 55,075 31,078 23,998 • PWD 17,453 9,848 7,605 • Total 178,807 100,893 77,914 54 Assets allocated in proportion to AAL. May 21, 2024 E-33 RESULTS BY GF DEPARTMENT ID Actuarially Determined Contribution (ADC) — 6.25% Discount Rate (Amounts in 000's) • GF Department 2024/25 2025/26 ■ ASD $ 584 $ 599 ■ ATT 157 162 ■ AUD 4 4 ■ CLK 36 37 ■ COU 69 71 ■ CSD 1,059 1,086 ■ DSD 478 491 ■ FIR 2,588 2,657 ■ HRD 157 161 ■ LIB 492 505 ■ MGR 186 191 ■ PLA 420 431 ■ POL 3,175 3,260 ■ PWD 920 945 ■ Total 10,325 10,600 r IjMa 21, 2024 Y Item 28: Staff Report Pg. 137 Packet Pg. 703 of 857 DEFINITIONS Present Value of Benefits Present Value of Benefits (Without Plan Assets) Future Normal Costs Normal Cost Unfunded Actuarial Accrued Liability t� May 21, 2024 E-35 DEFINITIONS Item 28 Attachment D - June 30, 2023 OPEB Actuarial Valuation Report (CMR 2402-2673).pdf Present Value of Benefits (With Plan Assets) Future Normal Costs Normal Cost Unfunded Actuarial Accrued Liability- Assets ■ Actuarially ■ Contribution for the current period including: Determined • Normal Cost Contribution • Administrative expenses (ADC) • Amortization of: ❑ Initial Unfunded AAL ❑ AAL for plan, assumption, and method changes ❑ Experience gains/losses (difference between expected and actual) ❑ Contribution gains/losses (difference between ADC and actual) May 21, 2024 Item 28: Staff Report Pg. 138 Packet Pg. 704 of 857 City of Palo Alto Central Other Post -Employment Benefits (OPEB) Adjustments in Various Funds Item 28 Attachment D Exhibit 1- Central OPEB Adjustments in Various Funds.pdf tachment D, Exhibit 1 Fund Department/Fund Title Revenue Expense Comments GENERAL FUND Adjustments to align OPEB costs with the June 30, 2023 Valuation General Fund Administrative Services Retiree Health Adjustment $ - $ 135,892 (CMR 2402-2673) Adjustments to align OPEB costs with the June 30, 2023 Valuation General Fund City Attorney Retiree Health Adjustment $ - $ 32,971 (CMR 2402-2673) Adjustments to align OPEB costs with the June 30, 2023 Valuation General Fund City Clerk Retiree Health Adjustment $ - $ (2,083) (CMR 2402-2673) Adjustments to align OPEB costs with the June 30, 2023 Valuation General Fund City Council Retiree Health Adjustment $ - $ 3,361 (CMR 2402-2673) Adjustments to align OPEB costs with the June 30, 2023 Valuation General Fund City Manager Retiree Health Adjustment $ - $ 38,164 (CMR 2402-2673) Adjustments to align OPEB costs with the June 30, 2023 Valuation General Fund Community Services Retiree Health Adjustment $ - $ 192,818 (CMR 2402-2673) Adjustments to align OPEB costs with the June 30, 2023 Valuation General Fund Development Services Retiree Health Adjustment $ - $ 97,619 (CMR 2402-2673) Adjustments to align OPEB costs with the June 30, 2023 Valuation General Fund Fire Retiree Health Adjustment $ - $ 332,566 (CMR 2402-2673) Adjustments to align OPEB costs with the June 30, 2023 Valuation General Fund Human Resources Retiree Health Adjustment $ - $ 13,933 (CMR 2402-2673) Adjustments to align OPEB costs with the June 30, 2023 Valuation General Fund Library Retiree Health Adjustment $ - $ 51,003 (CMR 2402-2673) Adjustments to align OPEB costs with the June 30, 2023 Valuation General Fund Office of Emergency Services Retiree Health Adjustment $ - $ 11,424 (CMR 2402-2673) Adjustments to align OPEB costs with the June 30, 2023 Valuation General Fund Office of Transportation Retiree Health Adjustment $ - $ 17,277 (CMR 2402-2673) Planning & Community Adjustments to align OPEB costs with the June 30, 2023 Valuation General Fund Services Retiree Health Adjustment $ - $ 62,823 (CMR 2402-2673) Adjustments to align OPEB costs with the June 30, 2023 Valuation General Fund Police Retiree Health Adjustment $ - $ 500,199 (CMR 2402-2673) Adjustments to align OPEB costs with the June 30, 2023 Valuation General Fund Public Works Retiree Health Adjustment $ - $ 162,690 (CMR 2402-2673) GENERAL FUND SUBTOTAL $ - $ 1,650,657 SPECIAL REVENUE FUNDS Adjustments to align OPEB costs with the June 30, 2023 Valuation 236 - University Avenue Parking Permits Administrative Services Retiree Health Adjustment $ - $ 536 (CMR 2402-2673) Adjustments to align OPEB costs with the June 30, 2023 Valuation 236 - University Avenue Parking Permits Office of Transportation Retiree Health Adjustment $ - $ 144 (CMR 2402-2673) Adjustments to align OPEB costs with the June 30, 2023 Valuation 236 - University Avenue Parking Permits Public Works Retiree Health Adjustment $ - $ 1,733 (CMR 2402-2673) Adjustments to align OPEB costs with the June 30, 2023 Valuation 237 - California Avenue Parking Permits Administrative Services Retiree Health Adjustment $ - $ 244 (CMR 2402-2673) Item 28: Staff Report Pg. 139 1 Packet Pg. 705 of 857 Item 28 Attachment D Exhibit 1- Central OPEB Adjustments in Various Funds.pdf achment D, Exhibit 1 237 - California Avenue Parking Permits Office of Transportation Retiree Health Adjustment $ - $ 144 Adjustnj (CMR 24 0, 2023 Valuation - 237 - California Avenue Parking Permits Public Works Retiree Health Adjustment $ - $ 187 Adjustments to align OPEB costs with the June 30, 2023 Valuation (CMR 2402-2673) 239 - Residential Parking Permit Programs Office of Transportation Retiree Health Adjustment $ - $ 1,000 Adjustments to align OPEB costs with the June 30, 2023 Valuation (CMR 2402-2673) SPECIAL REVENUE FUNDS SUBTOTAL $ - $ 3,987 CAPITAL FUNDS 471- Capital Improvement Fund Administrative Services Retiree Health Adjustment $ - $ 2,039 Adjustments to align OPEB costs with the June 30, 2023 Valuation (CMR 2402-2673) 471- Capital Improvement Fund Community Services Retiree Health Adjustment $ - $ 1,699 Adjustments to align OPEB costs with the June 30, 2023 Valuation (CMR 2402-2673) 471- Capital Improvement Fund Office of Transportation Retiree Health Adjustment $ - $ 13,611 Adjustments to align OPEB costs with the June 30, 2023 Valuation (CMR 2402-2673) 471 - Capital Improvement Fund Public Works Retiree Health Adjustment $ - $ 36,760 Adjustments to align OPEB costs with the June 30, 2023 Valuation (CMR 2402-2673) CAPITAL FUNDS SUBTOTAL $ - $ 54,109 ENTERPRISE FUNDS 513 - Electric Supply Fund Utilities $ - $ 19,110 Adjustments to align OPEB costs with the June 30, 2023 Valuation (CMR 2402-2673) 514 - Gas Supply Fund Utilities $ - $ 5,030 Adjustments to align OPEB costs with the June 30, 2023 Valuation (CMR 2402-2673) 521- Utilities Administration Fund Utilities $ - $ (3,364) Adjustments to align OPEB costs with the June 30, 2023 Valuation (CMR 2402-2673) 522 - Water Fund Utilities $ - $ 75,809 Adjustments to align OPEB costs with the June 30, 2023 Valuation (CMR 2402-2673) 523 - Electric Fund Utilities $ - $ 258,632 Adjustments to align OPEB costs with the June 30, 2023 Valuation (CMR 2402-2673) 524 - Gas Fund Utilities $ - $ 131,896 Adjustments to align OPEB costs with the June 30, 2023 Valuation (CMR 2402-2673) 525 - Refuse Fund Public Works $ - $ 47,695 Adjustments to align OPEB costs with the June 30, 2023 Valuation (CMR 2402-2673) 526 - Wastewater Treatment Fund Public Works $ - $ 295,490 Adjustments to align OPEB costs with the June 30, 2023 Valuation (CMR 2402-2673) 527 - Wastewater Collection Fund Utilities $ - $ (74,921) Adjustments to align OPEB costs with the June 30, 2023 Valuation (CMR 2402-2673) 528 - Stormwater Management Fund Public Works $ - $ 36,272 Adjustments to align OPEB costs with the June 30, 2023 Valuation (CMR 2402-2673) 530 - Airport Enterprise Fund Public Works $ - $ 9,345 Adjustments to align OPEB costs with the June 30, 2023 Valuation (CMR 2402-2673) 533 - Fiber Optics Fund Utilities $ - $ (3,028) Adjustments to align OPEB costs with the June 30, 2023 Valuation (CMR 2402-2673) ENTERPRISE FUNDS SUBTOTAL $ - $ 797,965 Item 28: Staff Report Pg. 140 1 Packet Pg. 706 of 857 Item 28 Attachment D Exhibit 1- Central achment D, Exhibit 1 OPEB Adjustments in Various Funds.pdf INTERNAL SERVICE FUNDS Adjustments to align OPEB costs with the June 30, 2023 Valuation 681- Vehicle Replacement & Maintenance Fund Public Works Retiree Health Adjustment $ - $ 20,134 (CMR 2402-2673) Adjustments to align OPEB costs with the June 30, 2023 Valuation 682 -Technology Fund Information Technology Retiree Health Adjustment $ - $ 71,067 (CMR 2402-2673) Adjustments to align OPEB costs with the June 30, 2023 Valuation 683 - Printing & Mailing Services Fund Administrative Services Retiree Health Adjustment $ - $ 5,296 (CMR 2402-2673) 687 - General Benefits & 687 - General Benefits & Insurance Fund Insurance Fund Retiree Health Adjustment $ - $ (254,500) Transfer for Implied Subsidy Retiree Health Benefits Fund - 694 - Retiree Health Benefits Fund - AB702 AB702 Retiree Health Adjustment $ 2,603,214 $ - OPEB Funding from City Funds Retiree Health Benefits Fund - 694 - Retiree Health Benefits Fund - AB702 AB702 Retiree Health Adjustment $ (254,500) $ - Transfer for Implied Subsidy Retiree Health Benefits Fund - 694 - Retiree Health Benefits Fund - AB702 AB702 Retiree Health Adjustment $ - $ 2,348,714 OPEB costs for increased Actuarial Determined Contribution (ADC) INTERNAL SERVICE FUNDS SUBTOTAL $ 2,348,714 $ 2,190,711 TOTAL ADJUSTMENT $ 2,348,714 $ 4,697,429 Item 28: Staff Report Pg. 141 1 Packet Pg. 707 of 857 DocuSign Envelope ID: 20611 F49-FDE8-4FDA-B7CB-D57B9C95650D May 30, 2024 Honorable City Council C/O City of Palo Alto 250 Hamilton Avenue Palo Alto, CA 94301 RE: Reviewof 2025-2029 Proposed Capital Improvement Plan (CIP) Item 28 Attachment E - PTC Letter of the 2025-2029 Capital Improvement Plan to the Citys Comprehensive Plan.pdf J The Planning and Transportation Commission (PTC) reviewed the 2025-2029 proposed Capital Improvement Plan on Wednesday, May 29, 2024. The PTC determined that the 16 new Capital Improvement Projects included in the 2025-2029 Capital Budget are consistent with the adopted Comprehensive Plan and recommended forwarding this finding to the City Council and Finance Committee. Commissioner Summa made the motion and it was seconded by Commissioner Reckdahl. The motion was approved by a vote of 7-0. The recommendation included adding to CIP project #5 (Gas Line Repair at Arastradero Creek (GS25001) the Comprehensive Plan Program S1.13.4 which is, "Enhance the safety of City -owned natural gas pipeline operations. Work with customers, public safety officials and industry leaders to ensure the safe delivery of natural gas throughout the service area. Provide safety information to all residents on City -owned natural gas distribution pipelines." Respectfully submitted DocuSigned by: 573165980AC3417 tsryna Lnang, Chair Planning and Transportation Commission Item 28: Staff Report Pg. 142 Packet Pg. 708 of 857 Item 29 Item 29 Staff Report City Council Staff Report From: City Manager CITY O F Report Type: ACTION ITEMS PALO Lead Department: Utilities ALTO Meeting Date: June 17, 2024 Staff Report: 2404-2842 TITLE PUBLIC HEARING & PROPOSITION 218 HEARING: Finance Committee Recommends Adoption of Six Resolutions: 1) Approving the Fiscal Year 2025 Wastewater Collection Utility Financial Plan, Including Approval of a Short -Term Loan From the Fiber Optics Fund Reserve to the Wastewater Collection Fund Operations Reserve for Fiscal Year 2024, and Amending Wastewater Collection Rate Schedules S-1, S-2, S-6 and S-7; 2) Approving the Fiscal Year 2025 Water Utility Financial Plan, and Amending Water Rate Schedules W-1, W-2, W-3, W-4, and W-7; 3) Approving the Fiscal Year 2025 Gas Utility Financial Plan, and Amending Gas Rate Schedules G-1, G-2, G-3 and G-10; 4) Approving the Fiscal Year 2025 Electric Utility Financial Plan and Accepting the 2024 City of Palo Alto Electric Cost of Service and Rate Study, and Amending Electric Rate Schedules E-1, E-2, E-4, E-4 TOU, E-7, E-7 TOU, E-14, E -EEC -1, E-NSE- 1, E -2-G, E -4-G and E -7-G; 5) Amending Utility Rate Schedules EDF-1 and EDF-2 to Increase Dark Fiber Rates 2.6 Percent; 6) Amending Utility Rate Schedule D-1 Increasing the Storm Water Management Fee by 2.6 Percent per Month per Equivalent Residential Unit for FY 2025; CEQA Status: Not a project under CEQA Guidelines Sections 15378(b)(4) and (5) and Exempt Under Section 15273(a) RECOMMENDATION Note: Resolutions are included in the packet as Attachments A — F, Attachment G reflects the Table of URLs for the Exhibits to Attachments A — F. The Finance Committee, the Utilities Advisory Commission and staff recommend that the City Council adopt the following; 1. For the Wastewater Collection Utility, a Resolution (Attachment A): a. Approving the Wastewater Collection Utility Financial Plan for Fiscal Year (FY) 2025, including approval of a short-term loan from the Fiber Optics Fund Reserve to the Wastewater Collection Fund Operations Reserve not to exceed $3,000,000 for FY 2024; Amend the Fiscal Year 2024 Budget Appropriation Ordinance: In the Wastewater Collection Fund: Item 29: Staff Report Pg. 1 Packet Pg. 709 of 857 Item 29 Item 29 Staff Report i. Increase the Transfer In from the Fiber Optics Fund by $3.0 million ii. Increase the Ending Fund Balance by $3.0 million; and b. Amending the following Wastewater Collection Utility Rate Schedules to reflect increases effective July 1, 2024 (FY 2025): i. S-1 (Residential Wastewater Collection and Disposal), ii. S-2 (Commercial Wastewater Collection and Disposal), iii. S-6 (Restaurant Wastewater Collection and Disposal), and iv. S-7 (Commercial Wastewater Collection and Disposal — Industrial Discharger); 2. For the Water Utility, a Resolution (Attachment B): a. Approving the FY 2025 Water Utility Financial Plan; and b. Amending the following Water Rate Schedules to reflect increases effective July 1, 2024 (FY 2025): i. W-1 (General Residential Water service), ii. W-2 (Water Service from Fire Hydrants), iii. W- 3 (Fire Service Connections), iv. W-4 (Residential Master -Metered and General Non- Residential Water Service), and v. W-7 (Non -Residential Irrigation Water Service); 3. For the Gas Utility, a Resolution (Attachment C): a. Approving the Gas Utility Financial Plan FY 2025, which includes amending the Gas Utility Reserve Management Practices; and b. Amending Gas Utility Rate Schedules FY 2025 to reflect increases effective July 1, 2024 (FY 2025): i. G-1 Residential Gas Service, ii. G-2 Residential Master -Metered and Commercial Gas Service, iii. G-3 Large Commercial Gas Service, and G-10 Compressed Natural Gas Service); and c. Transferring up to 14.5% of gas utility gross revenues received during FY 2023 to the General Fund in FY 2025. 4. For the Electric Utility, a Resolution (Attachment D): a. Accepting the 2024 City of Palo Alto Electric Cost of Service and Rate Study; b. Approving the Electric Utility Financial Plan FY 2025, which includes the following actions: i. Amending the Electric Utility Reserves Management Practices, to direct staff to transfer to the CIP reserve, at the end of each fiscal year, any budgeted capital investment that remains unspent, uncommitted, and which is not proposed for reappropriation to the following fiscal year and to clarify how the Cap and Trade Program Reserve is adjusted each year. ii. Approving the following transfers at the end of FY 2024: 1. Up to $20 million from the Electric Special Projects Reserve to the Item 29: Staff Report Pg. 2 Packet Pg. 710 of 857 Item 29 Item 29 Staff Report Supply Operations Reserve; 2. Up to $17 million from the Supply Operations Reserve to the Hydroelectric Stabilization Reserve; 3. Up to $58 million from the Supply Operations Reserve to the Distribution Operations Reserve; and iii. Approving the following transfers in FY 2025: 1. Up to $26 million from the Distribution Operations Reserve to the Supply Operations Reserve; 2. Up to $30 million from the Supply Operations Reserve to the Electric Special Projects Reserve; and 3. Up to $5 million from the Distribution Operations Reserve to the CIP Reserve; c. Amending the following Electric Utility Rate Schedules effective July 1, 2024 (FY 2025): i. E-1 (Residential Electric Service), E-2 (Small Non -Residential Electric Service), E-4 (Medium Non -Residential Electric Service), E-4 TOU (Medium Non -Residential Time of Use Electric Service), E-7 (Large Non - Residential Electric Service), E-7 TOU (Large Non -Residential Time of Use Electric Service) and E-14 (Street Lights), each by varying percentages depending on rate schedule and consumption with an overall revenue increase of 0.5% effective July 1, 2024; ii. Decreasing the Net Surplus Electricity Compensation (E-NSE-1) rate to reflect 2023 avoided cost, effective July 1, 2024; and iii. Decreasing the Export Electricity Compensation (E -EEC -1) rate to reflect current projections of FY 2025 avoided cost, effective July 1, 2024; iv. Updating the Residential Master -Metered and Small Non -Residential Green Power Electric Service (E -2-G), the Medium Non -Residential Green Power Electric Service (E -4-G), and the Large Non -Residential Green Power Electric Service (E 7 G) rate schedules to reflect modified distribution and commodity components, effective July 1, 2024. 5. A Resolution (Attachment E) Amend the Fiscal Year 2024 Budget Appropriation Ordinance: In the Fiber Optics Fund: Increase the Transfer Out to the Wastewater Collection Fund by 3.0 million Decrease the Ending Fund Balance by $3.0 million; and amending Fiber Optic Utility Rate Schedules EDF-1 and EDF-2 to increase Dark Fiber Rates 2.6 percent effective July 1, 2024, consistent with the applicable Consumer Price Index; 6. A Resolution (Attachment F) amending Storm Water Management Fee Rate Schedule D- 1 to increase the Storm Water Management Fee by 2.6 percent effective July 1, 2024, consistent with the applicable Consumer Price Index. Item 29: Staff Report Pg. 3 Packet Pg. 711 of 857 Item 29 Item 29 Staff Report EXECUTIVE SUMMARY The rate changes described in this report will allow Palo Alto to invest in utility infrastructure, gradually increase reserves to guideline levels, and to support community goals. As utility infrastructure ages, investment is needed to maintain the reliability of the water, wastewater, electric and gas utilities. These rate increases will support the maintenance and replacement of infrastructure including rebuilding Palo Alto's wastewater treatment plant (Regional Water Quality Control Plant). Investment in modernizing the electric grid will allow the City to achieve the Council's Sustainability and Climate Action goals as well as to increase reliability of utility service to residents and businesses in Palo Alto. During the pandemic, the City of Palo Alto held rate increases to a minimum in order to limit the financial impacts to Palo Alto residents and businesses. However, holding down rates with rising commodity prices and drought means that utility reserves are now low; the reserves need to be replenished to provide fiscal responsibility for when unexpected events occur and more stable rate management overall. From January 2024 through April 2024, the Utilities Advisory Commission (UAC) and Finance Committee reviewed preliminary and proposed rate changes recommended by staff for Fiscal Year 2025. This report summarizes the meetings, and incorporates UAC and Finance Committee recommendations into the staff recommendations for Council adoption. This comprehensive utility rates report includes separate sections for each of the Utilities: wastewater collection, water, gas, electric, dark fiber, and storm drainage and surface water. Estimates for retail revenue impacts are included in the FY 2025 budget assumptions. This report outlines the recommended actions and transmits the draft resolutions requested for City Council approval and adoption. Approval of this item would result in implementation of the finalized rates for FY 2025, beginning July 1, 2024. The expected average residential utility bill changes are below, with the expected overall average utility bill for residential service to increase 9% in FY 2025. • 15% increase for Wastewater Collection, • 9.5% increase for Water, • 12.5% increase for Gas, • 9% for Electric, • 2.6% increase for Dark Fiber rate schedules EDF-1 and EDF-2 and • 2.6% increase for the Storm Water Management Fee. In addition to the financial plans, the City engaged the services of a consultant to prepare a cost of service analysis (COSA) for the City's electric rates to ensure that electric rates continue to represent the Utility's cost to serve customers. The COSA, completed in April 2024, showed the need for different changes by customer class ranging from a 6% decrease for small non- residential customers (E-2) to a 2% increase for the residential class as a whole. However, recommended changes to the tier structure and the addition of a fixed charge result in a range of changes for residential customers depending on usage, with the median residential electric customer seeing a 9% increase. With the proposed rate increases, Palo Alto residential electric bills are projected to be approximately 50% lower than neighboring communities served by Item 29: Staff Report Pg. 4 Packet Pg. 712 of 857 Item 29 Item 29 Staff Report PG&E. BACKGROUND Wastewater Collection Utilities staff presented to the Finance Committee on April 23, 2024 and to the UAC on March 6, 2024 a recommendation that Council approve the Wastewater Collection Utility Financial Plan FY 2025, including approval of a short-term loan from the Fiber Optics Fund Reserve to the Wastewater Collection Fund Operations Reserve not to exceed $3,000,000 for FY 2024 if short- term cashflow becomes negative. In addition, staff recommended increasing wastewater collection rates 15% by amending rate schedules S-1 (Residential Wastewater Collection and Disposal), S-2 (Commercial Wastewater Collection and Disposal), S-6 (Restaurant Wastewater Collection and Disposal) and S-7 (Commercial Wastewater Collection and Disposal — Industrial Discharger). See Staff Report 2402-26031 for more information. The Finance Committee and UAC unanimously recommended approval of this proposal. Water Utilities staff presented to the Finance Committee on April 23, 2024 and the UAC on March 6, 2024 a recommendation that Council approve the Water Utility Financial Plan FY 2025. In Staff Report 2402-2604,2 staff originally recommended a 13% water distribution rate increase and reflected a 6.5% water commodity rate increase based on preliminary estimates from the SFPUC. However, on April 12, 2024, SFPUC provided its rate notice to Palo Alto with an 8.8% water commodity rate increase. To mitigate the overall bill impact to customers, the Finance Committee voted unanimously on April 23rd to lower the distribution rate increase to maintain an overall expected bill impact of 9.5% through the use of additional rate stabilization reserve funds in FY 2025, bringing the Operations and CIP Reserves below the minimum guideline ranges during the forecast period. Staff updated the Resolution (Attachment B) and all Exhibits to Attachment B to reflect the Finance Committee's direction: a 10% water distribution rate increase in combination with the 8.8% water commodity rate increase resulting in an overall 9.5% rate increase. Staff recommends increasing water distribution rates 10% by amending rate schedules W-1 (General Residential Water service), W-2 (Water Service from Fire Hydrants), W-3 (Fire Service Connections), W-4 (Residential Master- Metered and General Non -Residential Water Service), and W-7 (Non -Residential Irrigation Water Service). The SFPUC is increasing its wholesale water rates by 8.8% due to the drought and related water -purchase cutbacks, resulting in an overall water rate increase for City customers of about 9.5%. 1 Staff Report 2402-2603 (April 23, 2024 Finance Committee); https://cityofpaloaIto.primegov.com/api/compilemeetingattachmenthistory/historyattachment/?historyld=90274 720-d4f9-47c2-964a-5c722c99d7d8 2 Staff Report 2402-2604 (April 23, 2024 Finance Committee); https://cityofpaloaIto.primegov.com/api/compilemeetingattachmenthistory/historyattachment/?historyld=29e7b 9c3-6b38-4c11-8032-8f921445fdac Item 29: Staff Report Pg. 5 Packet Pg. 713 of 857 Item 29 Item 29 Staff Report On April 29, Staff mailed a Prop 218 notice3 to all utility customers, outlining proposed adjustments to the water and wastewater rates. Due to the timing of the Finance Committee meeting on April 23, 2024, which occurred after the deadline for finalizing the Prop 218 notice, the notice specified a 13% increase in distribution rates for water, alongside an 8.8% increase in water commodity rates. Consistent with the Finance Committee's direction, staff lowered the proposed water distribution rate increase from 13% to 10% in the FY 2025 Water Utility Financial Plan and related Water Rate Schedules. Consequently, the staff proposal for the water distribution rates recommended for Council approval in this report is lower than indicated in the Prop 218 notice. Gas Utilities staff presented to the Finance Committee on April 23, 2024 and UAC on March 6, 2024 a recommendation that Council Adopt a Resolution approving the FY 2025 Gas Utility Financial Plan, which includes amending the Gas Utility Reserve Management Practices. At that time, staff's preliminary recommendation was to increase gas rates overall by 9% (a 15% distribution rate increase). The Finance Committee unanimously recommended approval of this proposal (see Staff Report 2402-2605 for more information). However, based upon a discussion of the City's budget on May 8, 2024, the Finance Committee referred several items to the Council for discussion, including changing the Gas General Fund Transfer from 11.9% to 14.5% of FY 2023 gross revenue transferred in FY 2025, and 18% of FY 2024 gross revenue transferred in FY 2026. Staff updated its recommendation consistent with the Finance Committee's May 8, 2024 referral to the Council. Attachment C and associated exhibits reflect this updated recommendation. Staff recommends increasing gas rates overall by 12.5% (this equates to a 20.9% distribution rate increase and assumes gas supply -related costs remain unchanged) by amending rate schedules G-1 (Residential Gas Service), G-2 (Residential Master- Metered and Commercial Gas Service), G- 3 (Large Commercial Gas Service), G-10 (Compressed Natural Gas Service). Electric Utilities staff presented to the UAC on March 6, 2024 and the Finance Committee on April 23, 2024 a recommendation that Council Adopt a Resolution (Attachment D): 1. Accepting the 2024 City of Palo Alto Electric Cost of Service and Rate Study 2. Approving the FY 2025 Electric Financial Plan, which includes the following actions: a. Amending the Electric Utility Reserves Management Practices, to direct staff to transfer to the CIP reserve, at the end of each fiscal year, any budgeted capital investment that remains unspent, uncommitted, and which is not proposed for 3 Prop 218 Notice; https://www.cityofpaloalto.org/files/assets/public/v/1/utilities/rates-schedules-for- utilities/prop-218-notice-FY 2025-final.pdf 4 Staff Report 2402-2605 (April 23, 2024 Finance Committee); https://cityofpaloaIto.primegov.com/api/compilemeetingattachmenthistory/historyattachment/?historyld=d5e65 956-71ef-419d-b758-2a841ff14bef Item 29: Staff Report Pg. 6 Packet Pg. 714 of 857 Item 29 Item 29 Staff Report reappropriation to the following fiscal year and to clarify how the Cap and Trade Program Reserve is adjusted each year. b. Approving the following transfers at the end of FY 2024: i. Up to $20 million from the Electric Special Projects Reserve to the Supply Operations Reserve; ii. Up to $17 million from the Supply Operations Reserve to the Hydroelectric Stabilization Reserve; iii. Up to $58 million from the Supply Operations Reserve to the Distribution Operations Reserve; and c. Approving the following transfers in FY 2025: i. Up to $26 million from the Distribution Operations Reserve to the Supply Operations Reserve; ii. Up to $30 million from the Supply Operations Reserve to the Electric Special Projects Reserve; and iii. Up to $5 million from the Distribution Operations Reserve to the CIP Reserve; 3. Amending the following rate schedules effective July 1, 2024 (FY 2025): a. Changing retail electric rates E-1 (Residential Electric Service), E-2 (Small Non - Residential Electric Service), E-4 (Medium Non -Residential Electric Service), E-4 TOU (Medium Non -Residential Time of Use Electric Service), E-7 (Large Non - Residential Electric Service), and E-7 TOU (Large Non -Residential Time of Use Electric Service)5 by varying percentages depending on rate schedule and consumption with an overall revenue increase of 0.5% effective July 1, 2024; b. Decreasing the Net Surplus Electricity Compensation (E-NSE-1) rate to reflect 2023 avoided cost, effective July 1, 2024; and c. Decreasing the Export Electricity Compensation (E -EEC -1) rate to reflect current projections of FY 2025 avoided cost, effective July 1, 2024; d. Updating the Residential Master -Metered and Small Non -Residential Green Power Electric Service (E -2-G), the Medium Non -Residential Green Power Electric Service (E -4-G), and the Large Non -Residential Green Power Electric Service (E 7 G) rate schedules to reflect modified distribution and commodity components, effective July 1, 2024. See Staff Report 2401-24976 for more information. The Finance Committee unanimously recommended approval of this proposal. 5 UAC and Finance Committee did not review E-14 (Street Lights) rate as the cost of service analysis on this rate schedule was not yet complete at the time of those meetings 6 Staff Report 2401-2497; https://cityofpaloaIto.primegov.com/api/compilemeetingattachmenthistory/historyattachment/?historyld=ldbef9 d 4-c39e-4f 1f -8944-442816a 6d 9f0 Item 29: Staff Report Pg. 7 Packet Pg. 715 of 857 Item 29 Item 29 Staff Report Dark Fiber Since 2007, the EDF-1 and EDF-2 rates for Dark Fiber customers have increased annually by the annual December change in the Consumer Price Index for All Urban Consumers (CPI -U) in the San Francisco area, as stated in their dark fiber license agreements. Based on prior Utilities Advisory Commission and City Council direction, these rate changes are routinely included as part of the Budget adoption process rather than in a separate staff report, however this report ensures the CPI increase is published in the City's adopted rate schedules. This year's change in CPI -U was 2.6 percent, as reported by the Bureau of Labor Statistics. Storm Drain On April 23, 2024, Public Works staff presented the Finance Committee with a recommendation that the City Council adopt a Resolution (Attachment F) amending Utility Rate Schedule D-1 (Storm and Surface Water Drainage) to implement a 2.6 percent rate increase consistent with the applicable Consumer Price Index, increasing the monthly charge per Equivalent Residential Unit by $0.44, from $16.76 to $17.20. See Staff Report 2402-2614 for more information. The Finance Committee unanimously recommended approval of this proposal. ANALYSIS In January 2024 and February 2024, respectively, the UAC and Finance Committee received preliminary projections of rate increase needs for FY 2025. Based on their feedback and updated financial information, staff brought to the UAC on March 6, 2024 and the Finance Committee on April 23, 2024, recommendations for utility financial plans, transfer requests, and rate changes. The Finance Committee voted to unanimously approve each of staff's recommendations with the exception of the Water Utility rate proposal, where the Committee recommended a lower rate increase. Specifically, the Finance Committee recommended to increase the use of reserve funds in FY 2025 to limit the overall system average water rate increase to 9.5% while reducing reserve funds available in FY 2026 and future years. In the May 8, 2024 budget meeting, the Finance Committee referred several items to the Council for discussion including changing the Gas General Fund Transfer from 11.9% to 14.5% of FY 2023 gross revenue transferred in FY 2025, and 18% of FY 2024 gross revenue transferred in FY 2026. An 11.9% Gas General Fund Transfer for FY 2025 is $8.960 million and a 14.5% Gas General Fund Transfer for FY 2025 is $10.917 million. A 14.5% General Fund Transfer will result in a 12.5% increase to overall gas rates in FY 2025 assuming gas supply -related costs remain unchanged, and staff will decrease the size of Gas Main Replacement 25 by $0.735 million to limit the rate impacts to customers. This report and all attachments reflect the Finance Committee's May 8, 2024 referral. On May 13, 2024 the Council discussed this item at a Study Session and Council members 7 Staff Report 2402-2614; https://cityofpaloaIto.primegov.com/api/compilemeetingattachmenthistory/historyattachment/?historyld=c05ba 13f-1c8a-4376-87b7-7d127a501824 Item 29: Staff Report Pg. 8 Packet Pg. 716 of 857 Item 29 Item 29 Staff Report discussed the transfer but did not reach consensus on the amount. This report outlines the actions recommended, transmits the resolutions from these reviews, and requests City Council approval and adoption, as summarized below: Proposed Rate Changes and Financial Plans Wastewater Collection Proposal The FY 2025 Wastewater Collection Utility Financial Plan includes projections of the utility's costs and revenues through FY 2029. The Financial Plan anticipates costs will rise over the forecast horizon due to increasing treatment costs related to capital improvements and operational costs at the Regional Water Quality Control Plant (RWQCP), as well as increasing collection system operational and Capital Improvement Program (CIP) costs. In 2023, the Council approved the first in a series of wastewater collection rate increases which incorporated expected costs for the City to accelerate its rate of sewer main replacements from 1 mile to 2.5 miles per year by FY 2026 (implemented as a major sewer replacement project of 5 miles every other year). The accelerated rate of main replacement was calculated to replace all aging sewer mains within 8 years beyond their 100 -year life expectancy. Additionally, in FY 2023 the Wastewater Utility accelerated by a year the most expensive sewer main replacement that the utility has ever completed (Staff Report 2301-08081, May 8, 2023 approving contract for Sanitary Sewer Replacement Project 31, WC -19001 for $8.36 million). However, in FY 2023, costs were higher than forecasted and revenues were lower than forecasted and the Operations Reserve ended the year with a negative balance of $0.7 million. In an effort to increase the currently low reserve levels, staff recommends a 15% rate increase in FY 2025, which is equivalent to $7.29 per month per residential customer. This proposal would include proceeding with a reduced -size main replacement in FY 2026 of 1.25 miles instead of 5 miles due to the low reserve and revenue levels. This would allow the highest priority mains to be replaced while allowing the reserves to gradually replenish before the next major project. The 5 -mile sewer main replacement every other year would resume with construction scheduled in FY 2028. With this schedule of main replacement, the last remaining sewer main would be 110 years old at the time it is replaced. Given the low reserves, and the projected levels of revenue and expenses, there is a risk that the short-term need for cash will exceed available cash in FY 2024 and/or FY 2025. Both the staff recommendation and the alternative assume a potential short- term loan from the Fiber Optics Fund Reserve to the Wastewater Collection Fund Operations Reserve not to exceed $3,000,000 for FY 2024. During the April 23, 2024 Finance Committee meeting, Committee members had questions about how certain the Valley Water grant funding is and staff responded that there will be a staff report to Council soon and that the funding will be available to Palo Alto, but the total amount is Item 29: Staff Report Pg. 9 Packet Pg. 717 of 857 Item 29 Item 29 Staff Report uncertain.8 A Finance Committee member asked whether the loan from the Fiber optic utility is a loan or a line of credit and staff responded that it could be structured either way. After deliberating the proposal, the Finance Committee voted unanimously in favor of the 15% rate increase proposal put forth by staff and in favor of the one-time loan from the Fiber Optics Fund Reserve to the Wastewater Collection Fund Operations Reserve not to exceed $3,000,000 for FY 2024. Water Proposal Overall costs in the Water Utility are projected to rise on average by about 6% per year from Fiscal Year (FY) 2024 to 2029. Operations cost projections rise on average by about 4% annually from FY 2024 to 2029, excluding one-time transfers and debt service. Debt service is expected to decline by 4.5% during this time because one bond is to be retired in 2026. SFPUC's FY 2024 wholesale water rate is $5.21 per CCF. On May 14, 2024, SFPUC held a public hearing and adopted the FY 2025 Wholesale Water Rate of $5.67 per CCF. Overall, this Water Financial Plan uses reserve funding (from the Operations Reserve, Rate Stabilization Reserve and CIP Reserve) together with rate increases to manage the decreased sales revenue and increasing costs from FY 2024 through FY 2029. While these rate increases can be perceived as decreasing the benefit of conservation, bills for customers who conserve will be lower in the future than they would have been without conservation. By approving the attached resolution, the Council would approve the proposed FY 2025 Water Utility Financial Plan, which includes an increase in distribution rates of 10% for rate W-1 (General Residential Water service), W-2 (Water Service from Fire Hydrants), W-3 (Fire Service Connections), W-4 (Residential Master -Metered and General Non -Residential Water Service), and W-7 (Non -Residential Irrigation Water Service). The FY 2025 Water Utility Financial Plan also increases the Commodity rate for each CCF of water sold to the SFPUC Wholesale Water Rate of $5.67. By approving the attached resolution (Attachment B), Council would also authorize the extension of Palo Alto's pass -through provision for the SFPUC wholesale rate increase for an additional five years, effective July 1, 2024. During the April 23, 2024 Finance Committee meeting, Committee members asked about Palo Alto's residential rates being higher relative to neighboring agencies and non-residential rates being closer to the average of neighboring utilities. Staff explained that the process used to set the water rates is a detailed cost of service study using a standard method and outside expert consultant. One Committee member suggested comparing Palo Alto's water rates to neighboring utilities who also use 100% SFPUC for their potable water supply. After deliberating the proposal, the three members of the Finance Committee voted unanimously in favor of the staff proposal 8 Staff Report 2404-2877, June 3, 2024 requests approval from council for a cost -sharing agreement with Valley water for Guiding Principle 5 Program funding for future projects at the Palo Alto Regional Water Quality Control Plant: https://cityofpaloaIto.primegov.com/api/compilemeetingattachmenthistory/historyattachment/?historyld=03d85 b35-0721-45f3-aa0e-d0a4d8360282 Item 29: Staff Report Pg. 10 Packet Pg. 718 of 857 Item 29 Item 29 Staff Report as modified to reflect SFPUC's April rate increase notice and by increasing the use of water reserves to limit the overall system average water rate increase to 9.5% in FY 2025 while reducing reserve funds available in FY 2026 and future years. Gas Proposal The FY 2025 Gas Utility Financial Plan includes projections of the utility's costs and revenues for FY 2025 through FY 2029. Staff recommends increasing the distribution component of the gas rates by 20.9% in FY 2025 to bring revenue up to a level closer to recovering the costs of operations and prevent further depletion of reserves. This distribution rate increase is projected to increase overall customer bills by about 12.5% in FY 2025, assuming gas supply -related costs remain unchanged. In FY 2021 and FY 2022, the Gas Utility maintained minimal rate increases, leading to revenues struggling to match the rising expenses, resulting in a significant depletion of reserves. Although revenues exceeded costs in FY 2023, some costs associated with FY 2023 were paid in FY 2024. Specifically, carbon offset purchases from FY 2023 were made in FY 2024, and the transfer of prior years' Cap and Trade auction sales revenue from the Operations Reserve to the Cap and Trade reserve, which is a cost item, also occurred in FY 2024. Additionally, FY 2024 costs reflect the Council's adopted revised natural gas purchasing strategy for the 2023 - 2024 winter months to include commodity price insurance against very high market prices. A longer -term strategy for mitigating against potential future gas price spikes will be presented to Council for consideration prior to next winter. Consequently, the Operations Reserve is projected to drop below the risk assessment level by the end of FY 2024. Overall distribution costs are expected to increase by 4% from FY 2024 to FY 2025 and by 5% on average annually from FY 2025 through FY 2029. This distribution cost increase is due to projected increases in operations costs as well as capital costs related to the safety and maintenance of gas pipelines in Palo Alto, as well as preparation for electrification - related costs. In addition, increased costs from prior years reduced reserve levels and rates need to be increased to bring reserves gradually back to within guideline ranges. As part of the annual budget process, Council also determines the amount of the General Fund transfer for the Gas Utility in FY 2025. Each year, in accord with the voter -approved changes codified in PAMC 2.28.185, the City Council may transfer from the gas utility to the General Fund an amount up to 18% of the gross revenues of the gas utility, though Council may choose to transfer a lesser amount. The Finance Committee and staff recommends transferring 14.5% of FY 2023 gas utility gross revenue to the general fund for FY 2025, and 18% of gas utility gross revenue in FY 2026 and subsequent years. Alternatively, in alignment with PAMC 2.28.185, Staff also provided two other alternatives for FY 2025: transfer 11.9%, or $8.96 million, or transfer up to 18%, or $13.55 million. The proposed FY 2025 Gas Utility Financial Plan includes an increase in distribution rates effective July 1, 2024 and will result in a 12.5 percent increase to the total system average gas rate, Item 29: Staff Report Pg. 11 Packet Pg. 719 of 857 Item 29 Item 29 Staff Report assuming supply rates remain unchanged. This will be done by amending rate schedules G-1 (Residential Gas Service), G-2 (Residential Master -Metered and Commercial Gas Service), G-3 (Large Commercial Gas Service), and G-10 (Compressed Natural Gas Service). Additional 5 to 6 percent increases per year to the total system average gas rate are projected over the next four years. See Attachment C and its exhibits for more information. Electric Proposal The FY 2025 Electric Utility Financial Plan includes projections of the utility's costs and revenues through FY 2029. Rate changes are recommended that vary significantly by customer class but that in aggregate result in little change (around a 0.5%increase) to total electric utility revenue in FY 2025. To ensure that electric rates continue to represent the Utility's cost to serve customers, the City engaged the services of a consultant to prepare a cost of service analysis (COSA), which was completed in March 2024 (Attachment D, Exhibit 1.1) The COSA showed the need for different changes by customer class ranging from a 6% decrease for small non-residential customers (E-2) to a 2% increase for the residential class as a whole. However, recommended changes to the tier structure and the addition of a fixed charge result in a range of changes for residential customers depending on usage, with the median residential customer seeing a 9% increase. Table 1: Revenue Allocation by Customer Class in FY2025 Projected Revenues under Current Rates Net Revenue Requirement Projected Surplus/ (Deficiency) in Revenue Based on Current Rates Revenue Increase/ (Decrease) Needed Residential E-1 $ 27,309,759 $ 27,852,514 $ (542,755) 2.0% Small Commercial E-2 $ 11,784,676 $ 11,067,556 $ 717,121 -6.1% Medium Commercial E-4 $ 67,707,023 $ 65,186,601 $ 2,520,422 -3.7% Large Commercial E-7 $ 59,295,683 $ 58,473,708 $ 821,975 -1.4% Street and Traffic Lighting $ 2,224,184 $ 2,006,759 $ 217,425 -9.8% TOTAL $ 168,321,326 $ 164,587,138 $ 3,734,187 -2.2% Palo Alto residential electric bills are approximately 50% lower than neighboring communities served by PG&E. As of the drafting of this report, precipitation for the 2023/2024 water year was still below average. However, reservoir conditions are good as a result of last year's rains, so staff is forecasting hydroelectric generation for FY 2025 and FY 2026 that is slightly higher than the baseline level assumed in its long-term projections. High one-time energy supply cost savings and surplus energy sales for FY 2024 are projected related to higher late summer 2023 hydroelectric generation resulting from the 2022/2023 winter rains. Other short term revenues include higher than average sales revenue for resource adequacy and renewable energy credits (RECs) in FY 2024 through FY 2026 due to favorable market conditions. Some of these revenues are being 9 This differs slightly from the 0.5% increase stated above, due to a difference in how revenues are forecast in the long-range cost of service model and staff's annual financial modeling. The net revenue requirement under both models is the same: $164.5 million. Item 29: Staff Report Pg. 12 Packet Pg. 720 of 857 Item 29 Item 29 Staff Report used to replenish the hydroelectric stabilization reserve, reducing the chance that the City would need to activate the hydroelectric rate adjuster in the next few years, even if there is less snow and rain. These one-time revenues are offset by significant capital investment costs associated with grid modernization ($50 million in FY 2024 and FY 2025), a rebuild of the Hanover substation ($15 million in FY 2024), and a new dark fiber backbone for the electric utility that will require some contribution from the electric utility ($13 million in FY 2026). Current plans anticipate offsetting these capital investments by issuing municipal bonds. However, reserves will need to absorb some of the costs in FY 2024 until the first bonds can be issued in FY 2025. This is leading to large reserve transfers in FY 2024 and FY 2025 to manage this short-term cash flow issue. Total costs for the Electric Utility are projected to increase steadily through the forecast period. The largest contributors to these cost increases are increasing transmission costs, reduced sales revenue from surplus RECs and resource adequacy rights, and increasing debt service associated with grid modernization. The financial plan projects the need for 5% per year rate increases through the forecast period. However, the electricity consumption projections in this report are conservative and increased load from electrification and any new large customer loads could reduce these projections. On the other hand, if the costs for grid modernization or other capital investment end up being higher than forecasted, as often occurs, those costs could offset the benefit of new customer loads. Dark Fiber Since 2007, the EDF-1 and EDF-2 rates for Dark Fiber customers have increased annually by the annual December change in the Consumer Price Index for All Urban Consumers (CPI -U) in the San Francisco area, as stated in their dark fiber license agreements. Based on prior Utilities Advisory Commission and City Council direction, these rate changes are routinely included as part of the Budget adoption process rather than in a separate staff report. This year's change in CPI -U was 2.6 percent, as reported by the Bureau of Labor Statistics. The City has five customers remaining on the EDF-1 rate schedule. All other dark fiber customers are on the EDF-3 rate schedule. Storm Water and Surface Water Drai On April 11, 2017, a majority of Palo Alto property owners approved a ballot measure approving a monthly Storm Water Management Fee. This fee funds thirteen storm drainage capital improvement projects listed in the ballot measure, enhanced maintenance of the storm drainage system, and a variety of stormwater quality protection programs. The approved ballot measure allows for an annual adjustment based on the Consumer Price Index (CPI) or six percent, whichever is less. The Storm Water and Surface Drainage Rate will increase 2.6 percent, increasing the monthly charge per Equivalent Residential Unit by $0.44, $16.76 to $17.20 for Fiscal Year 2025, effective July 1, 2024, to reflect the annual CPI change. See Staff Report 2402- 261410 for more information. 10 Staff Report 2402-2614; Item 29: Staff Report Pg. 13 Packet Pg. 721 of 857 Item 29 Item 29 Staff Report Timeline Water and Wastewater Collection Rates After the June 17th Public Hearing is opened and testimony from members of the public accepted, City Council may choose to: 1. Close the hearing and take action; or 2. Close the hearing and defer action until the close of the Budget Adoption Hearing on June 17th; or 3. Continue the hearing until the end of the Budget Adoption Hearing (should the Budget Adoption Hearing be continued to another Council meeting), and then reconvene the hearing, take any additional water and wastewater collection rate testimony, close the hearing, and take action. The latter option has been used in prior years when the Budget Adoption process has spanned multiple City Council meetings. It is customary in such circumstances to continue to accept written protests up until the hearing is closed. Unless written protests are filed by a majority of affected water and wastewater customers, Council may vote on the proposed rate actions. If approved, the water and wastewater rates will become effective July 1, 2024. The City Council will also consider changes to the Financial Plans for the wastewater collection and water utilities, and should they take action to approve these plans, they will also become effective July 1, 2024. Electric, Gas, Dark Fiber and Storm Water rates, as well as Utility Financial Plans The electric, gas, dark fiber and storm drainage rates will be considered at the June 17, 2024 public hearing. Should the City Council take action to approve any or all of these rates, they will become effective July 1, 2024. The City Council will also consider changes to Financial Plans and/or Reserve Management Policies for the electric and gas utilities, and should they take action to approve any or all of these Plans and/or Policies, they will also become effective July 1, 2024. FISCAL/RESOURCE IMPACT The resource impact of the recommendations summarized in this report is the continued financial solvency of the various utilities through the revenue increases described below. Following are the estimated FY 2025 revenue impacts of the recommendations in this report relative to projected revenue for FY 2025 without changing utility rates: • Staff anticipates normal year revenues for the Wastewater Collection Utility will increase by approximately $3.3 million in FY 2025 as a result of a 15% rate increase; • Estimated revenue for the Water Utility in FY 2025 is projected to increase approximately 9.5% or $4.6 million as a result of the proposed rate increases; • Normal year sales revenues for the Gas Utility in FY 2025 are projected to increase by roughly 12.5% to overall rates, with a projected distribution revenue increase of $7 million as a result of the proposed rate increases, not including fluctuations in commodity revenue/cost. The change in General Fund revenues from FY 2024 to FY 2025 would https://cityofpaloaIto.primegov.com/api/compilemeetingattachmenthistory/historyattachment/?historyld=c05ba 13f-1c8a-4376-87b7-7d127a501824 Item 29: Staff Report Pg. 14 Packet Pg. 722 of 857 Item 29 Item 29 Staff Report depend on the General Fund transfer alternative chosen by Council. Under the 14.5% transfer in FY 2025 alternative, which was supported by the Finance Committee during their discussion of the City annual budget in May 2024, the General Fund transfer would increase from $7.707 million in FY 2024 to $10.917 million in FY 2025, an increase of about $3.210 million. • FY 2025 revenues for the Electric Utility are projected to remain very close to FY 2024 levels if Council adopts this report's recommendations. The City is a non-residential utility customer and can expect a decrease in estimated City utility expenses of about $160,000, approximately $85,000 of that being in the General Fund. Streetlight expenses (which are paid from the General Fund) are projected to decrease by about $180,000. Resource impacts to City departments and funds of the recommended rate adjustments are programmed in the FY 2025 Proposed Operating Budget. If the final rates adopted by Council in June differ from those proposed in this report, further adjustments may be brought forward as part of the annual budget process. Utility Systemwide Residential Average Rate Increase FY 2025 Estimated Overall Revenue Impact Electric 9% $0.8 million Gas 12.5% $7.0 million Water 9.5% $4.6 million Wastewater Collection 15% $3.3 million Stormwater Management 2.6% $0.2 million Staff estimates the Fiber Optics rate increase will increase revenue $14,768 from the five remaining customers on the EDF-1 rate schedule. Policy Implications Policy implications related to the proposed wastewater collection, water, gas, electric, dark fiber and storm water management fee rate actions are detailed fully in the attached Resolutions and associated exhibits. STAKEHOLDER ENGAGEMENT The UAC reviewed preliminary financial forecasts for the Electric, Gas, Water and Wastewater Collection utilities at its January 3, 2024 meeting (Staff Report 2309-208011), and the Finance Committee reviewed those utilities' preliminary forecasts at its February 21, 2024 meeting (Staff Report 2312-246812). 11 Staff Report 2309-2080 (UAC January 3, 2024); https://cityofpaloa Ito.primegov.com/Portal/viewer?id=0&type=7&uid=73e00809-8d00-449b-9e3e-b3dc0b0a44dd 12 Staff Report 2312-2468 (UAC February 21, 2024); https://cityofpa loa Ito. pri megov.com/Portal/viewer?id=0&type=7&uid=bfccaf4e-7ad7-49a b-9da2-5d728220M33 Item 29: Staff Report Pg. 15 Packet Pg. 723 of 857 Item 29 Item 29 Staff Report The UAC reviewed staff's final recommendations for the Wastewater Collection, Water, Gas, and Electric utilities at its March 6, 2024 UAC meeting13, which were all passed unanimously. The Finance Committee reviewed staff's proposals for the following utilities at its April 23, 2024 Finance Committee meeting14, which were all passed unanimously (3-0): 1. Wastewater Collection (Staff Report 2402-260315) 2. Water (Staff Report 2402-260416) 3. Gas (Staff Report 2402-260517) 4. Electric (Staff Report 2401-249718) 5. Stormwater Management (Staff Report 2402-261419) The Finance Committee voted on additional changes for the Gas Utility General Fund Transfer on May 8, 2024 and the Council discussed those changes on May 13, 2024 during a budget study session. This report discusses those changes above and the attached resolutions reflect the Committee's direction. The FY 2025 Budget is being developed concurrent with these rates and, depending on the final rates, adjustments to the budget may be necessary. Note that there were no specific stakeholder engagement meetings on Dark Fiber rates because there are only a few impacted customers and the rate is increasing by CPI consistent with past practice. ENVIRONMENTAL REVIEW Adoption of the attached Financial Plans and budgeted transfers does not meet the California Environmental Quality Act's definition of a project, pursuant to Public Resources Code Section 21065 and CEQA Guidelines Section 15378(b)(4) and (5), because it is a governmental fiscal and administrative activity which will not cause a direct or indirect physical change in the environment. Adoption of the proposed wastewater collection, water, gas, electric, storm water management fee, and dark fiber rates to meet operating expenses, purchase supplies and materials, meet financial reserve needs and obtain funds for capital improvements necessary to maintain service is not subject to the California Environmental Quality Act (CEQA), pursuant to 13 March 6, 2024 UAC meeting; https://cityofpaloaIto.primegov.com/Portal/Meeting?meetingTemplateld=13458 14 April 23, 2024 Finance Committee meeting; https://cityofpaloaIto.primegov.com/Portal/Meeting?meetingTemplateld=15049 15 Staff Report 2402-2603; https://cityofpaloaIto.primegov.com/Portal/viewer?id=0&type=7&uid=90274720-d4f9- 47c2-964a-5c722c99d7d8 16 Staff Report 2402-2604; https://cityofpaloaIto.primegov.com/Portal/viewer?id=0&type=7&uid=29e7b9c3- 6b38-4c11-8032-8f921445fdac 17 Staff Report 2402-2605; https://cityofpaloaIto.primegov.com/Portal/viewer?id=0&type=7&uid=d5e65956-71ef- 419d-b758-2a841ff14bef 18 Staff Report 2401-2497; https://cityofpaloaIto.primegov.com/Portal/viewer?id=0&type=7&uid=83d9b5c9-f7le- 4d48-8322-665a9b4754a9 19 Staff Report 2402-2614; https://cityofpaloaIto.primegov.com/Portal/viewer?id=0&type=7&uid=cO5ba13f-1c8a- 4376-87b7-7d 127a501824 Item 29: Staff Report Pg. 16 Packet Pg. 724 of 857 Item 29 Item 29 Staff Report California Public Resources Code Sec. 21080(b)(8) and Title 14 of the California Code of Regulations Sec. 15273(a). After reviewing the staff report and all attachments presented to Council, the Council incorporates these documents herein and finds that sufficient evidence has been presented setting forth with specificity the basis for this claim of CEQA exemption. ATTACHMENTS Attachment A: Resolution for the Wastewater Collection Utility FY 2025 Attachment B: Resolution for the Water Utility FY 2025 Attachment C: Resolution for the Gas Utility FY 2025 Attachment D: Resolution for the Electric Utility FY 2025 Attachment E: Resolution for the Fiber Optic Utility FY 2025 Attachment F: Resolution for the Storm Water Management Fee Rates FY 2025 Attachment G: Table of URLs for Exhibits to Attachments A - F APPROVED BY: Dean Batchelor, Director of Utilities Item 29: Staff Report Pg. 17 Packet Pg. 725 of 857 Item 29 chmentA Attachment A - Wastewater Resolution * NOT YET APPROVED * FY25 Resolution No. Resolution of the Council of the City of Palo Alto Approving the FY 2025 Wastewater Collection Utility Financial Plan, Including Approval of a Short -Term Loan from the Fiber Optics Fund Reserve to the Wastewater Collection Fund Operations Reserve for FY 2024, and Adjusting Wastewater Rates by Amending Rate Schedules S-1 (Residential Wastewater Collection and Disposal), S-2 (Commercial Wastewater Collection and Disposal), S-6 (Restaurant Wastewater Collection and Disposal) and S-7 (Commercial Wastewater Collection and Disposal — Industrial Discharger) RECITALS A Each year the City of Palo Alto ("City") assesses the financial position of its utilities with the goal of ensuring adequate revenue to fund operations. This includes making long-term projections of market conditions, the physical condition of the system, and other factors that could affect utility costs, and setting rates adequate to recover these costs. The City does this with the goal of providing safe, reliable, and sustainable utility services at competitive rates. The City adopts Financial Plans to summarize these projections. B. The City uses reserves to protect against contingencies and to manage other aspects of its operations, and regularly assesses the adequacy of these reserves and the management practices governing their operation. The status of utility reserves and their management practices are included in Reserves Management Practices attached to and made a part of the Financial Plans. C Pursuant to Chapter 12.20.010 of the Palo Alto Municipal Code, the Council of the City of Palo Alto may by resolution adopt rules and regulations governing utility services, fees and charges. D. On June 17, 2024, the City Council held a full and fair public hearing regarding the proposed rate increase and considered all protests against the proposals. E. As required by Article XIII D, Section 6 of the California Constitution and applicable law, notice of the June 17, 2024 public hearing was mailed to all City of Palo Alto Utilities wastewater customers by April 29, 2024. F. The City Clerk has tabulated the total number of written protests presented by the close of the public hearing, and determined that it was less than fifty percent (50%) of the total number of customers and property owners subject to the proposed wastewater rate amendments, therefore a majority protest does not exist against the proposal. The Council of the City of Palo Alto does hereby RESOLVE as follows: Item 29: Staff Report Pg. 18 Packet Pg. 726 of 857 027052824 * NOT YET APPROVED * Item 29 chmentA Attachment A - Wastewater Resolution FY25 SECTION 1. The Council hereby approves the FY 2025 Wastewater Collection Utility Financial Plan (Exhibit 1). SECTION 2. The Council hereby approves a short term loan transfer from the Fiber Optics Fund Reserve to the Wastewater Collection Fund Operations Reserve of up to $3,000,000 for FY 2024, as described in the FY 2025 Wastewater Collection Utility Financial Plan (Exhibit 1). SECTION 3. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule S-1 (Residential Wastewater Collection and Disposal) is hereby amended to read as attached and incorporated. Utility Rate Schedule S-1, as amended, shall become effective July 1, 2024 (Exhibit 2). SECTION 4. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule S-2 (Commercial Wastewater Collection and Disposal) is hereby amended to read as attached and incorporated. Utility Rate Schedule S-2, as amended, shall become effective July 1, 2024 (Exhibit 2). SECTION 5. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule S-6 (Restaurant Wastewater Collection and Disposal) is hereby amended to read as attached and incorporated. Utility Rate Schedule S-6, as amended, shall become effective July 1, 2024 (Exhibit 2). SECTION 6. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule S-7 (Commercial Wastewater Collection and Disposal — Industrial Discharger) is hereby amended to read as attached and incorporated. Utility Rate Schedule S-7, as amended, shall become effective July 1, 2024 (Exhibit 2). SECTION 7. The Council finds that the revenue derived from the wastewater rates approved by this resolution do not exceed the funds required to provide wastewater service, and the revenue derived from the adoption of this resolution shall be used only for the purposes set forth in Article VII, Section 2, of the Charter of the City of Palo Alto. SECTION 8. The Council finds that the fees and charges adopted by this resolution are charges imposed for a specific government service or product provided directly to the payor that are not provided to those not charged, and do not exceed the reasonable costs to the City of providing the service or product. // // // // 027052824 Item 29: Staff Report Pg. 19 Packet Pg. 727 of 857 * NOT YET APPROVED * Item 29 chmentA Attachment A - Wastewater Resolution FY25 SECTION 9. The Council finds that the adoption of this resolution approving the FY 2025 Wastewater Collection Utility Financial Plan does not meet the California Environmental Quality Act's definition of a project under Public Resources Code Section 21065 and CEQA Guidelines Section 15378(b)(5), because it is an administrative governmental activity which will not cause a direct or indirect physical change in the environment, and therefore, no environmental review is required. The Council finds that the adoption of this resolution changing Wastewater collection rates to meet operating expenses, purchase supplies and materials, meet financial reserve needs and obtain funds for capital improvements necessary to maintain service is not subject to the California Environmental Quality Act (CEQA), pursuant to California Public Resources Code Sec. 21080(b)(8) and Title 14 of the California Code of Regulations Sec. 15273(a). After reviewing the staff report and all attachments presented to Council, the Council incorporates these documents herein and finds that sufficient evidence has been presented setting forth with specificity the basis for this claim of CEQA exemption. INTRODUCED AND PASSED: AYES: NOES: ABSENT: ABSTENTIONS ATTEST: City Clerk APPROVED AS TO FORM: Assistant City Attorney Mayor APPROVED: City Manager Director of Utilities Director of Administrative Services 027052824 Item 29: Staff Report Pg. 20 Packet Pg. 728 of 857 Item 29 *NOT YET APPROVED* Attachment B -Water nt B Resolution FY25 Resolution No. Resolution of the Council of the City of Palo Alto Approving the FY 2025 Water Utility Financial Plan and Reserve Transfers, and Increasing Water Rates by Amending Rate Schedules W-1 (General Residential Water Service), W-2 (Water Service from Fire Hydrants), W-3 (Fire Service Connections), W-4 (Residential Master -Metered and General Non- Residential Water Service), and W-7 (Non -Residential Irrigation Water Service) RECITALS A. Each year the City of Palo Alto ("City") assesses the financial position of its utilities with the goal of ensuring adequate revenue to fund operations. This includes making long-term projections of market conditions, the physical condition of the system, and other factors that could affect utility costs, and setting rates adequate to recover these costs. The City does this with the goal of providing safe, reliable, and sustainable utility services at competitive rates. The City adopts Financial Plans to summarize these projections. B. The City uses reserves to protect against contingencies and to manage other aspects of its operations, and regularly assesses the adequacy of these reserves and the management practices governing their operation. The status of utility reserves and their management practices are included in Reserves Management Practices attached to and made part of the Financial Plans. C. Pursuant to Chapter 12.20.010 of the Palo Alto Municipal Code, the Council of the City of Palo Alto may by resolution adopt rules and regulations governing utility services, fees and charges. D. On June 17, 2024, the City Council held a full and fair public hearing regarding the proposed rate increase and considered all protests against the proposals. E. As required by Article XIII D, Section 6 of the California Constitution and applicable law, notice of the June 17, 2024 public hearing was mailed to all City of Palo Alto Utilities water customers by April 29, 2024. The City Clerk has tabulated the total number of written protests presented by the close of the public hearing, and determined that it was less than fifty percent (50%) of the total number of customers and property owners subject to the proposed water rate amendments, therefore a majority protest does not exist against the proposal. The Council of the City of Palo Alto does hereby RESOLVE as follows: Item 29: Staff Report Pg. 21 1 r Packet Pg. 729 of 857 027052824 *NOT YET APPROVED* Item 29 Attachment B -Water Resolution FY25 nt B SECTION 1. The Council hereby approves the FY 2025 Water Utility Financial Plan (Exhibit 1). SECTION 2. The Council hereby approves a transfer from the Capital Improvement Program Reserve to the Operations Reserve of up to $3,461,000 in FY 2024 as described in the FY 2025 Water Utility Financial Plan (Exhibit 1). SECTION 3. The Council hereby approves a transfer from the Rate Stabilization Reserve to the Operations Reserve of up to 2,069,000 in FY 2024 as described in the FY 2025 Water Utility Financial Plan (Exhibit 1). SECTION 4. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule W-1 (General Residential Water Service) is hereby amended to read as attached and incorporated. Utility Rate Schedule W-1, as amended, shall become effective July 1, 2024 (Exhibit 2). SECTION 5. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule W-2 (Water Service from Fire Hydrants) is hereby amended to read as attached and incorporated. Utility Rate Schedule W-2, as amended, shall become effective July 1, 2024 (Exhibit 2). SECTION 6. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule W-3 (Fire Service Connections) is hereby amended to read as attached and incorporated. Utility Rate Schedule W-3, as amended, shall become effective July 1, 2024 (Exhibit 2). SECTION 7. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule W-4 (Residential Master -Metered and General Non -Residential Water Service) is hereby amended to read as attached and incorporated. Utility Rate Schedule W- 4, as amended, shall become effective July 1, 2024 (Exhibit 2). SECTION 8. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule W-7 (Non -Residential Irrigation Water Service) is hereby amended to read as attached and incorporated. Utility Rate Schedule W-7, as amended, shall become effective July 1, 2024 (Exhibit 2). SECTION 9. The City Council finds as follows: a. Revenues derived from the water rates approved by this resolution do not exceed the funds required to provide waterservice. b. Revenues derived from the water rates approved by this resolution shall not be used for any purpose other than providing water service, and the purposes set forth in 027052824 L Item 29: Staff Report Pg. 22 Packet Pg. 730 of 857 Item 29 Attachment B -Water *NOT YET APPROVED* Resolution FY25 nt B Article VII, Section 2, of the Charter of the City of Palo Alto. c. The amount of the water rates imposed upon any parcel or person as an incident of property ownership shall not exceed the proportional cost of the water service attributable to the parcel. SECTION 10. The Council finds that the fees and charges adopted by this resolution are charges imposed for a specific government service or product provided directly to the payor that are not provided to those not charged, and do not exceed the reasonable costs to the City of providing the service or product. // // // // // // // // // // // // // // // // // 027052824 3 Item 29: Staff Report Pg. 23 Packet Pg. 731 of 857 *NOT YET APPROVED* Item 29 Attachment B -Water Resolution FY25 nt B SECTION 11. The Council finds that the adoption of this resolution approving the FY 2025 Water Financial Plan and Reserve transfers does not meet the California Environmental Quality Act's (CEQA) definition of a project under Public Resources Code Section 21065 and CEQA Guidelines Section 15378(b)(5), because it is an administrative governmental activity which will not cause a direct or indirect physical change in the environment, and therefore, no environmental review is required. The Council finds that the adoption of this resolution changing water rates to meet operating expenses, purchase supplies and materials, meet financial reserve needs and obtain funds for capital improvements necessary to maintain service is not subject to the California Environmental Quality Act (CEQA), pursuant to California Public Resources Code Sec. 21080(b)(8) and Title 14 of the California Code of Regulations Sec. 15273(a). After reviewing the staff report and all attachments presented to Council, the Council incorporates these documents herein and finds that sufficient evidence has been presented setting forth with specificity the basis for this claim of CEQA exemption. INTRODUCED AND PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: City Clerk APPROVED AS TO FORM: Assistant City Attorney Mayor APPROVED: City Manager Director of Utilities Director of Administrative Services 027052824 4 Item 29: Staff Report Pg. 24 Packet Pg. 732 of 857 hment C Item 29 Attachment C - Gas Resolution FY25 * NOT YET APPROVED * Resolution No. Resolution of the Council of the City of Palo Alto Approving the Fiscal Year 2025 Gas Utility Financial Plan and General Fund Transfer, and Increasing Gas Rates by Amending Rate Schedules G-1 (Residential Gas Service), G-2 (Residential Master -Metered and Commercial Gas Service), G-3 (Large Commercial Gas Service), and G- 10 (Compressed Natural Gas Service) RECITALS A. Each year the City of Palo Alto ("City") regularly assesses the financial position of its utilities with the goal of ensuring adequate revenue to fund operations, including reserves. This includes making long-term projections of market conditions, the physical condition of the system, and other factors that could affect utility costs, and setting rates adequate to recover these costs. It does this with the goal of providing safe, reliable, and sustainable utility services at competitive rates. The City adopts Financial Plans to summarize these projections. B. The City uses reserves to protect against contingencies and to manage other aspects of its operations, and regularly assesses the adequacy of these reserves and the management practices governing their operation. The status of utility reserves and their management practices are included in Reserves Management Practices attached to and made part of the Financial Plans. C. Pursuant to Chapter 12.20.010 of the Palo Alto Municipal Code, the Council of the City of Palo Alto may by resolution adopt rules and regulations governing utility services, fees and charges. D. On June 17, 2024, the City Council heard and approved the proposed rate increase at a noticed public hearing. The Council of the City of Palo Alto does hereby RESOLVE as follows: SECTION 1. The Council hereby approves the fiscal year ("FY") 2025 Gas Utility Financial Plan (Exhibit 1), including the amendments to the Gas Utility Reserves Management Practices (Exhibit 2); SECTION 2. The Council hereby approves the transfer of up to 14.5% of gas utility gross revenues received during FY 2023 to the general fund in FY 2025; SECTION 3. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule G-1 (Residential Gas Service) is hereby amended to read as attached and incorporated. Utility Rate Schedule G-1, as amended, shall become effective July 1,2024 (Exhibit 3); 6056816 Item 29: Staff Report Pg. 25 Packet Pg. 733 of 857 hment C Item 29 Attachment C - Gas Resolution FY25 * NOT YET APPROVED * SECTION 4. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule G-2 (Residential Master -Metered and Commercial Gas Service) is hereby amended to read as attached and incorporated. Utility Rate Schedule G-2, as amended, shall become effective July 1, 2024 (Exhibit 3); SECTION 5. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule G-3 (Large Commercial Gas Service) is hereby amended to read as attached and incorporated. Utility Rate Schedule G-3, as amended, shall become effective July 1, 2024 (Exhibit 3); SECTION 6. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule G-10 (Compressed Natural Gas Service Service) is hereby amended to read as attached and incorporated. Utility Rate Schedule G-10, as amended, shall become effective July 1, 2024 (Exhibit 3); SECTION 7. The City Council finds as follows: a. Revenues derived from the gas rates approved by this resolution do not exceed the funds required to provide gas service. b. Revenues derived from the gas rates approved by this resolution shall not be used for any purpose other than providing gas service, and the purposes set forth in Article VII, Section 2, of the Charter of the City of Palo Alto. SECTION 8. The Council finds that the fees and charges adopted by this resolution are charges imposed for a specific government service or product provided directly to the payor that are not provided to those not charged, and do not exceed the reasonable costs to the City of providing the service or product. // // // // 6056816 Item 29: Staff Report Pg. 26 Packet Pg. 734 of 857 hment C Item 29 Attachment C - Gas Resolution FY25 * NOT YET APPROVED * SECTION 9. The Council finds that approving the FY 2025 Gas Utility Financial Plan does not meet the California Environmental Quality Act's (CEQA) definition of a project under Public Resources Code Section 21065 and CEQA Guidelines Section 15378(b)(5), because it is an administrative governmental activity which will not cause a direct or indirect physical change in the environment, and therefore, no environmental assessment is required. The Council finds that changing gas rates to meet operating expenses, purchase supplies and materials, meet financial reserve needs and obtain funds for capital improvements necessary to maintain service is not subject to the California Environmental Quality Act (CEQA), pursuant to California Public Resources Code Sec. 21080(b)(8) and Title 14 of the California Code of Regulations Sec. 15273(a). After reviewing the staff report and all attachments presented to Council, the Council incorporates these documents herein and finds that sufficient evidence has been presented setting forth with specificity the basis for this claim of CEQA exemption. INTRODUCED AND PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: City Clerk APPROVED AS TO FORM: Assistant City Attorney Mayor APPROVED: City Manager Director of Utilities Director of Administrative Services 6056816 Item 29: Staff Report Pg. 27 Packet Pg. 735 of 857 Item 29 NOT YET APPROVED Attachment D - Electric Resolution FY25 t D Resolution No. Resolution of the Council of the City of Palo Alto Approving the Fiscal Year 2025 Electric Utility Financial Plan and Accepting the 2024 City of Palo Alto Electric Cost of Service and Rate Study, and Amending Utility Rate Schedules E-1 (Residential Electric Service), E-2 (Residential Master -Metered and Small Non -Residential Electric Service), E -2-G (Residential Master - Metered and Small Non -Residential Green Power Electric Service), E-4 (Medium Non -Residential Electric Service), E -4-G (Medium Non -Residential Green Power Electric Service), E-4 TOU (Medium Non -Residential Time of Use Electric Service), E-7 (Large Non -Residential Electric Service), E -7-G (Large Non- Residential Green Power Electric Service), E-7 TOU (Large Non - Residential Time of Use Electric Service), E-14 (Street Lights), E-NSE (Net Surplus Electricity Compensation Rate), and E -EEC (Export Electricity Compensation) A. Each year the City of Palo Alto ("City") regularly assesses the financial position of its utilities with the goal of ensuring adequate revenue to fund operations. This includes making long-term projections of market conditions, the physical condition of the system, and other factors that could affect utility costs, and setting rates adequate to recover these costs. It does this with the goal of providing safe, reliable, and sustainable utility services at competitive rates. The City adopts Financial Plans to summarize these projections. B. The City uses reserves to protect against contingencies and to manage other aspects of its operations, and regularly assesses the adequacy of these reserves and the management practices governing their operation. The status of utility reserves and their management practices are included in Reserves Management Practices attached to and made part of the Financial Plans. C. Pursuant to Chapter 12.20.010 of the Palo Alto Municipal Code, the Council of the City of Palo Alto may by resolution adopt rules and regulations governing utility services, fees and charges. D. On June 17, 2024, the City Council heard and approved the proposed rate increase at a noticed public hearing. The Council of the City of Palo Alto does hereby RESOLVE as follows: 6056815 Utility Electric Rate Schedules FY25 Electric Financial Plan Item 29: Staff Report Pg. 28 Packet Pg. 736 of 857 Item 29 Attachment D - Electric Resolution FY25 t D SECTION 1. The Council hereby approves the FY 2025 Electric Utility Financial Plan (Exhibit 2), including the amended Electric Utility Reserves Management Practices in Appendix B of the Financial Plan and accepts the 2024 City of Palo Alto Electric Cost of Service and Rate Study (Exhibits 1.1 and 1.2). SECTION 2. The Council hereby approves the following transfers to be made by the end of FY 2024, as described in the FY 2025 Electric Utility Financial Plan (Exhibit 2): a. A transfer of up to $20 million from the Electric Special Projects Reserve to the Supply Operations Reserve; and b. A transfer of up to $17 million from the Supply Operations Reserve to the Hydroelectric Stabilization Reserve; and c. A transfer of up to $58 million from the Supply Operations Reserve to the Distribution Operations Reserve SECTION 3. The Council hereby approves the following transfers to be made by the end of FY 2025, as described in the FY 2025 Electric Utility Financial Plan (Exhibit 2): a. A transfer of up to $26 million from the Distribution Operations Reserve to the Supply Operations Reserve; and b. A transfer of up to $30 million from the Supply Operations Reserve to the Electric Special Projects Reserve; and c. A transfer of up to $5 million from the Distribution Operations Reserve to the CIP Reserve SECTION 4. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule E-1 (Residential Electric Service) is hereby amended to read as attached and incorporated. Utility Rate Schedule E-1, as amended, shall become effective July 1, 2024 (Exhibit 3). SECTION 5. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule E-2 (Residential Master -Metered and Small Non -Residential Electric Service) is hereby amended to read as attached and incorporated. Utility Rate Schedule E-2, as amended, shall become effective July 1, 2024 (Exhibit 3). SECTION 6. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule E -2-G (Residential Master -Metered and Small Non -Residential Green Power Electric Service) is hereby amended to read as attached and incorporated. Utility Rate Schedule E -2-G, as amended, shall become effective July 1, 2024 (Exhibit 3). 6056815 Utility Electric Rate Schedules Item 29: Staff Report Pg. 29 Packet Pg. 737 of 857 FY25 Electric Financial Plan Item 29 Attachment D - Electric Resolution FY25 t D SECTION 7. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule E-4 (Medium Non -Residential Electric Service) is hereby amended to read as attached and incorporated. Utility Rate Schedule E-4, as amended, shall become effective July 1, 2024 (Exhibit 3). SECTION 8. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule E -4-G (Medium Non -Residential Green Power Electric Service) is hereby amended to read as attached and incorporated. Utility Rate Schedule E -4-G, as amended, shall become effective July 1, 2024 (Exhibit 3). SECTION 9. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule E-4 TOU (Medium Non -Residential Time of Use Electric Service) is hereby amended to read as attached and incorporated. Utility Rate Schedule E-4 TOU, as amended, shall become effective July 1, 2024 (Exhibit 3). SECTION 10. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule E-7 (Large Non -Residential Electric Service) is hereby amended to read as attached and incorporated. Utility Rate Schedule E-7, as amended, shall become effective July 1, 2024 (Exhibit 3). SECTION 11. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule E -7-G (Large Non -Residential Green Power Electric Service) is hereby amended to read as attached and incorporated. Utility Rate Schedule E -7-G, as amended, shall become effective July 1, 2024 (Exhibit 3). SECTION 12. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule E-7 TOU (Large Non -Residential Time of Use Electric Service) is hereby amended to read as attached and incorporated. Utility Rate Schedule E-7 TOU, as amended, shall become effective July 1, 2024 (Exhibit 3). SECTION 13. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule E-14 (Street Lights) is hereby amended to read as attached and incorporated. Utility Rate Schedule E-7 TOU, as amended, shall become effective July 1, 2024 (Exhibit 3). SECTION 14. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule E-NSE (Net Surplus Electricity Compensation Rate) is hereby amended to read as attached and incorporated. Utility Rate Schedule E-NSE-1, as amended, shall become effective July 1, 2024 (Exhibit 3). SECTION 15. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule E -EEC -1 (Export Electricity Compensation) is hereby amended to read as attached and 6056815 Utility Electric Rate Schedules Item 29: Staff Report Pg. 30 Packet Pg. 738 of 857 FY25 Electric Financial Plan Item 29 Attachment D - Electric Resolution FY25 t D incorporated. Utility Rate Schedule E -EEC -1, as amended, shall become effective July 1, 2024 (Exhibit 3). SECTION 16. The Council makes the following findings: a. The revenue derived from the adoption of this resolution shall be used only for the purpose set forth in Article VII, Section 2, of the Charter of the City of Palo Alto. b. The fees and charges adopted by this resolution are charges imposed for a specific government service or product provided directly to the payor that are not provided to those not charged, and do not exceed the reasonable costs to the City of providing the service or product. // // // // // // // // // // // 6056815 Utility Electric Rate Schedules Item 29: Staff Report Pg. 31 Packet Pg. 739 of 857 FY25 Electric Financial Plan Item 29 Attachment D - Electric Resolution FY25 t D SECTION 17. The Council finds that approving the Financial Plan and Reserve transfers does not meet the California Environmental Quality Act's (CEQA) definition of a project under Public Resources Code Section 21065 and CEQA Guidelines Section 15378(b)(5), because it is an administrative governmental activity which will not cause a direct or indirect physical change in the environment, and therefore, no environmental assessment is required. The Council finds that changing electric rates to meet operating expenses, purchase supplies and materials, meet financial reserve needs and obtain funds for capital improvements necessary to maintain service is not subject to the California Environmental Quality Act (CEQA), pursuant to California Public Resources Code Sec. 21080(b)(8) and CEQA Guidelines Sec. 15273(a). After reviewing the staff report and all attachments presented to Council, the Council incorporates these documents herein and finds that sufficient evidence has been presented setting forth with specificity the basis for this claim of CEQA exemption. INTRODUCED AND PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: City Clerk APPROVED AS TO FORM: Assistant City Attorney Mayor APPROVED: City Manager Director of Utilities Director of Administrative Services 6056815 Utility Electric Rate Schedules Item 29: Staff Report Pg. 32 Packet Pg. 740 of 857 FY25 Electric Financial Plan Attachment E Item 29 Attachment E - Fiber * NOT YET APPROVED * Resolution FY25 Resolution No. Resolution of the Council of the City of Palo Alto Adopting a Dark Fiber Rate Increase and Amending Rate Schedules EDF-1 (Dark Fiber Licensing Services), and EDF-2 (Dark Fiber Connection Fees) The Council of the City of Palo Alto does hereby RESOLVE as follows: SECTION 1. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule EDF-1 (Dark Fiber Licensing Services) is hereby amended to read as attached and incorporated. Utility Rate Schedule EDF-1, as amended, shall become effective July 1, 2024. SECTION 2. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule EDF-2 (Dark Fiber Connection Fees) is hereby amended to read as attached and incorporated. Utility Rate Schedule EDF-2, as amended, shall become effective July 1, 2024. SECTION 3. The Council finds that the revenue derived from the adoption of this resolution shall be used only for the purpose set forth in Article VII, Section 2, of the Charter of the City of Palo Alto. // // // // // // Item 29: Staff Report Pg. 33 Packet Pg. 741 of 857 6056841 Attachment E Item 29 Attachment E - Fiber * NOT YET APPROVED * Resolution FY25 SECTION 4. The Council finds that the adoption of this resolution increasing Dark Fiber utility rates by the Consumer Price Index to meet operating expenses, purchase supplies and materials, meet financial reserve needs and obtain funds for capital improvements necessary to maintain service is not subject to the California Environmental Quality Act (CEQA), pursuant to California Public Resources Code Sec. 21080(b)(8) and Title 14 of the California Code of Regulations Sec. 15273(a). After reviewing the staff report and all attachments presented to Council, the Council incorporates these documents herein and finds that sufficient evidence has been presented setting forth with specificity the basis for this claim of CEQA exemption. INTRODUCED AND PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: City Clerk APPROVED AS TO FORM: Assistant City Attorney Mayor APPROVED: City Manager Director of Utilities Director of Administrative Services Item 29: Staff Report Pg. 34 Packet Pg. 742 of 857 6056841 Attachment F *NOT YET APPROVED* Resolution No. Item 29 Attachment F - Storm Water Management Fee Resolution Resolution of the Council of the City of Palo Alto Amending Utility Rate Schedule D-1 (Storm and Surface Water Drainage) to Increase Storm Water Management Fee Rates by 2.6% Per Month Per Equivalent Residential Unit for Fiscal Year 2025 RECITALS A. In April 2017, a majority of property owners approved a ballot measure adopting a monthly Storm Water Management Fee to fund storm drain capital improvements projects, enhanced maintenance of the storm drain system, storm water quality protection programs, and related activities. B. The ballot measure allowed for annual increases to the fee based on lesser of the local rate of inflation (based on changes to the Consumer Price Index for the San Francisco - Oakland -San Jose region as published by the Bureau of Labor Statistics) or 6%. C. According to the Bureau of Labor Statistics, the Consumer Price Index for the San Francisco -Oakland -San Jose region increased by 2.6% between December 2022 and December 2023. The Council of the City of Palo Alto does hereby RESOLVES as follows: SECTION 1. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule D-1 (Storm and Surface Water Drainage) is hereby amended to read in accordance with sheet D-1-1, attached hereto and incorporated herein. The foregoing Utility Rate Schedule, as amended, shall become effective July 1, 2024. SECTION 2. The Council finds that this rate increase is being imposed to offset the effects of inflation on labor and material costs pursuant to the annual inflationary fee escalator provision of the Storm Water Management Fee ballot measure, which was approved by a majority of Palo Alto property owners on April 11, 2017. SECTION 3. The Council finds that the revenue derived from the authorized adoption enumerated herein shall be used only for the purpose set forth in Article VII, Section 2, of the Charter of the City of Palo Alto. // // // Item 29: Staff Report Pg. 35 Packet Pg. 743 of 857 6056842 *NOT YET APPROVED* Item 29 Attachment F - Storm Water Management Fee SECTION 4. The Council finds that the adoption of this resolutiL Resolution Storm Water Management Fee to meet operating expenses, purchase supplies and materials, meet financial reserve needs and obtain funds for capital improvements necessary to maintain service is not subject to the California Environmental Quality Act (CEQA), pursuant to California Public Resources Code Sec. 21080(b)(8) and Title 14 of the California Code of Regulations Sec. 15378(b)(4). After reviewing the staff report and all attachments presented to Council, the Council incorporates these documents herein and finds that sufficient evidence has been presented setting forth with specificity the basis for this claim of CEQA exemption. 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 Director of Administrative Services Item 29: Staff Report Pg. 36 Packet Pg. 744 of 857 6056842 Attachment G "Table of URLs for the Exhibits to Attachments A — F" Item 29 Attachment G -Table of URLs for Exhibits VT1T A I'11 1 tI[r- Wastewater Collection Utility Financial Plan FY 2025 111:1 https://www.cityofpaloalto.org/files/assets/public/v/2/agendas-minutes- reports/reports/city-manager-reports-cmrs/attachments/2024-rates/wastewater- financial-plan-fy25.pdf A 2 Wastewater Collection Utility Rate Schedules FY 2025 https://www.cityofpaloalto.org/files/assets/public/v/1/agendas-minutes- reports/reports/city-manager-reports-cmrs/attachments/2024-rates/wastewater- rate-sched u les-fy25.pdf B 1 Water Utility Financial Plan FY 2025 https://www.cityofpaloalto.org/files/assets/public/v/1/agendas-minutes- reports/reports/city-manager-reports-cmrs/attachments/2024-rates/water-financial- plan-fy25. pdf B 2 Water Utility Rate Schedules FY 2025 https://www.cityofpaloalto.org/files/assets/public/v/1/agendas-minutes- reports/reports/city-manager-reports-cmrs/attachments/2024-rates/water-rate- schedules-fy25.pdf C 1 Gas Utility Financial Plan FY 2025 https://www.cityofpaloalto.org/files/assets/public/v/2/agendas-minutes- reports/reports/city-manager-reports-cmrs/attachments/2024-rates/gas-financial- plan-fy25.pdf C 2 Amended Gas Utility Reserve Management Practices https://www.cityofpaloalto.org/files/assets/public/v/2/agendas-minutes- reports/reports/city-manager-reports-cmrs/attachments/2024-rates/gas-reserve- man age ment-practices-fy25.pdf C 3 Gas Utility Rate Schedules FY 2025 https://www.cityofpaloalto.org/files/assets/public/v/1/agendas-minutes- reports/reports/city-manager-reports-cmrs/attachments/2024-rates/gas-rate- schedules-fy25.pdf D 1.1 2024 City of Palo Alto Electric Cost of Service and Rate Study https://www.cityofpaloalto.org/files/assets/public/v/3/agendas-minutes- reports/reports/city-manager-reports-cmrs/attachments/2024-rates/electric-cosa.pdf D 1.2 COSA Technical Appendix https://www.cityofpaloalto.org/files/assets/public/v/2/agendas-minutes- reports/reports/city-manager-reports-cmrs/attachments/2024-rates/techincal- appendix.pdf D 2 Electric Utility Financial Plan FY 2025 https://www.cityofpaloalto.org/files/assets/public/v/2/agendas-minutes- reports/reports/city-manager-reports-cmrs/attachments/2024-rates/electric-utility- financial-plan-fy25.pdf D 3 Electric Utility Rates Schedules FY 2025 https://www.cityofpaloalto.org/files/assets/public/v/2/agendas-minutes- reports/reports/city-manager-reports-cmrs/attachments/2024-rates/electric-rates- schedule.pdf Item 29: Staff Report Pg. 37 Packet Pg. 745 of 857 Attachment G "Table of URLs for the Exhibits to Attachments A — F" Item 29 Attachment G -Table of URLs for Exhibits y-ir D iii 4 tIrI Amended Electric Utility Reserves Management Practices 111.1 https://www.cityofpaloalto.org/files/assets/public/v/3/agendas-minutes- reports/reports/city-manager-reports-cmrs/attachments/2024-rates/amended- electric-utility-reserves-management-practices.pdf E 1 Fiber Optic Utility Rate Schedules FY 2025 https://www.cityofpaloalto.org/files/assets/public/v/1/agendas-minutes- reports/reports/city-manager-reports-cmrs/attachments/2024-rates/fiber-rate- schedules-fy25.pdf F 1 Storm and Surface Drainage Rate Schedule FY 2025 https://www.cityofpaloalto.org/files/assets/public/v/1/agendas-minutes- reports/reports/city-manager-reports-cmrs/attachments/2024-rates/storm-and- surface-drainage-rate-schedule.pdf Item 29: Staff Report Pg. 38 Packet Pg. 746 of 857 Item 30 Item 30 Staff Report City Council Staff Report From: City Manager CITY O F Report Type: ACTION ITEMS PALO Lead Department: Utilities ALTO Meeting Date: June 17, 2024 Staff Report: 2405-2996 TITLE Approve Retention of the Current Western Area Power Administration (WAPA) Hydroelectricity Base Resource Contract Allocation From 2025-2030; CEQA Status: Not a Project. RECOMMENDATION The Utilities Advisory Commission and staff recommend that the City Council keep the City of Palo Alto's full share of its allocated hydroelectric resource under the current hydroelectricity supply contract, the 2025 Base Resource Contract from Sierra Nevada Region of the Western Area Power Administration (2025 WAPA Contract), as approved by Council in February of 2021 (Staff Report #116791) Note: No action from City Council is required to remain in the contract at the current resource allocation percentage (12.06299%). Staff will revisit project financial impact in 2029 and make a recommendation for the period of 2030 through 2034. The decision to reduce the contract allocation or terminate the contract will be revisited every five years until the last termination opportunity in 2049. EXECUTIVE SUMMARY In 2021 the City Council approved the 2025 WAPA Contract, which allocates to the City a 12.06299% share of the WAPA contract's base resource generation from 2025-2055. As negotiated, the City has the option to reduce its allocation or terminate the 2025 WAPA Contract until June 30, 2025. The current decision is whether to maintain, decrease, or exit our hydroelectricity supply contract with WAPA for the years 2025 - 2030. If the City chooses to keep this contract in the electricity supply portfolio at the current allocation percentage, there will be an opportunity to reduce or eliminate the City's resource allocation share again in 2029, and every five years until the contract terminates in 2054. Exiting the contract or reducing the 1 Staff Report 11679 https://www.cityofpaloalto.org/files/assets/public/v/1/agendas-minutes- reports/reports/city-manager-reports-cmrs/yea r-archive/2021/02-01-21-id-11679.pdf Item 30: Staff Report Pg. 1 Packet Pg. 747 of 857 Item 30 Item 30 Staff Report contract allocation share is a permanent decision through the remaining duration of the contract (2054). Extensive analysis was completed to support this recommendation to extend the full share of contract, which will continue to provide approximately 40% of the City's current electricity supply. The recommendation to keep the hydroelectric contract is driven by high market electricity prices, improved project cost control, and greatly improved operational flexibility of the project. City of Palo Alto Utilities (CPAU) is working alongside WAPA to increase flexibility of the hydroelectric resource, to mitigate risks to the project, and to improve value in the rapidly changing electricity markets of the Western U.S. Staff would like to highlight exceptional efforts over the last eight years by federal staff at both WAPA and U.S. Bureau of Reclamation (USBR) who have worked with power customers to increase project flexibility while lowering costs. This continued partnership with power customers helps to mitigate the risks and uncertainties inherent in the contract. BACKGROUND CPAU has been a power customer of the USBR and WAPA since 1960. The City signed the current contract in 2000 (CMR 378:00, Resolution 80072) which began delivering hydroelectric power to the City in 2005 and would terminate if not extended by December 31, 2024. The City Council approved the 2025 WAPA Contract extension in 2021 after nearly seven years of negotiation (Staff Report #116793). This 2025 WAPA Contract extension runs from 2025-2054 unless the City decides to reduce its resource allocation percentage or exit the contract. The City can choose to reduce its resource allocation or exit the contract before June 30, 2024, and then may reconsider every five years thereafter for duration of the 30 -year extension, assuming the City remains in the contract through the full extension term. Therefore, while this is potentially a 30 -year extension, any decision to remain at the City's current resource allocation percentage is only binding for the next five years from January 1, 2025 to December 31, 2029. Most renewable and hydroelectricity contracts require a ten to twenty-year commitment, so the opportunity to reduce or end the contract every five years is a somewhat rare flexibility. A decision to reduce the City's allocation percentage or terminate the agreement will be permanent for the remainder of the 30 -year extension period. In 2020 WAPA completed a cost -of -service study which found that power customers such as the City had overpaid over the lifetime of the project since 1930. WAPA has been returning overpaid funds to the City and other power customers since 2021 and that will continue through 2030,4 and if the City exits the contract in 2025 then overpaid funds will not be reimbursed to the City. 2 Resolution 8007 https://www.cityofpaloaIto.org/files/assets/public/v/1/city-clerk/resolutions/reso8007.pdf 3 Staff Report 11679 https://www.cityofpaloalto.org/files/assets/public/v/1/agendas-minutes- reports/reports/city-manager-reports-cmrs/yea r-archive/2021/id-11679.pdf 4 WAPA's financial limitations do not allow return of funds by 2025. Item 30: Staff Report Pg. 2 Packet Pg. 748 of 857 Item 30 Item 30 Staff Report The contractual costs have been estimated by WAPA and USBR to be about $9M in 2025 escalating to about $11.5M in 2030. Contractual costs are not fixed, but WAPA and USBR aim for cost stability year to year. The 2025 WAPA Contract governs a hydroelectricity resource which comes almost entirely from the Central Valley Project. The Central Valley Project is a federal water storage and conveyance project consisting of twenty reservoirs, ten generating power plants, three pump stations, and 643 miles of canals. The Central Valley Project can generate up to 2,000 MW and delivers about seven -million -acre feet of water 500 miles south each year. Most of the water delivered irrigates agriculture in the southern part of the California Central Valley. As a reference this is equivalent to moving water from Jamestown New York, on Lake Erie, to Spartanburg South Carolina. Figure 1 shows the entire project spanning much of California. Figure 2 shows a simplified diagram of the Central Valley Project focused on the reservoirs, power plants and pumping stations. CPAU currently purchases about 12% of the Base Resource hydroelectricity, which is the surplus electricity from the project and amounts to about 65% of the total generation of the Central Valley Project. [Intentionally left blank] Item 30: Staff Report Pg. 3 Packet Pg. 749 of 857 Item 30 Item 30 Staff Report U.S. Bureau of Reclamation's OREGON CALIFORNUI Central Valley Project CaGlorniu, U50 Trinity 2,447.650 A.F. I Eurek IV' i Shasta 1 R. BAS 4,552,000A.F. Redding------------- �% z Pumligf4,m � 0 Black Butt 143,70000, ochico SACRAMENTO Pacific '. 13 - Ocean oYuha City 't, y Folsom Delta Division I- �• / �0LAN0 �D couNn c% ey°"n` wpv tote Canal Clifton Court Forebay n Legend CVP reservoir •• CVP canal •� ' .. Canal shared with State Water Project G Pumping plant aC Hydroelectric station/hydro dam a Pumped -storage hydro station ~—� River or stream River/stream carrying CVP water Shastafirinity River Division c — Trinity 0% Lake aaverviIl Levu Shasta Lake Clear Creek? nnel >u. Keswick11— 1 '- - whiskeytown spri ck Redding Lake Tun 5 tD 15 ,rl 977,000A.F. oSanta Rosa Sacramento -S EE INSET San Franciscoij'� Auburn -Folsom 5outh and Folsom/Sly Park Units f xe>sanp�� A,uan, sins Americ'� Auburn o d d1[ FDtk L' Roseville a kin Place O Lak. - , Folsom Lake '••'� aas ma Folsom �' feumy lln � tia,n sna ��� CDsvmM1[s 0 5 10 15 20 Mi. Stockton New Melons Ino Pl.nr 400,000 .F.- ` n[�� 9'Yi,9 ModestoAO o t7m/ o o Merced ?r a Friant San Luis t 52osoF. 2,041,000 A.F. , � e 11. Sall so O i '•.'��s Fresno ; —.— LI s e,Ii =ter VisQliao� �e, San Luis Unit and San Felipe Division o hem Morgan Hill Foana. _ . son Lai. Pumo,-\ wafsonviiie ��'• ' San Luis y;,' Nellis1u\ Reservoir �,O;, 0.an Fro a 0,5allnasevvoo 0 1 10 IS M1. Bakersfield I • Santa Maria - 0 10 20 30 40 Mlles Figure 1. USBR Map of Central Valley Project- By Shannonl - Own work, CC BY -SA 4.0, httl7s://commons.wikimedia.orR/w/index.DhD?curid=47015188 Item 30: Staff Report Pg. 4 Packet Pg. 750 of 857 Item 30 Item 30 Staff Report r ------------------------ I TRINITY LEwrSTON SHASTA SPRING CDEEK POWERDUNi i TO SAN FRANCISCO BAY I DELTA' sE«s. MNKSyD �k{WaNn ISWD) _ DDIn,*IW I ,c I I! ol' JONES PP I tiP O'NEILL DE LTA ME NEK)TACANM TO SAN FELIPE� s�ANnL Dos Amigos PP I LSANLUIS--------I CVP and SWP System Schematic OROVILLE 15wv1 -------------I NIMBUS FOLSOM L-------------1 NEW MELONEs TUILOCM I (TN -Dams) I-----------J FRIANT Figure 2.Simplified diagram of the Central Valley Project (CVP). A few State Water Project (SWP) units are shown when they are closely integrated or shared with the CVP. Credit: Cary Fox, USBR 2024 ANALYSIS To determine whether or not to recommend keeping the status quo under this contract extension, modeling with Ascend Analytics energy software as well as a broader uncertainty and sensitivity analyses was completed. Supplemental sensitivity and uncertainty analysis was performed to illustrate the magnitude of the uncertainties and to verify the Ascend model results with more conservative assumptions. Ascend Analytics Analysis Staff and the Ascend Analytics team completed robust analysis of the energy value under the 2025 WAPA Contract, using hundreds of Monte Carlo simulations5 comparing WAPA to other resources and variable forward -market prices. Several large community choice aggregators use Ascend Analytics tools for valuation of electricity supply contracts as it is considered one of the best -in -class tools currently available. Ascend uses current market prices along with planned transmission projects and generation projects to create a custom market price forecast for the California ISO area. These price forecasts by region within the California ISO are then used to generate project -specific price forecasts at 5 Monte Carlo simulations are used to model the probability of different outcomes when a number of the inputs in models have large uncertainties associated. It is a technique used to understand the impact of risk and uncertainty. Item 30: Staff Report Pg. 5 Packet Pg. 751 of 857 Item 30 Item 30 Staff Report each ISO node. This nodal price granularity provides improved accuracy for project revenue projections. The model dispatched the hydropower from the 2025 WAPA Contract realistically, respecting hourly maximum and minimum constraints (which change daily but, were modeled by a representative day per month) and then shaping the output around the highest priced hours. The modeling implemented monthly and annual total energy constraints which were tied to the precipitation of that year. Modeling also swept a broad modeling space with large variations in precipitation each year and a large range of forward -market electricity prices to reflect the current unpredictable conditions to assist in studying the range of possibilities. Supplemental Sensitivity and Uncertainty Analysis The primary purposes of the supplemental analyses were to explore a broader set of uncertainties, and more conservative scenarios than were considered with Ascend. The supplemental analyses performed by staff included: - Input lower energy prices since forward -market prices have come down since last year when the IRP modeling was completed, and explore sensitivity of results to a broader range of prices - Quantify the impact of highly variable precipitation as an explicit cost adder of the project as the variable generation (steady costs are an intrinsic cost of the current 2025 WAPA Contract) - Quantify the cost to the City's electricity portfolio of the seasonal mismatch of generation from WAPA, which generates in the spring and summer, versus the City's electric portfolio needs, which are mostly in the fall and winter - Quantify the cost adder due to the inaccurate month -ahead forecast from WAPA - Map the magnitude of uncertainties that should be planned for via hydroelectricity reserves if City keeps its status quo allocation under the 2025 WAPA contract - Map the sensitivity to each of the additional costs and potential regulatory risks. Supplemental Costs Included in Analysis Actual costs of the 2025 WAPA contract in the City's electric utility resource portfolio are greater than the contractual costs, due to: the hydrologic variability which we self -insure against and partially pass through to customers (via the large hydro adder), the high cost of supplemental energy in dry years, and the cost monthly forecasting errors. These and other costs are described in more detail below and are included as intrinsic costs to the project. Cost of precipitation variability: - The structure of the 2025 WAPA Contract is that CPAU must pay fully for the contracted allocation amount, no matter how much energy is generated. This means CPAU pays an extremely volatile price per unit of electricity from year to year given the extreme swings from wet to dry years in California. For example: o In 2022 CPAU received about 20% of long-term average generation expected Item 30: Staff Report Pg. 6 Packet Pg. 752 of 857 Item 30 Item 30 Staff Report o In 2021 CPAU received about 50% of long-term average generation expected Back-to-back dry years and extreme multi -year droughts are becoming more common in California, which effectively increases the reserve funds CPAU needs to self -insure against precipitation variability through the Hydroelectric Stabilization Reserve. CPAU limits the self- insurance costs by accepting some level of volatility in electricity rates, as CPAU passes through to customers some costs in Hydro Rate Adjustment surcharge. Cost of seasonal mismatch with CPAU electric portfolio: - WAPA delivers electricity mostly in the Spring and Summer, when CPAU's electric portfolio already has a surplus, requiring CPAU to sell power from other projects during low price seasons, and purchase market power during higher priced Fall and Winter to comply with risk management guidelines. The seasonal mismatch to CPAU's electric portfolio is quantified and included additional cost to capture the full cost of keeping the 2025 WAPA Contract. Cost of month -ahead forecast errors: - Poor forecasts add cost and exposure to the day -ahead market if the energy is not delivered as expected for the current month. The month -ahead forecasts from WAPA have been shown to have persistent inaccuracies to due to the operational complexity of the project and the reservoir, streamflow, temperature, dissolved oxygen, and pumping requirements. This cost is quantified and included in staff's analysis. Supplemental Uncertainties Included in Analysis - Exploring a broader range of low power prices similar to 2019 power price levels as an additional conservative sensitivity analysis - Additional environmental costs which could be added to the contract cost analysis in the future under some interpretations of the Central Valley Improvement Act - Lower generation from the project from both climate change and additional environmental constraints which would lower absolute generation which could be implemented as part of federal and state proceedings - Lower value generation from more generation being shifted into spring months with lower value from both reduced snowpack and additional environmental constraints being considered at the state and federal level RESULTS Overall, the 2025 WAPA Contract competed favorably under the large majority of scenarios explored, due to the dispatchable nature of the hydroelectricity. The improved dispatchability allows the project to generate in the late evening hours of the summer and even to some extent year-round as the overbuild of solar generation causes shortfalls of dispatchable power in the evening hours. The new flexibility of the project benefits from the increasing seasonal and hourly volatility from surplus solar in California. USBR operators are currently cycling pumped storage within the day to capture additional power revenues, backing down generation and spilling water Item 30: Staff Report Pg. 7 Packet Pg. 753 of 857 Item 30 Item 30 Staff Report over dams to capture negative prices, and pumping during the middle of the day to capture negative prices. These operational improvements are new in the last few years and are saving millions of dollars per year to CPAU and other power customers. Results of Analysis with Ascend Analytics The WAPA contract was chosen over competing resources in nearly every scenario of hundreds designed by staff and run by Ascend Analytics. The WAPA contract also had a positive net energy value in nearly every scenario. Some important caveats to these Ascend results are that the forward -market energy prices were very high last year, and that the supplemental cost of the inaccuracy of the month -ahead forecast were not explicitly added to the cost of the WAPA electric product. Results of Supplemental Uncertainty and Sensitivity Analysis The results of the additional uncertainty and sensitivity analysis are shown in Figure 3. Key takeaways are that the uncertainties are large especially in the latter years, but overall, the 2025 WAPA Contract will likely have a positive net value to CPAU. The largest drivers of the positive net value are high market electricity prices and the higher likelihood of better than average generation in 2025 and 2026. The probability of relatively high hydroelectricity generation in 2025 and 2026 is due to the very high precipitation in 2023 and the average precipitation 2024. The primary drivers of the decreasing value over time are the increasing chance of dry years over the next five years, increasing costs, and decreasing power market prices. Current market price forecasts expect prices to decline from today through 2030, and each forecast for several months has slightly accelerated this projected decline. The largest drivers of uncertainty are the variability of power prices, variability of precipitation, and regulatory risks to the amount and timing of generation. The magnitude of uncertainty one year out into the future is approximately $7-$15M. With climate change increasing the likelihood of multiyear droughts in the future, CPAU may need to consider increasing the hydro reserve fund to ensure rate stability. Alternatives Analyzed The modeling using Ascend Analytics energy software compared WAPA to several alternatives. This modeling showed that overall WAPA outperformed other available carbon -free electricity resources in the Western US. Internal additional analysis confirmed that WAPA is most likely less expensive and more resilient to emerging risks (increasing volatility, lower average prices) than all other carbon -free electricity sources currently available. These advantages were maintained even accounting for climate change uncertainties with large hydroelectric. If CPAU electricity load grows, we may consider local round-the-clock resources for additional diversity as our current portfolio is heavy in remote hydroelectric and solar resources. Staff have Item 30: Staff Report Pg. 8 Packet Pg. 754 of 857 Item 30 Item 30 Staff Report assessed that the marginal diversity benefit of decreasing our exposure to hydroelectricity by decreasing the WAPA contract is far outweighed by the flexibility and cost of the WAPA resource. 2025-2029 VALUATION ESTIMATE FOR WAPA BASE RESOURCE $30 O $20 p. - -$30 - O2025 2026 O2027 O2028 O2029 Figure 3. Results of the supplemental uncertainty and sensitivity analysis for years 2025-2029 FISCAL/RESOURCE IMPACT Although there is a great deal of uncertainty due to regulatory risks and precipitation uncertainty, CPAU is expected to save money in aggregate over the next five years by retaining the resource. The annual costs are estimated to be $9M in 2025 and escalate to approximately $11.5M in 2029. Alternatives to continuing with the 2025 WAPA Contract are likely substantially more expensive in the next two to three years. There are larger risks and uncertainties associated with the project in the latter two to three years of the period analyzed (2027-2029). Staff is engaged with federal staff partners to mitigate those risks as much as possible by operational improvements and facility upgrades. POLICY IMPLICATIONS Keeping the current resource allocation under the 2025 WAPA Contract is consistent with the 2023 Electric Utilities Integrated Resource Plan, the Utilities Strategic Plan, the Sustainability Implementation Plans, and the City's Sustainability and Climate Action Plan (S/CAP). Item 30: Staff Report Pg. 9 Packet Pg. 755 of 857 Item 30 Item 30 Staff Report STAKEHOLDER ENGAGEMENT Staff presented the recommendation to extend the maximum available share of the WAPA Base Resource to the UAC May 1, 20246. UAC members asked for clarification about: 1. Why the value of the project is going down over time? a. Energy prices are currently projected to go down over the 2025-2029 timeframe, meaning the revenue from this generation would also go down. 2. If it were possible to sign up for only the years where the project was projected to be profitable, such as 2025-2027? a. Our current WAPA contract is a 20 -year contract, and that technically this contract extension is a 30 -year contract, with the option to decrease our share or terminate every five years. That flexibility to decrease or exit every five years was the result of contract negotiations. 3. What the WAPA bar chart of costs the really meant in the presentation'? a. Costs in 2024 were lower than in any year since 2010. This is largely because staff had worked closely with Western to get more value from WAPA transmission charging more to their transmission customers and generating more revenue from the project by operating it more flexibly and also participating in the Energy Imbalance Market. 4. How could costs of WAPA be going down if our rates were going up? a. City rates are not only driven by the profitability of our electricity supply, but also by transmission costs and reliability products such as resource adequacy, the cost of both of which is going up. The recommendation was approved with all six UAC Commissioners in attendance. ENVIRONMENTAL REVIEW The City Council's approval regarding remaining in this contract extension does not require California Environmental Quality Act review, because it does not meet the definition of a project under Public Resources Code Section 21065 and CEQA Guidelines Section 15378(b)(5), as an administrative governmental activity which will not cause a direct or indirect physical change in the environment. WAPA's 2025 Power Marketing Plan authorizing the contract has a Categorical Exclusion from National Environmental Policy Act (NEPA) review since WAPA is reallocating its existing resources and is not planning to increase its generation or transmission. APPROVED BY: Dean Batchelor, Director of Utilities Staff: Lena Perkins, PhD, Senior Resource Planner 6 https://www.citVofpaloalto.org/files/assets/public/v/1/agendas-minutes-reports/agendas-minutes/utilities- advisory-commission/a rch ived-agenda-and-minutes/agendas-and-minutes-2024/05-may-2024/05-01-2024- packet-v2.pdf Beginning page 14 of the pdf UAC Presentation https://recordsportal.paloalto.gov/Weblink/DocView.aspx?id=61715 Item 30: Staff Report Pg. 10 Packet Pg. 756 of 857 Item 31 Item 31 Staff Report City Council Staff Report From: City Manager CITY OF Report Type: ACTION ITEMS PALO Lead Department: Transportation ALTO Meeting Date: June 17, 2024 Report #:2405-3046 TITLE Discussion Regarding Caltrans' Repaving Project on El Camino Real Replacing Existing Parking with Bicycle Lanes, Authority for Staff to Make Adjustments to the Residential Preferential Parking Permit Programs and Return to Council on Consent if Needed, Authority for Staff to Enter into Agreements As Needed to Provide Temporary Safe Parking Along the Corridor in Palo Alto, and Approval of a Resolution Supporting the Removal of On -Street Parking for this Project; CEQA status — categorically exempt. RECOMMENDATION Staff recommends that Council take the following actions: A. Review the revised plans from Caltrans regarding the Caltrans project to repave El Camino Real that will repurpose parking spaces for bicycle lanes, B. Authorize the City Manager or their designee to direct staff to make necessary adjustments to the RPP Programs and return to Council on consent if needed, C. Authorize the City Manager or their designee to enter into agreements as needed to provide temporary safe parking for those currently along the project corridor in Palo Alto, and D. Approve a resolution supporting the removal of on -street parking for this project. EXECUTIVE SUMMARY Staff anticipates that the Caltrans El Camino Real Council ad hoc Committee may wish to amend the staff recommendation to impose conditions on adoption of the resolution. Those conditions may include things like: • Transmittal of the Fehr & Peers review memo and the joint City and VIA memo (Attachments A & D) to Caltrans with a request that Caltrans respond to requested changes • City -proposed locations in Attachment E for additional No Right Turn on Red restrictions Item 31: Staff Report Pg. 1 Packet Pg. 757 of 857 Item 31 Item 31 Staff Report • Development of a new Maintenance Agreement with Caltrans for the bikeway project • A Caltrans commitment to expediting encroachment permits on El Camino Real • Caltrans provision of tentative and final project timelines, when available, for public notification efforts This report is a follow-up from the April 1, 2024 City Council meeting discussion of Caltrans' proposal to eliminate parking lanes and replace them with bicycle lanes on El Camino Real (ECR) throughout Palo Alto.' As proposed, the replacement of parking with bike lanes would occur during the upcoming Caltrans repaving project to be done in Palo Alto. While Caltrans staff have consistently expressed a desire to collaborate with the City on improving safety on El Camino Real, to date, Caltrans has indicated that its analysis of safety issues along ECR require the agency to take action. On April 1, 2024 the City Council provided direction by: 1) Requesting Caltrans return with additional safety measures based on Safe Systems Approach, applicable Caltrans Design Information Bulletins, and a complete street network approach 2) Creating an ad hoc committee of council members to consult with staff, Valley Transportation Authority (VTA) staff, bicycle advocates, and other stakeholders including the Chamber of Commerce that would focus on: a. Prioritizing a plan for safety improvements at intersections and conflict areas b. Conducting outreach to small-business community and neighborhoods to identify parking alternatives including modifications to the City's Residential Preferential Parking (RPP) districts and work with the Transportation Management Association (TMA) c. Coordinating efforts to accommodate RV Dwellers along El Camino Real This report provides an update on how the above direction has been addressed and options for how to proceed from this point. The City's engagement with Caltrans has led to significant safety improvements in the Caltrans proposal. While Caltrans' ability to fully implement a Safe System Approach is limited by several factors, the outcome of the collaboration to date has yielded an improved plan and a mutual understanding that El Camino Real will require future planning and study to further reduce road user conflicts in key locations along the corridor. This report also includes attachments providing additional information and context. • Attachment A: Updated plans from Caltrans with an accompanying memo detailing 1 See Caltrans draft plans dated May 20, 2024. Item 31: Staff Report Pg. 2 Packet Pg. 758 of 857 Item 31 Item 31 Staff Report the review completed by the City's Transportation consultant, Fehr and Peers. • Attachment B: Resolution for Council consideration endorsing the removal of parking spaces from El Camino Real for bike lanes • Attachment C: Caltrans' Bicycle Counts along El Camino Real • Attachment D: Joint City of Palo Alto/VTA Memo presenting Review and Comments on Bike and Bus Conflict Areas • Attachment E: Matrix of Proposed No Right Turn on Red Restrictions If Council approves the resolution for the removal of parking spaces from ECR for bicycle lanes, staff will return to Council for follow-up actions that require council approval as necessary and appropriate. Such actions may include changes to the RPP, longer -term agreements to provide safe parking to those currently dwelling in vehicles along the project corridor, or additional follow-up items. BACKGROUND El Camino Real (State Route 82) is a state highway maintained by Caltrans. To meet the requirements of its Capital Preventive Maintenance (CAPM) program, Caltrans is repaving El Camino Real in Mountain View, Los Altos, and Palo Alto to improve ride quality, comply with current ADA standards, and improve safety, access, and mobility of pedestrians and bicyclists. The project will repair pavement and upgrade existing non-standard ADA curb ramps and add complete street elements.' There has been significant work on this project to -date. For additional background on this topic, please reference the City Council Staff Report from April 1, 2024 (Agenda Item 11)3. On April 1, 2024, Caltrans presented slides during the City Council meeting and discussed the proposed bikeway implementation in Palo Alto and the Caltrans SR 82 Paving Project.4 Through motion, City Council requested that Caltrans return with added safety measures in the bike lane design based on the Safety System Approach Design and other best practices, and created an ad hoc committee to focus on safety improvements at conflict areas and intersections, identify alternatives to minimize parking impacts to small businesses and the community, and coordinate efforts to accommodate vehicle dwellers along the project corridor. Mayor Stone appointed Council Members Ed Lauing and Pat Burt to the ad hoc committee. The ad hoc met frequently with staff and other stakeholders and has also corresponded over e-mail with staff to discuss developments on this project. Meetings took place throughout April, May, ' Caltrans project website: SR -82 — Pavement Rehabilitation and ADA Improvements CC Staff Report (Agenda Item 11), April 1, 2024 a The meeting recording is available on the City's YouTube channel: https://www.youtube.com/c/cityofpaloaIto. Item 31: Staff Report Pg. 3 Packet Pg. 759 of 857 Item 31 Item 31 Staff Report and June (April 25, April 30, May 9, May 16 (joint workshop), and June 5) to ensure this important work continued to advance. On May 15, 2024, Caltrans sent the City the third iteration of the proposed draft bikeway plans with added safety measures based on the Safe Systems Approach and other industry standards, per City Council request. These plans were reviewed during the joint workshop held on May 16, 2024 that included the members of the ad hoc, City Staff, Caltrans staff, VTA staff, Fehr & Peers, and biking advocate stakeholders including representatives from the City's Pedestrian and Bicycle Advisory Committee (PABAC), and the Silicon Valley Bicycle Coalition (SVBC). Following the workshop, Caltrans sent the City the fourth iteration of the proposed draft bikeway plans, dated May 20, 2024. This plan has been posted to the City's website.5 City staff engaged Fehr & Peers to conduct a comprehensive review of the May 20 bikeway plans to confirm whether the plan is in alignment with Caltrans' Design Information Bulletin -94 (DIB-94) and the Safe System Approach. Fehr & Peers' memorandum and comments on the draft bikeway plans with recommended modifications for Caltrans' consideration are included as Attachment A to this report. A detailed summary of the changes from the January 22, 2024 plans that were discussed with City Council on April 1 and the revised bikeway plan from May 20, 2024 can be found on the City's website.6 ANALYSIS This section will provide updates on each of the four main areas from Council's April 1 direction which focused on: 1) Requesting Caltrans return with additional safety measures based on Safe Systems Approach, applicable Caltrans Design Information Bulletins, and a complete street network approach 2) Using the ad hoc to prioritize a plan for safety improvements at intersections and conflict areas between motorized vehicles, buses, bicycles, and pedestrians 3) Using the ad hoc to conduct outreach to small-business community and neighborhoods to identify parking alternatives including modifications to the City's Residential Preferential Parking (RPP) districts and work with the Transportation Management Association (TMA) 4) Using the ad hoc to coordinate efforts to accommodate RV Dwellers along El Camino Real Draft Caltrans Bikeway Plan, dated May 20, 2024 6 See City website: City Issues Letter to Caltrans SR82 El Camino Real Bikeway Project Item 31: Staff Report Pg. 4 Packet Pg. 760 of 857 Item 31 Item 31 Staff Report Given the significant overlap between the first two topics, they are grouped together in this section with subsections elaborating on bicycle and bus interactions and the potential for greater 'No Right Turn on Red' restrictions. Following the updates of each of these four items, additional considerations are presented for discussion with the City Council, as well as information about what future Caltrans projects may entail and potential additional City Council actions. Requesting Caltrans return with additional safety measures based on Safe Systems Approach, applicable Caltrans Design Information Bulletins, and a complete street network approach and Using the ad hoc to Prioritizing a plan for safety improvements at intersections and conflict areas As noted in correspondence with the City, the bike lane proposal is a response to Caltrans policies to reduce risk to vulnerable road users on State Route 82. Caltrans has adopted both a Safe System Approach and a Vision Zero goal in roadway safety planning across California to eliminate traffic deaths and severe injuries.' This approach identifies traffic safety as the highest priority for the design and operation of the transportation system and views traffic fatalities and severe injuries as unacceptable and preventable through joint action. The Safe System Approach is the foundation for the National Safety Strategy released by the US Department of Transportation in 2022.1 To bring the Safe System Approach into statewide roadway design, Caltrans issued Design Information Bulletin — 94 (DIB-94), effective on January 16, 2024, which provides Caltrans staff guidelines on how to select and incorporate transit, bicycle, and pedestrian facilities to match their urban context.' This bulletin alters Caltrans design guidance to "minimize the transfer of kinetic energy through the adoption of design elements that minimize crash speeds and impact angles."10 City staff have requested clarification of whether DIB-94 applies to the repaving project given that the recent bike lane draft plans were dated after January 16, 2024. In their written response to PTC Commissioner George Lu, Caltrans stated that DIB-94 was applied to the bicycle lane proposal." According to El Camino Real bike counts recently provided by Caltrans, cyclists generally cross El Camino Real ride on the correct side of the street where bike lanes are provided. However, where there are no bike lanes, cyclists on El Camino Real more often ride the wrong way and on the sidewalk. Attachment C to this report details Caltrans' bicycle counts on El Camino Real. https://dot.ca.gov/news-releases/news-release-2022-009 8 https://www.transportation.gov/nrss/usdot-national-roadway-safety-strategy 9 Design Information Bulletin -94 Complete Streets: Contextual Design Guidance io Design Information Bulletin -94 Complete Streets: Contextual Design Guidance, p. 17 11 Caltrans Response to Commissioner Lu, March 11, 2024 Item 31: Staff Report Pg. 5 Packet Pg. 761 of 857 Item 31 Item 31 Staff Report As mentioned earlier, Fehr & Peers prepared a memorandum and comments on the draft bikeway plans, dated May 20, 2024, with recommended modifications for Caltrans' consideration based on Design Information Bulletin -94 (DIB-94) and the Safe Systems Approach (Attachment A). The memorandum notes that the Caltrans proposal reflects improvements delivered as part of the State Highway Operation and Protection Program (SHOPP), which has limitations on the types of modifications that can be constructed. As such, the consultant proposes both suggested enhancements to the proposed Caltrans design and additional modifications which could be pursued as part of separate planning and design efforts in the future. Overall, the consultant observed the following: • The proposed design has been refined to include reduced vehicle lane widths and expand the availability of Class IV bikeways. Additional refinements are suggested to increase separation for bicyclists and reduce turning speeds for vehicles. • Though many portions of El Camino Real will receive noticeable enhancement to bicycle facilities through the Caltrans SHOPP design, limitations of SHOPP may result in "weak links" (higher level of traffic stress situations) being maintained at a few major intersections where the cross-section is limited. The consultant team suggested enhancements which provide additional separation for bicyclists near intersections, improve pedestrian and transit accommodation, and address conflicts between vehicles and vulnerable users as a next step to build upon the proposed Caltrans design. • Revisions to the plans have resulted in anticipated improvements to interactions between bicyclists and buses at some locations, but additional enhancements are suggested to establish a desired standard for marking shared bus/bike spaces including "BUS BIKE ONLY" pavement legends and yield markings for bicyclists where feasible. Further collaboration with transit providers, Caltrans, and City is suggested to identify short-term pilot treatments that could address interactions between buses and bicyclists. This matter is also discussed in greater detail below. With the additional refinements noted within the memo and plan mark-ups, the improvements proposed as part of the Caltrans SHOPP project serve as a helpful first step toward improved multimodal comfort, access, and mobility along El Camino Real. Ideally, the SHOPP project would be accompanied by cooperation with transit providers to address interactions between modes at bus stops and a commitment to undertake a more comprehensive planning and design process to address the needs of all users on the corridor. Considerations for Bus & Bike Interactions The proposed draft bikeway plans, dated May 20, 2024, include dashed standard bike lanes that are shared with bus pull out areas except for the northbound bus stop near the El Camino Real and Park Boulevard/Serra Street intersection, which includes a dedicated bike lane and separated pull out area for buses. At most bus stops, cyclists approaching a bus at a stop would Item 31: Staff Report Pg. 6 Packet Pg. 762 of 857 Item 31 Item 31 Staff Report be expected to either wait behind the bus, merge into the vehicle lane to pass the bus on the left, or ride on the sidewalk to pass the bus on the right. Staff from Caltrans, VTA, City, and Fehr & Peers met on May 23, 2024, to discuss opportunities to improve bike and bus interactions on El Camino Real as part of the Caltrans project. Recommendations from that meeting include enhancing the striping and visibility of the bus stops (as noted above in the prior section), re-evaluation of bus stop locations, an education and messaging campaign on how to use the new bike lane, and a pilot bus boarding island collaboration with VTA. The meeting summary, including a list of short- and near -term recommendations, is provided as Attachment D of this report. No Right Turns on Red City staff and representatives from the City/School Transportation Safety Committee met to discuss the proposed Caltrans project. As school route crossings of the corridor were of primary importance for this group, key outcomes of those conversations were to request that Caltrans consider additional No Right Turn On Red (NRTOR) restrictions beyond those proposed by Caltrans at school route intersections listed on City Walk and Roll Suggested Routes Maps. No Right Turn on Red restrictions eliminate conflict between right -turning vehicles and pedestrians and bicyclists traveling through an intersection. Multiple studies validate the effectiveness of this low-cost, high -reward safety measure. Without this restriction, right - turning drivers look to the left to find a gap in traffic and may not look for people on foot or on bicycles coming from the right. In particular, children crossing in such a scenario may not be seen due to their height relative to larger vehicles. This treatment is a best practice at locations where there is high pedestrian activity, school activity, older road users, and bicycle facilities." A matrix of locations where NRTOR restrictions are proposed can be found in Attachment E. Caltrans has proposed 17 NRTOR locations, and City staff have indicated in Attachment E the school route and other locations that could be considered for NRTOR. Due to the operational delay associated with NRTOR restrictions, Council will need to indicate which, if any, of the additional City -proposed locations should receive this treatment. From a policy perspective, the City's Comprehensive Plan has both safety enhancement and congestion reduction as conflicting priorities, and delay (such as intersection level of service) is no longer a valid metric under the California Environmental Quality Act (CEQA). The Safe System Approach recognizes that speed is the major factor in severe injury and death in traffic collisions and that NRTOR restrictions both slow speeds and reduce points of conflict. 12 See FHWA Right Turn on Red Restrictions and Older Users guidance Item 31: Staff Report Pg. 7 Packet Pg. 763 of 857 Item 31 Item 31 Staff Report Addressing Parking Impacts Potential Changes to RPP Districts RPP Districts in the City are generally established via ordinance and following a public process involving documentation and analysis of a parking issue, along with public agreement (and City Council approval) of any program recommendation to be instituted. City parking programs manage parking availability to the benefit of either residents or employees, and in two cases, both residents and employees, during weekday business hours Monday -Friday, from 8:00 am to 5:00 pm or 6:00 PM depending on the program. Only two of the City's existing programs regulate parking resources on El Camino Real, as most of the curb space along the corridor is currently free and available for parking stays of up to 72 hours. Parking beyond 72 hours is prohibited citywide and enforced on a complaint basis. The Evergreen Park -Mayfield (EPM) Residential Parking Program (RPP) and the Southgate RPP include some frontage on El Camino Real (ECR). In each case, parking permit availability is managed with a specified number of employee permits made available to employees with a maximum allotment allowed in set aside and signed zones. Resident permits are limited to a specific allotment per household. In the EPM RPP, ECR parking availability is managed via Zone G and in the Southgate RPP, ECR parking availability is managed via Zone Si. In order to address the potential loss of parking spaces along ECR, staff recommends modifications to the Evergreen Park -Mayfield and Southgate RPP districts to move the appropriate number of employee permits currently sited along ECR to neighborhood zones. Staff anticipates interim administrative changes in the near -term to avoid immediate impacts if repaving begins before Council returns. When Council returns, staff anticipates redistributing the 50 employee permits in Zone G of Evergreen Park -Mayfield across zones A, B, C, and D of that district and increasing Southgate's' neighborhood zone allotment from 10 to 15 in total. Staff will work to finalize these distributions and include the discussion when it returns to Council for long-term authorization to change these two RPPS. The EPM RPP District formerly had 250 employee permits across zones A, B, C, and D. Since those employee permits were removed from zones A -D, the City has completed construction of the Sherman Garage near California Avenue and implemented changes to the RPP program that make parking permits in garages cheaper than RPP employee permits. Staff anticipates a de minimis impact from the addition of 50 total employee permits throughout zones A, B, C, and D in EPM. Staff will monitor the utilization rates of these permits and return to Council for future changes as necessary and appropriate. In general, neither residents nor business stakeholders who utilize these two RPP districts expect the Caltrans project to move forward without substantially impacting ECR parking. Item 31: Staff Report Pg. 8 Packet Pg. 764 of 857 Item 31 Item 31 Staff Report Other RPP districts, such as College Terrace, are not expected to be impacted by this loss of parking along ECR. Similarly, near Stanford's frontage there are current Saturday game -day prohibitions for parking along ECR, but these would become redundant if all parking was disallowed along ECR. Short-term Parking Solutions on Streets Adjacent to ECR Staff has conducted preliminary outreach to stakeholders including businesses sited along ECR as well as the Chamber of Commerce to discuss options for short-term parking sited on streets adjacent to ECR. This was the greatest priority for the Chamber of Commerce. Staff will continue to work to align potential changes to short-term parking (such as shorter -time limit zones of 20 minutes, green curbs, and yellow curbs) with the desires of businesses along El Camino Real. Staff will provide updates on these conversations as they continue, including timing relative to the potential removal of parking for the repaving. Using the TMA to leverage existing resources Parking demand by ECR businesses could be further reduced by enrolling eligible employees into transit or bike commute programs supported by the Palo Alto Transportation Management Association (TMA). The TMA supports low-income workers with transit fare subsidies and a bicycle commute incentive program. The TMA is funded by the City, and the current budget request for FY 2025 from the TMA includes a small increase over their baseline service costs to expand outreach and coverage to El Camino Real businesses. The TMA has begun working on reaching out to businesses on ECR and has already provided some services to employees. Using the ad hoc to coordinate efforts to accommodate RV Dwellers along El Camino Real The Caltrans El Camino Real Project will result in, at minimum, temporary and potentially long- term displacement of vehicles that park along this State Highway. City staff is in regular contact with the County Office of Supportive Housing and community partners to identify ways to help vehicle dwellers who will be impacted by this project. In response to the City's request for clarification on notification and outreach to vehicle dwellers, Caltrans sent a communication on April 30 where Caltrans committed to providing a three-week notification to impacted businesses and parked vehicles along El Camino Real in Palo Alto. City staff requested that Caltrans share the draft of any notice/flyer with City staff before it is finalized. Sufficient notice of when vehicles may be displaced helps the City, its partners, and the impacted households to plan for resources and options. The County Office of Supportive Housing is conducting outreach and consulting with local nonprofits to help identify the characteristics of the households who may be impacted. This will help the City understand what types of services and options are needed. Item 31: Staff Report Pg. 9 Packet Pg. 765 of 857 Item 31 Item 31 Staff Report At the same time, the City is in conversation with the County, local safe parking operators, and local landowners to identify and then secure a near -term and longer -term safe parking option for these additional RVs. Next steps will be identifying funding and advancing necessary steps for the longer -term approach such as bringing to City Council a budget amendment, an urgency ordinance, contract(s), and/or lease agreement(s). The exact timing for the Caltrans project is unclear, but the parking spaces could be removed as early as July or August. Because the Council will be on its summer recess during July, staff is seeking the City Council's authority to negotiate and enter into agreements (e.g., letter of intent, lease agreement, etc.) as needed to provide temporary safe parking to the vehicles impacted along the corridor. In the revised Caltrans bike lane plans, existing parking on El Camino Real that can continue to accommodate vehicles will be retained on certain segments. Currently, the Caltrans Bike Lane proposal includes retaining approximately 780' of existing parking on the West side of El Camino Real in between Galvez Street and just past Encina Avenue. Additional Considerations There are three items of additional consideration for the City Council. One is the need to synchronize the repaving effort with other City efforts, namely the effort along California Avenue. The second is the need for potential maintenance agreements with Caltrans, and the third is future projects anticipated from Caltrans. chronizina with California Avenue Efforts The Caltrans project offers an opportunity to coordinate upcoming improvements to the City's Car -Free Street project on California Ave with new pavement markings at the El Camino Real/California Avenue intersection. In addition to adding stamped asphalt crosswalks to match those at Stanford Avenue and Charleston Road/Arastradero Road, staff propose a two-way bikeway on the north side of car -free California Avenue at El Camino Real to enable implementation of Council's direction for a bicycle facility along California Avenue (Figure 1). To connect this new facility to the bike lanes across the intersection with El Camino Real, staff propose a realignment of the travel and bike lanes on California Avenue on the west leg of the intersection to accommodate the movement of eastbound cyclists into the northside bikeway along car -free California Ave. A bike lane could be inserted between a left -turn lane and a right -turn lane. Staff is working with Caltrans to determine if this work can be included in the current SHOPP program funding. Work outside of the intersection on California Avenue would need to be funded by the City. Item 31: Staff Report Pg. 10 Packet Pg. 766 of 857 Item 31 Item 31 Staff Report Figure 1: California Ave/El Camino Real Intersection Concept Plan (For Discussion Only) U i ❑ � U d❑ � y .] T` LEnTuaN t � i r ❑ �L Iu CONSTRUCTION LEGEND SYMBOL DESCRIPTION () RED STICK STARRED ASPHALT PAVING AT CROSSWALKS.PATTERN TORY ENNIS FLINT PATTERN COLOR SANTA FE CLAY G GREEN THERMOPLASTIC PAVEMENT MARKINGS S'X4'WITH P BETWEEN CJ BIKE BOX -GREEN THERMOPLASTIC PAVEMENT MARKING Maintenance Agreements Caltrans informed City staff of their intent to draft a Maintenance Agreement (MA) stating the City would be responsible for all maintenance and costs associated with the bike lane channelizers included in the draft bikeway plans. City staff and Caltrans staff held a virtual meeting on May 24, 2024 to discuss the proposed MA. This topic is still an ongoing negotiation with Caltrans.l3 Public entities may be liable for dangerous conditions that arise on property they maintain, even if maintenance is performed under an agreement and the property is not owned by the agency. Therefore, if the City enters into a maintenance agreement with Caltrans for the bike lane channelizers, it will assume some liability for those channelizers. Future Caltrans Workshops and Projects Caltrans is planning to hold a number of workshops starting in August 2024 with all El Camino Real local and regional stakeholders through Santa Clara, San Mateo, and San Francisco counties, including transit agencies. This initiative will discuss and form consensus on bicycle 13 For informational purposes, the "Agreement for Maintenance of State Highways in the City of Palo Alto" (effective July 1, 2007) is a delegated maintenance agreement between the City and Caltrans whereby the City is reimbursed by Caltrans for street sweeping and sidewalk maintenance along El Camino Real. The City submits invoices to Caltrans every six (6) months for this service. In addition, the City is responsible for maintenance costs at the intersections of Stanford Avenue and Arastradero Road/Charleston Road along El Camino Real per our maintenance agreements with Caltrans. The Stanford Avenue and Arastradero Road/Charleston Road intersection improvements along El Camino Real were City -led projects and are, therefore, the responsibility of the City to maintain. Item 31: Staff Report Pg. 11 Packet Pg. 767 of 857 Item 31 Item 31 Staff Report and pedestrian safety enhancement strategies and how they will be implemented for the corridor. This effort will also discuss and explore funding opportunities from both state and local agencies to be able to leverage funding contributions for a medium -to -long-term corridor safety enhancement investment plan. This work will be the basis of Caltrans' Comprehensive Multimodal Corridor Plan (CMCP) development for the entirety of Highway 82/El Camino Real. This plan will be developed through a collaborative process involving the Metropolitan Transportation Commission, County Transportation Agencies, cities and counties, transit agencies and other stakeholders within the corridor. It will include comprehensive performance assessments, analyses and evaluations leading to recommendations of system management strategies and multimodal projects for the corridor. Staff anticipates actively participating in these workshops and this planning effort. Next Steps The City's engagement with Caltrans has led to significant safety improvements in the Caltrans proposal. While Caltrans' ability to fully implement a Safe System Approach is limited by several factors, the outcome of the collaboration to date has yielded an improved plan and a mutual understanding that El Camino Real will require future planning and study to further reduce road user conflicts in key locations along the corridor. Recognizing that the current project is an initial step towards improving safety for vulnerable road users on a key corridor of the City's High Injury Network, the City Council could choose to pursue additional actions beyond those included in staff's recommendation. Those could include: • Request Caltrans add Council -identified locations for No Right Turn On Red restrictions (Attachment E) and evaluate the safety and operational performance of the restrictions two to three years after implementation. • Direct staff to continue working with Caltrans to improve the safety of the proposed bikeways, including requesting all changes to the plans recommended in the F&P memo and plan mark-ups (Attachment A) that are within the bounds of the SHOPP funding program • Direct staff to work with Caltrans and VTA to pilot a bus boarding island program to reduce bus and bike conflicts • Direct staff to engage in Caltrans-led planning for the El Camino Real corridor scheduled for August 2024 FISCAL/RESOURCE IMPACT As a Caltrans project, it is not anticipated that Caltrans will ask the City for any funding for the proposed bikeway project. However, the City is absorbing the cost of hosting the community engagement meetings that are in excess of the usual standing committee calendars as well as the cost of consultant peer review of Caltrans plans. The City may also be asked to maintain the bike lane channelizers included in the draft bikeway plans. The Item 31: Staff Report Pg. 12 Packet Pg. 768 of 857 Item 31 Item 31 Staff Report City's proposed changes at California Avenue may require City funding as well depending on discussion with Caltrans. Other costs may result from the project for altering existing City services, such as street sweeping, to maintain our quality of service. There is also a cost associated with providing additional safe parking. If the City identifies and secures a temporary safe parking option for households living in vehicles that are displaced from El Camino Real due to the Caltrans project, there would be costs associated with leasing land and operating a safe parking site in the near term. Staff is seeking other funding options (e.g., grants, private funders) to help with this temporary need. Staff will likely require a return to Council during the mid -year budget process for any longer -term costs associated with continuing to operate additional safe parking. STAKEHOLDER ENGAGEMENT As discussed throughout the body of this report, there has been extensive stakeholder engagement on this project since April 1, 2024. For the full breakdown of stakeholder engagement prior to April 1, 2024, please reference the City Council Staff Report from April 1, 2024 (Agenda Item 11)14. The following sections summarize the additional stakeholder engagement completed since April 1, 2024, organized by the Council motion areas. Safety Improvements • May 16, 2024 — Joint Ad Hoc Workshop with Caltrans and other stakeholders (including SVBC, PABAC, VTA) • May 23, 2024 — Follow-up meeting with Caltrans, VTA staff, City staff, and Fehr and Peers • Conversations with representatives of the City/School Transportation Safety Committee • Various meetings with the ad hoc Parkine Impacts • Conversations with the TMA • Conversation with the Chamber of Commerce • Targeted Survey for Businesses along ECR and Residents in neighboring RPPs • Site visits and discussions with stakeholders representing businesses and residents Vehicle Dwellers • Participation in monthly Caltrans' Unsheltered Encampment and Maintenance Plan of Action Meeting and correspondence with Caltrans 14 CC Staff Report (Agenda Item 11), April 1, 2024 Item 31: Staff Report Pg. 13 Packet Pg. 769 of 857 Item 31 Item 31 Staff Report • Regular and ongoing conversations with community partners and the County Office of Supportive Housing ENVIRONMENTAL REVIEW As the lead agency, Caltrans is responsible for the environmental review of the El Camino Real Repaving Project. Caltrans has determined that this project meets the criteria for a Categorical Exemption (CE) under CEQA regulation 15301 (existing facilities) and a Categorical Exclusion (CE) under NEPA at 23 CFR 771.117(c). The City does not anticipate being a "responsible agency" under CEQA for this project because it does not anticipate having discretionary approval authority for a portion of this project. ATTACHMENTS Attachment A: Memo and Plan Markups from Fehr & Peers Attachment B: Resolution in Support of Caltrans' Repaving Project on El Camino Real Attachment C: Caltrans Bicycle Counts on El Camino Real Attachment D: Joint City of Palo Alto and Santa Clara Valley Transportation Authority (VTA) Review and Comments on Bike and Bus Conflict Areas Proposed on State Route (82)/El Camino Real (June 4, 2024) Attachment E: Matrix of Proposed No Right Turn on Red Restrictions APPROVED BY: Philip Kamhi, Chief Transportation Official Item 31: Staff Report Pg. 14 Packet Pg. 770 of 857 Item 31 F E H R 3' Attachment A - Fehr & Peers El Camino Real Memo & Plan Mark-ups Memorandum Date: June 5, 2024 To: City of Palo Alto - Philip Kamhi, Chief Transportation Official; Sylvia Star -Lack, Transportation Planning Manager; and Charlie Coles, Senior Transportation Planner From: Fehr & Peers - Steve Davis, PE and Meghan Mitman, AICP, RSP21 Subject: Review of El Camino Real Proposed Striping in Palo Alto, California SJ21-2081.12 We have performed a review of the proposed striping plans dated May 20, 2024, from Caltrans for the El Camino Real (State Route 82) Corridor in the City of Palo Alto. We previously reviewed draft Caltrans striping plans dated January 22, 2024, in a memorandum dated March 11, 2024. That review considered the consistency of the proposed design with Caltrans' complete streets and safety policies and national complete streets design best practices, as well as the City's ongoing Bicycle Pedestrian Transportation Plan (BPTP) update and safety action plan efforts. It also considered the role of the El Camino Real Corridor in the City's land use plans, in particular planned high -density housing along the corridor, and the compatibility of the proposed design with the land use context and mode shift goals to meet the City's sustainability, affordable housing, and climate goals. Our review of the May 20, 2024, striping plans was similarly rooted in the Safe System Approach, which recognizes the role of kinetic energy (speed and vehicle mass) and exposure as the root causes of severe injuries and fatalities, and requires a redundant, holistic, and proactive approach to address systemic issues and opportunities. As such, we completed a detailed evaluation of the proposed design treatments to identify how they best serve the core principles of this approach. This included specifically reviewing: • Lane widths, alignments, and intersection treatments that affect overall travel speeds, including speeds of turning vehicles • Bikeway separation, bike lane provision, bicycle turn accommodation, and pedestrian enhancements that help to reduce exposure and points of conflict for people walking, biking, and rolling by separating them from moving vehicles • Bus stop treatments that address interactions between bicyclists and buses as well as between bicyclists and pedestrians/transit riders • Operational enhancements such as turn restrictions and traffic signal operations adjustments that separate users temporally 60 S. Market Street I Suite 700 1 San Jose, CA 95113 1 (408) 278-1700 1 Fax (408) 278-1717 www.fehrandpeers.com Item 31: Staff Report Pg. 15 Packet Pg. 771 of 857 Item 31 Attachment A - Fehr & City of Palo Alto Peers El Camino Real June 5, 2024 Page 2 of 5 Memo & Plan Mark-ups A redline markup with review comments for consideration is attached. These comments represent suggestions based on a review of the proposed design plans and existing conditions, but require further engineering evaluation to verify feasibility. Note that the Caltrans design reflects improvements are being delivered as part of the State Highway Operation and Protection Program (SHOPP), which has limitations on the types of modifications that can be constructed. As such, our review comments note both suggested enhancements to the proposed Caltrans design and additional modifications which could be pursued as part of separate planning and design efforts in the future. Overall, we observe the following: • The proposed design has been refined to include reduced vehicle lane widths and expand the availability of Class IV bikeways. Additional refinements are suggested to increase separation for bicyclists and reduce turning speeds for vehicles. • Though many portions of El Camino Real will receive noticeable enhancement to bicycle facilities through the Caltrans SHOPP design, limitations of SHOPP may result in "weak links" (higher level of traffic stress situations) being maintained at a few major intersections where the cross-section is limited. We have suggested enhancements which provide additional separation for bicyclists near intersections, improve pedestrian and transit accommodation, and address conflicts between vehicles and vulnerable users as a next step to build upon the proposed Caltrans design. • Revisions to the plans have resulted in anticipated improvements to interactions between bicyclists and buses at some locations, but additional enhancements are suggested to establish a desired standard for marking shared bus/bike spaces including "BUS BIKE ONLY" pavement legends and yield markings for bicyclists where feasible. Further collaboration with transit providers, Caltrans, and City is suggested to identify short-term pilot treatments that could address interactions between buses and bicyclists. In summary, with additional refinements noted below, the improvements proposed as part of the Caltrans SHOPP project serve as a helpful first step toward improved multimodal comfort, access, and mobility along El Camino Real. We suggest the SHOPP project ideally be accompanied by cooperation with transit providers to address interactions between modes at bus stops and a commitment to undertake a more comprehensive planning and design process to address the needs of all users on the corridor. Item 31: Staff Report Pg. 16 Packet Pg. 772 of 857 City of Palo Alto June 5, 2024 Page 3 of 5 Item 31 Attachment A - Fehr & Peers El Camino Real Memo & Plan Mark-ups In our review of the Caltrans striping plans dated January 22, 2024, we described how the typical candidate bicycling populations were likely to be affected by the proposed design. With the refined Caltrans plans dated May 20, 2024, it is anticipated that bicyclists would be affected in the following positive (+) or negative (-) ways: TYPE OF EXISTING PROPOSED CALTRANS POTENTIAL LOWER STRESS BICYCLIST CONDITIONS CONFIGURATION DESIGN STRONG AND Currently riding + Will continue riding on the + Will continue riding on the street FEARLESS on the street street and benefit from new and benefit from new separated separated (Class IV) facilities in facilities as well as easy access to some stretches turns off and on El Camino Real ENTHUSED AND CONFIDENT (OR BICYCLE DEPENDENT) INTERESTED BUT CONCERNED Currently riding on the sidewalk, at times contra - flow Not currently riding on El Camino Real +/- Will likely use enhanced on - street bicycle facilities in many areas but are likely to divert to the sidewalk to avoid weak links at major intersections or busy bus stops; contra -flow riding may occur in the bikeway where high -quality crossings of El Camino Real are infrequent and/or side street crossings of/access to El Camino Real are not enhanced for bicyclists. +/- Some may use El Camino Real, particularly on segments providing a high proportion of separated bikeways; some are likely to continue to avoid El Camino Real or choose to drive instead because of weakest links + Will likely shift to on -street riding, removing the challenges associated with contra -flow sidewalk or bikeway riding; additional refinements to the Caltrans design to add separation and reduce turning speeds, as well as treatments to enhance crossings and crossing opportunities, could shift the design plans closer to this category for confident bicyclists + May be open to riding on El Camino Real, including a wider range of ages and abilities (i.e., 8-80 year olds) Item 31: Staff Report Pg. 17 Packet Pg. 773 of 857 Item 31 Attachment A - Fehr & City of Palo Alto Peers El Camino Real June 5, 2024 4 5 Memo & Plan Mark-ups Page of We suggest the following to support higher comfort, access, and mode shift potential for walking and bicycling along and across El Camino Real (moving to the right -most column in the table above). These suggestions specifically focus on opportunities to proactively and redundantly reduce exposure for vulnerable road users to high-speed traffic and/or heavy vehicles, in line with the Safe System Approach: • As part of the Caltrans SHOPP project, potentially including City coordination in parallel: o Provide additional segments of Class IV bikeway with physical separation, including elimination of conflict markings downstream from most intersections. o Add separation in locations that will reduce the total length of conflict marking zones that serve as de facto right -turn lanes approaching intersections. o Convert some sections of Class II bike lane to Class IV bikeway by utilizing reduced bikeway and/or buffer widths (on a roadway such as El Camino Real, a somewhat narrower separated bikeway is likely to provide a more comfortable riding experience than a wider standard bike lane for many bicyclists) o Provide quick -build curb extensions at many intersections to address turning speeds on and off El Camino Real while reducing crossing distances. o Provide "paint and plastic" protected intersections, dedicated intersections, and two -stage turn opportunities where geometry allows, including elimination of right -turn channelization where feasible. o Provide additional temporal separation of modes at key intersections using signal timing strategies and/or right turn on red restrictions to reduce bicyclist and pedestrian exposure. o Where Class II bike lanes are provided, continue the bike lane with solid striping across minor driveways rather than providing conflict markings. o Provide additional striping to narrow lane widths and clarify desired travel paths for drivers. o Provide wayfinding to direct people walking, biking, or rolling to desirable travel routes such as the Stanford Perimeter Trail where facilities on El Camino Real are not suited to accommodating all modes. • In the short term, as enhancements to the Caltrans SHOPP project presumed to be completed separately: o Address bus/bicycle conflicts by piloting stop -in -lane bus stops and bus boarding islands, including shared bike lane/boarding islands, in collaboration with transit providers. o Evaluate left -turn restrictions to limit/remove situations with permissive or unsignalized left turns to or from side streets, which require drivers to evaluate gaps in multiple lanes of traffic while monitoring the location of bicyclists and pedestrians. o After evaluating additional refinements to the Caltrans SHOPP project based upon the suggestions above, pursue a comprehensive planning and design Item 31: Staff Report Pg. 18 Packet Pg. 774 of 857 Item 31 Attachment A - Fehr & City of Palo Alto Peers El Camino Real June 5, 2024 Page 5 of 5 l.Memo & Plan Mark-ups process to determine a vision for El Camino Real in collaboration with stakeholders and the community. Potential for more comprehensive intersection and traffic signal modifications, vehicle lane reductions, or other reallocation of space in the public realm should be studied, potentially allowing: ■ More substantial separation for bicyclists, ■ Protected corners that increase the overall separation of the bikeway, ■ Enhanced bus stops with separation between bicyclists, pedestrians, and transit vehicles, • Restoration of parking, loading, and other existing curbside uses, and • An overall El Camino Real corridor compatible with the mode shift goals, context, and community needs of the corridor. • In the medium term: o Convert all quick -build enhancements to permanent treatments, including reviewing all signalized intersection geometry and controls, especially those with skewed/high speed angles and/or missing crosswalk legs. o Determine additional midblock crossings that may be needed to serve desire lines for pedestrians and bicyclists traveling to key destinations in the corridor, including bus stops. o As development occurs along El Camino Real, prioritize access and curbside management strategies that promote greater bicycle/pedestrian activity and reduce the number of driveways which access El Camino Real directly. 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W N W H z a) W z 0 N I- C.) J U. z 0 C) <I 0 <O w � o x H N z a W z a W Y m ZZ-B1-LL 0591135 31S0 is As 0351535 IIV 91110101 <= 0311015 3011 ZZ_9Z_ 11 0000/9/50= 0311015 3100 N 0101000 1001 Item 31 r C Attachment A - Fehr & D s Peers El Camino Real d 0 Memo & Plan Mark-ups 0 IM z O 101 aJ a a W a 0 U Z. z v) J O w z � '^o YWzo W a a awo � � r7 O O U ^ r O Ups aWN N J°° z LU z Qao aF 3� W 3 3 QLLr O Q z o Fa Jy z Q > xa plp ao� DLL WZ as a QM W tpF Cr J F H y 0 O z Y a W z J Y m +s1x3 HD1tl0 ___ z � i m N 9°E'm a 0 n�nE 3 noca >,E .101) 353`0 0N113A N/IA-1-I:' 1... 331 531531 Item 31: Staff Report Pg. 36 1010 0l CYYY ^ a � � W 01 a o � 3 KIf J - a H 0 H Z W OC x Q O a =_ N ooh O _ J a. C d55,5 a 3 ¢ c> vw> rn d o m o yam m & rad Ear e8 88 � m r ol��val UW J II Packet Pg. 792 of 857 jo 31VIS NOT YET APPROVED Resolution No. Item 31 Attachment B - Resolution in Support of CaltransRepaving Project on El Camino Real Resolution of the Council of the City of Palo Alto in Support of Caltrans' Repaving Project on El Camino Real RECITALS A. El Camino Real is a state highway maintained by the California Department of Transportation (Caltrans); and B. Caltrans plans to resurface El Camino Real in Palo Alto in 2024; and C. Caltrans is prepared to install bicycle lanes along El Camino Real within the City of Palo Alto, in addition to pavement rehabilitation, striping improvements, and curb ramps, sidewalks, and driveway improvements to comply with Americans with Disabilities Act (ADA) standards (the "project"); and D. Use of the road as bicycle lanes would require the conversion of all on -street parking along El Camino Real within the City of Palo Alto; and E. Creating and maintaining a sustainable transportation system that provides safe, comfortable, and convenient travel along and across streets through a comprehensive, integrated transportation network that emphasizes walking, bicycling, use of public transportation, and other modes to reduce greenhouse gas (GHG) emissions and the use of single -occupancy motor vehicles is, and has been a major focus for the City of Palo Alto; and F. The adopted Transportation Element of the City of Palo Alto Comprehensive Plan 2030 includes the following goals, policies, and programs in support of bicycle facilities along El Camino Real: • Goal T-1 Create a sustainable transportation system, complemented by a mix of land uses, that emphasizes walking, bicycling, use of public transportation and other methods to reduce GHG emissions and the use of single -occupancy motor vehicles. • Policy T-1.3 Reduce GHG and pollutant emissions associated with transportation by reducing VMT and per -mile emissions through increasing transit options, supporting biking and walking, and the use of zero -emission vehicle technologies to meet City and State goals for GHG reductions by 2030. • Policy T-1.16 Promote personal transportation vehicles as an alternative to cars (e.g. bicycles, skateboards, roller blades) to get to work, school, shopping, recreational facilities and transit stops. • Policy T-1.19 Provide facilities that encourage and support bicycling and walking. • Program T1.19.2 Prioritize investments for enhanced pedestrian access and bicycle use within Palo Alto and to/from surrounding communities, including by incorporating improvements from related City plans, for example the 2012 Palo Alto Bicycle + Pedestrian Transportation Plan and the Parks, Trails & Open Space Master Plan, as amended, into the Capital Improvements Program. • Policy T-3.5 When constructing or modifying roadways, plan for use of the roadway by all users. 106_20240320_ts24 1 Item 31: Staff Report Pg. 37 Packet Pg. 793 of 857 Item 31 Attachment B - NOT YET APPROVED Resolution in Support of CaltransRepaving Project • Program T3.5.1 Continue to use best practices in roadway design th on EI Camino Real with complete streets principles and the Urban Forest Master Plan, focusing on bicycle and pedestrian safety and multimodal uses. Consider opportunities to incorporate best practices from the National Association of City Transportation Officials guidelines for urban streets and bikeways, tailored to the Palo Alto context. • Policy T-3.11 Consider the objectives of the Grand Boulevard Initiative and the South El Camino Boulevard Design Guidelines when designing roadway and pedestrian improvements along El Camino Real. • Policy T-3.12 Coordinate roadway improvements with other transportation and utility infrastructure improvements such as sewer and water. • Policy T-3.13 Work with Caltrans, Santa Clara County and VTA to improve east and west connections in Palo Alto and maintain a circulation network that binds the city together in all directions. • GOAL T-6 Provide a safe environment for motorists, pedestrians and bicyclists on Palo Alto streets. • Policy T-6.1 Continue to make safety the first priority of citywide transportation planning. Prioritize pedestrian, bicycle and automobile safety over motor vehicle level of service at intersections and motor vehicle parking. • Policy T-6.2 Pursue the goal of zero severe injuries and roadway fatalities on Palo Alto city streets. • GOAL T-8 Influence the shape and implementation of regional transportation policies and technologies to reduce traffic congestion and GHG emissions. • Policy T-8.2 Coordinate with local and regional agencies and Caltrans to maintain and improve transportation infrastructure in Palo Alto, including the Multi -Modal Transit Center. • Policy T-8.8 Support regional bicycle and pedestrian plans including development of the Bay Trail, Bay -to -Ridge Trail and the Santa Clara County Countywide Bicycle System. • Program T8.8.1 Identify and improve bicycle connections to/from neighboring communities in Santa Clara and San Mateo counties to support local trips that cross city boundaries. Also advocate for reducing barriers to bicycling and walking at freeway interchanges, expressway intersections and railroad grade crossings. G. The 2018 Caltrans District 4 Bike Plan identifies the implementation of Class IV protected bikeways on El Camino Real in Palo Alto as a Tier 1 project; and H. Caltrans is the lead agency for purposes of CEQA and has found this project Class 1 (existing facilities) categorically exempt under CEQA regulation 15301. NOW, THEREFORE, the Council of the City of Palo Alto does RESOLVE as follows: SECTION 1. The City Council of the City of Palo Alto hereby expresses its support for the the removal of parking on El Camino Real within the City of Palo Alto to allow Caltrans to proceed with its project. 106_20240320_ts24 2 Item 31: Staff Report Pg. 38 Packet Pg. 794 of 857 NOT YET APPROVED Item 31 Attachment B - Resolution in Support of CaltransRepaving Project on El Camino Real SECTION 2. Environmental Review. As the lead agency for this project, Caltrans has found this project to be categorically exempt under CEQA regulation 15301 (existing facilities). Should the City be determined to be a responsible agency under CEQA, the City has considered the lead agency's determination. INTRODUCED AND PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: City Clerk Mayor APPROVED AS TO FORM: APPROVED: Assistant City Attorney City Manager Chief Transportation Official 106_20240320_ts24 3 Item 31: Staff Report Pg. 39 Packet Pg. 795 of 857 Item 31 Attachment C - Caltrans Bicycle Counts on El EL CAMINO REAL BIKE COUNTS - APPROACH VOLU Camino Real DATE: WEDNESDAY MARCH 13, 2024 PERIOD: 7:00 AM to 7:00 PM El Camino Real 1 2 0 27 139 (Shopping C 103 j 34 1 NW NE 3 14 1 86 SW SE 22 Embarcadero Road 1 Embarcadi 40 0 3 7 El Camino Real ## in street ## on sidewz Item 31: Staff Report Pg. 40 Packet Pg. 796 of 857 Item 31 Attachment C - Caltrans Bicycle Counts on El EL CAMINO REAL BIKE COUNTS - APPROACH VOLUL Camino Real DATE: WEDNESDAY MARCH 13, 2024 PERIOD: 7:00 AM to 7:00 PM 0 127 California Avenue 20 15 El Camino Real 8 2 11 NW NE SW SE 1 2 El Camino Real 16 37 57 93 47 California Avenue ## in street ## on sidewalk/path Item 31: Staff Report Pg. 41 Packet Pg. 797 of 857 Item 31 Attachment C - Caltrans Bicycle Counts on El EL CAMINO REAL BIKE COUNTS - APPROACH VOLUL Camino Real DATE: WEDNESDAY MARCH 13, 2024 PERIOD: 7:00 AM to 7:00 PM El Camino Real 9 0 0 NW 19 15 Page Mill Road A A NE SW SI 0 3 El Camino Real 8 1 19 7 1 0 17 Road in street on sidewalk/path Item 31: Staff Report Pg. 42 Packet Pg. 798 of 857 Item 31 Attachment C - Caltrans Bicycle Counts on El EL CAMINO REAL BIKE COUNTS - APPROACH VOLUL Camino Real DATE: WEDNESDAY MARCH 13, 2024 PERIOD: 7:00 AM to 7:00 PM 13 El Camino Real 8 0 11 0 NW 134 1 Arastradero Road NE SW SE 0 5 El Camino Real 31 129 0 17 Arastradero Road 24 ## in street ## on sidewalk/path Item 31: Staff Report Pg. 43 Packet Pg. 799 of 857 DocuSign Envelope ID: B7A35691-ADD7-4DED-AE47-5FAA97069149 Item 31 Attachment D -Joint City OFFICE OF TRANSPORTATION vrA Review and Comments on Bike & Bus 250 Hamilton Ave, 5th Floor CITY O F Palo Alto, CA 94301 Conflict Areas Memo J PALO (650) 329-2520 ALTO Transportation@CityofPaloAlto.org Memo Date: June 4, 2024 To: Caltrans El Camino Real Council Ad Hoc Committee From: Philip Kamhi (City of Palo Alto Office of Transportation) & Lauren Led�etter LYTA Bicycle cu DocuSigned by: oigne y and Pedestrian Program Manager) ��p 84 41809 046451. Subject: Joint City of Palo Alto and Santa Clara Va eyF�aBr���$4Pfation Authority VTA Review and Comments on Bike and Bus Conflict Areas Proposed on State Route (82)/El Camino Real On May 16, 2024, the Caltrans El Camino Real Council Ad Hoc Committee requested a meeting between VTA, Caltrans, and City staff to discuss bus stop treatments to add to the current bikeway proposal that accommodates bus stops within the new bike lanes.' Under this configuration, cyclists approaching a bus at a stop are expected to either wait behind the bus, safely merge into the vehicle lane to pass the bus on the left, or merge onto the sidewalk and pass the bus on the right. A follow up meeting with Caltrans staff, VTA staff, City staff, and Fehr & Peers was held virtually on May 23, 2024, to discuss the proposed bike facilities at bus stops and identify other opportunities to improve bike and bus interactions on El Camino Real. Caltrans staff presented a range of various bus stop design treatments that were generally consistent with the designs featured in VTA's Bus Stop & Passenger Facility Design Criteria and Standards (December 2020), Caltrans' Design Information Bulletin -94 Complete Streets Contextual Design Guidance (DIB-94) (January 16, 2024), and Caltrans' Design Information Bulletin -89-02 (DIB-89-02) (February 7, 2022). DIB-94 includes strategies to reduce conflicts between buses and cyclists (see DIB-94, Section 7.3) and states that "[i]n general, preference should first be given to a design that provides separate spaces for bicyclists to move within their travel way, for buses to stop, and for pedestrians to wait and board bus vehicles. The next -preferred design option would provide a lower degree of separation, integrating pedestrians and bicyclists through the boarding area. The third preference would be to provide a space shared by bicyclists and buses." There was consensus that right-of-way constraints severely limit the bus stop treatments that can be implemented within the Caltrans project. Even so, there was agreement that the City and VTA would 'The proposed draft bikeway plans, dated May 20, 2024, include one improved bus stop near the north-east corner of the El Camino Real and Park Boulevard/Serra Street intersection which does not require the bus stop and bike lane to share space. This stop retains a dedicated bike lane and a separated pull-out area for buses. Item 31: Staff Report Pg. 44 Packet Pg. 800 of 857 DocuSign Envelope ID: B7A35691-ADD7-4DED-AE47-5FAA97069149 Item 31 Attachment D -Joint City VrA Review and Comments on Bike & Bus further investigate the high frequency bus stops for any treatments that do not r Conflict Areas Memo ht - of -way. To support this work, VTA shared bus stop utilization and ridership (boardings and alightings) data revealing the highest frequency stops to be those at California Avenue, Embarcadero/Galvez, and Charleston/Arastradero. The following sections provide examples of the range of design treatments referenced in the design standard documents above and discussed in the meeting. Bus Stop Designs Featuring Separated Spaces Bus boarding island platforms (i.e., side -boarding islands or floating islands) (see Figure 1) represent an example design featuring separated spaces for bikes and buses. However, given the limitations in scope and right-of-way along El Camino Real, it was concluded that bus boarding island platforms would need to be considered in a future project separate from the current Caltrans project. Figure 1: Example of Bus Boarding Island in San Francisco Source: Caltrans DIB-94 Bus Stop Designs Featuring Integrated Bicycle/Pedestrian Spaces An integrated bike/pedestrian zone at bus stops (see Figure 2) is an example design featuring integrated bicycle/pedestrian spaces, however, given the limitations in scope and right-of-way along El Camino Real, it was concluded that these designs would need to be considered in a future project separate from Caltrans SHOPP project. Additionally, VTA design guidelines prohibit integrated bicycle/pedestrian zones at bus stops. The agency cannot commit to a permanent installation but would be willing to participate in a temporary pilot to understand how an integrated stop could be designed to prevent conflicts between transit customers and bicyclists. A pilot would need to be completed outside of the current Caltrans repaving project to allow for the lead time associated with pre -launch planning, outreach, engineering, funding identification, materials procurement, construction, and staff resource identification. 2 Item 31: Staff Report Pg. 45 Packet Pg. 801 of 857 DocuSign Envelope ID: B7A35691-ADD7-4DED-AE47-5FAA97069149 Item 31 Attachment D -Joint City VIA Review and Comments on Bike & Bus Figure 2: Diagram of an Integrated Bicycle/Pedestrian Zone at a Bus Stop (Mass Conflict Areas Memo Lane Guide) Source: Caltrans DIB-94 Bus Stop Designs Featuring Shared Bike/Bus Spaces The following bikeway designs featuring shared bike and bus spaces were also discussed: • Dashed standard bike lane shared with bus pull out area (current proposal for most stops - see Figure 3) • Dashed standard bike lane with separated bus pull out area (current proposal for 1 stop) • Dashed buffered bike lane with separated bus pull out area Figure 3: Bus Stop in Standard Bike Lane with No Parking Bu$ Slap (1..M &.. .AA ykti..r. I.ngM aW p..-I./...T Tom.)—) A T50MN. —iinuTir;— T 70 F,vb1,d.,1.,I&„ T .110 1(T.)I!•( SFCTION A Source: VTA Bus Stop & Passenger Facility Design Criteria and Standards (December 2020) Additional Strategies Considered Below are several other design strategies and programs that were considered in addition to the above bus stop designs: • Class I bikeway and signage (as needed) directing bicyclists to ride on sidewalk around bus stop. This was not recommended after staff analysis documented in the next section. 3 Item 31: Staff Report Pg. 46 Packet Pg. 802 of 857 DocuSign Envelope ID: B7A35691-ADD7-4DED-AE47-5FAA97069149 Item 31 Attachment D -Joint City VIA Review and Comments on Bike & Bus • On -street markings to clarify conflict areas and right-of-way for bicyclists Conflict Areas Memo recommended based on the discussion in the next section. • Relocate bus stops to locations with additional right-of-way that would allow for separated bike/bus design treatments. VTA recently rebalanced bus stops on ECR, so this would not be ideal. • Educational materials and techniques for transit operators and bicycle educators to encourage safer interactions between buses and bicyclists. This is recommended below. Assessment of Bus Stops along El Camino Real Sidewalk Use Palo Alto staff performed a qualitative assessment of the six high frequency bus stops to determine the feasibility of potential treatments to improve bike and bus interactions. One question to resolve was whether existing sidewalks could be used for both bicycle and pedestrian traffic when buses are stopped in the bike lane at bus stops. When buses block the bike lane, the sidewalk could potentially provide a safer alternative for cyclists than passing a bus on the left in the adjacent travel lane. Potential conflicts with pedestrians could occur depending on sidewalk width, but these conflicts may be less severe than potential bus/bike or car/bike conflicts if cyclists or drivers make a mistake. To safely support bus loading as well as bicycle and pedestrian traffic, adjacent sidewalks would need to accommodate a bus landing of 5 feet wide by 8 feet deep plus a 10' sidewalk clearance, for a total width of 18 feet. The results of this bus stop analysis are in Table 1, which includes the following: • the average number of buses per day that use that stop • average number of boardings/alightings per day • presence of a concrete bus pad at the stop • estimate of the sidewalk width adjacent to the stop Table 1: Highest Frequency Bus Stops for Routes 22/522 — Riders, Bus Pads, Sidewalk Width Cross Street Avg. # of 22/522 Stops/Day Oct 2023 Bus Pad Sidewalk Direction Weekday Saturday Sunday Boardings Y/N Width @ Stop EL CAMINO + CALIFORNIA EAST (to Si) 59 48.4 45.4 186.21 Y 10' + planter strip WEST (to PA Transit Center) 56.9 49.8 43.6 56.73 Y <10' EL CAMINO + EMBARCADERO WEST (to PA Transit Center) 42.19 30.2 26 10.26 N <10' EL CAMINO + ARASTRADERO EAST (to Si) 40.81 24.6 26.4 69.97 N 10' + planter strip EL CAM INO + CHARLESTON WEST (to PA Transit Center) 38.29 29.6 29.8 33.25 N <10' EL CAM INO + GALVEZ EAST (to Si) 33.81 25 23.8 97.62 N <10' Staff found that none of the sidewalks adjacent to the high frequency bus stops meet standards for bus loading and Class 1 bike facilities. Only two of the high frequency bus stops have greater than 10 feet clearances that could accommodate both cyclists and pedestrians. However, when space for wheelchair landing area is taken into account, these stops do not meet the threshold widths needed for safe mixed bicycle and pedestrian use under Caltrans and VTA standards. Moreover, the sidewalk widths leading up to the bus stop areas are generally not wide enough to support mixed bicycle and pedestrian traffic. 4 Item 31: Staff Report Pg. 47 Packet Pg. 803 of 857 DocuSign Envelope ID: B7A35691-ADD7-4DED-AE47-5FAA97069149 Item 31 Attachment D -Joint City VrA Review and Comments on Bike & Bus On -Street Markings Conflict Areas Memo Bus/bike interaction designs should make bicyclists and bus operators feel more comfortable about sharing the road with one another, mostly by knowing where to expect each other. See Figures 4 and 5 below for suggested green paint markings, "Bike Bus Only" labels, and "Bike Yield" markings that may have following benefits: • Make it clear to bus operators and cyclists who has the right-of-way when conflicts occur (i.e., yield markings in bike lane indicates priority for buses and delineates space for cyclists to stop and wait for buses to load/unload passengers) • Encourage cyclists to wait behind buses, keeping them out of the travel lane and off the sidewalks • Reinforce that this space is for bicyclists and uses only, which could deter private vehicle loading/unloading activity that may occur Staff Recommendations Following the meeting with Caltrans, City staff and VTA staff reviewed the range of bus stop treatments discussed above and noted that the following strategies could be available within the current Caltrans project to enhance the safety of the shared bus stop/bike lane areas: • Incorporate on -street green markings at bus stopping areas with "Bike Bus Only" labels (see Figure 4 for example) • Include "Bike Yield" markings in bike lanes (see Figure 5 for example) • Implement an educational campaign on how to safely use the shared bike lane/bus stop area • If possible, relocate bus stops to locations with additional right-of-way that would allow for desired bike/bus design treatments Figure 4: Example of Bus Stop at Class IV Separated Bikeway in Hayward Source: Caltrans DIB-94 5 Item 31: Staff Report Pg. 48 Packet Pg. 804 of 857 DocuSign Envelope ID: B7A35691-ADD7-4DED-AE47-5FAA97069149 Item 31 Attachment D -Joint City VIA Review and Comments on Bike & Bus Figure 5: Diagram of Bus Stop Mixing from the FHWA Separated Bike Lane Plan Conflict Areas Memo de IeVt nL xu Source: Caltrans DIB-94 Next Steps Based on the discussion above, City staff and VTA staff suggest the following as key next steps: • Prior to finalizing striping plans, City and VTA staff to coordinate with Caltrans on incorporating clear, consistent, and gap -free roadway markings and signage (as needed) into bikeway design, considering the potential bus stop treatments and strategies discussed above • Prior to finalizing striping plans, City staff and VTA staff to assess the feasibility of relocating bus stops to locations with additional right-of-way that would allow for desired bike/bus design treatments • Prior to repaving completion, City staff and VTA staff to coordinate with Caltrans, Silicon Valley Bicycle Coalition (SVBC), and other relevant stakeholders to develop educational materials and techniques for transit operators and bicycle educators to encourage safer interactions between buses and bicyclists • In the coming months once resources and staff are identified, City staff and VTA staff to coordinate with Caltrans on a bus boarding island pilot on El Camino Real in Palo Alto outside of the current Caltrans project Attachments Attachment 1: VTA Boardings for Palo Alto Bus Stops along El Camino Real (October 2023) Attachment 2: VTA Daily Number of Stops at Palo Alto Bus Stops along El Camino Real 6 Item 31: Staff Report Pg. 49 Packet Pg. 805 of 857 DocuSign Envelope ID: B7A35691-ADD7-4DED-AE47-5FAA97069149 Attachment 1 VIA Data: Boardings by Bus Stop on El Camino Real in Palo Alt Item 31 Attachment D - Joint City stopid stop_di on_name at_name oct2023_boardings V -A Review and 60331 E EL CAMINO REAL SAM MCDONALD 3.61 Comments on Bike & Bus 60339 E EL CAMINO REAL BARRON 21.26 Conflict Areas Memo 60337 E EL CAMINO REAL HANSEN 38.09 60340 E EL CAMINO REAL LOS ROBLES 25 60335 E EL CAMINO REAL CALIFORNIA 186.21 60330 S EL CAMINO REAL GALVEZ 97.62 60341 E EL CAMINO REAL VISTA 15.92 60518 N EL CAMINO REAL WELLS 0.67 60511 W EL CAMINO REAL PAGE MILL 20.36 60514 W EL CAMINO REAL PARK 2.36 60508 W EL CAMINO REAL CURTNER 21.83 60343 E EL CAMINO REAL ARASTRADERO 69.97 60327 S EL CAMINO REAL STANFORD SHOP 4.8 60510 W EL CAMINO REAL PORTAGE 7.49 60507 W EL CAMINO REAL EL CAMINO WAY 21 60516 W EL CAMINO REAL SAM MCDONALD 0.12 60515 W EL CAMINO REAL CHURCHILL 0.5 60513 W EL CAMINO REAL STANFORD 3.81 60504 W EL CAMINO REAL CHARLESTON 33.25 60338 E EL CAMINO REAL MATADERO 10.57 60509 W EL CAMINO REAL MARGARITA 12.58 60342 E EL CAMINO REAL MAYBELL 10.72 60503 W EL CAMINO REAL Dianhs Court 8.61 60336 E EL CAMINO REAL PAGE MILL 40.79 60333 E EL CAMINO REAL SERRA 20.84 60505 W EL CAMINO REAL EL CAMINO WAY 11.9 60332 E EL CAMINO REAL CHURCHILL 7.48 60512 W EL CAMINO REAL CALIFORNIA 56.73 60329 S EL CAMINO REAL PALM 26.29 60517 N EL CAMINO REAL EMBARCADERO 10.26 60334 E EL CAMINO REAL OXFORD 9.93 Item 31: Staff Report Pg. 50 Packet Pg. 806 of 857 DocuSign Envelope ID: B7A35691-ADD7-4DED-AE47-5FAA97069149 VTA Data: Daily number of stops at ECR stops LOCATION Average # of buses per day Cross Street Weekday Saturday Sunday EL CAMINO + CALIFORNIA EAST 59 48.4 45.4 WEST 56.9 49.8 43.6 EL CAMINO + EMBARCADERO WEST 42.19 30.2 26 EL CAMINO + ARASTRADERO EAST 40.81 24.6 26.4 EL CAMINO + CHARLESTON WEST 38.29 29.6 29.8 EL CAMINO + GALVEZ EAST 33.81 25 23.8 EL CAMINO + PAGE MILL EAST 17.19 9.2 9 WEST 22.48 12 10 EL CAMINO + EL CAMINO WAY! LOS ROBLES WEST 19.48 17.8 17.4 EL CAMINO + CURTNER WEST 17.95 19.2 17.2 EL CAMINO + HANSEN EAST 17.05 8.4 8.4 EL CAMINO + LOS ROBLES EAST 16.19 16 14 EL CAMINO + BARRON EAST 16 13 13.2 EL CAMINO + DINAHS CT EAST 7 5.4 5.6 WEST 9 9.2 8.2 EL CAMINO + CESANO WEST 13.1 10.4 8.8 EL CAMINO + PORTAGE WEST 11.62 8.2 5.6 EL CAMINO + MARGARITA WEST 11.29 9.4 7.8 EL CAMINO + VISTA EAST 10.67 10.4 8.6 EL CAMINO + EL CAMINO WAY! MAYBELL WEST 10.48 9 6.4 EL CAMINO + MATADERO EAST 10.29 8.2 7 EL CAMINO + MAYBELL EAST 10 4.8 5.8 EL CAMINO + WELLS WEST 8.86 8.4 6.6 EL CAMINO + OXFORD EAST 8.38 8.4 8.4 EL CAMINO + PARK WEST 7.86 8.4 5.4 EL CAMINO + STANFORD WEST 6.81 8.8 6.6 EL CAMINO + PALM EAST 6.81 4.6 3.2 EL CAMINO + SERRA EAST 6.19 5.8 6 EL CAMINO + CHURCHILL EAST 2.9 2.4 2.6 WEST 3.1 3.4 2.8 EL CAMINO + SAM MCDONALD EAST 1.05 1.4 1 WEST 1.38 2 0.2 Item 31 Attachment D -Joint City VIA Review and Comments on Bike & Bus Conflict Areas Memo Item 31: Staff Report Pg. 51 Packet Pg. 807 of 857 Item 31 Attachment E - Matrix of No Right Turn on Red Proposed Locations Proposed No Right Turn These tables show the El Camino Real intersections where No Right Turn on Red restrictions are b on Red Restrictions Table 1 shows the intersections that appear on the City's Suggested Routes to School maps. Table 2 shows the remaining non -school route intersections where Caltrans is proposing right turn restrictions. 0 indicates an approach where Caltrans is proposing a No Right Turn on Red restriction. + indicates an approach where City staff recommend Council request an additional No Right Turn on Red Restriction. A grey cell indicates that a turn restriction is not feasible or requested for that approach. Table 1: Proposed Right Turn Restrictions at School Route Crossings of El Camino Real El Camino Real Intersection Proposed No Right Turn on Red Restriction Schools Served Northbound on Southbound on Eastbound on Westbound & El Camino Real El Camino Real Side Street on Side Street Bike/Ped Context Notes Arastradero Rd/ + 0 0 Gunn/Fletcher/Briones W Charleston Rd Heavy bike commuter use Los Robles Ave/ El 0 0 0 0 Gunn/Fletcher/Briones Camino Way Heavy bike commuter use Matadero Ave/ 0 0 + + Gunn/Fletcher/Barron Park Margarita Ave Heavy bike commuter use Stanford Ave 0 0 + + Escondido/Greene/Paly Heavy bike commuter use Maybell Ave/ El Gunn/Fletcher/Briones Camino Way + + + + Heavy bike commuter use Cesano Ct/ Los Santa Rita Altos Ave + + (Monroe Park students) Cambridge Ave + + + + Paly/Greene Curtner Avenue + Barron Park Ventura Avenue + Barron Park Table 2: Proposed Right Turn Restrictions at Non -School Route Crossing of El Camino Real El Camino Real Intersection Proposed No Right Turn on Red Restriction Schools Served Northbound on Southbound on Eastbound on Westbound & El Camino Real El Camino Real Side Street on Side Street Bike/Ped Context Notes Page Mill Rd/ 0 0 Mayfield Soccer Fields/ Oregon Expwy Stanford Research Park Park Blvd/Serra St + + 0 0 Stanford Univ Bike & Ped Gateway Heavy bike commuter use Churchill Ave Paly HS Stanford Univ Bike& Ped Gateway Heavy bike commuter use Galvez St/ 0 Stanford Univ Bike & Ped Gateway Embarcadero Rd Heavy bike commuter use California Ave Stanford Univ & SRP Bike & Ped + 0 Gateway/Hi-frequency bus stops/ Hi ped activity/Car-free street Item 31: Staff Report Pg. 52 Packet Pg. 808 of 857 Item 32 Item 32 Staff Report CITY OF PALO ALTO City Council Staff Report From: City Manager Report Type: INFORMATION REPORTS Lead Department: Community Services Meeting Date: June 17, 2024 Report #:2405-3036 TITLE Informational Report on the Public Art Commission Presentation to Policy & Services Committee May 14, 2024 RECOMMENDATION This is an informational report, and no action is being requested. BACKGROUND AND ANALYSIS The City Council discussed and approved the restoration of the Public Art Commission from five to seven members at the December 4, 2023 City Council meeting. As part of the motion, the Council also referred to Policy and Services Committee to review with the Public Art Commission the respective role of the Public Art Commission staff, stakeholders, and the Council in public art decisions in relation to placement and themes of art. Public Art Manager, Elise DeMarzo, along with Public Art Commission Vice -Chair, Hsinya Shen, attended the Policy and Services Committee Meeting on May 14, 2024. Together they presented an overview of the Public Art commissioning process for three main categories: Municipal Percent for Art Projects, Private Percent for Art Projects, and Temporary Public Art Projects. Staff also outlined the comprehensive stakeholder involvement in project and artist selection and discussed the respective roles of the Public Art Commission, staff, stakeholders, and the Council in public art decisions in relation to placement and themes of art in Palo Alto. The discussion was the first item on the May 14, 2024 meeting agenda, and the Staff Report' is available online and included as Attachment A. The presentation highlighted the opportunities for City Council involvement and reviewed the Municipal Code which assigns decision -making on matters related to Public Art to staff and the Public Art Commission. This ensures that decisions, including artist selections of artists, art works, 1 Policy and Services Committee, May 14,2024; Item 1: https://cityofpaloaIto.primegov.com/Portal/viewer?id=0&type=7&uid=2f649ec3-541e-4935-8ee4-7d3565b63ba7 Item 32: Staff Report Pg. 1 Packet Pg. 809 of 857 Item 32 Item 32 Staff Report and locations are made by professionals with expertise in public art. Staff shared that Section 2.26.0602 of the Municipal Code outlines the role of the City Council in the review of artistic matters in the visual art in public places program and implicitly states that the City Council can agendize an artistic matter for discussion should it determine necessary. No changes were recommended by the Committee, however further discussion items included clarification about the stakeholder and neighborhood outreach in the deaccession process, the criteria selection panelists are given to score artist applications for a given project, the importance of considering the past and the future of a given site when considering public art, and the inclusion of neighborhood association and youth representatives in selection panels. There was additional discussion regarding the diversity of selection panelists to ensure that a more diverse group of artists are selected for commissions. FISCAL/RESOURCE IMPACT There are no fiscal impacts associated with this informational report. STAKEHOLDER ENGAGEMENT Extensive stakeholder engagement went into the development of the Public Art Master Plan, the California Avenue District Plan, and the Baylands Art Overlay. Each public art installation begins with community engagement to determine potential locations and types of artwork to be considered and influences the design development process for each artwork. ENVIRONMENTAL REVIEW This report is for informational purposes only with no action required by the Council and therefore not a project subject to CEQA review. ATTACHMENTS Attachment A: P&S Committee May 14, 2024 Staff Report (Item 1) APPROVED BY: Kristen O'Kane, Community Services Director 2 Municipal Code outlining City Council Review of Artistic Matters: https://codeIibrary.amlegaI.com/codes/paloaIto/latest/paloaIto ca/0-0-0-61497#JD 2.26.070 Item 32: Staff Report Pg. 2 Packet Pg. 810 of 857 Item 32 Attachment A - P&S Committee May 14, 2024 Staff Report (Item 1) Policy & Services Committee Staff Report From: City Manager CITY O F Report Type: ACTION ITEMS PALO Lead Department: Community Services ALTO Meeting Date: May 14, 2024 Report #:2402-2679 TITLE City Council Referral to Review the respective role of the Public Art Commission, staff, stakeholders, and the Council in public art decisions in relation to placement and themes of art. (CEQA Status — Not a Project.) RECOMMENDATION Staff recommends that the Policy and Services Committee review and discuss a report on Public Art processes as referred by the City Council. BACKGROUND AND ANALYSIS The City Council discussed and approved the restoration of the Public Art Commission from five to seven members at the December 4, 2023, Council meeting. As part of the motion, the Council also referred to Policy and Services Committee to review with the Public Art Commission the respective role of the Public Art Commission staff, stakeholders, and the Council in public art decisions in relation to placement and themes of art. Public art projects generally fall into three categories: Municipal Percent for Art Projects, Private Percent for Art Projects, and Temporary Public Art Projects. The current roles of the Public Art Commission, the City Council, and City staff are outlined in the Visual Art in Public Places Municipal Code 2.261, along with the Public Art for Municipal Projects process. All projects 1 Palo Alto Municipal Code section 2.26: https://codelibrary.amlegaI.com/codes/paloalto/latest/paloalto ca/0-0-0- 61433 Item 32: Staff Report Pg. 3 Packet Pg. 811 of 857 Item 32 Attachment A - P&S Committee May 14, 2024 Staff Report (Item 1) commissioned and installed are guided by the Public Art Master Plane and associated public art plans for the California Avenue Area3 and the Baylands4. The Municipal Code assigns decision -making on matters related to Public Art to staff and the Public Art Commission. This ensures that decisions, including selections of artists, art works, and locations are made by professionals with expertise in public art. Section 2.26.0605 of the Municipal Code outlines the role of the City Council in the review of artistic matters in the visual art in public places program and implicitly states that the City Council can agendize an artistic matter for discussion should it determine necessary. The code states: (1) Decisions on artistic matters will be made by city staff and the public art commission; (2) The city council will not exercise its independent judgment on artistic matters unless the city council requests that the matter be agendized for its review; (3) Unless the city council determines to exercise its independent judgment as provided above, sketches, designs, photographs, precise plans, art examples, and similar items on artistic matters will not be transmitted to the city council as a matter of course in conjunction with projects before the city council; (4) The city council will refer questions, suggestions, requests, complaints, and similar items pertaining to the visual art in public places program to city staff and the public art commission for their review and response. Municipal Percent for Art Projects The Municipal Percent for Art Policy was established in 2005 and amended in 20156. In 2015, the City Council also amended Chapter 2.26 of the Municipal Code to add Public Art for Municipal 2 2016 Public Art Master Plan: https://www.cityofpaloalto.org/files/assets/public/v/1/community-services/public- art-program/pap-policies-and-docs/public-art-master-plan.pdf 3 2021 California Avenue District Public Art Plan: https://www.citvofpaloalto.org/files/assets/public/v/1/community-services/public-art-program/pap-policies-and- docs/caIifornia-ave-district-public-art-plan.pdf 4 2019 Public Art Overlay to the Baylands Comprehensive Conservation Plan: https://www.cityofpaloalto.org/files/assets/public/v/1/community-services/public-art-program/bccp-public-art- overlay.pdf 5 City Council Review of Artistic Matters in the Visual Art in Public Places Program: https://codelibrary.amlegaI.com/codes/paloalto/latest/paloalto ca/0-0-0-61497#JD 2.26.070 6 2015 Municipal Percent for Art Policy: https://www.cityofpaloalto.org/files/assets/public/v/2/community- services/public-art-program/pap-policies-and-docs/muni-policy-effective-march-2015.pdf Item 32: Staff Report Pg. 4 Packet Pg. 812 of 857 Item 32 Attachment A - P&S Committee May 14, 2024 Staff Report (Item 1) Projects7 to strengthen its ongoing commitment to integrating art into the community. The ordinance states that the City will budget one percent of its CIP budget for public art, with certain exceptions. These funds are transferred as part of the annual budget process into the Art in Public Spaces Capital Improvement Project (CIP AC -86017 — Art in Public Spaces) budget, and funds may be pooled and allocated to temporary and permanent public art throughout the City. The process chart (Attachment A) outlines how public art projects are identified, artists are selected, concepts approved, and artwork is commissioned. The chart also is a general outline for how all the City's public art projects are commissioned, with a few nuances. All municipal public art projects are posted as an open call to artists for temporary or permanent projects initiated by Public Art staff. Public Art staff also occasionally utilize a prequalified pool of artists that is refreshed with an open call approximately every few years, last completed May 2021. When a project is announced for artists to apply, Palo Alto generally receives a robust number of applicants. For instance, a recent open call for artists, completed in April 2024, yielded 120 applicants. Once applications are received and vetted for qualification, as outlined in the call to artists, staff assembles a selection panel to review and score the applicants. Usually, each selection panel is made up of seven voting members: one Public Art Commissioner, the architect and/or project manager for the CIP project, and a combination of local stakeholders and artists determined by the project location. The panel selects a final artist to recommend to the Public Art Commission (PAC) for approval. The Public Art Commission discusses and votes to approve the artist before the artist begins the community outreach process for design development. Location history and context is of utmost importance when commissioning site -specific artwork to ensure it is aligned with the neighborhood setting and needs. Public Art staff works closely with the artist to arrange public meetings as well as informational meetings with key City staff, usually Palo Alto Historical Association, and any other important stakeholders for the location. Once a conceptual proposal has been developed, that proposal goes to the Public Art Commission for public discussion and approval prior to beginning detailed design development. If the artist contract is over $85,000, the contract must be approved by City Council in alignment with the Palo Alto Municipal Code procurement authorities. Temporary Public Art Projects Temporary projects are usually defined as being in place for one year or less. Temporary projects initiated by the City, such as Code:ART or ArtLift grants follow a similar, but sometimes more streamlined trajectory as the longer -term municipal projects described above. Depending on the nature and duration of the artwork, sometimes the selection panel is made up of five members instead of the usual seven, or if an artwork is in place for an extremely short period of time (under Palo Alto Municipal Code 2.26.070: https://codelibrary.amlegal.com/codes/paloalto/latest/paloalto ca/0-0-0- 61497#JD 2.26.070 Item 32: Staff Report Pg. 5 Packet Pg. 813 of 857 Item 32 Attachment A - P&S Committee May 14, 2024 Staff Report (Item 1) 24 hours), City staff may approve the installation in accordance with the Temporary Artwork Policy8. The exception to this one-year definition for temporary public art is murals. Murals are increasingly being defined as temporary (in place a few years) in the public art field, and Palo Alto is keeping alignment with best practices in the public art field. In recent years, the Public Art Program has approved murals that are classified as temporary but approved for up to five years. The reason for this is to avoid the process of taking a mural into the City collection and later going through a legal deaccession process - especially when murals typically do not have a long lifespan. This also helps set expectations with the public about the expected lifespan of an artwork. Percent for Art in Private Development Projects In December 2013, the Palo Alto City Council added chapter 16.61 to the Municipal Code9 establishing a requirement for public art in projects over 10,000 square feet with an estimated construction valuation of over $200,000 to either commission art on -site or pay a contribution to the Public Art Fund equivalent to one percent of their construction budget. There is a process chart included in the Application Packet10. Applicants choosing to commission art on site develop their public art plan at the same time as the rest of the construction project design. The applicants meet with public art staff prior to their initial review with the Public Art Commission. At the Initial Review, the applicant is asked to present their overall project, estimated art budget, artist selection plan and consultant, areas of consideration for integrating public art, and the overall timeline for the project. The PAC gives feedback for the applicant team to consider regarding placement and themes for the artwork prior to initiating their artist selection process. Some projects come to the PAC for an Interim Review once their artist is selected and to gather feedback on their design direction prior to returning for Final Review. When the applicant comes to the PAC for Final Review, they are asked to present their art selection process, samples of the selected artist's previous work and resume, description of the proposed artwork with dimensions and materials, an in -situ rendering of the artwork on site, a rendering of the artwork with any locations of lighting and the identification plaque, a timeline and budget detailing installation and associated consultant fees, and a statement about maintenance requirements. The applicant must get final approval prior to the issuance of a building permit. 8 2017 Temporary Artwork Policy: https://www.cityofpaloalto.org/files/assets/public/v/1/community- services/public-art-program/pap-policies-and-docs/temporary-artwork-policy.pdf 9 Palo Alto Municipal Code Chapter 16.61: https://codelibrary.amlegaI.com/codes/paloalto/latest/paloalto ca/0-0- 0-75139 10 Public Art in Private Development Application and Informational Packet: https://www.cityofpaloalto.org/files/assets/public/v/3/community-services/public-art-program/pap-policies-and- docs/application-packet public -art -in -private -development 2024.pdf Item 32: Staff Report Pg. 6 Packet Pg. 814 of 857 Item 32 Attachment A - P&S Committee May 14, 2024 Staff Report (Item 1) FISCAL/RESOURCE IMPACT There is no fiscal impact associated with this Council referral. The Public Art budget is reflected in CIP AC -86017 —Art in Public Spaces. The Art in the City Capital Improvement Projects ordinance states that the City will budget one percent of its CIP budget for public art, with certain exceptions. A base level of funding in the amount of $50,000 is included each year, and a portion of this funding pays for staff to project manage municipal CIP projects funded with CIP funds. Prior to Fiscal Year 2015, one percent for public art was included in the budget for each applicable project. Beginning in Fiscal Year 2015, public art funding is accounted for within this capital project. This change provides a clearer picture of how much funding is available for public art, allows for the pooling of funds for more impactful projects, and ensures that the funds are preserved for public art. Additional budget needs provided from the General Fund include staff and maintenance costs. One Public Art staff position is funded through the Private Percent for Art in -lieu fees. STAKEHOLDER ENGAGEMENT Extensive community engagement went into the development of the Public Art Master Plan, the California Avenue District Plan, and the Baylands Art Overlay. Each public art installation begins with community engagement to determine potential locations and types of artwork should be considered, and influences the design development process for each artwork. ENVIRONMENTAL REVIEW This report is for informational purposes only with no action required by the City Council and is therefore not a project subject to CEQA review. ATTACHMENTS Attachment A: Public Art Approval Process Flow Chart APPROVED BY: Kristen O'Kane, Community Services Director Item 32: Staff Report Pg. 7 Packet Pg. 815 of 857 Item 32 PUBLIC ART SELECTION AND APPROVAL PRd Attachment A-P&S Committee May 14, 2024 Percent for Art in Municipal Projects L Staff Report (Item 1) PROJECTS IDENTIFIED BY PUBLIC ART PROGRAM (PAP) STAFF Site/Timeline/Needs assessed / Budget Set ART PLAN PRESENTED TO PUBLIC ART COMMISSION (PAC) ✓ Artist selection panel Community Outreach ✓ Art site recommendations PAP staff and PAC ✓ Type of artist selection process V Budget ✓ Community stakeholders or partners I REQUEST FOR QUALIFICATIONS (RFQ) ISSUED ARTIST SELECTION PROCESS Community Input V Panelists + PAP Staff review artists to select a finalist PAP Staff reports to ✓ PAC approves the selected artist PAC during process ✓ Artist contract for artwork design development Community Input FINAL ARTWORK DESIGN PROPOSAL GOES TO PUBLIC ART COMMISSION (PAC) FOR APPROVAL FABRICATION + PLACEMENT CONTRACT NEGOTIATED BY PAP STAFF AND ARTIST IF OVER $85,000, CONTRACT GOES Community Input TO CITY COUNCIL FOR APPROVAL PROJECT MANAGED BY PAP STAFF WITH REGULAR UPDATES TO COMMISISON PROJECT MANAGEMENT INCLUDES: ✓ Design development ✓ Permitting and community meetings/outreach ✓ Coordination with the project architect and City Depts V Scheduling payments ✓ Ensuring insurance/ safety/ ADA requirements and engineered drawings are approved. V Subcontractors and contract extensions are approved ✓ Coordination of underground utility identification, cranes, trucks, concrete contractors, etc. ✓ Opening celebration planning ✓ Press release and promotions Item 32: Staff Report Pg. 8 Packet Pg. 816 of 857 Item 32 Attachment A - P&S Committee May 14, 2024 Staff Report (Item 1) J PALO ALTO May14, 2024 _r�itvnf ublicart Item 32: Staff Report Pg. 9 Packet Pg. 817 of 857 Staff Recommendation Item 32 Attachment A - P&S Committee May 14, 2024 Staff Report (Item 1) Staff recommends that the Policy and Services Committee review and discuss a report on Public Art processes as referred by the City Council. > CITY OF PALO ALTO Item 32: Staff Report Pg. 10 Packet Pg. 818 of 857 Item 32 Public Art Commissionin Att Committee ay 14, 2024 Staff Repot (Item1) CITY OF PALO ALTO Item 32: Staff Report Pg. 11 Packet Pg. 819 of 857 Item 32 Att14,2024StaffRepot(Iteme1)Public Art Commissionin_ Project Identification • CIP/Council/Private Development/PAC origin • Site • Timeline • Needs Assessed • Budget Set A 1, o�. r C 'gyfdt„f�y Project Initiation Art Plan Presented to PAC • Artist Selection panel • Art site recommendations • Type of artist selection process • Budget • Community stakeholders/partners > CITY OF PALO ALTO Item 32: Staff Report Pg. 12 Packet Pg. 820 of 857 Item 32 Att14,2024StaffRepot(Iteme1)Public Art Commissionin_ Artist Selection Process CITY OF PALO ALTO Item 32: Staff Report Pg. 13 • RFQlssued • Panelists review artists to select a finalist to recommend to PAC • PAC approves the selected artist • Artist contract for artwork design development Community Input PAP Staff reports to PAC during process Packet Pg. 821 of 857 Item 32 Att y Public Art Commissionin 14, 2024 Staff Repot (Iteme1Ma Conceptual Design Development • Community and stakeholder meetings • History of site • Final artwork design proposal goes to PAC for approval • Community Input Detailed Design and Implementation • Coordination with construction team • Materials research/engineering • Fabrication + Installation • Regular updates to PAC CITY OF PALO ALTO Item 32: Staff Report Pg. 14 Packet Pg. 822 of 857 Staff Recommendation Item 32 Attachment A - P&S Committee May 14, 2024 Staff Report (Item 1) Staff recommends that the Policy and Services Committee review and discuss a report on Public Art processes as referred by the City Council. > CITY OF PALO ALTO Item 32: Staff Report Pg. 15 Packet Pg. 823 of 857 Item 33 Item 33 Staff Report CITY OF PALO ALTO City Council Staff Report From: City Manager Report Type: INFORMATION REPORTS Lead Department: Administrative Services Meeting Date: June 17, 2024 Report #:2405-2989 TITLE Sales Tax Digest Summary, Calendar Year 2023 04 (October 2023 -December 2023) DISCUSSION This report transmits information regarding the City of Palo Alto's sales tax receipts for the fourth quarter (October - December) of 2023. Further and more detailed levels of information can be found in the attached City of Palo Alto Sales Tax Digest Summary and Legislative Update 2023 Q4 (Attachment A). The City's sales tax cash receipts of $9.7 million for the fourth quarter (October to December 2023) is $0.16 million (1.6%) higher than the same quarter of the prior year (see Attachment A, Historical Analysis by Calendar Quarter). When adjusted for non -period related payments, the overall economic quarter over quarter sales tax activity (Q4 2022 to 04 2023) in Palo Alto decreased by $50 thousand (-0.6%). The largest quarterly decline was in the business -to - business category (-19.2%) which was primarily driven by car leasing segment. The transportation category experienced the largest increase (27.7) which was driven by new auto sales. For calendar year 2023, sales tax cash receipts for the City increased by 8.2% from the prior year. When adjusted for non -period related payments, the overall economic sales tax activity in Palo Alto for the year increased by 3.7%. In comparison, statewide sales tax cash receipts decreased by 1.4% and the San Francisco Bay Area decreased by 0.8%. The Consumer Price Index for the same period was 3.4%. Palo Alto's, in calendar year 2023, the economic growth was driven by business to business segment (51%), followed by restaurants (33.9%), miscellaneous retail (19.1%), and new auto sales (18.3%). Offsetting these growths was a decline in the furniture/Appliance (-26.7%). As of writing of this report, the preliminary 2024 first quarter (January to March 2024) sales tax cash receipts growth is 2.4%; economic performance is not yet available for this period. The fourth quarter includes $1.9 million of sales tax receipts from the county pool. The City's share of the county pool for 04 was 6.7%, down 50 basis points from the same Item 33: Staff Report Pg. 1 Packet Pg. 824 of 857 Item 33 Item 33 Staff Report quarter last year. County pools are primarily from online purchases from out-of-state companies, remote sellers who ship merchandise to California/County destinations, and private vehicle sales that are not directly allocated to a jurisdiction. County pools are allocated to local jurisdictions based on each jurisdiction' s share of total sales taxes. ATTACHMENTS Attachment A: 2023 O4 Sales Tax Data and Legislative Update APPROVED BY: Lauren Lai, Administrative Services Director Item 33: Staff Report Pg. 2 Packet Pg. 825 of 857 City of Palo Alto Item 33 Attachment A - 2023 Q4 Sales Tax Digest Summary SalesTax Data and Collections through February 2024 Legislative Update Sales October through December 2023 (2023Q4) California Overview For the year ending in the fourth quarter of 2023, cash receipts decreased 1.4% statewide, and decreased 2.4% in S.F. Bay Area. However, when adjusted for non -period related payments, the overall economic sales tax activity for the year ending in fourth quarter of 2023 decreased by 3.5% statewide and decreased by 3.9% in S.F. Bay Area. City of Palo Alto For the year ending in the fourth quarter of 2023, sales tax cash receipts for the city increased by 8.2% from the prior year. However, when adjusted for non -period related payments, the overall economic sales tax activity in Palo Alto for the year ending in fourth quarter of 2023 increased by 3.7%. Same quarter sales tax cash receipts decreased by 2.6% in California from Q4 2022 to O4 2023. Overall, the decline in sales tax cash receipts in California in O4 2023 when compared to the same quarter in the prior year was due to a combination of factors, including consumer responses to higher prices and higher interest rates. While inflation rates have been declining, the cumulative impact of higher prices and economic uncertainty have started to impact consumer confidence and ultimately impacted consumer demand in O4 2023. Interest rate increases made financing larger purchases, such as new autos, more expensive. The Palo Alto citywide sales tax cash receipts increased by 1.6% over the O4 2022 to O4 2023 period. Palo Alto's growth bucked the overall statewide decreasing trend during the same period. Key reasons for the Palo Alto increase during this period (while the rest of the state was down) were a 10.8% increase in the auto leasing segment and a 3.7% increase in the restaurant segment. www.avenuinsights.com Item 33: Staff Report Pg. 3 Packet Pg. 826 of 857 ge 1 City of Palo Alto Regional Overview Item 33 Attachment A - 2023 Q4 Sales Tax Data and Legislative Update The first chart on page two shows adjusted economic benchmark year amounts, which means that it shows the year ended fourth quarter of 2023 compared to the year ended fourth quarter of 2022 (benchmark years are rolling annual comparisons through the current quarter). The growth rates are different between the state and Palo Alto because the sales tax from businesses in Palo Alto performed better overall than the statewide average. Regional Overview Chart (Economic) BENCHMARK YEAR 2023Q4 COMPARED TO BENCHMARK YEAR 2022Q4 rr• of Total 1% Change Palo Alto California S.F. Bay Area Sacramento Central Valley South Coast Inland Empire North Coast Statewide Valley General Retail 26.3/-0.3 28.7/-1.2 26.1/-4.7 28.1/-2.9 37.4/2.1 26.9/0.1 34.1/-5.7 27.6/4.6 Food Products 17.5/8.0 21.0/0.9 22.3/2.0 16.7/0.1 14.7/1.1 23.1/1.8 17.8/-7.5 18.3/0.5 Transportation 19.1/3.0 23.6/-6.8 19.1/-7.0 27.1/-5.0 22.7/-4.5 24.6/-5.8 24.3/-16.0 28.4/-9.5 Business to Business 33.8/6.1 15.8/-6.4 21.2/-3.9 14.4/-5.5 14.5/-6.9 15.5/-6.5 10.8/-13.4 10.2/-9.4 Misc/Other 3.3/-4.5 10.8/-5.4 11.2/-7.5 13.7/-8.8 10.7/-6.3 9.9/-2.3 13.1/-11.4 15.5/-4.9 Total 100.0/3.7 100.0/-3.5 100.0/-3.9 100.0/-4.2 100.0/-1.9 100.0/-2.3 100.0/-10.3 100.0/-3.4 • • California •ENDED]I'1J..I.l; Sacramento I''tiII0 Palo Alto Statewide S.F. Bay Area Valley Central Valley South Coast Inland Empire North Coast Auto Sales - Miscellaneous Miscellaneous Largest Segment Leasing Restaurants Restaurants New Retail Restaurants Retail Restaurants % of Total / % Change 21.9/10.8 15.2/3.2 16.6/3.8 11.7/1.1 15.6/15.4 17.1/3.9 17.0/-1.8 11.7/1.8 2nd Largest Segment Restaurants Auto Sales - Miscellaneous Restaurants Department Auto Sales - Restaurants Department New Retail Stores New Stores % of Total / % Change 15.7/9.3 11.4/-3.9 9.8/-2 11.5/1.8 10.9/-3.4 12.6/-3.9 11.5/-3.1 11.5/26.8 3rd Largest Segment Auto Sales - Miscellaneous Auto Sales - Miscellaneous Restaurants Miscellaneous Auto Sales - Auto Sales - New Retail New Retail Retail New New %of Total /%Change 15.2/5.0 10.6/6.7 9.3/-4.8 11.0/0.3 9.9/3.9 8.7/11.3 11.1/-8.7 11.3/-1.0 www.avenuinsights.com Item 33: Staff Report Pg. 4 Packet Pg. 827 of 857 e 2 City of Palo Alto Gross Historical Sales Tax Cash Receipts by Benchmark Year and Quarter $35,000,000 $30,000,000 $25,000,000 $20,000,000 $15,000,000 $10,000,000 $5,000,000 Item 33 Attachment A - 2023 Q4 Sales Tax Data and Legislative Update $- Oti O� O�' ti0 ti0 y0 ti0 ti0 y0 ti0 ti0 LO ti0 ti0 LO LO ti0 LO ,LO 4, LO LO 4, Quarterly —Benchmark Year Net Cash Receipts for Benchmark Year fourth Quarter 2023: $36,846,615 *Benchmark year (BMY) is the sum of the current and 3 previous quarters (2023Q4 BMY is sum of 2023 Q4, 2023 Q3, 2023 Q2, 2023 Q1) Leasing Net POOIs &, 24. All Other 33.3% Office Equipment Apparel Stores 7.1% 6.8% Restaurants 15.7% Sales - New 15.2% www.avenuinsights.com Item 33: Staff Report Pg. 5 Packet Pg. 828 of 857 ge 3 City of Palo Alto TOP 25 SALES/USE TAX CONTRIBUTORS Item 33 Attachment A - 2023 Q4 Sales Tax Data and Legislative Update The following list identifies Palo Alto's Top 25 Sales/Use Tax contributors. The list is in alphabetical order and represents the year ended fourth quarter of 2023. The Top 25 Sales/Use Tax contributors generate 61.6% of Palo Alto's total sales and use tax revenue. Anderson Honda Apple Stores Arco AM/PM Mini Marts Audi Palo Alto Bloomingdale's Brilliant Earth Hermes HP Enterprise Services Louis Vuitton Macy's Department Store Magnussen's Toyota of Palo Alto Neiman Marcus Nordstrom Department Store Richemont Rivian Automotive Sephora Shell Service Stations Shreve & Co. Stanford Health Care Tesla Tesla Lease Trust Tiffany & Company Union 76 Service Stations Varian Medical Systems Volvo Cars Palo Alto www.avenuinsights.com Item 33: Staff Report Pg. 6 Packet Pg. 829 of 857 e 2 $5,000,000 $4,500,000 $4,000,000 $3,500,000 $3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 $- City of Palo Alto Item 33 Attachment A - 2023 Q4 Sales Tax Data and Legislative Update Sales Tax from Largest Non -Confidential Sales Tax Segments (Economic) Saes �e� �estaJta��s ((i\c�e�ti a<e\S�oteS er�S�otes �ePatYtt` ■ Benchmark Year 2023Q4 ■ Benchmark Year 2022Q4 www.avenuinsights.com Item 33: Staff Report Pg. 7 Packet Pg. 830 of 857 5 City of Palo Alto Historical Analysis by Calendar Quarter Item 33 Attachment A - 2023 O4 Sales Tax Data and Legislative Update Economic Category % 202304 202303 202302 2023Q1 202204 2022Q3 2022Q2 202201 202144 202103 202102 Business To Business 23.2% 2,262,034 2,619,833 2,439,519 2,350,567 2,571,178 2,194,817 2,095,020 2,031,199 2,136,501 1,689,561 1,559,814 Miscellaneous/Other 20.0% 1,951,428 1,870,170 1,546,096 1,302,322 1,517,005 1,597,816 1,724,861 1,701,538 1,687,189 1,812,731 1,743,358 General Retail 23.8% 2,315,882 1,834,297 2,017,885 1,640,927 2,305,038 1,802,777 1,920,316 1,639,417 2,282,253 1,687,461 1,740,666 Food Products 13.8% 1,348,051 1,277,173 1,349,926 1,195,458 1,260,287 1,230,824 1,227,240 1,018,577 1,083,309 999,729 912,939 Subtotal Economic(Local Business) 80.8% 7,877,395 7,601,473 7,353,426 6,489,274 7,653,508 6,826,234 6,967,438 6,390,731 7,189,252 6,189,482 5,956,778 Net Pools & Adjustments 19.2% 1,867,172 1,986,175 2,084,763 1,586,938 1,935,580 1,862,181 686,044 1,721,924 1,806,328 584,508 1,513,663 Total Cash Receipts 100.0% 9,744,567 9,587,647 9,438,189 8,076,212 9,589,088 8,688,414 7,653,481 8,112,655 8,995,580 6,773,990 7,470,441 Economic Segment % 202304 202303 202302 202301 202204 202203 202202 202201 202104 202103 2021O.2 Miscellaneous/Other 45.3% 4,409,850 4,635,983 4,197,978 3,818,384 4,490,992 4,087,158 4,008,008 3,949,786 3,969,954 3,752,178 3,570,610 Restaurants 12.5% 1,214,598 1,154,189 1,214,502 1,073,621 1,114,637 1,102,248 1,093,944 902,707 947,771 884,911 799,544 Miscellaneous Retail 7.1% 689,939 480,649 512,077 448,322 545,797 381,616 479,710 432,956 679,381 412,016 514,516 Apparel Stores 6.0% 586,863 478,973 509,894 423,470 538,573 435,730 495,508 392,724 540,782 406,274 398,447 Department Stores 5.6% 549,893 435,388 492,374 356,626 533,032 423,601 454,349 367,144 525,295 388,703 384,763 Service Stations 2.2% 214,900 229,911 222,029 192,723 215,640 233,387 250,715 191,755 190,610 181,460 157,268 Food Markets 1.2% 112,372 103,251 111,465 101,978 116,810 99,811 104,253 91,634 108,203 90,773 89,773 Business Services 1.0% 98,980 83,130 93,106 74,150 98,027 62,683 80,950 62,025 227,256 73,169 41,858 Subtotal Economic(Local Business) 80.8% 7,877,395 7,601,473 7,353,426 6,489,274 7,653,508 6,826,234 6,967,438 6,390,731 7,189,252 6,189,482 5,956,778 Net Pools & Adjustments 19.2% 1,867,172 1,986,175 2,084,763 1,586,938 1,935,580 1,862,181 686,044 1,721,924 1,806,328 584,508 1,513,663 Total Cash Receipts 100.0% 9,744,567 9,587,647 9,438,189 8,076,212 9,589,088 8,688,414 7,653,481 8,112,655 8,995,580 6,773,990 7,470,441 The chart above shows the categories and segments in quarterly economic basis amounts. The total amount is the net cash receipts, and it was obtained by adding up the categories/segments with the "Net Pools & Adjustments" amount. www.avenuinsights.com (800) 800-8181 Item 33: Staff Report Pg. 8 1 Packet Pg. 831 of 857 City of Palo Alto Historical Analysis by Calendar BMY from 2014Q4 to 2023Q4 Item 33 Attachment A - 2023 O4 Sales Tax Data and Legislative Update Economic Category % 2023Q4 2022Q4 2021Q4 2020O4 2019Q4 2018O4 2017Q4 2016Q4 2015Q4 2014Q4 Business To Business 27.3% 10,069,198 9,470,030 7,429,716 7,892,339 8,552,385 6,449,047 5,784,574 5,070,338 4,815,757 4,204,609 Miscellaneous/Other 18.1% 6,663,630 6,544,315 6,808,975 5,644,772 7,305,572 7,675,512 6,512,034 6,341,684 5,725,186 5,279,140 General Retail 21.1% 7,767,128 7,695,732 6,884,490 4,446,793 7,707,933 8,242,149 8,243,228 8,405,459 8,150,481 8,046,622 Food Products 14.1% 5,184,711 4,799,545 3,653,946 2,792,288 4,927,015 4,836,530 4,691,143 4,623,448 4,476,455 4,202,500 Subtotal Economic (Local Business) 80.6% 29,684,668 28,509,623 24,777,127 20,776,192 28,492,905 27,203,238 25,230,978 24,440,930 23,167,878 21,732,871 Net Pools & Adjustments 19.4% 7,161,947 5,534,016 5,252,686 4,581,233 6,368,218 6,245,742 4,747,057 4,007,873 3,911,397 3,863,167 Total 100.0% 36,846,615 34,043,639 30,029,814 25,357,425 34,861,122 33,448,980 29,978,035 28,448,802 27,079,275 25,596,038 Economic Segment % 2023Q4 2022Q4 2021Q4 2020O4 2019Q4 2018Q4 2017Q4 2016Q4 2015Q4 2014Q4 Miscellaneous/Other 47.4% 17,457,055 17,021,481 14,955,112 14,224,570 16,848,675 15,322,569 13,781,407 12,398,374 11,601,816 10,579,941 Restaurants 12.7% 4,674,768 4,276,150 3,194,169 2,345,059 4,363,220 4,242,726 4,081,788 4,022,319 3,890,586 3,663,579 Miscellaneous Retail 5.6% 2,073,948 1,849,815 1,945,897 1,209,629 1,611,952 1,675,357 1,682,585 2,315,408 1,630,021 1,523,204 Apparel Stores 5.5% 2,008,961 1,866,535 1,610,034 1,005,415 1,912,604 1,979,846 1,741,358 1,659,929 1,657,179 1,660,838 Department Stores 5.0% 1,834,276 1,781,739 1,536,282 777,559 1,795,157 1,980,754 2,066,909 2,143,430 2,366,679 2,364,448 Service Stations 2.3% 865,278 892,331 645,596 436,436 700,254 697,083 613,070 551,153 644,027 768,488 Business Services 0.9% 338,309 408,864 526,824 420,433 817,597 834,834 759,131 843,203 872,811 704,647 Food Markets 1.2% 432,073 412,708 363,213 357,092 443,446 470,070 504,729 507,114 504,759 467,726 Subtotal Economic (Local Business) 80.6% 29,684,668 28,509,623 24,777,127 20,776,192 28,492,905 27,203,238 25,230,978 24,440,930 23,167,878 21,732,871 Net Pools & Adjustments 19.4% 7,161,947 5,534,016 5,252,686 4,581,233 6,368,218 6,245,742 4,747,057 4,007,873 3,911,397 3,863,167 Total 100.0% 36,846,615 34,043,639 30,029,814 25,357,425 34,861,122 33,448,980 29,978,035 28,448,802 27,079,275 25,596,038 The chart above shows the categories and segments in benchmark year economic basis amounts. The total amount is the net cash receipts, and it was obtained by adding up the categories/segments with the "Net Pools & Adjustments" amount. Benchmark year (BMY) is the sum of the current and 3 previous quarters (2023Q4 BMY is sum of 2023 Q4, 2023 Q3, 2023 Q2, 2023 Q1). www.avenuinsights.com Item 33: Staff Report Pg. 9 1 Packet Pg. 832 of 857 Item 33 City of Palo Alto Attachment A - 2023 Q4 Sales Tax Data and Legislative Update Quarterly Analysis by Sales Tax Category: Change from 2022Q4 to 2023Q4 (Economic) Campbell -9.6% -2.8% 7.8% 7.0% -22.6% 2,799,078 2,826,459 -1.0% I.T. Infrastructure Service Stations Recreation Products Office Equipment Cupertino 1.1% 1.9% 3.7% 5.0% -6.5% 10,487,350 10,031,381 4.5% Office Equipment Light Industry I.T. Infrastructure Food Markets Gilroy -1.1% -1.6% 13.2% 3.5% 43.5% 4,797,438 4,658,106 3.0% Auto Sales - New Heavy Industry Misc. Vehicle Sales Energy Sales Los Altos -16.9% -3.6% -13.1% -8.3% -77.2% 623,990 696,637 -10.4% Auto Parts/Repair Light Industry Miscellaneous Retail Service Stations Los Gatos -13.4% -3.2% -6.8% 20.6% -0.3% 1,569,677 1,649,770 -4.9% Biotechnology Light Industry Furniture/Appliance Auto Sales - New Milpitas 8.8% 0.3% -7.2% -33.4% -30.6% 5,985,167 6,672,200 -10.3% Miscellaneous Retail Restaurants Office Equipment Heavy Industry Morgan Hill 3.0% -1.2% -7.9% 2.4% 3.9% 2,587,362 2,672,320 -3.2% Light Industry Apparel Stores Service Stations Heavy Industry Mountain View 2.0% 5.1% -22.4% -5.9% -19.4% 5,174,314 5,388,721 -4.0% Restaurants Business Services Auto Sales - New Light Industry Palo Alto 2.1% 6.1% 27.4% -19.2% 4.6% 7,962,621 8,012,706 -0.6% Auto Sales - New Miscellaneous Retail Office Equipment Furniture/Appliance San Jose -2.4% 1.8% -12.3% -7.4% 189.3% 50,630,869 52,512,578 -3.6% Office Equipment Miscellaneous Other Auto Sales - New Green Energy Santa Clara 0.1% 2.2% -13.5% -0.3% 23.6% 12,473,017 13,035,968 -4.3% I.T. Infrastructure Electronic Equipment Office Equipment Auto Sales - New County of Santa Clara -7.1% 0.9% 66.8% -39.3% 9.0% 1,250,694 1,381,160 -9.4% Light Industry Auto Sales - Used I.T. Infrastructure BIdg.Matls-Whsle Saratoga -13.3%-0.7%-9.5%-48.7%- 17.0% 274,941 299,738 -8.3% Restaurants Light Industry Business Services Service Stations Sunnyvale 21.2% 2.2% 16.1% 3.6% -19.1% 8,474,166 7,981,219 6.2% Light Industry Miscellaneous Retail Office Equipment BIdg.Matls-Whsle Unlike the chart on page one which showed a 'benchmark year' through fourth quarter of 2023, the chart above shows a comparison of one quarter only —fourth quarter of 2023 to fourth quarter of 2022. This chart is for local 'brick and mortar' businesses and it excludes county pools and adjustments. www.avenuinsights.com (800) 800-8181 Page 8 Item 33: Staff Report Pg. 10 Packet Pg. 833 of 857 Item 33 City of Palo Alto AttachmentA-2023Q4SalesTax Data and Legislative Update City of Palo Alto Geo Areas & Citywide Chart Data: Change from 2022Q4 to 2023Q4 (Economic) FOOD PRODUCTS 8.3% 93,308 86,121 61.2% 57.2% GENERAL RETAIL -26.4% 16,628 22,601 10.9% 15.0% ALL OTHER 1.5% 42,438 41,826 27.9% 27.8% TOTAL 1.2% 152,375 150,549 100.0°,_-100.0% FOOD PRODUCTS 3.4% 162,711 157,368 28.6% 30.4% GENERAL RETAIL 6.1% 41,645 39,239 7.3% 7.6% ALL OTHER 13.3% 364,182 321,518 64.1% 62.1% TOTAL 9.7% 568,538 518,125 A 100.0%j 100.0% FOOD PRODUCTS 7.9% 533,070 493,949 60.4% 52.1% GENERAL RETAIL -29.8% 271,697 386,928 30.8% 40.8% CONSTRUCTION 283.3% 40,615 10,597 4.6% 1.1% BUSINESS TO BUSINESS -44.9% 25,303 45,910 2.9% 4.8% MISCELLANEOUS 25.8% 8,034 6,386 0.9% 0.7% TRANSPORTATION -13.6% 3,240 3,750 0.4% 0.4% TOTAL -6.9% 881,959 947,519 100.0XX 100.0% GENERAL RETAIL 10.8% 1,777,249 1,603,759 76.1% 78.1% FOOD PRODUCTS -7.6% 164,915 178,551 7.1% 8.7% ALL OTHER 45.8% 394,298 270,413 16.9% 13.2% TOTAL 13.8% 2,336,462 2,052,723 100.0% 100.0% www.avenuinsights.com Item 33: Staff Report Pg. 11 Packet Pg. 834 of 857 e 9 City of Palo Alto City of Palo Alto Geo Areas & Citywide Chart Data: Change from 2022Q4 to 2023Q4 (Economic) Cont. Item 33 Attachment A - 2023 O4 Sales Tax Data and Legislative Update FOOD PRODUCTS 6.5% 112,570 105,723 55.8% 57.4% GENERAL RETAIL 15.6% 81,893 70,852 40.6% 38.5% ALL OTHER -1.9% 7,326 7,466 3.6% 4.1% TOTAL 9.6% 201,789 184,041 100.0% 100.0% GENERAL RETAIL 2.8% 2,249,091 2,187,385 30.8% 29.9% BUSINESS TO BUSINESS -18.1% 2,151,367 2,626,836 29.4% 35.9% TRANSPORTATION 27.7% 1,656,983 1,297,935 22.7% 17.8% FOOD PRODUCTS 5.0% 1,154,648 1,099,310 15.8% 15.0% CONSTRUCTION 72.8% 57,220 33,117 0.8% 0.5% MISCELLANEOUS -31.9% 43,779 64,270 0.6% 0.9% TOTAL 0.1% 7,313,088 7,308,852 + 100.0% 100.0% Balance of Jurisdiction -8.2% 3,171,966 3,455,895 43.4% 47.3% Stanford Shopping Center -6.9% 881,959 947,519 12.1% 13.0% Greater Downtown 13.8% 2,336,462 2,052,723 31.9% 28.1% El Camino Real and Midtown 9.7% 568,538 518,125 7.8% 7.1% Town And Country Shopping Center 9.6% 201,789 184,041 2.8% 2.5% California Avenue 1.2% 152,375 150,549 2.1% 2.1% TOTAL 0.1% 7,313,088 7,308,852 100.0% 100.0% BUSINESS TO BUSINESS -19.2% 2,341,984 2,897,154 29.4% 36.2% GENERAL RETAIL 2.1% 2,315,882 2,267,515 29.1% 28.3% TRANSPORTATION 27.4% 1,659,937 1,303,260 20.8% 16.3% FOOD PRODUCTS 6.1% 1,348,051 1,270,193 16.9% 15.9% MISCELLANEOUS 0.0% 232,629 232,569 2.9% 2.9% CONSTRUCTION 52.7% 64,138 42,015 0.8% 0.5% TOTAL -0.6% 7,962,621 8,012,706 100.0% 100.0% www.avenuinsights.com (800) 800-8181 Page 10 Item 33: Staff Report Pg. 12 Packet Pg. 835 of 857 ALL OTHE 1.5% CHANGE, 27.9% TO" GEN ERAL RETAI -26.4% CHANGE, $1E 10.9% TOTAL ALL OTHER, 13.3% CHANG $364,182 , 64.1% TOTAL City of Palo Alto City of Palo Alto Geo Area Pie Charts California Avenue 2023Q4 SALES TAX AMOUNTS DOD PRODUCTS, CHANGE, $93,308 , 61.2% TOTAL El Camino Real and Midtown 2023Q4 SALES TAX AMOUNTS FOOD PRODUCTS, Yo CHANGE, $162,711 , 28.6% TOTAL GENERAL RETAIL, 1.1% CHANGE, $41,645 , 7.3% TOTAL ALL OTHER, $41,821 27.8% TOTAL GENERAL RETAIL, $22,601 , 15.0% TO1 Item 33 Attachment A - 2023 O4 Sales Tax Data and Legislative Update California Avenue 2022Q4 SALES TAX AMOUNTS D PRODUCTS, $86,121 , 57.2% TOTAL El Camino Real and Midtown 2022Q4 SALESTAXAMOUNTS ALL OTHER, $321,5 62.1% TOTAL 1 PRODUCTS, $157,368 , 30.4% TOTAL GENERAL RETAIL, 39,239, 7.6% TOTAL www.avenuinsights.com Item 33: Staff Report Pg. 13 Packet Pg. 836 of 857 11 City of Palo Alto City of Palo Alto Geo Areas Pie Charts Greater Downtown 2023O4 SALES TAX AMOUNTS BUSINESSTO BUSINESS, MISCELLANEOUS, -44.9% CHANGE, $25,303, 25.8% CHANGE, $8,034, TRANSPORTATION, 2.9%TOTAL 0.9%TOTAL -13.6%CHANGE,$3,240 CONSTRUCTION, 283.3% CHANGE, $40,615, 4.6% TOTAL - GENERAL RETAIL, -29.8% CHANGE, $271,697 , 30.8% TOTAL Stanford Shopping Center 2023O4 SALES TAX AMOUNTS ALL OTHER. 45.8% CHANGE. FOOD P -7.6% $16 7.1% 0.4% TOTAL I FOOD PRODUCTS, 7.9% CHANGE, $533,070 , 60.4% TOTAL tAL RETAIL, IGE, $1,777,249 , 9 TOTAL Item 33 Attachment A - 2023 O4 Sales Tax Data and Legislative Update Greater Downtown 2022O4 SALES TAX AMOUNTS MISCELLANEOUS, $6,386 , BUSINESSTO BUSINESS, 0.7% TOTAL TRANSPORTATION, $3,750, $45,910 , 4.8% TOTAL- I 0.4% TOTAL CONSTRUCTION, $10,597 , 1.1% TOTAL GENERAL RETAIL, $386,928 ,40.8% TOTAL PRODUCTS, ,52.1% TOTAL Stanford Shopping Center 2022O4 SALES TAX AMOUNTS ALL OTHER, $270,413 , 13.2% TOTAL FOOD PRODUCTS, $178,551 8.7%TOTAL AL RETAIL 03,759 , a TOTAL www.avenuinsights.com (800) 800-8181 Item 33: Staff Report Pg. 14 Page 12 Packet Pg. 837 of 857 City of Palo Alto City of Palo Alto Geo Area Pie Charts Town And Country Shopping Center 2023O4 SALES TAX AMOUNTS ALL OTHER, -1.9% CHANGE, $7,326 ,3.6% TOTAL GENERALR 15.6% CHANGE, 40.6% TO FOOD PRODUCTS, -"' HANGE, $112,570 , i5.8% TOTAL All Other Geos combined with Balance of Jurisdiction 2023O4 SALES TAX AMOUNTS CONSTRUCTION, 72.8% CHANGE, MISCELLANEOUS, $57,220 .0.8% TOTAL -31.9% CHANGE, $43,779 , 0.6% TOTAL FOOD PRO 5.0% CHANGE, 15.8% T TRAN SPORTATIO 27.7% CHANGE $1,656,983, 22.7% TOTAL ENERAL RETAIL, ?.8% CHANGE, $2,249,091 , 30.8% TOTAL SS TO BUSINESS, IANGE, $2,151,367, z i.4% TOTAL Item 33 Attachment A - 2023 O4 Sales Tax Data and Legislative Update Town And Country Shopping Center 2022O4 SALES TAX AMOUNTS ALL OTHER, $7,466 ,4.1% TOTAL GENERAL REI $70,852 , 38.5% TOT) FOOD P 15.09 TRANSPORTA $1,297,93 17.8% TOT All Other Geos combined with Balance of Jurisdiction 2022O4 SALES TAX AMOUNTS CONSTRUCTION, MISCELLANEOUS, $33,117 , 0.5%TOTAL $64,270 ,0.9% TOTAL FOOD PRODUCTS, $105,723 , 57.4% TOTAL 3EN ERAL RETAIL, $2,187,385 , 29.9% TOTAL $2,626,836, 35.9% TOTAL www.avenuinsights.com Item 33: Staff Report Pg. 15 Packet Pg. 838 of 857 City of Palo Alto Item 33 Attachment A - 2023 O4 Sales Tax Data and Legislative Update City of Palo Alto Geo Area & Citywide Pie Charts All Geo Area Totals 2023Q4 SALES TAX AMOUNTS All Geo Area Totals 2022Q4 SALES TAX AMOUNTS Town And CountryShopping Center, 9.6% CHANGE, $201,789 ,2.8% TOTAL California Avenue, 1.2% CHANGE, I $152,375 .2.1% TOTAL El Camino Real and Midtown, 9.7% CHANGE, $568,538 7.8% TOTAL Greater Downtow 13.8% CHANGE,' $2,336,462 , 31.9% T1 Balance of Jurisdiction, -8.2% CHANGE, $3,171,966 , 43.4% TOTAL Stanford Sholapi ng Center, -6.9% CHANGE, $881,959 , 12.1% TOTAL Palo Alto citywide 2023Q4 SALES TAX AMOUNTS CONSTRUCTION, MISCELLANEOUS, 0.0% CHANGE, 52.7% CHANGE, $64,138, $232,629 , 2.9% TOTAL N. l 0.8% TOTAL FOOD PRODUC 6.1%CHANGE, $1,3 16.9% TOTAI TRANSPORTATION, 27.4% CHANGE, $1,659,937 , 20.8% TOTAL SINESSTO BUSINESS, Yo CHANGE, $2,341,968, 29.4% TOTAL GENERAL RETAIL, CHANGE, $2,315,882 29.1% TOTAL Town And CountryShoppingCenter, $184,041 , 2.5% TOTAL El Camino Real anc $518,125 , 7.1% Greater Downtown, $2,052,723 , 28.1% TOTAI California Avenue, $150,549 ,2.1% TOTAL )fJurisdiction, 47.3% TOTAL $947,519 , 13.0% TOTAL Palo Alto citywide 2022Q4 SALES TAX AMOUNTS MISCELLANEOUS, $232,569 , 2.9% TOTAL CONSTRUCTION, $42,015 , 0.5% TOTAL FOOD PRODUCTS, $1,270,193 15.9% TOTAL BUSINESS TO BUSINESS, $2,897,154 , 36.2% TOTAL GENERAL RETAIL, $2,267,515 , 28.3% TOTAL www.avenuinsights.com (800) 800-8181 Page 14 Item 33: Staff Report Pg. 16 1 Packet Pg. 839 of 857 CALIFORNIA LL ILA AVFNU California Legislative Update March 11, 2024 The February bill introduction deadline for the 2024 legislative year has passed, with a summary of the salient legislation provided in this report. We will continue to keep you abreast of all pertinent discussions, including updates on the increasingly pressing budget situation, in future communications. The Legislative Analyst's Office has revised its estimate of the state's revenue shortfall from $68 billion in November to $73 billion in February. This continued downward trajectory is anticipated to influence legislation, particularly bills entailing substantial fiscal implications. The evolving revenue situation is also poised to significantly impact both the governor's May budget revision and the legislature's response. Consequently, state agencies have been advised to remain vigilant of the deficit while prioritizing funding in the forthcoming months and years. Meanwhile, budget subcommittees have commenced their hearings, scrutinizing each of the governor's budget proposals while actively engaging with stakeholders and legislators for feedback. Concurrently, legislative policy committees are convening legislative hearings this month to address policy bills. Bonds AB 1567 (Garcia) Safe Drinking Water, Wildfire Prevention, Drought Preparation, Flood Protection, Extreme Heat Mitigation, Clean Energy, and Workforce Development Bond Act of 2024. If approved by voters, would authorize the issuance of bonds in the amount of $16 billion to finance projects for safe drinking water, wildfire prevention, drought preparation, flood protection, extreme heat mitigation, clean energy, and workforce development programs. Status: Referred to the Senate committees on Natural Resources & Water and Governance & Finance. Cal Cities Position: Support if Amended SB 638 (Eggman) Climate Resiliency and Flood Protection Bond Act of 2024. If approved by voters, would authorize the issuance of bonds in the amount of $6 billion for flood protection and climate resiliency projects. Item 33 Attachment A - 2023 Q4 Sales Tax Data and Legislative Update E Status: Awaiting hearing in the Assembly Water, Parks, & Wildlife Committee. Cal Cities Position: Support if Amended SB 867 (Allen) Drought, Flood, and Water Resilience, Wildfire and Forest Resilience, Coastal Resilience, Extreme Heat Mitigation, Biodiversity and Nature - Based Climate Solutions, Climate Smart Agriculture, Park Creation and Outdoor Access, and Clean Energy Bond Act of 2024. If approved by voters, would authorize the issuance of bonds in the amount of $15.5 billion to finance projects for drought, flood, and water resilience, wildfire and forest resilience, coastal resilience, extreme heat mitigation, biodiversity and nature -based climate solutions, climate smart agriculture, park creation and outdoor access, and clean energy programs. Status: Awaiting hearing in the Assembly Natural Resources Committee. Cal Cities Position: Support if Amended SB 986 (Seyarto) Ballot label: bond measure fiscal impact. This bill would require, for state bond measures and for local measures to approve the issuance of bonds that will be secured by an ad valorem tax, the ballot label to include a summary of the measure's fiscal impact in a specified form. Status: Scheduled to be heard in the Senate Elections & Constitutional Amendments Committee on March 19. Cal Cities Position: Watch Broadband AB 1588 (Wilson) Affordable Internet and Net Equality Act of 2024. Would, under the Affordable Internet and Net Equality Act of 2024, require the Department of Technology, in coordination with the Public Utilities Commission and the Department of General Services, to develop and establish the Net Equality Program. The bill would require the state and state agencies to only enter into a procurement contract with an internet service provider offering affordable home internet service, which costs no more than $40 per month and meets specified minimum speed requirements, to Item 33: Staff Report Pg. 17 Packet Pg. 840 of 857 A AVNU Ih 5'Cn 15 i +Mf, r ric. CALIFORNIA LE ILA households participating in certain public assistance programs, or with an internet service provider participating in the federal Affordable Connectivity Program, or any other state or federal program that offers broadband affordability assistance for households that qualify for that program, and that offers to households that qualify for those programs internet service that costs no more than $40 per month and meets specified minimum speed requirements. Status: Awaiting referral to a policy committee in the Senate. Cal Cities Position: Watch AB 1826 (Holden) Digital Equity in Video Franchising Act of 2024. Would revise and recast the Digital Infrastructure and Video Competition Act of 2006 to, among other things, rename the act as the Digital Equity in Video Franchising Act of 2024, provide that the act does not authorize the California Public Utilities Commission (CPUC) to regulate the rates of video services, and authorize the CPUC to exercise the authority, jurisdiction, and powers authorized to be exercised by a franchise authority pursuant to certain federal law. The bill would require the CPUC to hold a public hearing related to each application for renewal of a state franchise, require the commission to issue a state franchise or a reject each application for a state franchise not more than 90 days after the public hearing, if required, or after the application is deemed complete, require a franchise applicant to submit a description of the households that are known to be unserved in the video service area footprint that the applicant proposes to serve, and extend deadlines related to the commission's review of applications for state franchises. Status: Referred to the Assembly Committee on Communications & Conveyance. Cal Cities Position: Watch AB 2369 (Patterson, Jim) Broadband: fixed wireless study: Little Hoover Commission. Would require the Little Hoover Commission to conduct a study on the use of fixed wireless and other technologies to bridge the digital divide. The bill would require the Little Hoover Commission, on or before January 1, 2027, to submit a report to the legislature with the commission's recommendations based on the study. Status: Referred to the Assembly Committee on Communications & Conveyance. Cal Cities Position: Support in Concept AB 2708 (Patterson, Jim) Office of Broadband and Digital Literacy: reports. Would require additional Item 33 Attachment A - 2023 Q4 Sales Tax Data and Legislative Update E information to be included in the annual report from the Office of Broadband and Digital Literacy to the budget committees of the legislature, including the total cost to complete the statewide open -access middle -mile broadband network, the total available funding for the statewide open -access middle -mile broadband network, and the projected completion date for the statewide open - access middle -mile broadband network. Status: Referred to the Assembly Committee on Communications & Conveyance. Cal Cities Position: Support in Concept SB 1383 (Bradford) California Advanced Services Fund: Broadband Public Housing Account. Would make funds in the Broadband Public Housing Account in the California Advanced Services Fund available for grants and loans to finance projects to connect broadband networks that offer broadband service for residents of low-income communities and would eliminate the requirement that the broadband service be free. Status: Referred to the Senate Committee on Energy, Utilities, & Communications. Cal Cities Position: Track Government Finance and Administration SB 908 (Cortese) Public records: legislative records: electronic messages. Would prohibit an elected or appointed official or employee of a public agency from creating or sending a public record using a nonofficial electronic messaging system unless the official or employee sends a copy of the public record to an official electronic messaging system. Status: Awaiting referral to a policy committee in the Senate. Cal Cities Position: Watch Economic Development AB 2922 (Garcia) Economic development: capital investment incentive programs. Prior law, until January 1, 2024, authorized a county, city and county, or city to establish a capital investment incentive program, pursuant to which the county, city and county, or city was authorized to pay, upon request, a capital investment incentive amount that does not exceed the amount of property tax derived from that portion of the assessed value of a qualified manufacturing facility, that exceeds $150 million to a proponent of a qualified manufacturing facility for up to 15 years. This bill would reestablish the Item 33: Staff Report Pg. 18 Packet Pg. 841 of 857 A A V 9 N LL Ih 5'Cn 15 4 +Mf, r ric. CALIFORNIALL ILA authorization for capital investment incentive programs until January 1, 2035, and make conforming changes. Status: Awaiting referral to a policy committee in the Assembly. Cal Cities Position: Support SB 517 (Gonzalez) Economic development: movement of freight. Would authorize the Governor's Office of Business and Economic Development (GO -Biz) to serve as the coordinating entity to steer the growth, competitiveness, and sustainability for freight and the supply chain across the state and to promote and assess the continued economic vitality, economic competitiveness, and sustainability of the freight sector. Would also authorize GO -Biz to provide freight and supply chain economic competitiveness information. Status: Awaiting hearing in the Assembly Jobs, Economic Development, & the Economy Committee. Cal Cities Position: Watch SB 720 (Stern) Aviation: airports: report: emissions: GO -Biz. Would require GO -Biz to create a stakeholder group to identify and pursue opportunities to attract and develop sustainable aviation fuel production and infrastructure in the state to help reach the goal of net -zero greenhouse gas emissions in California. Status: Awaiting hearing in the Assembly Natural Resources Committee. Cal Cities Position: None SB 864 (Smallwood -Cuevas) Workforce development: workplace rights curriculum. Would require the California Workforce Development Board to assist the governor with partnering with the labor commissioner and other subject matter experts in developing a workplace rights curriculum to be provided to all individuals receiving individualized career services, supportive services, or training services through the California workforce system. Would require each local workforce development board to ensure the provision of workplace rights training consistent with that workplace rights curriculum. The bill would require the comprehensive 4 -year local plan to include a description of how the local board plans to comply with this requirement. Status: Awaiting hearing in the Assembly Appropriations Committee. Cal Cities Position: Watch SB 1140 (Caballero) Enhanced infrastructure financing district. Would authorize a city or county official, as applicable, to electronically submit a copy of a city or county's resolution of intention to establish an Item 33 Attachment A - 2023 Q4 Sales Tax Data and Legislative Update E infrastructure financing district to each affected taxing entity, rather than mailing a physical copy. Status: Referred to the Senate committees on Local Government and Environmental Quality. Scheduled to be heard in the Senate Local Government Committee on March 20. Cal Cities Position: Watch Infrastructure AB 2403 (Bonta) Enhanced infrastructure financing districts: allowable projects. Current law authorizes the legislative body of a city or a county to establish an enhanced infrastructure financing district to finance public capital facilities or other specified projects of communitywide significance, including projects that implement a sustainable communities strategy. AB 2403 would additionally include, in the list of facilities and projects enhanced infrastructure financing district may fund, community food and climate resilience projects that increase local food production in and for disadvantaged communities, and are powered by renewable energy, including community gardens. Status: Referred to the Assembly Committee on Local Government. Cal Cities Position: None SB 955 (Seyarto) Office of Planning and Research: Infrastructure Gap -Fund Program. Would require the Office of Planning and Research, upon appropriation by the legislature, to establish the Infrastructure Gap -Fund Program to provide grants to assist local agencies in developing and constructing infrastructure projects. Status: Scheduled to be heard in the Senate Committee on Local Government on March 20. Cal Cities Position: Support Telecommunications AB 2512 (Patterson, Jim) Telecommunications: automatic dialing -announcing devices: artificial voices. This bill would expand the definition of "automatic dialing -announcing device" under the Public Utilities Commission, to include calls made using an artificial voice. Status: Referred to the Assembly Committee on Communications & Conveyance. Cal Cities Position: Track Item 33: Staff Report Pg. 19 Packet Pg. 842 of 857 CALIFORNIALL ILA AVFN U Revenue and Taxation AB 1781 (Waldron) State mandates: claims. The California Constitution, whenever the Legislature or a state agency mandates a new program or higher level of service on any local government, including school districts, requires the state to provide a subvention of funds to reimburse the local government, unless an exception applies. Statutory provisions that establish procedures for making that reimbursement include a requirement that no claim shall be made or paid unless it exceeds $1,000. This bill would change the minimum claim amount to $800. Status. Referred to the Assembly Committee on Local Government. Cal Cities Position: Pending AB 2813 (Aguiar-Curry) Government Investment Act. Would authorize a local government that imposes a tax under ACA 1 to commit revenues to affordable housing programs, including down payment assistance, first-time home buyer programs, and owner -occupied affordable housing rehabilitation programs. Would require a local government to ensure that any project that is funded with ACA 1 bonded indebtedness or ACA 1 special taxes to have an estimated useful life of at least 15 years or 5 years if the funds are for specified public safety buildings, facilities, and equipment. Status: Awaiting assignment to a policy committee in the Assembly. Cal Cities Position: Pending AB 3005 (Wallis) Motor Vehicle Fuel Tax Law: adjustment suspension. Would authorize the governor to suspend an adjustment to the motor vehicle fuel tax, scheduled on or after July 1, 2025, upon determining that increasing the rate would impose an undue burden on low- income and middle-class families. Would require the governor to notify the legislature of an intent to suspend the rate adjustment on or before January 10 of that year and would require the Department of Finance to submit to the legislature a proposal by January 10 that would maintain the same level of funding for transportation purposes as would have been generated had the scheduled adjustment not been suspended. Status: Awaiting assignment to a policy committee in the Assembly. Cal Cities Position: Oppose ABX1 2 (Fong, Vince) Motor Vehicle Fuel Tax Law: suspension of tax. Would suspend the imposition of the tax on motor vehicle fuels for one year. The bill would Item 33 Attachment A - 2023 Q4 Sales Tax Data and Legislative Update E require that all savings realized based on the suspension of the motor vehicle fuels tax by a person other than an end consumer, be passed on to the end consumer, and would make the violation of this requirement an unfair business practice, in violation of unfair competition laws. The bill would require a seller of motor vehicle fuels to provide a receipt to a purchaser that indicates the amount of tax that would have otherwise applied to the transaction. Status. Awaiting referral to a policy committee in the Assembly. Cal Cities Position: None Sales and Use Taxes AB 2006 (Mathis) Sales and Use Tax Law: exemption: over-the-counter medication. This bill would, until January 1, 2030, provide an exemption for the state portion of the sales and use tax imposed on the sale of, and the storage, use, or other consumption in this state of, over-the-counter medication. Status. Scheduled to be heard in the Assembly Revenue & Taxation Committee on March 11. Cal Cities Position: Watch AB 2061 (Wilson) Sales and Use Tax: exemptions: zero -emission public transportation ferries. This bill, beginning January 1, 2025, and until January 1, 2030, provides an exemption for the state portion of the sales and use tax imposed on a zero -emission public transportation ferry. This bill intends to offset the cost to eligible public transportation providers associated with purchasing zero -emission public transportation ferries. Status. Scheduled to be heard in the Assembly Revenue & Taxation Committee on March 11. Cal Cities Position: Support AB 2274 (Dixon) Taxation: sales and use taxes: exemption: tax holiday. Would, on and after January 1, 2025, exempt from sales and use taxes the gross receipts from the sale of, and the storage, use, or other consumption of, any tangible personal property purchased during the first weekend in August, beginning at 12:01 a.m. on Saturday and ending at 11:59 p.m. on Sunday. Status. Scheduled to be heard in the Assembly Revenue & Taxation Committee on March 11. Cal Cities Position: Pending Opposition AB 2366 (Ta) Sales and use tax: administration: settlements. Would decrease the number of days in which the California Department of Tax and Fee Administration director is required to either approve or disapprove a Item 33: Staff Report Pg. 20 Packet Pg. 843 of 857 CALIFORNIA LEGISLA AVENU Ih 5 'cn154 + Hi' rICS recommendation for settlement to 30 days, down from 45 days. Status: Scheduled to be heard in the Assembly Revenue & Taxation Committee on April 1. Cal Cities Position: Watch AB 2400 (Rivas, Luz) California Alternative Energy and Advanced Transportation Financing Authority Act. The California Alternative Energy and Advanced Transportation Financing Authority Act authorizes, until January 1, 2026, the authority to provide financial assistance to a participating party in the form of specified sales and use tax exclusions for projects, including those that promote California -based manufacturing, California - based jobs, advanced manufacturing, reduction of greenhouse gases, or reduction in air and water pollution or energy consumption. This bill would extend the authorization to provide financial assistance in the form of a sales and use tax exclusion for qualifying projects to January 1, 2031, and would extend the sales and use tax exclusion to January 1, 2031. Status: Referred to the Assembly committees on Revenue & Taxation and Transportation. Cal Cities Position: Watch AB 2647 (Low) State of emergency: extensions. Under the Sales and Use Tax Law, if the governor issues a state of emergency proclamation, the California Department of Tax and Fee Administration (CDTFA) is authorized to extend the time, for making any report or return or paying any tax required under its provisions for any person in an area identified in the state of emergency proclamation. The Sales and Use Tax Law authorizes CDTFA to make the extension only during the first 12 months following the issuance of the state of emergency proclamation or the duration of the state of emergency, whichever is less. This bill would expand the authorization for the CDFTA to make the extension to the first 12 months and one day following the issuance of the state of emergency proclamation or the duration of the state of emergency, whichever is less. Status: Referred to the Assembly Revenue & Taxation Committee. Cal Cities Position: None SB 1086 (Seyarto) Sales and Use Tax Law: motor vehicle fuel tax: sales price: gross receipts. The Motor Vehicle Fuel Tax Law imposes a tax upon each gallon of motor vehicle fuel removed from a refinery or terminal rack in this state, entered into this state, or sold in this state, at a specified rate per gallon. Existing sales and use tax laws provide a partial exemption from the taxes Item 33 Attachment A - 2023 Q4 Sales Tax Data and Legislative Update E imposed by those laws for motor vehicle fuel that is subject to the taxes imposed by the Motor Vehicle Fuel Tax Law. This bill, beginning January 1, 2025, would exclude from the terms "gross receipts" and "sales price" under the Sales and Use Tax Law the amount of any motor vehicle fuel tax imposed pursuant to the Motor Vehicle Fuel Tax Law. Status: Referred to the Senate Committee on Revenue & Taxation. Cal Cities Position: Watch SB 1494 (Glazer) Local agencies: Sales and Use Tax: retailers. This bill would prohibit, on or after January 1, 2024, a local agency from entering into, renewing, or extending any form of agreement that would result, directly or indirectly, in the payment, transfer, diversion, or rebate of Bradley -Burns local tax revenues to any retailer, in exchange for the retailer locating or continuing to maintain a place of business that serves as the place of sale, as defined, within the territorial jurisdiction of the local agency if that place of business would generate revenue, from the sale of tangible property delivered to and received by the purchaser in the territorial jurisdiction of another local agency, for the local agency under the Bradley -Burns Uniform Local Sales and Use Tax Law. The bill would make those forms of agreements existing before January 1, 2024, void and unenforceable on January 1, 2030. The bill would require a local agency to post those forms of agreements existing before January 1, 2024, on the local agency's internet website until the form of agreement expires or is made void and unenforceable by these provisions. Status Referred to the Senate committees on Local Government and Revenue & Taxation. Cal Cities Position: Taking to Policy Committee Online Sales SB 1144 (Skinner) Marketplaces: online marketplaces. Would revise the types of transactions that qualify a third - party seller as a "high -volume third -party seller." Specifically, the bill would remove the conditions that the transactions be made through an online marketplace and that the online marketplace process the payment and, instead, would add the condition that the transactions were made utilizing an online marketplace. Status: Referred to the Senate committees on Judiciary and Public Safety. Cal Cities Position: Pending Item 33: Staff Report Pg. 21 Packet Pg. 844 of 857 A CALIFORNIA LEGISLA AVENU Ih 5'Cn 15 4 +Mf, r rite Corporation Tax AB 1973 (Lackey) Personal Income Tax Law: Corporation Tax Law: Bobcat Fire: exclusions. Would, for taxable years beginning on or after January 1, 2020, and before January 1, 2029, provide an exclusion from gross income for any qualified taxpayer, for amounts received in settlement for costs and losses associated with the 2020 Bobcat Fire in the County of Los Angeles. Status: Referred to the Assembly Committee on Revenue & Taxation. Cal Cities Position: None AB 2128 (Ta) Income and corporation taxes: credits: work opportunity credit. For taxable years beginning on or after January 1, 2024, and before January 1, 2029, would allow a tax credit in an amount equal to 40% of the qualified wages paid or incurred to a qualified employee employed during the taxable year. The bill would define a qualified employee as an individual that, among other things, has been convicted of a felony, and has a hiring date not more than one year after the date the individual was convicted or was released from prison. Status: Scheduled to be heard in the Assembly Revenue & Taxation Committee on April 1. Cal Cities Position: None AB 2294 (Schiavo) Personal Income Tax Law: Corporation Tax Law: New Employment Credit. The Personal Income Tax Law and the Corporation Tax Law allow various credits against the taxes imposed by those laws, including, for taxable years beginning on or after January 1, 2014, and before January 1, 2026, a credit for hiring qualified full-time employees, within a designated census tract or economic development area in an amount equal to 35% of the qualified wages, defined in part as those wages that exceed 150% of minimum wage but do not exceed 350% of minimum wage, paid to those employees multiplied by the applicable percentage for that taxable year. This bill would eliminate the requirement that the new employment be located within a designated census tract or economic development area. The bill would expand the definition of qualified wages to include the amount of wages that exceeds 100% of minimum wage but does not exceed 350% of minimum wage. The bill would expand the definition of qualified employee to include an employee that is a member of a targeted group, as defined. Status: Scheduled to be heard in the Assembly Revenue & Taxation Committee on April 1. Cal Cities Position: None Item 33 Attachment A - 2023 Q4 Sales Tax Data and Legislative Update E SB 370 (McGuire) Personal Income Tax Law: Corporation Tax Law: wildfires: exclusions. Would, for taxable years beginning on or after January 1, 2020, provide an exclusion from gross income for any qualified taxpayer, for amounts received in settlements associated with the 2019 Kincade Fire in the county of Sonoma. Status: Awaiting hearing in the Assembly Revenue & Taxation Committee. Cal Cities Position: None SB 542 (Dahle) Personal Income Tax Law: Corporation Tax Law: wildfires: exclusions. Would, for taxable years beginning on or after January 1, 2022, and before January 1, 2029, provide an exclusion from gross income for any qualified taxpayer, for amounts received in settlement for costs and losses associated with the 2021 Dixie Fire in the Counties of Butte, Plumas, Lassen, Shasta, and Tehama, or the 2022 Mill Fire in the county of Siskiyou. Status: Awaiting hearing in the Assembly Appropriations Committee. Cal Cities Position: None SB 1102 (Nguyen) Personal Income Tax Law: Corporation Tax Law: oil spill: exclusions. Would provide an exclusion from gross income for any qualified taxpayer, for amounts received in settlements associated with the October 2, 2021, oil spill that occurred off the coast of the county of Orange near the City of Huntington Beach. The bill would repeal these provisions on January 1, 2029. Status: Referred to the Senate Revenue & Taxation Committee. Cal Cities Position: None Property Tax AB 1868 (Friedman) Property taxation: assessments: affordable housing. Current law requires the county assessor to consider, when valuing real property for property taxation purposes, the effect of any enforceable restrictions to which the use of the land may be subjected. Under current law, these restrictions include, among other enumerated items, a recorded contract with a nonprofit corporation that meets prescribed requirements, including requirements that the nonprofit corporation has received a welfare exemption for properties intended to be sold to low-income families who participate in a special no - interest loan program, and that the contract includes a restriction on the use of the land for at least 30 years to owner -occupied housing available at affordable housing cost. This bill would, for purposes of valuing property by Item 33: Staff Report Pg. 22 Packet Pg. 845 of 857 CALIFORNIA LEGISLA AVENU Ih 5'cn154 + Hi' rICS the county assessor, establish a rebuttable presumption that, at the time of purchase, the value of real property subject to a recorded contract that meets the above - described requirements is no greater than the sum of the value of the first mortgage and any applicable down payment. Status: Referred to the Assembly Committee on Revenue & Taxation. Cal Cities Position: Watch AB 2353 (Ward) Property taxation: welfare exemption: delinquent payments: interest and penalties. Would provide that a taxpayer is not liable for interest or penalties imposed by the county tax collector, and would prohibit the county tax collector from taking or continuing any collection action, with respect to any delinquent installments of property taxes levied upon a property for which the taxpayer has submitted to the county assessor an application for an exemption pursuant to a partial welfare exemption, except as provided. Status. Referred to the Assembly committees on Revenue & Taxation and Housing & Community Development. Cal Cities Position: Watch AB 2506 (Lowenthal) Property taxation: local exemption: possessory interests: publicly owned housing. Would authorize a county board of supervisors to exempt from property taxation any possessory interest held by a tenant of publicly owned housing, with a value so low that the total taxes and applicable subventions on the property would amount to less than the cost of assessing and collecting them. Would provide that there is a rebuttable presumption that the property taxes and applicable subventions on a possessory interest held by a tenant in publicly owned housing are less than the costs of assessing and collecting those taxes and applicable subventions. Would provide that the board shall be deemed to have agreed with the rebuttable presumption and the exemption shall be deemed granted if the board does not take any action, if the board agrees, by a majority vote, to grant the exemption at a public hearing, or if the board fails to reach a majority vote for or against the exemption at the public hearing. Status: Referred to the Assembly Committees on Revenue & Taxation and Housing & Community Development. Cal Cities Position: Watch AB 2564 (Boerner) Property tax postponement: Senior Citizens and Disabled Citizens Property Tax Postponement Fund. Would require money to be transferred, on June 30, 2025, and on June 30 each year thereafter, from the state General Fund to the Senior Item 33 Attachment A - 2023 Q4 Sales Tax Data and Legislative Update E Citizens and Disabled Citizens Property Tax Postponement Fund when the balance in the latter fund is less than $15 million. Status: Referred to the Assembly Committee on Revenue & Taxation. Cal Cities Position: Watch AB 2897 (Connolly) Property tax: welfare exemption: community land trusts. Would eliminate specified requirements of a lease agreement between a lower income household and a community land trust in order for the unit to continue to be treated as occupied by a lower income household. Status: Awaiting referral to a policy committee in the Assembly. Cal Cities Position: Watch AB 3134 (Chen) Property taxation: refunds. Would require the county auditor, if the cancellation of taxes will result in a refund, to either process the refund to the payor of the tax or notify the payor in writing of the requirements for obtaining a refund. Would require that a claim for a refund under this provision be deemed timely filed if it is filed within 60 days of the notice. This bill would also authorize an order for refund of taxes or assessments to be paid to the assessee of a property, without a claim for refund filed, if certain conditions are met, including, among other requirements, that the amount of the refund is less than $10,000. Status. Awaiting referral to a policy committee in the Assembly. Cal Cities Position: Watch AB 3277 (Committee on Local Government) Local agency formation commission: districts: property tax. Would require a commission to determine the amount of property tax revenue to be exchanged by an affected local agency if the proposal includes the formation of a district and the applicant is seeking a share of the 1% ad valorem property taxes. Status. Awaiting referral to a policy committee in the Assembly. Cal Cities Position: None SB 726 (Archuleta) Property taxation: exemption: disabled veteran homeowners. Would exempt from taxation, on that part of the full value of the residence that does not exceed $863,790, property owned by, and that constitutes the principal place of residence of, a veteran, the veteran's spouse, or the veteran and the veteran's spouse jointly if the veteran is 100% disabled. The bill would provide an unmarried surviving spouse a property Item 33: Staff Report Pg. 23 Packet Pg. 846 of 857 CALIFORNIA LEGISLA AVENU Ih 5'Cn 15 4 +Mf, r ric. exemption in the same amount that they would have been entitled to if the veteran was alive and if certain conditions are met. Status. Awaiting hearing in the Assembly Revenue & Taxation Committee. Cal Cities Position: Watch SB 871 (Archuleta) Property taxation: homeowners', veterans', and disabled veterans' exemptions. Would provide that if Senate Constitutional Amendment 6 is approved by the voters at the statewide general election scheduled for November 5, 2024, then commencing January 1, 2025, notwithstanding that prohibition, the homeowners' exemption also applies to property on which an owner receives the veterans' exemption or the disabled veterans' exemption. Status: Awaiting referral to a policy committee in the Assembly. Cal Cities Position: None SB 964 (Seyarto) Property tax: tax -defaulted property sales. Would update California code to match a 2023 Supreme Court ruling where a county is not allowed to keep profits from the sale of an auctioned property, if the property was seized and auctioned because of defaulted property taxes. Any profits made from such an auction would be restored to the owner. Status. Referred to the Senate Revenue & Taxation Committee. Cal Cities Position: Watch SB 1013 (Bradford) Housing: property tax relief: grant program. Would establish the Property Tax Assistance for Descendants of Enslaved Persons Program for purposes of making, upon appropriation of the legislature, grants available to persons who currently live in a formerly redlined neighborhood in the state and are descendants of a person enslaved in the United States. The bill would require the Department of Housing & Community Development to develop and administer the program and to provide grants to qualified applicants it selects to receive the grant. Status. Awaiting referral to a policy committee in the Senate. Cal Cities Position: Watch SB 1072 (Padilla) Local government: Proposition 218: remedies. Would require, if a property -related fee or charge creates revenues more than the local government's reasonable cost of providing the specific benefit or specific government service, that the excess revenues be used only Item 33 Attachment A - 2023 Q4 Sales Tax Data and Legislative Update to reduce the subsequently adopted and following property -related fee or charge. Status: Referred to the Senate Local Government Committee. Cal Cities Position: Watch E SB 1164 (Newman) Property taxation: new construction exclusion: accessory dwelling units. This bill would exclude an accessory dwelling unit, until 15 years have passed since construction on the accessory dwelling unit was completed or there is a subsequent change in ownership of the accessory dwelling unit from property taxes. Status: Referred to the Senate Revenue & Taxation Committee. Cal Cities Position: Oppose SCA 4 (Seyarto) Property taxation: principal residence and family home transfers. Would place a measure before voters that repeals Proposition 19's limitation on the parent -child and grandparent -grandchild exclusion from change in ownership of a principal residence to apply only if the property continues as the primary residence of the transferee. SCA 4 also reinstates the parent -child, grandparent -grandchild exclusion for up to $1 million in aggregate value of all other types of property that is not the principal residence. Under the measure, both changes become effective on January 1, 2025, if approved by voters. Status: Failed passage in the Senate Governance & Finance Committee. Cal Cities Position: Watch SCA 6 (Archuleta) Property taxation: veterans' exemption. Would allow a dwelling that receives the veterans' exemption or the disabled veteran's exemption to also receive the homeowners' exemption. Would authorize the legislature to exempt property eligible for the veterans' exemption in an amount up to the full value of the property. If the legislature increases the homeowners' exemption, the measure would require that the legislature provide the same increase in the veterans' exemption, except as limited by the full value of the property. Status: Awaiting referral to a policy committee in the Assembly. Cal Cities Position: Watch Development Fees AB 1820 (Schiavo) Housing development projects: applications: fees and exactions. Would authorize a Item 33: Staff Report Pg. 24 Packet Pg. 847 of 857 A Item 33 CALIFORNIALE I L Af TIVAttachment A - 2023 Q4 AVENU Sales Tax Data and 1h SLDH i s a Jyr, F 1 its Legislative Update development proponent that submits a preliminary application for a housing development project to request a preliminary fee and exaction estimate and would require the local agency to provide the estimate within 10 business days of the submission of the preliminary application. Status: Referred to the Assembly Committee on Housing & Community Development. Cal Cities Position: Pending AB 2430 (Alvarez) Planning and zoning: density bonuses: monitoring fees. Would prohibit a city, county, or city and county from charging a monitoring fee on Density Bonus Law types of housing developments if certain conditions are met. The bill would provide that, beginning on January 1, 2025, any housing development that is currently placed in service, is subject to monitoring fees, and meets those conditions shall no longer be subject to those fees. Status: Referred to the Assembly committees on Housing & Community Development and Local Government. Cal Cities Position: Track AB 2433 (Quirk -Silva) California Private Permitting Review and Inspection Act: fees: building permits. Current law authorizes the governing body of a county or city to prescribe fees for permits, certificates, or other forms or documents required or authorized under the State Housing Law, and fees to defray the cost of enforcement required by the law to be carried out by local enforcement agencies. This bill, the California Private Permitting Review and Inspection Act, would require a building department of the county or city to prepare a schedule of the above -described fees and post the schedule on the county or city's internet web site if the city or county prescribes the fees. Status: Referred to the Assembly committees on Local Government and Housing & Community Development. Cal Cities Position: Watch AB 2729 (Patterson, Joe) Residential fees and charges. Current law prohibits a local agency that imposes fees or charges on a residential development for the construction of public improvements or facilities from requiring the payment of those fees or charges until the date of the final inspection or the date the certificate of occupancy is issued, whichever occurs first, except that the payment may be required sooner if the local agency determines that the fees or charges will be collected for public improvements or facilities for which an account has been established and funds appropriated and for which the local agency has adopted a proposed construction schedule or plan prior to final inspection or issuance of the certificate E of occupancy, or if the fees or charges are to reimburse the local agency for expenditures previously made. This bill would delete the above -described authorization for a local agency to require payment of fees or charges prior to the date of final inspection or issuance of the certificate of occupancy, whichever occurs first. Status: Referred to the Assembly committees on Local Government and Housing & Community Development. Cal Cities Position: Pending AB 3177 (Carrillo, Wendy) Mitigation Fee Act: land dedications: mitigating vehicular traffic impacts. Current law requires a local agency that imposes a fee on a housing development for the purpose of mitigating vehicular traffic impacts to set the rate for the fee to reflect a lower rate of automobile trip generation if the housing development satisfies specified characteristics, including that the housing development is located within a 1/2 mile of a transit station. Current law defines a transit station for these purposes to mean a rail or light -rail station, ferry terminal, bus hub, or bus transfer station. This bill would instead require the housing development to be located within a 1/2 mile of a transit priority area for purposes of a local agency setting the rate for a mitigating vehicular traffic impacts fee to reflect a lower rate of automobile trip generation. The bill would define "transit priority area" as an area within 1/2 mile of a major transit stop that is existing or planned, if the planned stop is scheduled to be completed within the planning horizon included in a Transportation Improvement Program or applicable regional transportation plan. Status: Awaiting referral to a policy committee in the Assembly. Cal Cities Position: Track SB 937 (Wiener) Development projects: permits and other entitlements: fees and charges. Would extend by 18 months the period for the expiration, effectuation, or utilization of a housing entitlement that was issued before January 1, 2024, and that will expire before December 31, 2025, except as specified. The bill would toll this 18 -month extension during any time that the housing entitlement is the subject of a legal challenge. Status: Referred to the Senate committees on Local Government and Housing. Cal Cities Position: Pending Short -Term Rentals SB 584 (Limon) Laborforce housing: Short -Term Rental Tax Law. This bill requires a 15% state short-term rental occupancy tax to be collected, and allocates the Item 33: Staff Report Pg. 25 Packet Pg. 848 of 857 A CALIFORNIA LEGISLA AVENU Ih S'CI 15 i +Mf, r rlt. funds for the construction, acquisition and rehabilitation of affordable housing and renter protection programs. Status. Awaiting hearing in the Assembly Housing & Community Development Committee. Cal Cities Position: Oppose Unless Amended SB 683 (Glazer) Hotels and short-term rentals: advertised rates: mandatory fees. Would, beginning July 1, 2024, require a person or a website, application, or other similar centralized platform that advertises a hotel room rate or short-term rental rate before the public in this state, or from this state before the public in any state, to include in the advertised hotel room rate or short-term rental rate all mandatory fees, that will be charged in order for the consumer to stay in the hotel room or short-term rental and include in the total price to be paid, before the consumer reserves the stay, all taxes and fees imposed by a government on the stay. Status: Awaiting an Assembly floor vote. Cal Cities Position: Watch SB 1424 (Glazer) Hotel and private residence rental reservations: cancellation: refunds. Would expand provisions requiring a hotel, third -party booking service, hosting platform, or short-term rental, to allow a reservation for a hotel accommodation or a short-term rental located in California to be canceled without penalty for at least 24 hours after the reservation is confirmed if the reservation is made 72 hours or more before the time of check -in, to also apply to a reservation for a hotel accommodation or short-term rental that is advertised in California. Would also expand provisions requiring consumer refunds for all amounts paid to the hosting platform, hotel, third -party booking service, or short-term rental to the original form of payment within 30 days of the cancellation of the reservation to also apply to a reservation for a hotel accommodation or short-term rental that is advertised in California. Status. Referred to the Senate Judiciary Committee. Cal Cities Position: None Cannabis Direct to Consumer AB 1111 (Pellerin) Cannabis: small producer event sales license. This bill establishes a small producer event sales license for licensed small-scale cannabis cultivators in California, utilizing the existing state framework for cannabis events established under AB 2020. The bill limits license issuance to cultivators meeting specific cultivation size criteria and designated equity licensees. Licensees are Item 33 Attachment A - 2023 Q4 Sales Tax Data and Legislative Update E required to sell only their own cultivated cannabis products and transport them to event venues through licensed distributors. Additionally, the bill mandates event organizers to provide a list of small producer event sales licensees to the Department of Cannabis Control (DCC) for temporary event applications and grants DCC authority to take disciplinary action for violations. Status: Awaiting hearing in the Senate Appropriations Committee. Cal Cities Position: Watch Employment Discrimination SB 1264 (Grove) Employment discrimination: cannabis use. While currently a spot bill, according to the author's office, this bill is being sponsored by the law enforcement community and seeks to undo provisions in SB 700 (Bradford, 2023) and AB 2188 (Quirk, 2022), which make it unlawful for an employer to request information from an applicant for employment relating to the applicant's prior use of cannabis and for an employer to discriminate against a person in hiring or termination because of the person's use of cannabis off the job and away from the workplace. Both bills took effect January 1, 2024. Status: Pending referral to a policy committee in the Assembly. Cal Cities Position: Watch Enforcement AB 491 (Wallis) Local government: fines and penalties. Provides additional tools for addressing illicit land use activities, including unlicensed cannabis operations. Specifically, AB 491 establishes: (1) streamlined judicial reviewed for minor administrative penalties (under $25,000) imposed for unpermitted cannabis activities; (2) efficient collection of final penalty order (i.e., after administrative/judicial review is complete), in the same manner presently used for pesticide enforcement fines; (3) clarifies that priority of real property liens used to collect administrative penalties for these violations, by providing that such liens have the same priority as a judgment lien. Status: Awaiting assignment to a policy committee in the Senate. Cal Cities Position: Watch AB 1616 (Lackey) California Cannabis Tax Fund: Board State and Community Corrections grants. This bill amends the Board of State and Community Corrections (BSCC) Prop 64 Public Health and Safety Grant Program to expand the eligibility criteria so that all 10 Item 33: Staff Report Pg. 26 Packet Pg. 849 of 857 CALIFORNIA LEGISLA AVENU Ih 5'Cn 15 i +Mf, r ric. of California's 482 cities and 58 counties may apply for grant funding. The bill further directs the BSCC to prioritize the allocation of BSCC grants to programs addressing unlawful retail and cultivation activities. Status: Awaiting hearing in the Senate Public Safety Committee. Cal Cities Position: Support AB 2296 (Villapudua) Enhancements: concentrated cannabis. This bill aims to amend existing laws related to controlled substances, particularly focusing on concentrated cannabis. Under existing law, certain activities related to controlled substances including manufacturing or possession can lead to felony charges. There are also sentencing enhancements if these crimes involve methamphetamine or phencyclidine and occur in a place where a child under 16 is present or gets seriously injured. This bill seeks to extend this sentencing enhancement provision to cases involving concentrated cannabis. Status: Referred to the Assembly Public Safety Committee. Cal Cities Position: Pending AB 2846 (Lackey): Controlled substances: synthetic cannabinoid compound or derivative. This is a spot bill, sponsored by the law enforcement community to address the proliferation of intoxicating synthetic cannabinoids, which are chemical compounds designed to mimic the effects of naturally occurring cannabinoids, such as THC found in cannabis. These synthetic compounds are often sprayed onto dried plant material and sold under various brand names as "synthetic cannabis" or "herbal incense." They are typically smoked or vaporized for their psychoactive effects. Status: Awaiting referral to an Assembly policy committee. Cal Cities Position: Pending AB 2850 (Rodriguez): Cannabis. This is a spot bill, which will be amended to incorporate provisions previously contained in AB 1725 (Smith, 2022), which stalled in the Assembly Public Safety Committee. AB 1725 made it a felony, punishable by 16 months or 2 or 3 years in county jail, for a person over 21 years of age to plant, cultivate, harvest, dry, or process more than 6 living cannabis plants. For persons under 21 years of age, the bill made it an infraction accompanied by a requirement to participate in drug education, counseling, and community service. While unconfirmed, it is assumed that the introduction of this bill is in reaction to the January 2024 mass murder in San Bernardino County linked to an illicit cannabis cultivation operation in the Mojave Desert. Item 33 Attachment A - 2023 Q4 Sales Tax Data and Legislative Update E Status: Pending referral to a policy committee in the Assembly. Cal Cities Position: Pending SB 820 (Alvarado -Gil) Cannabis: enforcement: seizure of property. Sponsored by the Rural County Representatives of California, this bill empowers the DCC or local jurisdictions, with an inspection warrant, to seize specified property used in unlicensed commercial cannabis activities, along with vehicles valued over $5,000 used to conceal or transport cannabis products for those engaging in such conduct. Specified property includes various equipment, materials, and currency exceeding $40,000. The bill excludes limited unlicensed commercial cannabis activities involving fewer than 1,000 living cannabis plants and real property. It establishes notice requirements and forfeiture proceedings, with seized property sold at public auction and proceeds split between the local jurisdiction and the Cannabis Control Fund. Proceeds allocated to the state are designated for use exclusively under the California Cannabis Equity Act, subject to legislative appropriations. Status: Awaiting referral to a policy committee in the Assembly. Cal Cities Position: Support Industrial Hemp AB 2223 (Aguiar-Curry) Cannabis: industrial hemp. This bill aims to integrate hemp into the cannabis supply chain, allowing hemp products to be sold in licensed cannabis dispensaries. The bill reinforces enforcement provisions established in AB 45, which regulates hemp cannabinoids in various products. Status: Referred to the Assembly Business & Professions and Judiciary committees. Cal Cities Position: Pending Licensing Reform/Simplification AB 2540 (Chen) Cannabis: license transfers. Authorizes the DCC to transfer, assign, or reassign licenses for commercial cannabis activity. Status: Referred to the Assembly Business & Professions Committee. Cal Cities Position: Pending SB 1064 (Laird) Cannabis. Co -sponsored by the Rural County Representatives of California and the California Cannabis Industry Association, this is a spot bill aimed at incorporating recommendations outlined in the "California Cannabis Report: Licensing and Market Access" by Cannabis Policy Lab. The bill proposes enhancements to 11 Item 33: Staff Report Pg. 27 Packet Pg. 850 of 857 A AVNU Ih 5'Cn 15 i +Mf, r ric. CALIFORNIALL ILA the regulatory framework for licensed cannabis businesses, addressing complexities hindering effective oversight and viability. While amendments are still being drafted, the bill seeks to establish a new commercial cannabis state/local licensing framework for retail, distribution, and manufacturing activities, with cultivation phased in over time. Status: Pending referral in the Senate. Cal Cities Position: Pending SB 1109 (Bradford) Cannabis licensure. This is currently a spot bill, which is intended to incorporate additional recommendations outlined in Cannabis Policy Lab's report, "California Cannabis Report: Licensing and Market Access." Status: Pending referral to policy committee in the Senate. Cal Cities Position: None Onsite Consumption AB 1775 (Haney) Cannabis: local control: cannabis consumption. This bill specifies that a local jurisdiction may allow a licensed retailer or microbusiness to prepare or sell pre-packaged non -cannabis -infused, nonalcoholic food or beverage products and to allow, and to sell tickets for, live musical or other performances on the premises by a licensed retailer or microbusiness in an area where the consumption of cannabis is allowed. Status: Referred to the Assembly committees on Business & Professions and Governmental Organization. Cal Cities Position: Pending SB 285 (Allen) Cannabis: retail preparation, sale, and consumption of non -cannabis food and beverage products. Permits the preparation or sale of non -cannabis food or beverage products in compliance with all applicable provisions of the retail food code by a licensed cannabis retailer or microbusiness in the area where the consumption of cannabis is allowed. Specifies that the activities above must be authorized by a local jurisdiction, and only if access to the area where cannabis consumption is allowed is restricted to persons 21 years of age or older, if cannabis consumption is not visible from any public place or nonage -restricted area, and if the sale or consumption of alcohol or tobacco is not allowed on the premises. Authorizes a local jurisdiction to allow for the sale of prepackaged, non -cannabis -infused, nonalcoholic food and beverages by a licensed retailer. Status: Awaiting hearing in the Assembly Governmental Organization Committee. Cal Cities Position: Watch Cannabis Taxation Item 33 Attachment A - 2023 Q4 Sales Tax Data and Legislative Update E AB 2555 (Quirk -Silva) Sales and use tax: exemption: medicinal cannabis: donations. This bill ensures continued access to medicinal cannabis donations for low- income patients by extending indefinitely the sales and use tax exemption for medicinal cannabis or medicinal cannabis products that are donated by cannabis licensees, also known as the Dennis Peron and Brownie Mary Act. This exemption is set to expire at the end of 2024. Status: Scheduled to be heard in the Assembly Revenue & Taxation Committee on April 1. Cal Cities Position: Watch SB 1059 (Bradford) Cannabis tax: cannabis retailers. This is currently a spot bill, which will be amended to incorporate provisions contained in SB 512 (Bradford, 2023) and AB 725 (Ward, 2021). SB 512, which was held in the Assembly Revenue & Taxation Committee, sought to reduce the tax burden on licensed cannabis businesses by clarifying that the state's 15% excise tax is calculated based on gross receipts of cannabis products and does not capture any tax or fee imposed by a local jurisdiction. In some jurisdictions, including the City of Los Angeles, local cannabis taxes or fees are being calculated after the state excise tax is applied. AB 725, which also stalled in the Assembly Revenue & Taxation Committee, eliminated the mandatory 50% penalty currently imposed by the Department of Tax and Fee Administration on late filings or delinquent payments of state cannabis taxes. Status: Awaiting referral to a policy committee in the Senate. Cal Cities Position: Watch Testing Integrity AB 1610 (Jones -Sawyer) Cannabis: Department of Cannabis Control. This bill aims to tackle the issue of illegal over -reporting of potency for price markups in the cannabis industry. The bill mandates the DCC maintain a record of recall orders on its website, including details like date, location, licensee name, and license number. It also requires the DCC to establish a blind proficiency test method for testing laboratories to ensure consistent results, conduct biennial in -person audits of testing labs, set guidelines for audit procedures, and establish quality assurance standards for cannabis products available for retail sale. Status: Awaiting hearing in the Senate Committee on Business, Professions, & Economic Development. Cal Cities Position: Watch 12 Item 33: Staff Report Pg. 281 [ Packet Pg. 851 of 857 A CALIFORNIA LEGISLA AVENU Ih 5'Cn 15 i +Mf, r rite Transit AB 1853 (Villapudua) San Joaquin Regional Transit District: meetings: surplus money investments. Would authorize the San Joaquin Regional Transit District board to provide, by ordinance or resolution, that each board member receive $100 for each board meeting and committee meeting attended, not to exceed $500 in a calendar month. Status: Scheduled to be heard in the Assembly Local Government Committee on March 20. Cal Cities Position: Track AB 1924 (Nguyen, Stephanie) Sacramento Regional Transit District. Would authorize the Sacramento Regional Transit District to also comprise the cities of Galt and Isleton, and the unincorporated portions of the county of Sacramento where the county has declared a need for the district to operate, provided the cities and county agree to annexation. Status. Scheduled to be heard in the Assembly Local Government Committee on March 20. Cal Cities Position: Track AB 2325 (Lee) San Francisco Bay Area Rapid Transit District: officers: designation and appointment. Would eliminate the treasurer and controller as specifically designated officers of the San Francisco Bay Area Rapid Transit District and as positions subject to appointment and removal by the board. The bill would also eliminate specified qualifications applicable to the controller. Status: Referred to the Assembly Committee on Local Government. Cal Cities Position: None AB 2553 (Friedman) Housing development: major transit stops: vehicular traffic impact fees. The California Environmental Quality Act (CEQA) exempts from its requirements residential projects on infill sites and transit priority projects that meet certain requirements, including a requirement that the projects are located within 1/2 mile of a major transit stop. CEQA defines "major transit stop" to include, among other locations, the intersection of 2 or more major bus routes with a frequency of service interval of 15 minutes or less during the morning and afternoon peak commute periods. This bill would revise the definition of "major transit stop" to increase the frequency of service interval to 20 minutes. The bill would additionally define "major transit stop" to include a site in an urbanized area that is being served by an on -demand transit service at least 12 hours a day, 7 days a week. Item 33 Attachment A - 2023 Q4 Sales Tax Data and Legislative Update E Status. Awaiting assignment to policy committee in the Assembly. Cal Cities Position: None AB 2634 (McCarty) Sacramento Regional Transit District. Would exempt the Sacramento Regional Transit District from the requirement for each transit operator that offers reduced fares to senior citizens to also offer reduced fares to disabled persons, and disabled veterans, at the same rate established for senior citizens, as specified. Status. Referred to the Assembly Local Government Committee. Cal Cities Position: None AB 2719 (Wilson) Vehicles: commercial vehicle inspections. Would authorize a public transit agency, as defined, to request the California Highway Patrol (CHP) to conduct an annual inspection and certification of its fleet. The bill would authorize the Commissioner of the CHP to issue stickers or other devices as evidence of certification. The bill would exempt any public transit agency vehicle that has been certified through that inspection from the requirement to stop at a roadside inspection. Status: Referred to the Assembly Transportation Committee. Cal Cities Position: Pending Support SB 904 (Dodd) Sonoma-Marin Area Rail Transit District. Current law authorizes the board of the Sonoma- Marin Area Rail Transit District to submit to the voters of the district a measure proposing a retail transaction and use tax ordinance. SB 904 would also authorize special district taxes to be imposed by a qualified voter initiative and require the board of supervisors of the counties of Sonoma and Marin to call a special election on a tax measure proposed by the district's board of directors or a qualified voter initiative in their respective counties. Status: Scheduled to be heard in the Senate Transportation Committee on April 9. Cal Cities Position: None SB 960 (Wiener) Transportation: planning: transit priority projects: multimodal. Would require all transportation projects funded or overseen by the Department of Transportation to provide comfortable, convenient, and connected complete streets facilities unless an exemption is documented and approved. Status. Scheduled to be heard in the Senate Transportation Committee on April 9. Cal Cities Position: Track 13 Item 33: Staff Report Pg. 29 Packet Pg. 852 of 857 A Item 33 CALIFORNIALEGISLATIV1AttachrnentA2O23Q4 E AVENU Ih S'CI15 i'H irrlt. SB 1417 (Allen) Transit districts: prohibition orders. This bill would provide that the Santa Monica Department of Transportation is also a transit district for purposes of provisions regarding prohibition orders. Status: Scheduled to be heard in the Senate Transportation Committee on April 9. Cal Cities Position: None Sales Tax Data and Legislative Update Item 33: Staff Report P . 30 14 p g Packet Pg. 853 of 857 Item 34 Item 34 Staff Report City Council Staff Report From: City Manager CITY O F Report Type: INFORMATION REPORTS PALO Lead Department: Planning and Development Services ALTO Meeting Date: June 17, 2024 Report #:2406-3056 TITLE Establishment of Community Advisory Group for Downtown Housing Plan. CEQA Status -- Not a Project. EXECUTIVE SUMMARY The Downtown Housing Plan will establish policies, set development, and design standards, and plan for the public infrastructure necessary to accelerate housing production and further fair housing while ensuring that the Downtown area continues to be an attractive local and regional destination. The City Council approved consultant contracts to begin the Downtown Housing Plan on February 26, 2024. Currently, the project team is collecting data and initiating public outreach and engagement for the Plan. The Downtown Housing Plan requires extensive community outreach and participation, and the Community Advisory Group (CAG) will be instrumental in this regard. The group will serve an advisory role and provide feedback to the project team at key junctures of the project. An application process will allow the City to identify individuals from diverse stakeholder interests for the CAG. Some perspectives may require an invitation to participate instead of a voluntary submittal of an application. The City Manager or designee will initiate the application and recruitment process, to select and appoint members of the CAG with input from the City Council Housing Ad hoc Committee in August 2024. BACKGROUND In March 2024, the City began the development of its Downtown Housing Plan and engaged Wallace Roberts & Todd, LLC (WRT) to provide planning and consulting services for the project, with additional project management support from Good City Company. The Metropolitan Transportation Commission (MTC) adopted a resolution on May 14, 2021, awarding $800,000 to the City to prepare a Housing Plan for Downtown, and the City Council Item 34: Staff Report Pg. 1 Packet Pg. 854 of 857 Item 34 Item 34 Staff Report accepted the grant on April 18, 20221, to initiate the preparation of a housing plan within the Downtown Palo Alto Priority Development Area (PDA). The Housing Plan needs to be completed by December 31, 2026, to be eligible for reimbursement from the grant funding agency. The Downtown Housing Plan will focus on housing production, including affordable housing, and will implement policies from the City's Comprehensive Plan and the 2023-2031 Housing Element. The formation of a Community Advisory Group to provide input throughout the planning process is a recommended community engagement activity of the grant and community engagement is key to the success of the planning effort, as is technical, design, and planning work by qualified consultants. The Downtown Housing Plan study area covers approximately 76 acres and is a sub -area of the Downtown Palo Alto PDA. Consistent with the requirements of the PDA Planning Grant, the Downtown Housing Plan will evaluate key opportunities and constraints for housing production in Palo Alto's Downtown and create a focused housing plan consistent with the policies set forth in the 2023-2031 Housing Element. The Plan will establish development standards and identify public infrastructure improvements necessary to accelerate housing production and further fair housing, as required by the grant. ANALYSIS The CAG is intended to comprise a representative cross-section of the Palo Alto community and Downtown stakeholders specifically. The CAG will be a key component of the public engagement process for the project. Role of the Community Advisory Group The CAG will be an advisory body to the Downtown Housing Plan project team. The project team will meet with the CAG approximately three to six times at key junctures throughout the planning process beginning September 2024; shortly after the selection and recruitment process and provide feedback to City staff and consultant team. The CAG is different in its nature of roles and responsibilities of a Working Group outlined in the PAMC Section 19.10 (Coordinated Area Plans). The intent of the group is to provide various perspectives and feedback on the ideas under development; serving as a sounding board for the City staff and the consultant team during the planning process to create a holistic plan. The CAG is not a decision -making body and will not provide recommendations to the City Council; establishing group consensus for a proposed Plan is not a goal. 'April 18, 2022, city Council Staff Report for Downtown Housing Plan: Initiation and MTC Supplement Agreement & Budget Amendment: https://recordsportal.paloalto.gov/Weblink/DocView.aspx?id=81822 Item 34: Staff Report Pg. 2 Packet Pg. 855 of 857 Item 34 Item 34 Staff Report The project team anticipates presenting the Downtown Housing Plan vision statement for the City Council's review in December 2024. Based on the large number of anticipated stakeholders, staff envisions a CAG of about 15 members representing multiple interests. This size is large enough to provide a diverse perspective and small enough to foster productive discussion and input. The proposed list of groups that would be represented in the CAG is: 1. Downtown resident (renter) 2. Downtown resident (homeowner) 3. Resident (owner - lives outside the project area) 4. Downtown business owner 5. Commercial broker 6. Non-profit housing groups 7. Affordable housing developer 8. Market -rate housing/ mixed -use developer 9. Major landholders and property managers 10. Community interest group representative 11. Neighborhood group representative 12. Chamber of Commerce representative 13. Representatives from the City's Architectural Review Board and the Planning and Transportation Commission Staff anticipates that the CAG membership will include individuals representing multiple categories on the list. NEXT STEPS Staff will prepare an application for participants interested in seeking an appointment and publicize this unique opportunity for engagement. Staff will make appointment recommendations to the City Manager who in turn will seek feedback from the City Council Housing Ad Hoc committee members, consisting of the Mayor and Vice Mayor to appoint members of the Downtown Housing Plan Community Advisory Group. It is anticipated the application process will start in late June 2024 with selection and appointment in August 2024. FISCAL/RESOURCE IMPACT Costs associated with the recommendation in this report are included in the project budget. STAKEHOLDER ENGAGEMENT Public engagement is an important part of the Downtown Housing Plan development. In addition to the Community Advisory Group, the community will be engaged through Item 34: Staff Report Pg. 3 Packet Pg. 856 of 857 Item 34 Item 34 Staff Report workshops, pop-up events, online surveys, stakeholder interviews, and a developer round table facilitated by the project team. The project webpage - Downtown Housing Plan — City of Palo Alto, CA was launched in early May and will be maintained throughout the planning process. The webpage includes a link for viewers to sign up for project updates. An initial outreach was conducted at the May Fete Event on May 4, 2024, at Heritage Park. Staff had a table for the Downtown Housing Plan to introduce the project and stimulate community conversation about the Downtown Housing Plan. Flyers were distributed and staff spoke to approximately 25 adults, seniors, high school students, and families with children, including residents of Downtown Palo Alto. ENVIRONMENTAL REVIEW Council action on this informational item is not a project as defined by the California Environmental Quality Act (CEQA) in that establishing the CAG is an administrative activity that will not result in direct or indirect physical changes in the environment. CEQA Guidelines Section 15378(b)(5). Staff will undertake the appropriate CEQA review for the Downtown Housing Plan. APPROVED BY: Jonathan Lait, Planning and Development Services Director Item 34: Staff Report Pg. 4 Packet Pg. 857 of 857