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2012-05-07 City Council Agenda Packet
CITY OF PALO ALTO CITY COUNCIL Special Meeting Council Chambers May 7, 2012 5:00 PM Agenda posted according to PAMC Section 2.04.070. Supporting materials are available in the Council Chambers on the Thursday preceding the meeting. 1 May 7, 2012 MATERIALS RELATED TO AN ITEM ON THIS AGENDA SUBMITTED TO THE CITY COUNCIL AFTER DISTRIBUTION OF THE AGENDA PACKET ARE AVAILABLE FOR PUBLIC INSPECTION IN THE CITY CLERK’S OFFICE AT PALO ALTO CITY HALL, 250 HAMILTON AVE. DURING NORMAL BUSINESS HOURS. Call to Order Closed Session Public Comments: Members of the public may speak to the Closed Session item(s); three minutes per speaker. 1. CONFERENCE WITH CITY ATTORNEY - EXISTING LITIGATION Subject: City of Palo Alto et al. v. California High-Speed Rail Authority Superior Court of California, County of Sacramento, Case No. 34-2010-80000679 Authority: Government Code section 54956.9(a) 2. CONFERENCE WITH CITY ATTORNEY- POTENTIAL/ANTICIPATED LITIGATION Subject: Written liability claim against the City of Palo Alto, et al. by Michael Siegel, et al., Palo Alto Claim No.: C11084 Subject: Written liability claim against the City of Palo Alto, et al. by David Morse, Palo Alto Claim No.: C11084-1 Authority: Government Code Sections 54956.9(b)(1) & (b)(3)(C) Study Session 3. Long Range Facilities Plan for the Palo Alto Wastewater Treatment Plant (RWQCP) Special Orders of the Day 4. Presentation by Keith Bechtel on the Tsuchiura Japan Marathon Race 2 May 7, 2012 MATERIALS RELATED TO AN ITEM ON THIS AGENDA SUBMITTED TO THE CITY COUNCIL AFTER DISTRIBUTION OF THE AGENDA PACKET ARE AVAILABLE FOR PUBLIC INSPECTION IN THE CITY CLERK’S OFFICE AT PALO ALTO CITY HALL, 250 HAMILTON AVE. DURING NORMAL BUSINESS HOURS. City Manager Comments Minutes Approval January 23, 2012 and January 30, 2012 Oral Communications Members of the public may speak to any item not on the agenda; three minutes per speaker. Council reserves the right to limit the duration of Oral Communications period to 30 minutes. Consent Calendar Items will be voted on in one motion unless removed from the calendar by two Council Members. 5. Approval of Contract with SAP Inc. for Software Maintenance Support Services to the City of Palo Alto 6. Request for Authorization to Increase the Existing Blanket Purchase Order with OldCastle Precast, Inc. by $200,000 for Fiscal Year 2012 and to Approve a $500,000 Blanket Purchase Order with Oldcastle Precast, Inc. for 2013 for the Purchase of Concrete Vaults and Pads 7. Approval of the City’s 2012 Federal and State Legislative Program 8. Second Reading: Adoption of an Ordinance Approving an Amendment to the 1997 Sand Hill Road Development Agreement to Extend the Lease on El Camino Park and to Remove Approximately 10.25 Acres of Land (Searsville and Fremont Roads) in Santa Clara County from Special Condition Area B to be used for Central Energy (Cogeneration) Facility. 9. Second Reading: Adoption of Ordinance to Amend the Contract Between the Board of Administration of the California Public Employees’ Retirement System (CalPERS) and the City of Palo Alto to Implement California Government Code Section 20475: Different Level of Benefits Provided for New Employees, Section 21363.1: 3.0% @ 55 Full Formula, Section 20037: Three Year Final Compensation, and Without Section 20692: Employer Paid Member Contributions for Safety Fire Employees( 1st Reading passed 3-5-12, 8-0 Yeh absent) 3 May 7, 2012 MATERIALS RELATED TO AN ITEM ON THIS AGENDA SUBMITTED TO THE CITY COUNCIL AFTER DISTRIBUTION OF THE AGENDA PACKET ARE AVAILABLE FOR PUBLIC INSPECTION IN THE CITY CLERK’S OFFICE AT PALO ALTO CITY HALL, 250 HAMILTON AVE. DURING NORMAL BUSINESS HOURS. 10. Approval of Amendment No. 2 to Agreement Between the City of Palo Alto and the Midpeninsula Community Media Center, Inc. in the Amount of $50,000 11. Adoption of a Resolution of Intent to Establish Underground Utility District No. 47( Middlefield Road/ Addison Ave/ Cowper Street/ Homer Ave) by Amending Section 12.16.020 of the Palo Alto Municipal Code 12. Approval of Revisions to Regulations of the City of Palo Alto Regarding Prohibited Conduct at or in Community Centers, Theaters, Interpretive Buildings and the Art Center Agenda Changes, Additions and Deletions HEARINGS REQUIRED BY LAW: Applications and/or appellants may have up to ten minutes at the outset of the public discussion to make their remarks and put up to three minutes for concluding remarks after other members of the public have spoken. OTHER AGENDA ITEMS: Public comments or testimony on agenda items other than Oral Communications shall be limited to a maximum of three minutes per speaker. Action Items Include: Reports of Committees/Commissions, Ordinances and Resolutions, Public Hearings, Reports of Officials, Unfinished Business and Council Matters. 13. Public Hearing to Hear Objections to the Levy of Proposed Assessments on the Palo Alto Downtown Business Improvement District and Adoption of a Resolution Confirming the Report of the Advisory Board and Levying Assessment for Fiscal Year 2013 on the Downtown Palo Alto Business Improvement District 14. Acceptance of the Long Range Financial Forecast for Fiscal Years 2012 to 2022 15. Public Hearing: Adoption of a Resolution Approving the Proposed Fiscal Year 2013 Community Development Block Grant (CDBG) Funding Allocations and the 2012/13 Draft Annual Action Plan 16. PUBLIC HEARING: Adoption Of A PC Ordinance For The Proposed Lytton Gateway Project to Amend The Zoning Map of the City Of Palo Alto to Change the Zone Designations From CDC-P And CDN-P to a Planned Community (PC) District To Allow A Mixed Office And Retail, Four-Story, 50 Foot Tall Building 4 May 7, 2012 MATERIALS RELATED TO AN ITEM ON THIS AGENDA SUBMITTED TO THE CITY COUNCIL AFTER DISTRIBUTION OF THE AGENDA PACKET ARE AVAILABLE FOR PUBLIC INSPECTION IN THE CITY CLERK’S OFFICE AT PALO ALTO CITY HALL, 250 HAMILTON AVE. DURING NORMAL BUSINESS HOURS. (And A 70 Foot Tall Corner Tower Feature) on the Former Shell Station Site, Located At 355 And 335 Alma Street. The Project Includes Exceptions to the Daylight Plane And 35-Foot Height Limit Within 150 Feet of Residential Property. *Quasi-Judicial Council Member Questions, Comments and Announcements Members of the public may not speak to the item(s) Adjournment AMERICANS WITH DISABILITY ACT (ADA) Persons with disabilities who require auxiliary aids or services in using City facilities, services or programs or who would like information on the City’s compliance with the Americans with Disabilities Act (ADA) of 1990, may contact (650) 329-2550 (Voice) 24 hours in advance. PUBLIC COMMENT Members of the Public are entitled to directly address the City Council/Committee concerning any item that is described in the notice of this meeting, before or during consideration of that item. If you wish to address the Council/Committee on any issue that is on this agenda, please complete a speaker request card located on the table at the entrance to the Council Chambers, and deliver it to the City Clerk prior to discussion of the item. You are not required to give your name on the speaker card in order to speak to the Council/Committee, but it is very helpful. 5 May 7, 2012 MATERIALS RELATED TO AN ITEM ON THIS AGENDA SUBMITTED TO THE CITY COUNCIL AFTER DISTRIBUTION OF THE AGENDA PACKET ARE AVAILABLE FOR PUBLIC INSPECTION IN THE CITY CLERK’S OFFICE AT PALO ALTO CITY HALL, 250 HAMILTON AVE. DURING NORMAL BUSINESS HOURS. Additional Information Supplemental Information Standing Committee Meetings Finance Committee Packet May 8, 2012 Policy and Services Committee Packet May 8, 2012 Finance Committee Packet May 10, 2012 Policy and Services Committee Packet May 10, 2012 City Council Rail Committee Packet May 10, 2012 Schedule of Meetings Schedule of Meetings Tentative Agenda Tentative Agenda Finance Committee Tentative Agenda Informational Report Informational Update Report on Transition of the Palo Alto Airport (PAO) from Santa Clara County to the City of Palo Alto Public Letters to Council City of Palo Alto (ID # 2586) City Council Staff Report Report Type: Consent Calendar Meeting Date: 5/7/2012 May 07, 2012 Page 1 of 2 (ID # 2586) Summary Title: SAP Support License Contract Extension Title: Approval of Contract with SAP Inc. for Software Maintenance Support Services to the City of Palo Alto From: City Manager Lead Department: IT Department Recommendation Staff recommends that the City Council approve and authorize the City Manager or his designee to execute the attached contract between the City of Palo Alto and SAP, Inc. in the amount of $1,003,545.75 for software maintenance services to support MySAP.com Solution Suite and Industry Solution for Utilities Executive Summary Approve a contract for essential software maintenance support between the City of Palo Alto and SAP, Inc. in the amount of $1,003,545.75 payable over a five-year period at $200,709.15 per year. We’ve been paying the same amount each year since 2009 CCS implementation. It covers five systems: Financial system, Industry Solution of Utilities (IS-U), Electronic Utilities Customer Service (UCES), Customer Relationship Management (CRM) and Business Intelligence (BI). Discussion The City implemented SAP as the Enterprise Resource Planning system in 2003. The Implementation of Industry Solution of Utilities (IS-U), Electronic Utilities Customer Service (UCES), Customer Relationship Management (CRM) and Business Intelligence (BI) followed in 2009. These applications support Finance, Payroll, Budget, Utilities, Public Works and customers and are now fully integrated into a city wide platform under one SAP contract. To ensure business continuity, it is crucial to secure 24x7 mission critical support from the vendor. In addition, City is using SAP delivered software enhancements to meet on-going legal regulation and compliance requirement. May 07, 2012 Page 2 of 2 (ID # 2586) Services covered under the maintenance contract include: Mission critical support, including global 24x7 and quality check Global customer support portal Support Packages – software corrections and changes to adapt existing functionality to changed legal and regulatory requirements. SAP Service Market for content, best practice, and solution composer New software releases and technology updates Timeline, Resource Impact, Policy Implications, Environmental Review (If Applicable) Funds for the SAP License is budgeted as IT operating budget under Technology Fund – Enterprise Systems Service and Maintenance, Software Application Maintenance Attachments: Attachment A : Contract Revision (PDF) Attachment B : CMR313.07 (PDF) Attachment C : CMR 313.07 attachments (PDF) Attachment D: 2009 SAP Support agreement change (PDF) Prepared By: Jennifer Leu, Manager, IT Department Head: Jonathan Reichental, Chief Information Officer City Manager Approval: ____________________________________ James Keene, City Manager City of Palo Alto (ID # 2720) City Council Staff Report Report Type: Consent Calendar Meeting Date: 5/7/2012 May 07, 2012 Page 1 of 2 (ID # 2720) Summary Title: Amendment to Blanket Contract -Oldcastle Precast Title: Request for Authorization to Increase the Existing Blanket Purchase Order with OldCastle Precast, Inc. by $200,000 for Fiscal Year 2012 and to Approve a $500,000 Blanket Purchase Order with Oldcastle Precast, Inc. for 2013 for the Purchase of Concrete Vaults and Pads From: City Manager Lead Department: Utilities Recommendation Staff recommends that the Council approve and authorize the City Manager or his designee to increase the amount of the blanket purchase order with Oldcastle Precast, Inc. (“Oldcastle”) by an additional $200,000, for the purchase of underground vaults and pads, for fiscal year 2012. Staff also recommends that the Council approve and authorize a blanket purchase order amount of $500,000 for fiscal year 2013. Executive Summary Oldcastle is a manufacturer of precast concrete vaults and pads used for the construction of the utility underground electric system. In 2011 a three year blanket purchase order was signed for the provision of this equipment to the City of Palo Alto. Purchase order limits are established each fiscal year. Council authorization to increase the amount of the blanket purchase order for fiscal years 2012 and 2013 will allow staff to purchase the materials necessary to facilitate the rebuilding of the electric system. Background The City of Palo Alto has in place an annual blanket purchase order with Oldcastle Precast, Inc. for the provision of precast concrete vaults and pads used for the construction of the underground electric utility system. A purchase limit is set for each fiscal year, based on historical expenditures and future projections. For fiscal year 2012 the purchase limit is $250,000. Staff requests council approval to increase the blanket purchase order amount by $200,000, for a total of $450,000, for the remainder of fiscal year 2012. Staff also requests council approval of $500,000 for the blanket purchase order for fiscal year 2013. Discussion May 07, 2012 Page 2 of 2 (ID # 2720) Historic levels of purchases from Oldcastle indicated that the $250,000 contract amount was sufficient for anticipated construction activities. But in recent months, the Utilities Electric Department has undertaken several projects to rebuild the underground electric system. The rebuilding is in areas where the existing equipment is close to the end of its useful life and needs to be replaced before the onset of equipment failure and the resultant negative impact on reliability to Palo Alto residents. Projects include the Hewlett subdivision on Los Trancos Road, the Greenhouse subdivision on San Antonio Road, Middlefield Road from San Antonio Road to Loma Verde Avenue, and El Camino Real between East Charleston Road and Monroe Avenue. The additional $200,000 is sufficient to pay for materials already received, on order, or to be ordered, from Oldcastle for the remainder of fiscal year 2012. Staff anticipates additional underground system rebuild projects in fiscal year 2013 to be on a similar pace. These projects include additional work in the vicinity of El Camino Real and El Camino Way, Arastradero Road, and San Antonio Road north of Charleston Avenue. The $500,000 purchase order amount for fiscal year 2013 will allow staff to purchase the necessary concrete vaults and pads to facilitate this work. Resource Impact Funding for these projects is available in the FY 2012 budget. This report is only requesting an approval of the blanket purchase limit. Policy Implications No policy implications. Environmental Review Council authorization to increase the amount of the blanket purchase order with Oldcastle Precast, Inc., does not meet the definition of a project pursuant to Public Resources Code Section 21065, thus no environmental review is required. Attachment None Prepared By: Tom Ting, Acting Engr. Manager-Electric Department Head: Valerie Fong, Director City Manager Approval: ____________________________________ James Keene, City Manager City of Palo Alto (ID # 2816) City Council Staff Report Report Type: Consent Calendar Meeting Date: 5/7/2012 May 07, 2012 Page 1 of 2 (ID # 2816) Summary Title: 2012 Federal and State Legislative Program Title: Approval of the City’s 2012 Federal and State Legislative Program From: City Manager Lead Department: City Manager Recommendation Staff and the Policy and Services Committee recommend that the Council approve the 2012 Federal and State Legislative Program. Background On March 13, 2012 the Policy & Services Committee reviewed the City's Legislative Action Manual and the proposed 2012 Federal and State legislative priorities and recommended that the Council approve the 2012 Federal and State Legislative Program with modifications as further described in this report. The minutes for this meeting were not complete at the time this staff report was prepared, therefore a summary of Committee comments and recommendations is provided in Attachment A. Discussion The Committee reviewed the City’s 2011 Legislative Guiding Principles for Legislative Advocacy and the City’s Legislative Action Manual and recommended approval with a minor change for clarity in language under the guiding principles as highlighted in the meeting summary. The Guiding Principles and the Action Manual is provided in Attachment B. The Committee also reviewed the proposed 2012 Federal and State Legislative priorities. Representatives from the City’s Federal advocacy firm, Van Scoyoc Associates, attended the Committee meeting, provided an update on current issues in Washington, and presented preliminary Federal legislative priorities. The Committee approved the Federal and State priorities with modifications as described in the meeting summary. The Federal legislative priorities are provided in Attachment C and the State May 07, 2012 Page 2 of 2 (ID # 2816) legislative priorities are provided in Attachment D. Staff is utilizing a state legislative tracking system in 2012 called Capitol Track. Included in Exhibit 3 of the State legislative priorities is a list of the bills of interest (at the time this staff report was prepared) that the City is tracking in coordination with Departments, the Utilities Legislative Program and the City’s Rail Advocate. There is significant legislative activity at this time as the state legislature is hearing over 650 bills in various Committees. As bills are being heard and modified, staff is actively monitoring changes and evaluating their application to the City. Staff is regularly updating this list and will provide periodic reports to Council. The Council may also refer bills to staff at any time for further analysis. Timeline The guiding principles and legislative priorities herein are intended to guide the City’s 2012 Legislative Program. Staff anticipates returning to Council in late 2012 to begin much earlier to prepare for the 2013 Legislative Program. Attachments: Attachment A. 3-13-2012 Policy & Services Committee Meeting Summary (PDF) Attachment B. Legislative Action Program Manual (DOC) Attachment C. Federal Legislative Priorities (PDF) Attachment D. State Legislative Priorities (PDF) Prepared By: Sheila Tucker, Assistant to the City Manager Department Head: James Keene, City Manager City Manager Approval: ____________________________________ James Keene, City Manager Attachment A. Policy & Services Committee Meeting March 13, 2012 2012 Federal and State Legislative Program – Summary of Committee Recommendations Guiding Principles 1. Amend Guiding Principle #2 of the Legislative Action Program Manual to “protect and increase local government discretion, balancing that with City values and priorities. Federal Legislative Program 1. Add U.S. Postal Service to the work program. Specifically we will need your assistance in our efforts to secure the post office property on Hamilton Avenue here in Palo Alto. 2. Delete advocate for the recommendations of the Infrastructure Blue Ribbon Committee. 3. Delete further support for the Stanford Avenue/El Camino Real Intersection project. 4. Add South Bay Shoreline Study Plan under review by the U.S. Army Corps of Engineers. 5. Add assistance in securing support to get a secondary major power supply for the city. 6. Seek public safety funding for the proposed City Public Safety Building identified in the IBRC report. 7. Initiate a program in the future to send communications to the City when you might think it would be useful for a councilmember to come to DC to meet with federal legislators, federal officials etc. 8. Develop a tracking/reporting mechanism that helps us focus on “wins” through our federal legislative advocacy in addition to monitoring updates. State Legislative Program 1. Add tracking SB375, Government Code 65-915 concerning concession and benefits, parcel tax exemption, and possible legislation concerning energy renewables and water policies. 2. Add the Utilities Legislative Policy Guidelines for 2012. 3. Remove redundant references to the League of California Cities and note the City will track League-supported bills and evaluate their application to the City. 4. Review past Council meetings with legislators and add any priority legislation discussed. 5. Include list of bills City is tracking. 6. Update the League’s Policy and Guiding principles if new version available. Attachment B Page 1 Legislative Action Program Manual Policy Statement The objective of the City of Palo Alto legislative action program is to keep the City Council, community and staff fully advised of proposed legislation with a potential impact upon the City. It is the City's general policy to take timely and effective action in support of or opposition to proposed legislation affecting Palo Alto at the County, State, Federal levels. In addition the City, where appropriate, will take the initiative to seek introduction of new legislation beneficial to Palo Alto and other local government entities. City Council Priorities The groundwork for the City's legislative strategy is the Council's priorities: City Finances; Land Use and Transportation; Emergency Preparedness; Environmental Sustainability; Community Collaboration for Youth Well Being. Guiding Principles for Legislative Advocacy 1. Protect local revenue sources and prevent unfunded mandates. Oppose Federal or State legislation, policies and budgets that have negative impacts on services, revenues and costs. Ensure that legislation, policies and budgets do not detract from Palo Alto’s ability to draw on local revenue sources. 2. Protect and increase local government discretion, balancing that with City values and priorities. Acknowledge the fundamental issues with the governance structure at the State level and ensure that legislative or Constitutional reforms align with the City’s values and maintain and/or enhance local discretion. 3. Ensure that legislation, policies and budgets retain or increase, but generally don’t decrease, the amount of local discretion held by the City and protect local decision making. Oppose legislation, policies and budgets that reduce the authority and/or ability of local government to determine how best to effectively operate local programs, services and activities. The City retains the right to exceed State goals, standards or targets. 4. Protect and increase funding for specific programs and services. Attachment B Page 2 Support County, State and Federal funding for local service by maximizing existing funding levels and seeking new and alternative funding for programs. Promote increases in the allocation of funds to cities and flexibility in distribution. 5. Proactively advocate on behalf of the City. 6. Identify key legislative areas to monitor annually. Take a proactive role in working with Federal and State legislators to draft and sponsor legislation around key City priorities. Attachment B Page 3 Contents Internal Coordination of the Legislative Action Program p. 4 The Role of the City Council p. 5 The Role of the City Manager's Office p. 6 The Role of the Departments p. 6 Guidelines for Evaluating Legislation p. 7 Legislative Advocacy p. 8 Lobbying Methods p. 10 Guidelines for Letter Writing p. 11 Procedure for City Council meetings with other Elected Representatives p. 12 California State Senate Legislative Timeline 2012 p. 13 Attachment B Page 4 Basic Steps in the City's Legislative Action Program Internal Coordination of the Legislative Action Program The basic steps in the City's legislative action program are illustrated in the accompanying diagram (above). 1. Legislation is brought to the City's attention by several means: the League of California Cities, the National League of Cities, Council Members, City staff, citizens, professional or governmental newsletters, legislators, the legislative tracking service, etc. 2. The City Manager's Office reviews the proposed legislation (the bill text) and, if warranted, requests assistance from one or more departments. Departments are urged to take the initiative to identify legislation of importance to the City and not wait for the City Manager's Office to ask for their involvement. 3. The Department evaluates the bill for its impact upon Palo Alto, recommends a position and potential action, and drafts a statement or letter for use by the City Manager's Office, as appropriate. 4. At this juncture, action can proceed in either of two ways: a. If the Council has previously adopted a policy directly relevant to the legislation, the City Manager's Office proceeds to prepare a letter for the Mayor's signature; Attachment B Page 5 b. If the Council policy relative to the legislation does not exist, or if the issue is politically controversial, or if there is significant local interest in the issue, the proposed legislation is referred to Council. (See Legislative Advocacy) 5. The Council will consider the information provided in a staff report, determine its position on the legislation and provide direction to staff. 6. The City Manager's Office coordinates the lobbying activities according to Council direction through this policy and procedure manual. 7. The Council will connect with the various legislative bodies in several ways throughout the year: a. Joint meetings with elected representatives b. Visits to Sacramento and Washington DC; c. Direct contact with elected representatives by phone or letter on key issues The Role of the Council The City Council has ultimate responsibility for determining the position the City shall take on legislative issues. Council positions applicable to legislation accumulate over the years and require periodic reevaluation to assure they are still relevant to the City's needs and interests. The Council generally takes positions only on issues that are of relevance to the City of Palo Alto. The Council's specific responsibilities include: Conduct an annual review and update of legislative priorities at both the State and Federal levels. Meet annually with the City's federal lobbyist to establish federal legislative priorities and strategies, given current trends in Washington. Establish legislative priorities, taking into account the Council priorities adopted each year. Consider legislative issues brought to the Council's attention by staff, citizens, organizations and others and determine what, if any, position the City should take. Determine Council positions on resolutions proposed for adoption by the League of California Cities and the National League of Cities. Suggest areas for staff action concerning legislation. Assume an active advocacy role with legislators on behalf of the City. This may include travel to Washington, DC and/or to Sacramento. Any such travel will be consistent with current City policies/procedures on travel. Attachment B Page 6 The Role of the City Manager's Office The City Manager's Office is the central coordinator of the City's legislative program. The responsibilities and activities of the office include the following: Ensure the consistency of legislative policy throughout the City. Serve as a clearinghouse and record keeper for all legislative activity occurring with the City. Coordinate contacts and communications with legislators and staff. Coordinate the evaluation of proposed legislation that may affect the City. Disseminate information on legislation of interest to departments and division within the City. Encourage suggestions from other departments concerning subjects for legislative action. Provide feedback to departments on progress of legislation of interest. Keep Council informed on the status of the City's legislative action program. Recommend priorities for legislative action, in order to avoid diminishing the effectiveness of the City’s lobbying activities. Plan, coordinate, and facilitate lobbying activities by Council Members and City staff. Maintain legislative files (bill texts, correspondence, records of lobbying activity, background information, Council policies). Serve as liaison to the League of California Cities, National League of Cities, and other organizations and jurisdictions concerning legislative activities. Coordinate the annual review of legislative positions and preparation of the City's legislative platform. The Role of Departments The participation of various departments within the City is essential to the success of the Legislative Action Program. The program requires departments to take responsibility for identifying, evaluating and monitoring legislation that relates to their functional areas. The program must be cooperative and interactive. Effective lobbying and testimony depends on factual data concerning the impacts and implications of proposed legislation upon the City's operations, services, and finances. The responsibilities of the departments include the following: Inform the Manager's Office of legislative issues of importance to the City. Attachment B Page 7 Designate a key contact within the department or division who will be responsible for coordinating the evaluation of legislation and monitoring those legislative issues of direct significance to the department. Continue to monitor bills as they progress through the Legislature or Congress. Establish a system within the department for assuring that requests for legislation evaluation are responded to promptly. Draft letters and provide analysis of legislation as requested by City Manager's Office. Maintain a legislative file with the department to assure consistency of policy recommendations. Establish mechanisms within the department for accessing direct information on legislation, e.g. computer networks, newsletters, etc. Network with other cities, agencies, professional organizations, etc. to gain background information and broader perspective on legislative issues. Suggest organizations, individuals, publications, and other legislators who may be allies in lobbying the City's position on certain legislation. Become acquainted with the League of California Cities staff person with responsibility for issues related to the department. Understand and adhere to the City’s Legislative Advocacy Policy. Consult the Manager's Office if there are questions. Annually, provide to the Manager's Office the department's recommendations for the ensuing year's legislative platform. This shall include: 1) a review of existing positions, 2) statements of underlying policies and principles, and 3) priorities related to specific legislative issues. Guidelines for Evaluating Legislation Several resources are available to departments that can enable them to identify proposed legislation and track its progress. The League of California Cities and National League of Cities publications contain information on Congressional legislation. Departments can also subscribe to legislative announcements through professional associations as well as State and Congressional websites. Bills often are amended several times in the course traveled between introduction and final approval. Analyses and letters expressing the City's position should always be based on the latest version. When reviewing the bill text, do not rely solely on the Legislative Counsel's Digest; read the entire bill. The bill-will contain the new or amended language proposed for the California Code. If the department wishes to compare the proposed language with the actual language of existing law, and does not have the relevant code (Government Code, Vehicle Code, Election Code, Revenue and Taxation Code, etc.) in the department, contact the City Attorney's Office with questions. Attachment B Page 8 If the bill is later amended, language that is deleted will be lined out and new proposed language will be shown in italics. Proper timing is vital in the legislative process. The City's views on a bill are of value only if they reach a legislator or committee before they vote on a bill. Departments should provide the City Manager's Office with information on bills of importance to the City as soon as they are aware of them. A. Citywide perspective Often, proposed legislation will have the potential for affecting more than one department. Not always will the impact be the same. While the proposal may be beneficial from the perspective of one department, it may have negative impacts for another department. It is essential that these differences be reconciled and a common citywide position is determined. The City Manager's Office will work with Departments to reconcile differences. B. Stating the City's position Departments should be aware of policies and programs contained in the City of Palo Alto Comprehensive Plan which relate to their area of responsibility. The City Manager's Office can verify if the League of California Cities or National League of Cities has taken a position on a bill. The most effective arguments in lobbying a bill are those which contain hard data about the effects on the City's operations and services. If the bill has potential significant effects for the City, it is well worth the time spent to assemble the examples and cost figures. The best criticism is that which contains suggestions for improvement. If there is little likelihood of defeating a bill the City opposes, indicate what could be changed to make it more palatable. Legislators and their staffs are more receptive to communications which offer concrete ideas. If the department recommendation is to support, oppose, or amend a bill, it is important to draft the body of a letter that the City Manager's Office can use in writing to the legislators. The Manager's Office will put the letter in final form and send it to the appropriate committees, legislators, etc. A copy of the finalized letter will be routed to the evaluating department for its records. Legislative Advocacy The Council is the official voice of the City of Palo Alto. The final authority for determining the position that shall be taken by the City on proposed legislation rests with the Council. The process outlined below would likely be followed only for key and controversial topics. In many instances, due to timing or the nature of the issue, the Mayor may sign a letter supporting or opposing legislation on behalf of the City. This position would need to be generally consistent with the City's overall guiding legislative principles or the annually adopted priorities. Attachment B Page 9 Process: (Taken from CMR: 315:02) 1. Two Councilmembers draft a Council Colleagues Memorandum to refer a ballot measure or legislative issue to the Policy and Services Committee for review. 2. Staff generates an informational report for the Policy and Services Committee summarizing the ballot measure or legislative issue. This report will include an analysis of City policy as it relates to the item, if applicable. It will also indicate if the League of California Cities has taken a position on the issue. 3. The item is agendized for the Policy and Services Committee meeting. 4. The Policy and Services Committee reviews and discusses the ballot measure or legislative issue at the meeting. 5. Policy and Services Committee members vote on the propositions and/or legislative issue that the Committee determines are consistent with the City's interests. 6. If the vote is unanimous, the matter is forwarded to the Council as consent calendar item. 7. If a timeliness issue exists, the item will referred to Council without minutes, and a one page executive summary will be provided. If no timeliness issue exists, the item will be referred with minutes in the usual manner. Signature on communication regarding legislation. Letters and other communications expressing the City's position on legislation will customarily bear the signature of the Mayor, particularly when the legislation relates to areas of Comprehensive Plan policies and programs, other Council adopted policies, issues of Council interest, and fiscal matters. If the legislation's principal impact is on the City’s operating procedures, the communication may be signed by the City Manager. In these instances, it may increase the effectiveness of the communication to have it co-signed by the head of the department most directly affected. In order to keep the Council and others informed of all City communications on legislation, copies of the letters will be distributed in the Council agenda packet. Independent lobbying by City personnel. City employees are not to lobby in the name of the City of Palo Alto unless the activity has been approved by the department head and City Manager has been informed in advance of the activity. City advisory commissions and committees. City employees who are staff or liaison to Council appointed advisory commissions and committees should encourage the bodies to bring to the attention of the Council proposed legislation upon which they recommend the Council take a position. Attachment B Page 10 The Palo Alto Municipal Code (Section 2.22.060(f)) authorizes the Human Relations Commission to adopt independent positions on legislation, provided the City Council has not taken an official position with respect to the legislation. All legislative letters sent by the HRC and its task forces shall be copied for the City Council. Lobbying Methods Listed here are a number of ways to inform and persuade legislators and others of the City's position on proposed legislation. Departmental participation in the planning and implementation of many of these activities is desirable and important. Departments should let the City Manager's Office know of their interest and suggestions for lobbying bills they have evaluated. Letters to The authors of proposed legislation. The City's elected representatives in the State Legislature and Congress. The Chair and members of legislative committees. The Governor or President. If the letter is being sent within three working days of the scheduled committee hearing of floor vote, the letter will be faxed or emailed. All records of faxes, mailings, e-mail, will be maintained by the City Manager's Office. Telephone calls Phone calls are useful for discussing with legislative staff the content and implications of a bill and for suggesting amendments or language clarification. However, many committees' rules prevent them from counting phone calls as a legitimate expression of a City's position on a bill. Pro and con positions are recorded only if they are received in writing. Meetings with Palo Alto's elected representatives either in the district or in Sacramento and Washington. It is the Council's practice to invite legislators representing Palo Alto to an annual meeting to discuss all issues of importance to the City during that legislative session. Councilmembers are encouraged to attend legislative days set by the National League of Cities and League of California Cities. Attachment B Page 11 Resolutions The Council is sometimes asked to adopt a resolution expressing its position on a bill. Resolutions are frequently sought by organizations as an indication of widespread support for a position, but they are less effective than letters when communicating directly with a legislator. Testimony Testifying in person at a legislative committee hearing provides an opportunity to present the City's position and respond to questions. The City Manager, the Mayor, a Councilmember, or the staff person with particular expertise in the subject assumes the responsibility. Editorial support from newspapers serving Palo Alto community Staff member must seek approval from Manager's Office before submitting editorials in newspapers. Press Conferences Press conferences are called by the Mayor and Councilmembers and are staged in a location relevant to the issues being lobbied. Any press conference should be coordinated with the City Manager's Office. Coalitions with other jurisdictions These alliances are not limited to governmental bodies, but extend to all segments of the broader community that can similarly be affected by the legislation, e.g. business, nonprofit organization, environmental groups, etc. Registered lobbyists are retained by the City when their specific skills and expertise are required. Guidelines for Letter Writing Concentrate on the letter content, rather than format. The City Manager's Office will produce the final letter, addressing it to the proper legislators or committees and securing the appropriate signature. The process can be expedited if the originating department provides the draft of the letter electronically. At the very start of the letter, indicate the bill number or title that is the subject of the letter. A short concise letter is generally more effective than a lengthy treatise. (Several short letters will carry more weight than one long letter; if there are many good arguments for supporting or opposing a bill, provide them all to the Manager's Office but in a form where they can be selectively used in several communications.) Attachment B Page 12 Provide specific examples of the impact of the legislation upon Palo Alto, e.g. estimated cost or savings, effect upon taxpayers and residents, relationship to the City's policies, programs, charter, etc. Think of examples that may be particularly newsworthy. Relate, when feasible, to the effect the proposed legislation may have upon the legislator’s constituents. If advice is needed on what aspects of the legislation can most successfully be lobbied, or what kind of information is most needed by the legislators, it is useful to talk to the staff of the League of California Cities, of the Legislature's Committees, or of the individual legislators. The Manager's Office can provide contact names and phone numbers. ATTACHED: Exhibit 1: Sample Federal Letter Exhibit 2: Sample State Letter Procedure for City Council meetings with other elected representatives Typically, the Council meets annually with its County, State and Federal representatives. These meetings are an important component of building legislative relationships and to share issues of importance to Palo Alto. These meetings should be scheduled at the appropriate times during the respective legislative calendars. At direction of Council, the other Elected Representative, or the City Manager, staff will schedule a meeting with the representative. The City Manager will seek agenda items from the Mayor and Council. Staff from the City Manager's Office will obtain agenda items from Departments and staff in the representative’s office. Agenda for the meeting and a potential list of topics will be published by City Clerk. Attachment B Page 13 California State Legislative Timeline 2012 Jan. 1 Statutes take effect Jan. 4 Legislature reconvenes Jan. 10 Budget must be submitted by Governor Jan. 13 Last day for policy committees to hear and report bills introduced in 2011 for referral to fiscal committees Jan. 20 Last day for any committee to hear and report to the Floor bills introduced in their house in 2011. Jan. 27 Last day to submit bill requests to the Office of Legislative Counsel. Jan. 31 Last day for each house to pass bills introduced in 2011 Feb. 24 Last day for bills to be introduced Mar. 29 Spring Recess begins upon adjournment Apr. 9 Legislature reconvenes from Spring Recess Apr. 27 Last day for policy committees to hear and report to fiscal committees fiscal bills introduced in their house May 11 Last day for policy committees to hear and report to the floor nonfiscal bills introduced in their house May 18 Last day for policy committees to meet prior to June 4 May 25 Last day for fiscal committees to hear and report to the floor bills introduced in their house. Last day for fiscal committees to meet prior to June 4. May 29 – June 1 Floor session only. No committee may meet for any purpose June 1 Last day to pass bills out of house of origin June 4 Committee meetings may resume June 15 Budget Bill must be passed by midnight June 28 Last day for a legislative measure to qualify for the Nov. 6 General Election ballot July 6 Last day for policy committees to hear and report bills. Summer Recess begins on adjournment, provided Budget Bill has been passed. Aug. 6 Legislature reconvenes from Summer Recess. Aug. 17 Last day for fiscal committees to meet and report bills to the Floor. Aug. 20 - 31 Floor session only. No committee may meet for any purpose. Aug. 24 Last day to amend on the Floor. Aug. 31 Last day for each house to pass bills. Final Recess begins on adjournment. Sept. 30 Last day for Governor to sign or veto bills passed by the Legislature before Sept. 1 and in the Governor’s possession on or after Sept. Attachment B Page 14 January 30, 2012 The Honorable Barbara Boxer United States Senate 112 Hart Senate Office Building Washington, DC 20510 Dear Chairman Boxer: As your Committee continues its work on a long-term surface transportation authorization, I write to urge you to support dedicated funding for bicycle and pedestrian infrastructure. Walking and cycling are critical modes of transportation for the City of Palo Alto, providing healthy and environmentally-friendly ways of getting around our community. In 2011, Palo Alto approved a comprehensive bicycle and pedestrian master plan to help the City become a leader in providing transportation choices to its citizens. Partnership with the federal government is one of many components of reaching the goals outlined in our plan. Today, programs such as Transportation Enhancements, Safe Routes to School, and Recreational Trails provide dedicated sources of funding for non-motorized transportation projects. As you know, the current version of MAP-21 proposes to eliminate these distinct pots of funding and force bicycle and pedestrian projects to compete against costly requirements such as environmental mitigation. While we appreciate your efforts to protect eligibility for bicycle and pedestrian projects, we are concerned that under the current bill these types of projects would rarely, if ever, be awarded funding. While efforts to save money and to refocus transportation programs toward national needs are laudable goals, eliminating dedicated funding for non-motorized projects achieves neither. Nationally, 12 percent of all trips are made by walking or bicycling, while these projects receive less than two percent of federal transportation funding. Walking and cycling facilities are cost-effective projects that enrich our communities, provide substantial economic benefits, and ease traffic congestion for drivers by taking cars off the roadway. Attachment B Page 15 As Chairman of the Environment and Public Works Committee and a leader in transportation and environmental issues, I ask that you work to protect dedicated funding for bicycle and pedestrian infrastructure. These programs will help the City of Palo Alto provide diverse transportation choices and ensure that all users of our transportation system have safe and reliable options. Sincerely, Yiaway Yeh, Mayor City of Palo Alto cc: Palo Alto City Council James Keene, City Manager – City of Palo Alto Curtis Williams, Director of Planning & Community Services – City of Palo Alto Mike Sartor, Director of Public Works – City of Palo Alto Attachment B Page 16 September 14, 2011 Governor Edmund G. Brown, Jr. State of California State Capitol Building Sacramento, CA 95814 RE: Request for Signature of SBx1 4 (Budget Committee) Dear Governor Brown: On behalf of the of Palo Alto I respectfully request your signature on SBx1 4. This measure amends and removes a provision included in AB X1 16, that would create a new maintenance of effort (MOE) requirement on all frontline municipal police services for cities to receive COPS (Citizens’ Option for Public Safety) funding. Given the current economic reality, Palo Alto has made reductions in police staffing. Palo Alto is especially concerned that this MOE requirement will leave us ineligible to receive COPS funding our community depends on unless we significantly cut other local services. This MOE language will tie the hands of cities in a time of considerable fiscal difficulty, when flexibility should be maximized so we can provide the highest level of services to our community with diminished resources. In many cities, like Palo Alto, returning frontline municipal police funding to the FY 2010- 11 levels will require offsetting cuts in other essential local services. The very real outcome is cities, including Palo Alto, will have little choice but to reject the COPS grants because the potential grant monies are insufficient to justify necessary cuts to other services. The MOE language is also unnecessary because the non-supplant language that has been in place for 15 years has ensured the grant monies for cities, counties, and police protection districts is used as intended. For these reasons, the City of Palo Alto respectfully requests your signature on SBx1 4, following your signature of ABx1 16, so that the harmful MOE provisions applicable to cities are removed. Attachment B Page 17 Thank you for your attention to this pressing issue. Please contact me at (650) 329-2571 if you have any questions about our concerns. Mayor Sid Espinosa City of Palo Alto Cc: Aaron Maguire, Deputy Legislative Secretary, Office of Governor Brown, via email (aaron.maguire@gov.ca.gov) Attachment C. Federal Legislative Priorities TO: James Keene, City Manager FROM: Steve Palmer and Thane Young DATE: March 21, 2012 SUBJECT: City of Palo Alto Federal Agenda with Policy and Services Committee Revisions _____________________________________________________________________________ Council Priorities In concert with the City Council’s five priorities for 2012, Van Scoyoc Associates (VSA) has developed a proposed federal agenda for the City Council’s consideration. We met with the Policy and Services Committee on March 13 and thoroughly discussed the federal agenda. The Committee recommended changes, which are incorporated into this memo. Once approved by Council, VSA is prepared to advocate on behalf of the City’s priorities. VSA also will help the City address other issues as they emerge and will advance the City’s concerns to the Congress and relevant federal agencies, while working to build key coalitions with organizations such as the National League of Cities. To further enhance the City’s efforts in Washington, DC, VSA will work with the City to more actively engage council members in advocacy efforts. The City will also establish linkage and coordination with businesses and other groups in the City, as appropriate, to advocate for common interests of the greater Palo Alto community. VSA also will continue to send regular reports on major legislative and policy initiatives of interest to the City. And, as discussed, we are committed to provide regular updates on status and strategy for City priorities in order to demonstrate progress and measurable achievements for the City’s engagement on federal issues. Washington’s Political Climate While it is anticipated that 2012, being an election year with a divided Congress, will produce little in the way of legislation, this year may surprise many. For example, after nearly five years and 23 extensions, Congress earlier this year passed a bill to fund airport development and the Federal Aviation Administration. The Senate has passed a surface transportation bill and the House is working on its version of the bill. The Senate is expected to tackle postal service reform and cyber security legislation, as well as a separate bill to enhance punishments for identity theft and other violations of data security. The President sent his proposed FY 2013 budget to the Congress in mid-February and hearings and committee markups on the budget blueprint will begin in the House this week. While the House and Senate are not expected to agree on a budget resolution, leaders in both bodies are committed to moving the annual appropriations bills in regular order, a process that has eluded Congress in recent years. Congressional action on the twelve appropriations bills will begin in April. Attachment C. Federal Legislative Priorities Work on a deficit reduction package continues, as a bipartisan, bicameral group of legislators is trying to gain consensus on a comprehensive long-term debt reduction bill that could be debated this spring. While enactment is unlikely early in the year, their work could set the stage for a major debt reduction deal later this year. Legislative activity will slow this summer, as the two parties focus on their respective nominating conventions in August and September. However, the post-election, lame duck session could be one of the busiest and most productive periods in recent memory, similar to the surprisingly productive lame duck session of Congress after the 2010 election. During this period numerous tax proposals could be under consideration as part of a deficit reduction bill, and major legislation that has awaited congressional action for quite some time--perhaps a multi- year farm bill--could pass the Congress and become law. VSA Advocacy on City Council Priorities Outlined below are some of the specific activities that VSA has been working on in support of the City Council’s priorities for 2012. City Finances and Federal Tax Proposals Preserve Tax Exempt Bonds. Support the implementation of the Mainstreet Fairness Tax Act (tax collection on internet sales.) Monitor the development of transient occupancy tax legislation in order to maintain investment in local hotels. Oppose the Wireless Tax Fairness Act, which preempts local revenue raising authority. The President has proposed various revisions to the tax code in his FY 2013 budget and a recent corporate tax reform proposal. However, the prospects for significant comprehensive change this year are rather remote. The President’s budget includes limitations on personal deductions for higher income earners, which would affect the marketability of municipal tax-exempt bonds. Closing this perceived loophole for investors who are in the higher tax brackets would require bond issuers to pay a higher interest rate to attract those same borrowers, increasing the cost to local governments for bond financing. VSA is convinced that this proposal will remain an issue for the foreseeable future, and the active engagement of public interest groups and the finance industry will be required in order to retain current law. Other tax proposals could gather momentum during the year, including the Main Street Fairness Tax Act, which is being supported by organizations such as the U.S. Conference of Mayors to replace revenue lost from federal budget cuts. This act would allow state and local governments to collect sales tax from online purchases. Other proposals requiring the City’s attention could include the Wireless Tax Fairness Act, which preempts local governments’ ability to assess fees on wireless communication devices as revenue continues to decrease from traditional land line excise taxes. Additionally, online travel service providers remain focused on securing legislation Attachment C. Federal Legislative Priorities to prohibit local governments from collecting transient occupancy taxes on hotel rooms booked through the internet. At the end of this calendar year, the President and Congress are expected to face a huge number of tax bills that could have significant impact on the economy. On that date, the Bush-era tax cuts are scheduled to expire, raising rates on investment income, estates and gifts, and earnings at all levels. The marriage penalty for joint filers will spring back to life, the value of the child credit will drop from $1,000 to $500, and the rate everyone pays on the first $8,700 of wages will jump from 10 percent to 15 percent. The Social Security payroll tax will pop back up to 6.2 percent from 4.2 percent under the deal recently approved by Congress. New Medicare taxes enacted as part of President Barack Obama's health care initiative will for the first time strike high-income households. Add to that the fact that on January 3, 2013, if Congress does nothing to cut the federal budget deficit by $100 billion, there will be an across-the-board “sequestration” of federal funds totaling nearly $100 billion. Half of that amount will be cut from defense programs and half from non- defense spending, if Congress does not cut that amount before that date. Emergency Preparedness Advocate for the continued funding of Fire Equipment grants to better equip local fire stations. Advocate for the continued funding of Staffing and Adequate Fire and Emergency Response (SAFER) grants. Support the Office of Emergency Services through continued funding of Emergency Management Performance grants. Support the Mobile Emergency Operations Center though the continued funding of Emergency Operations Centers. Emergency preparedness has not been spared from budget cuts. As you can see from the attached spreadsheet of federal programs important to the City, the FY 2013 budget request proposes modest cuts in grants funding for fire departments but deeper reductions for law enforcement programs, except for police hiring. Congress is likely to reduce spending for all these programs this year. For Department of Homeland Security (DHS) grants, local grant programs are being consolidated into one program, with more funding decisions being made at the state level. VSA will be advocating for the highest level of funding and greater flexibility at the local level for how these funds can be spent. Environmental Sustainability Strengthen support for the San Francisquito Creek Flood Control project. Monitor development of the South Bay Shoreline study being conducted by the U.S. Army Corps of Engineers to address coastal flooding concerns and consistency with the San Francisquito Creek flood control project. Monitor the development of climate adaption and climate change regulations and policies. Attachment C. Federal Legislative Priorities Oppose the residual risk mapping in the National Flood Insurance Program reauthorization. Monitor the development of energy sustainability legislation such as the Property Assessed Clean Energy (PACE) Protection Act. Monitor upcoming Environmental Protection Agency (EPA) stormwater regulations. Monitor upcoming EPA and Army Corps of Engineers Waters of the U.S. guidance. Work with City to identify a potential major secondary power supply for the City, with VSA advocating for federal funding. Flood protection along San Francisquito Creek remains a high priority for the City. VSA is working closely with the JPA to secure additional funding for the flood control study and to ensure that the local sponsor receives appropriate credit from the Army Corps of Engineers for the early construction phases of the project. Unfortunately, the President’s budget request did not include funding for the study; however, Congress can be expected to again provide additional funds in this year’s Energy and Water Development Appropriations bill for projects not included in the budget request. Additionally, VSA will be seeking to strike a provision from the Senate version of the National Flood Insurance Program reauthorization bill that would keep areas protected by levees on floodplain maps, requiring insurance coverage and building restricts regardless of the flood protection provided. This could be a disincentive for local residents to support an assessment for flood control improvement, knowing that flood insurance would still be required for the protected area. Legislation to overtly address climate change is highly unlikely. However, EPA will move ahead with regulations to control greenhouse gases. Energy assistance programs will experience significant cuts, but legislation to preserve the Property Assessed Clean Energy (PACE) program could advance, at least as an impetus to overturn by regulation a decision last year by the Federal Housing Finance Administration to discontinue the program on residences financed by federally- backed mortgages. Early this year EPA is expected to propose new regulations for stormwater management and guidance for determining waters of the United States. Both regulatory actions could impose significant new costs on the City. The stormwater rule is expected to require more on-site retention, pervious pavements, and plans to retrofit existing development. The guidance could introduce additional regulation of the City’s municipal separate storm sewer system, ditches, and wastewater or reuse facilities. Land Use and Transportation Planning Oppose the California High Speed Rail project. Support funding for Caltrain modernization. Monitor the development of further Transportation Investment Generating Economic Recovery (TIGER) grants in order to support the Highway 101 Pedestrian/Bicycle Overpass project and other transportation livability projects. Transfer the U.S. Postal Service building on Hamilton Avenue to the City for appropriate reuse. Attachment C. Federal Legislative Priorities This year, Congress is debating legislation to extend the funding of highway, transit, and rail programs for 2012-13. The key issue delaying the bill is the lack of revenues needed to finance these programs, as the Highway Trust Fund will run out of money later this year. The Senate is has completed work on its bill and the House would like to finish its bill by the end of March. While earmarks are still forbidden, the Department of Transportation (DOT) continues to have a number of competitive grants for highway and transit programs, serving as a possible source of funding for road, bridge, and bicycle/pedestrian projects. DOT also has $500 million in TIGER grant funds to award this year. While this grant program is extremely competitive, it is an opportunity for the City to seek funding for critical transportation projects. If the City applies for any of these grants, VSA will work with Senators Boxer and Feinstein, as well as Representative Eshoo to urge DOT to award grant funds to the City. High speed rail clings to life in Washington, as the President’s FY 2013 budget proposes $2.5 billion to continue a national program. Given opposition in the House of Representatives to this program, it is unlikely to garner much support in Congress. Regardless, it remains a priority of this Administration. We will continue to monitor and report to the City on any developments related to high speed rail and advocate for funding for Caltrain modernization. VSA will work with the City to seek conveyance of the Post Office building on Hamilton Avenue. VSA will provide information to the City on the USPS property disposal process and work with the relevant federal agencies and legislators as appropriate to transfer the property to the City for redevelopment. Community Collaboration for Youth Well Being Advocate for the continued funding of Community Oriented Policing Services grants in order to support the hiring of local law enforcement. Monitor the solicitation of Juvenile Justice Program grants in order to further support Project Safety Net and the Development Assets program. Advocate for continued funding of Community Development Block (CDBG) grants. Seek public safety funding for the proposed City Public Safety Building identified in the IBRC report. Community Oriented Policing is one of the few bright spots for local government in the budget request. While the final appropriation might not meet the 29 percent increase proposed by the President, Congress is expected to retain this program as a priority. Other law enforcement programs do not fare as well, and additional cuts can be expected in juvenile justice programs. CDBG will remain a priority for local government advocacy groups; however, this program will remain under the budget knife because it is widely perceived as federal assistance for strictly local government functions, over which federal agencies and Congress have little control. VSA will continue to work with the National League of Cities and other public interest groups to preserve current levels of funding for FY 2013. ### Information on President Obama's FY13 Budget for Palo Alto Program Agency FY12 President's Request FY12 Enacted FY13 President's Request Change ($)Change (%) Community Development Block Grant HUD 3.684 billion 3.3 billion 2.948 billion ‐352 million 10.6% HOME Investment Program HUD 1.673 billion 1 billion 1 billion 0 0 Choice Neighborhoods HUD 250 million 120 million 150 million +30 million 25% Byrne Justice Assistance Grants DOJ 519 million 470 million 430 million ‐40 million 8.5% State and Local Law Enforcement Assistance DOJ 1.173 billion 1.162 billion 781.5 million ‐380.5 million 33% Juvenile Justice Programs DOJ 280 million 262.5 million 245 million ‐17.5 million 6% COPS Hiring DOJ 669.5 million 198.5 million 257 million +58.5 million 29% Clean Water State Revolving Fund EPA 1.55 billion 1.468 billion 1.175 billion ‐293 million 20% Drinking Water State Revolving Fund EPA 990 million 919 million 850 million ‐69 million 7% High Speed Rail DOT 8.3 billion 0 2.5 billion 2.5 billion 100% National Infrastructure Investments (TIGER)DOT 2 billion 500 million 500 million 0 0 Assistance to Firefighter Grants DHS 250 million 337.5 million 335 million ‐2.5 million 0.07% Staffing for Adequate Fire & Emergency Response Grants DHS 420 million 337.5 million 335 million ‐2.5 million 0.07% General Investigations ACOE 104 million 125 million 102 million ‐23 million 18% Construction General ACOE 1.48 billion 1.694 billion 1.471 billion ‐223 million 13% Opeartions and Maintenance ACOE 2.314 billion 2.412 billion 2.398 billion ‐14 million 0.50% Attachment D. 2012 State Legislative Priorities 1 State of California On January 5, 2012, the Governor proposed a 2012-13 state spending plan with $92.6 billion of General Fund expenditures, $39.8 billion of spending from state special funds, and $5.0 billion of bond fund expenditures. In addition, the budget assumes that $73 billion of federal funds flow through state accounts in 2012-13. The cornerstone of the plan is its assumption that voters will approve the Governor’s proposed tax initiative in November 2012. The Governor’s Office estimates indicate that the state will end 2011-12 with a $4.1 billion deficit. Additionally, in 2012-13, increased costs are projected that will contribute to a shortfall of over $5 billion. Combined, the state faces an estimated budget problem of $9.2 billion to address prior to the state adopting the FY 2012-13 budget. With respect to the impact of the State’s 2011-12 budget on the City of Palo Alto the Sacramento Superior Court’s ruling in the Vehicle License Fee case is something to watch. Included in the final budget bill was SB 89, a budget trailer bill that passed during the final hours of the session without debate, which swept $130 million in city vehicle license fee funds. While there was a corresponding action that partially offset this loss by reinstating some restricted police service funding, the net negative impact to Palo Alto is approximately $200,000 annually. Also under the final 2011-12 budget bill signed by the Governor, if the State falls between $1 billion and $2 billion short in revenues, the budget calls for "trigger" cuts in higher education, social services and public safety. If the State falls more than $2 billion short, the State will cut K-12 schools and community colleges. Despite passage of the budget, the State’s finances remain in an unstable position. With California’s continuing structural budget deficit, estimated to be over $9 billion through June 2012, it will be very important that the City follow legislative proceedings closely and strongly hold an advocacy position that: opposes any unfunded or under-funded mandates, changes that affect the timing of payments to local governments and any legislation that reduces or erodes local revenues or local control; supports positive reform of the state fiscal structure and procedures, and; ensures local governments’ revenue sources are protected. For the City’s 2012 state legislative program and priority areas are: 1. Track League-supported bills and evaluate their application to the City. See the LOCC’s Summary of Existing Policy and Guiding Principles attached as Exhibit 1. 2. Track progress of ballot measures relating to pension reform, including the Governor’s 12 point pension reform plan and take appropriate positions on legislation. 3. Follow the progress of ballot measures intended to revise various State-level budget and governance reforms and determine impacts to City of Palo Alto. Attachment D. 2012 State Legislative Priorities 2 4. Monitor the development of the State budget and take positions to support or oppose proposals depending on the impact to Palo Alto, particularly as they relate to the taking or borrowing of local revenues. 5. For the 2012 California Legislative Session, closely monitor legislation that may be introduced that affects funding to local governments including, but not limited to Transit Occupancy Tax, Utility User Tax, and Gas Tax. 6. Coordinate with and support the Utilities Department Legislative Program, which preserves and enhances local flexibility in the control and oversight of matters impacting utility programs and rates for City customers. See Utilities 2012 Legislative Policy Guidelines included as Exhibit 2. 7. Coordinate with and support the Rail legislative program and advocate to monitor and support State rail legislative activity. See bills of interest that City’s rail advocate is tracking in Exhibit 3. 8. Advocate for the continued funding of local first responder public safety grants for police, fire, public works, utilities, emergency management, and related facilities and capabilities and continued funding of Emergency Management Performance Grants and the Urban Area Security Initiative (UASI). Monitor initiatives related to regional planning, radio interoperability, and data sharing. 9. Monitor statewide bag and plastic foam ban legislation, pharmaceutical collection legislation, and conservation pricing for refuse. 10. Work with the California Air Resources Board's on implementation of AB 32 (“Global Warming Solutions Act”). 11. Monitor SB375, Government Code 65-915 concerning concession and benefits, parcel tax exemption, and possible legislation concerning energy renewables and water policies. In addition, staff is utilizing a legislative tracking system in 2012 called Capitol Track. The platform enables the City to find and track bills of interest, stay up to date on important bills, store notes and positions on bills, and run customized reports. Included in Exhibit 3 is a list of the bills of interest that the City is tracking in coordination with Departments, the Utilities Legislative Program and the City’s Rail Advocate. Staff is actively monitoring the bills and receiving action alerts as the bills are being heard and modified in various Committees. The legislature is currently hearing over 650 bills in various Committees. Staff will regularly update this list and provide periodic reports to Council. Council may also at any time refer a bill for further staff analysis. Exhibit 1. League of California Summary of Existing Policy and Guiding Principles Exhibit 2. Utilities 2012 Legislative Policy Guidelines Exhibit 3. Bills of Interest Summary of Existing Policy and Guiding Principles MARCH 2012 The Summary of Existing Policy and Guiding Principles document is available in PDF format on our Web site: www.cacities.org/summary 1400 K Street 4th Floor Sacramento, CA 95814 916.658.8200 916.658.8240 Fax www.cacities.org VISION To be recognized and respected as the leading advocate for the common interests of California’s Cities. MISSION STATEMENT To expand and protect local control for cities through education and advocacy to enhance the quality of life for all Californians. WE BELIEVE • Local self-governance is the cornerstone of democracy. • Our strength lies in the unity of our diverse communities of interest. • In the involvement of all stakeholders in establishing goals and in solving problems. • In conducting the business of government with openness, respect, and civility. • The spirit of public service is what builds communities. • Open decision-making that is of the highest ethical standards honors the public trust. • Cities are the economic engine of California. • The vitality of cities is dependent upon their fiscal stability and local autonomy. • The active participation of all city officials increases the League’s effectiveness. • Focused advocacy and lobbying is most effective through partnerships and collaboration. • Well-informed city officials mean responsive, visionary leadership, and effective and efficient city operations. ABOUT THE LEAGUE Established in 1898, the League of California Cities is a member organization that represents California’s incorporated cities. The League strives to protect the local authority and autonomy of city government and help California’s cities effectively serve their residents. In addition to advocating on cities’ behalf at the state capitol, the League provides its members with professional development programs and information resources, conducts educational conferences and research, and publishes Western City magazine. To learn more about the League and how to be involved, see inside back cover. League of California Cities • www.cacities.org • March 20122 Administrative Services ...............................................................3 Brown Act/Public Records Act ..............................................................3 Political Reform Act of 1974 (PRA) ........................................................3 Governance, Transparency, and Ethics ..................................................3 Elections ................................................................................................6 Recall Elections .....................................................................................6 Elected Officials .....................................................................................6 Legal Issues: ..........................................................................................6 Smoking and Tobacco Control ..............................................................7 Community Services .....................................................................8 Arts, Cultural Resources, Historic Preservation and Activities .............8 Child Care ..............................................................................................8 Children .................................................................................................8 Park Bond Funds ...................................................................................8 Public Libraries ......................................................................................8 Seniors ...................................................................................................8 Healthy Cities ........................................................................................9 Employee Relations .......................................................................9 Labor Relations ......................................................................................9 Public Sector Pensions, Compensation and Other Post-Employment Benefits (OPEBs) ......................................10 Workers’ Compensation ......................................................................13 Other Employer and Employee Related Issues .................................................................................13 Federal Fair Labor Standards Act (FLSA) .............................................14 Succession Planning and Mentoring ...................................................14 Environmental Quality ...............................................................14 Air Quality ............................................................................................14 Climate Change ...................................................................................14 Hazardous Materials ...........................................................................15 Integrated Waste Management ..........................................................16 Electronic Waste .................................................................................17 Extended Producer Responsibility (EPR) .............................................17 Single-Use Carryout Bags ....................................................................17 Utilities ................................................................................................18 Electric Industry Restructuring ............................................................18 California Environmental Protection Act (CEQA) ................................21 Procedures and Notices ......................................................................21 Definition of a Project .........................................................................21 Significant Environmental Effect .........................................................22 Alternatives .........................................................................................22 Coastal Issues .....................................................................................22 Miscellaneous .....................................................................................22 Water Policy Guidelines .............................................................24 TABLE OF CONTENTS ..........................................................................24 I. CALIFORNIA WATER: GENERAL PRINCIPLES .................................26 II. WATER CONSERVATION ..............................................................26 III. WATER RECYCLING ......................................................................27 IV. WATER QUALITY ...........................................................................27 V. AREAS OF ORIGIN ........................................................................29 VI. WATER STORAGE .........................................................................29 VII. CONVEYANCE SYSTEMS ...............................................................29 VIII. FLOOD MANAGEMENT .................................................................30 IX. GROUNDWATER ...........................................................................31 X. FISH AND WILDLIFE .......................................................................31 XI. DRAINAGE ....................................................................................32 XII. RECREATION .................................................................................32 XIII. NEW TECHNOLOGY .......................................................................32 XIV. FINANCIAL CONSIDERATIONS ......................................................32 APPENDIX A ........................................................................................33 APPENDIX B .........................................................................................34 Housing, Community and Economic Development .........38 Planning and Zoning ............................................................................38 Housing Element .................................................................................39 Housing Finance .................................................................................39 Economic Development ......................................................................39 Eminent Domain ..................................................................................40 Rent Control ........................................................................................40 Subdivision Map Act ............................................................................40 Residential Care Facilities ...................................................................40 Development Fees ..............................................................................40 Annexation and Incorporation ............................................................40 Development Agreements ..................................................................41 Building Standards ..............................................................................41 Housing for Homeless .........................................................................41 Military Base Closure And Reuse ........................................................41 Mobile Home Regulation .....................................................................41 Sign Regulation ....................................................................................41 Principles for Smart Growth: ..............................................................41 Public Safety ..................................................................................43 Fire Services ........................................................................................43 Emergency Services ............................................................................43 Law Enforcement ................................................................................43 Emergency Communications Interoperability .....................................44 Wildland Urban Interface ....................................................................44 Nuisance Abatement ...........................................................................44 Violence ...............................................................................................44 Indian Gaming .....................................................................................44 Alcohol ...............................................................................................44 Marijuana Regulation ..........................................................................45 Graffiti ..................................................................................................45 Sex Offender Management .................................................................45 Corrections ..........................................................................................45 Miscellaneous .....................................................................................45 Revenue and Taxation ................................................................46 Cities and the League ..........................................................................46 Legislature or the Voters .....................................................................46 State Mandates ...................................................................................47 Additional Revenue .............................................................................47 Reduce Competition ............................................................................47 Funding for Counties ...........................................................................47 Regional Revenues ..............................................................................47 Federal Streamlined Sales and Use Tax Agreement (SSUTA) ..............48 Transportation, Communication and Public Works ........48 Transportation .....................................................................................48 Public Works ........................................................................................49 Vehicles ...............................................................................................49 Contracts .............................................................................................49 Telecommunications ...........................................................................49 Air Pollution .........................................................................................50 Table of Contents League of California Cities • www.cacities.org • March 2012 3 Administrative Services »The protection of the taxpayer’s interests over property and other acquisitions by a public agency. »The proper maintenance of the same attorney-client privilege enjoyed by the private sector. • The League supports legislation that includes less-than- a-quorum advisory committees within the definition of “legislative body” as defined in the Ralph M. Brown Act, if the committee is composed solely of members of the legislative body whose subject matter jurisdiction has cumulatively lasted two years or less. • The League supports alternative methods of meeting public notice requirements and enhancing them through the use of cost effective and innovative, technology friendly methods of communication. Political Reform Act of 1974 (PRA) • The League supports legislation and regulations that establish sound practices and principles related to political campaigns. Regulations and legislation that restrict or preempt local authority will be opposed. • The League should continue to explore opportunities to improve and streamline the Political Reform Act and its implementation through regulations. • The League supports an increase in the fee for the reproduction of statements required under the Political Reform Act from ten cents ($0.10) per page to twenty-five cents ($0.25) per page. • The League opposes legislation that would prohibit the use of public resources to commence an action to enjoin the operation of any law or constitutional amendment that was proposed by initiative petition and approved by the voters. Governance, Transparency, and Ethics • Public trust and confidence in government is essential to the vitality of a democratic system and is the reason ethics laws hold public officials to high standards. • Laws alone cannot foresee or prevent all actions that might diminish the public’s trust in governmental institutions. Transparency laws impose the minimum standards of conduct; to preserve public trust, public officials should aspire to conduct that exceeds minimum standards. • State revisions to laws governing local agency transparency and ethics should address material and documented inadequacies in those laws and have a reasonable relationship to resolving those problems. Administrative Services Scope of Responsibility The Committee on Administrative Services reviews election law, insurance and tort reform, open meeting law, (the Brown Act), the Public Records Act, the Political Reform Act and other conflict of interest laws, and the regulation of smoking and tobacco products. Summary of Existing Policy and Guiding Principles Open Meeting Law (Ralph M. Brown Act) & Open Access to Public Records (California Public Records Act) • The League supports legislation that recognizes the need to conduct the public’s business in public. To this end, the League supported and was a co-sponsor of the original Ralph M. Brown Act and supports legislation that conforms to the intent of the Act. The League also supports the regulation of the state and other public agencies to ensure conformance to the principles of the open meetings provision in the Ralph M. Brown Act. • The League opposes legislation claiming to enhance open and public meetings that in practice unnecessarily complicates the ability of a local governing body to properly communicate with the public and that discourages communications among governing body members through unproductive restrictions and inappropriate activities. • The League opposes legislation that would impose further unnecessary restrictions on the action that a governing body can take in closed sessions. • The League supports legislation that recognizes the realities of other constraints under which a local governing body must operate that necessitates judicious use of closed sessions, including: »The privacy rights granted to individuals under the U.S. and California constitutions. »The personnel issues that have a potential impact on an individual’s career and potential earning capacity and that raise serious liability questions for a local jurisdiction. League of California Cities • www.cacities.org • March 20124 Administrative Services Recall Elections • The League supports legislation that maintains the integrity of the recall process. • The League supports legislation that reduces the amount of recall abuse while improving, streamlining and ensuring that the public has full knowledge of the issues. Elected Officials • The League recognizes that elected and appointed officials receive threats, and have become the target of violence at their homes. The unauthorized publication of home addresses or telephone numbers in newspapers or similar periodicals, like publications on the Internet, is a threat to the security of public officials in their homes. The League supports legislation to extend or provide protection to elected and appointed officials from the unauthorized publication of their home addresses or telephone numbers in newspapers or similar periodicals. • The League supports requiring both elected local and state officials to maintain their place of residence in the jurisdiction they were elected to represent. Legal Issues: 1. Attorney-Client Privilege a. The League recognizes the special role of public agency attorneys in protecting the public interest, while at the same time maintaining appropriate and critical attorney-client confidentiality. The basis for this position is the belief that it is the public agency that is the public agency attorney’s client, not an individual public official. Thus, the League supports legislation that permits public agency attorneys to breach attorney-client confidentiality to disclose only very serious wrongdoings where internal corrective measures have failed or are futile; the disclosure is made to narrowly circumscribe regulatory agencies and the public agency attorney follows specific procedures. • In order to encourage and facilitate compliance with new transparency and ethics requirements, State laws should be internally consistent, avoid redundancy and be mindful of the practical challenges associated with implementation. • State officials and agencies should aspire to conform to the same level of transparency and ethical behavior as is imposed on local officials and agencies. • The League supports legislation that strengthens the ethics laws related to the Board of Administration (Board) for the California Public Employees’ Retirement System (CalPERS) including banning the ability for former Board members to do business with CalPERS. Elections • The League supports legislation that reduces any unnecessary and costly procedures for conducting a municipal election. The League opposes legislation that mandates costly and unnecessary procedures related to the election process. • The League supports providing city councils more flexibility to fill city council vacancies including extending the appointment period to fill a vacancy. • The League supports mail ballot elections. • The League supports the requirement that the intent and text of a local ballot measure is to be filed with the city clerk and published in a newspaper of general circulation with a filing fee. With regard to any land use measure, the League supports allowing the city council to refer it to the planning agency for a report on the measure’s effects. • The League supports legislation that facilitates newly sworn citizen’s voter registration. • The League supports permitting elections officials to administer voter information electronically so long as such a process remained voluntary to voters. • The League opposes any legislation or regulation that would prohibit legal action from being filed by any person(s) challenging the validity of the initiative petition or ordinance after the date of the election. • The League supports a process that would allow a city presented with an allegation of a violation of the California Voter Rights Act (CVRA) to address the allegation before any person may file a lawsuit related to the alleged violation. League of California Cities • www.cacities.org • March 2012 5 Administrative Services • The League supports and advocates that all 480 California cities be equitably included in the distribution of moneys that the state receives from the Tobacco Settlement Memorandum of Understanding, and believes that the moneys received by counties should benefit all cities within the county and that cities have input into the decision-making process. • The League supports legislation that requires tobacco retailers to obtain a state-issued license to sell tobacco products, as long as the legislation does not restrict or preempt the ability of cities to enact and enforce their own retail licensing programs and to enforce the state-wide licensing program. • The League also supports legislation designed to restrict the sale of illegal, counterfeit tobacco products. Note: The League will review new legislation to determine how it relates to existing League policies and guiding principles. In addition, because this document is updated every two years to include policies and guiding principles adopted by the League during the previous two years, there may be new, evolving policies under consideration or adopted by the League that are not reflected in the current version of this document. However, all policies adopted by the League Board of Directors or the League’s General Assembly become League policy and are binding on the League, regardless of when they are adopted and whether they appear in the current version of “Summary of Existing Policies and Guiding Principles.” 1. Government Liability and Tort Reform a. The League supports legislation that limits the exposure of local governments to lawsuits related to liability, including but not limited to such areas as unimproved natural conditions, design immunity, hazardous recreational activities, and injuries due to wild animals in public places. b. The League supports modifications to the joint liability laws that require the responsible parties in a civil action to pay only their fair share of judgment based on their relative responsibility. 1. Private Sector Liability a. The League will work closely with private sector representatives to evaluate the potential for League support of civil justice reform measures designed to improve the business climate in California. These measures should be evaluated on a case-by-case basis through the League policy process. b. The League supports legislation that enables cities to better prosecute unfair competition cases (Business and Professions Code 17200) in order to protect consumers and their residents, and that removes the 750,000 population and District Attorney approval for city attorney action in this area. The League opposes legislation that restricts cities from pursuing unfair competition cases beyond the restrictions in current law (2003). Smoking and Tobacco Control • The League supports legislation that establishes a statewide smoking and tobacco control standard, as long as such legislation does not preempt the ability of cities and counties to enact local laws that are stronger than the statewide standard or to regulate in areas not covered in the statewide standard. The League opposes legislation that would restrict such local authority. • The League supports legislation that limits the ability of minors to obtain tobacco and tobacco related products. League of California Cities • www.cacities.org • March 20126 Community Services • The League encourages cities to promote anti-bullying efforts across California as well as provide education and awareness to the general public about the imminent health and safety concerns for bullied children. Park Bond Funds • The League believes that any statewide park bond measure should include a component that provides per capita grants to cities and counties. The League opposes tying local eligibility for grant funds to non-park related issues, such as rent control or housing element status. Public Libraries • The League supports full funding of the Public Library Fund so that the State of California can fully fund its share of the program, understanding how libraries play an integral role in building and sustaining our communities. (Additional library- related policy is included in “Restructuring California’s Public Library Services,” the report of a joint task force co-sponsored by the League, CSAC, California Library Association and the California Association of Library Trustees and Commissioners.) • The League opposes legislation that requires public libraries to install and maintain computer software for use on computers in the library that prohibits access to obscene material to minors and other library patrons. The League believes that this issue is more appropriately addressed at the local level, in ways that meet local circumstances, and thus is an issue of local control. Seniors • The League encourages cities to recognize seniors as a valuable state resource and to develop and improve intergenerational programs and activities. The League supports legislation that would provide funding for side-by-side day care facilities for California’s youth, adults and seniors. Community Services Scope of Responsibility The Committee on Community Services reviews issues related to childcare, parks and recreation, libraries, cultural arts and community and human services programs. Summary of Existing Policy and Guiding Principles Arts, Cultural Resources, Historic Preservation and Activities • The League supports continued state funding that recognizes the important role of local arts activities and historic preservation in community life and how these cultural activities affect the social health and economic vitality of cities. Child Care • The League supports the creation of more affordable, innovative and quality parks and recreation and child care options for parents and concurrently encourages adherence to strict regulations and guidelines. Children • The League believes that the children of California must be recognized as our state’s most valuable resource. Their development, education and well-being are key to our state’s future. Further, it is essential that each child have the support needed to become a productive citizen in the world of the 21st Century. This involves supporting diverse before-and- after-school programs and creating stronger linkages between municipal services and school-based job training programs in order to produce more job placement opportunities. • The League promotes the development of a cooperative program with the goal to increase enrollment of California’s children in the Healthy Families Program. League of California Cities • www.cacities.org • March 2012 7 Employee Relations Employee Relations Scope of Responsibility The Committee on Employee Relations reviews issues related to the field of labor relations and human resource management. Summary of Existing Policy and Guiding Principles Labor Relations • The League supports legislation that specifically exempts local public agencies from the requirement to negotiate with any labor or special interest group about matters submitted to the voters of that jurisdiction as initiatives or Charter amendments. • The League supports efforts to promote, initiate and improve both public and private sector labor-management relations. • The League supports the long-held position of California courts that public employees cannot engage in strikes. • The League opposes any system of compulsory and binding interest arbitration, including state-mandates and the imposition of binding arbitration through the initiative process. No arbitrator board or other private person should have any control, direct or indirect, over local budgets, revenues or appropriations. • The League opposes any legislative action that requires the continuation of the terms of any Memorandum of Understanding (MOU) between a public agency and an employee organization until a successor MOU is agreed upon. • The League opposes any extension of the State Public Employment Relations Board jurisdiction over local public agency labor relations disputes and charges of unfair labor practices, and also opposes any interference or intervention in local collective bargaining by all labor-management relations councils or boards. • The League opposes state-mandated compulsory mediation or fact-finding processes that are not mutually agreed upon by the local public agency and its employee organizations, except as provided by local law. Healthy Cities • The League encourages California cities to help parents make healthy family choices; create healthy schools; provide access to healthy and affordable foods; and adopt city design and planning principles that promote physical activity. • The League encourages cities to involve youth, especially middle and high school students, with city health-related programs. • The League encourages cities to address the needs of an aging population through local and statewide planning, education and conference programming. • The League encourages cities to establish their own rules and regulations pertaining to community recreational activities. (AB 874) Note: The League will review new legislation to determine how it relates to existing League policies and guiding principles. In addition, because this document is updated every two years to include policies and guiding principles adopted by the League during the previous two years, there may be new, evolving policies under consideration or adopted by the League that are not reflected in the current version of this document. However, all policies adopted by the League Board of Directors or the League’s General Assembly become League policy and are binding on the League, regardless of when they are adopted and whether they appear in the current version of “Summary of Existing Policies and Guiding Principles.” League of California Cities • www.cacities.org • March 20128 Employee Relations n. The League supports reducing the long-term costs of public pension systems in California. o. The League supports reducing public retirement benefit fraud and increasing transparency of other post-employment benefits. p. The League supports full participation in the PERS Coalition (PERS/PAC) and its purpose of monitoring legislation, policies and action necessary to maintain or further the interests of contracting agencies. 2. California Public Employees’ Retirement System (CalPERS) a. The League supports an exemption for retired CalPERS employees, allowing them to work for CalPERS agency under contract or appointment by the local agency. b. The League supports broadening the definition of “compensation” to allow employers to offer additional years of service credit under specific conditions (golden handshake), and to extend the period in which local members can purchase public service credit for lay-off periods up to five years. c. The League supports certain limitations upon recoveries under judgments against public retirement systems, and supports a requirement that the CalPERS Board of Administration adjust or cancel the retirement allowance of any person convicted of making fraudulent benefit claims. d. The League supports actions by the Legislature and the CalPERS Board of Administration to establish a funding base within CalPERS that eliminates the cross- subsidy of pension costs among all employers in the CalPERS system. e. The League supports stabilizing employer contribution rates through actuarial principles that “smooth” the impact of volatile investment earnings. f. The League opposes declaring eligible for CalPERS benefits those part-time employees who have satisfied a minimum requirement of service, thereby defeating the intent and value of part-time employment. g. The League opposes requiring agencies to provide CalPERS information about employees who are not enrolled as members of CalPERS, such as part-time, seasonal, and temporary employees. Public Sector Pensions, Compensation and Other Post-Employment Benefits (OPEBs) 1. General Pension Principles a. The League supports any locally negotiated retirement system programs that are fair to the taxpayers and to the employees, and that provide long-term financial stability and sustainability. b. The League supports the establishment of fair benefits for public employees that are effective in recruiting and retaining a skilled, quality workforce. c. The League supports the establishment of public pension systems that can be defended to the taxpayer in a public debate. d. The League recognizes and supports the value of a dependable, sustainable, employer provided defined benefit plan for career employees; supplemented with other retirement options including personal savings such as a 457 Plan. e. The League supports pension portability across all public agencies to sustain a competent cadre of California public servants. f. The League supports pension cost sharing among employees and employers (taxpayers). g. The League supports the adoption of a second, lower tier of retirement benefits for newly hired employees. h. League supports prohibiting enhancing the second tier pension formulas for twenty years. i. League supports basing final retirement salary on the three highest years worked. j. The League supports calculating benefits only on base salary eliminating all “spiking.” No overtime, vacation or sick leave should be included in the pension calculation. k. The League supports meeting any retirement needs for part-time employees with alternatives to a defined benefit plan. l. The League supports the establishment of industrial disability retirement benefits that provide fair benefits for an injured employee when the injury is clearly linked to the employee’s job. m. The League opposes preemption of charter city authority over public pension systems. League of California Cities • www.cacities.org • March 2012 9 Employee Relations d. The League support having CalPERS provide a broader range of formula choices with lower benefit local options for all types of member classes. e. The League supports eliminating the purchase of “air time” (purchase of time not served). f. The League supports requiring employees to pay the employee’s share of CalPERS (e.g. 7-8% for miscellaneous employees and 8-9% for safety employees.) g. The League supports removing caps on the percentages employees can pay for the total cost of CalPERS programs. h. The League supports giving government agencies through the collective bargaining process the option to extend retirement ages for miscellaneous employees up to social security retirement ages. Seek minimum (floor) retirement age of 60 for miscellaneous employees and 55 for safety employees before earning full retirement benefits. i. The League supports prohibiting retroactive pension benefit increases. j. The League supports deleting the 1,000 hours rule for part-time employee mandatory enrollment in CalPERS. k. The League supports prohibiting employees and employers from taking contribution “holidays.” l. The League supports providing employers with a hybrid pension system option that caps the defined benefit CalPERS pension at an annual maximum retiree benefit equal to 70% of the retiring employee’s eligible base pay (determined by averaging the 3 highest year’s pay) and supplement the defined benefit plan with a risk managed CalPERS defined contribution plan. A defined contribution plan should integrate with a defined benefit plan not, as some pension revision plans suggest, substitute for it. m. The League supports eliminating the requirement that any negotiated changes in pension benefits under the Public Employees’ Retirement Law (PERL) be voted on twice by the affected employees. h. The League supports allowing local agencies the option to utilize excess CalPERS investment assets as determined exclusively by the affected local contracting agency, and as permitted by law, to provide employers the option to amend contracts if funds are depleted. i. The League opposes a requirement that all assets of an employer, including “excess assets,” be used in the determination of the employer contribution rate. j. The League supports expansion of the membership of the CalPERS Board of Administration to include one new member appointed by the League of California Cities. k. The League supports: (a) reducing all disability retirement payments for employees hired after a certain date; (b) imposing an earnings test for persons receiving industrial disability retirement; (c) requiring state departments to identify annual unemployment and disability payments in separate budget items; (d) requiring persons receiving disability retirement payments to obtain an annual medical examination; (e) prescribing a 60% cap on payments for either job- related or non-job-related disabilities; (f) eliminating the tax-exempt status of disability retirement payments; (g) requiring mandatory reinstatement for employees certified able to work by medical exam; and (h) discontinuing disability retirement payments if the employee rejects reinstatement. l. The League opposes requiring an employer to continue to pay the salary of a member while PERS makes its decision on the member’s application for involuntary disability retirement. 3. Pension Reform a. The League supports allowing employees to pick up a portion of the employers’ CalPERS costs up to CalPERS limits through negotiation to better share the normal cost of pensions. b. The League supports eliminating the CalPERS contract option of including Employer Paid Member Contributions (EPMC) in the calculation of an employee’s base pay for retirement purposes. c. The League supports repealing SB400/AB616 returning to more sustainable benefit formulas of 2% at 60 for miscellaneous employees and 2% at 55 for safety employees. League of California Cities • www.cacities.org • March 201210 Employee Relations b. The League supports the PERS Board in developing programs to reduce the rate of medical premium increases and to control medical insurance costs, and urges repeal of current law requiring that contributions toward retiree medical benefits equal the contributions made toward the medical benefits of active employees. c. The League supports legislation permitting cities to establish their contributions toward retiree health premiums through the labor relations negotiating process, including: (a) multi-tiered contribution levels; (b) vesting eligibility other than PERS retirement eligibility; (c) prorated contribution based on age and/ or length of service; and (d) different contributions for active and retired employees. d. The League supports addressing Other Post- Employment Benefits (OPEBs), such as retiree health care through comprehensive reform measures. 5. Compensation Principles a. The League believes that the standard practice for establishing employee compensation should be reasonably based upon market conditions, transparent, and tied to experience, benefits and salaries at comparable agencies. Compensation should also be based on job requirements, the complexity of both the make-up of the city organization and community, the leadership needed, labor market conditions, and the organization’s ability to pay. b. Because the salaries and benefits public employees receive impact public perception, ethical considerations about what is just and fair must be taken into account when determining compensation. c. State revisions to laws governing local agency retirements, benefits and compensation should address material and documented inadequacies in those laws and have a reasonable relationship to those problems. d. In order to encourage and facilitate compliance with new benefits, compensation and retirement laws, State laws and regulations should be internally consistent, avoid redundancy and be mindful of the practical challenges associated with implementation. e. Public retirement systems programs should be fair to taxpayers and employees, and provide long-term financial stability and sustainability. n. The League supports, to the extent permitted by federal and state law, a well-designed State Constitutional Amendment or comprehensive legislative overhaul is needed for prospective retirement formula reductions and incremental retirement age increases for current employees to guarantee their already accrued benefits, while making the plan sustainable, affordable and market competitive on a going-forward basis. The amendment should also include a risk-managed CalPERS defined contribution plan for public agencies. o. The League supports restructuring the CalPERS Board of Administration to substantially increase in independent public members (preferably with financial expertise) to ensure greater representation of tax payer interests with regard to public pension decisions. p. The League supports setting uniform standards and definitions for disability benefits and evaluating the level of benefit that is considered as tax exempt. The tax exempt portion should either be eliminated or allowed on a proportional basis to the severity of the disability. q. If the above reforms prove unfeasible or ineffective, the League supports considering a standard public employee pension system where one benefit level is offered to every employee as a further option to restore sustainability to CalPERS. r. The League supports developing a program with the State to ensure that pension programs offered by localities are fully transparent, and that professional actuarial evaluations of unfunded components of other post-retirement benefits (OPEBs) and pension plans are completed. s. The League supports, to the extent permitted by federal and state law, prohibiting payment of pension benefits to a public employee convicted of a felony related to fraudulently enhancing those benefits. 4. Other Post-Employment Benefits (OPEBs) Including Retiree Healthcare a. The League urges the PERS Board, and would support legislation to require the PERS Board, to contract with health maintenance organizations (HMOs) or fee-for- service plans, licensed and doing business in other states, to provide health benefits for retired employees who choose to reside outside of California. League of California Cities • www.cacities.org • March 2012 11 Employee Relations • The League supports the special protection of elected officials, county public defenders, public figures and public employees acting in their official capacity against threats of death or serious bodily injury. • The League opposes a mandatory Social Security tax on any public sector employees or employers by the federal government. The League’s position is that such a tax will result in significantly increased labor costs for many of California’s local governments and would adversely affect public sector employers and the retirement benefits of many public sector employees. • The League opposes any state or federal mandate of benefits on local employees, including, but not limited to, domestic partner benefits and veterans’ preferences. The employee benefit structure within local government should be developed locally through the local government collective bargaining process and that process should be strictly honored by the state Legislature and the Governor. • The League opposes legislation making it a misdemeanor to disclose peace officer personnel records and citizen complaint records, as well as prohibiting the use of documents or information obtained in violation of this procedure in any administrative proceeding against a peace officer, and any measure that makes it more difficult to discipline the misconduct of police officers. • The League opposes undermining the confidentiality of personnel matters by making peace officer discipline records public. • The League opposes the mandated inclusion of governmental entities for Occupational Safety and Health Agency (OSHA) violations without appropriate compensation for the mandates. • The League opposes extending the filing dates for Fair Employment and Housing Commission (FEHC) charges from one to two years, and opposes permitting the FEHC to provide affirmative or prospective relief to prevent the recurrence of an unlawful practice. • The League opposes prohibiting employers from requesting that an applicant disclose information or use for employment related decisions information concerning a criminal conviction that was expunged or judicially ordered sealed. f. Transparency of retirement benefits and other pension obligations ensures the public is informed about the fiscal realities local agencies face as they relate to pension obligations. Workers’ Compensation • The League supports the principles of narrow causation and definition of injury and supports requiring the employee to prove by clear and convincing evidence that sudden or extraordinary employment conditions were the predominant causes for the injury. • The League supports existing workers’ compensation laws to be liberally construed only after an injury is deemed “specific” and consists of serious physical or bodily harm. • The League supports the cost containment of medical expenses for workers’ compensation claims. • The League opposes regulations or legislation that would require increased employer medical costs for workers’ compensation. • The League opposes legislation that would permit an employee to use more than one legal process in regard to disability claims (i.e., ADA, workers’ compensation, DFEH), or any other erosion of the “exclusive remedy” principle as it relates to disability claims covered under workers’ compensation. • The League supports reforming the way temporary disability (TD) benefits are awarded by increasing the amount of time an injured worker receives TD benefits while at the same time eliminating the disincentive to return to work. Other Employer and Employee Related Issues • The League supports a consistent standard for hostile sexual harassment cases by adopting the federal “reasonable victim” standards in matters before the FEHC. The League supports changing the standard from the “viewpoint of a reasonable victim” to a standard utilizing the “perception of reasonable persons of the same gender as the claimant,” in order to shift from a gender-based sexual harassment standard to a plaintiff-based standard. • The League supports efforts to conform the California Family Care Leave Laws to the federal Family and Medical Leave Act (FMLA) laws. League of California Cities • www.cacities.org • March 201212 Environmental Quality Environmental Quality Scope of Responsibility The Committee on Environmental Quality reviews issues related to air, water and water quality, climate change, CEQA, integrated waste management, hazardous materials, coastal issues, and utilities. Summary of Existing Policy and Guiding Principles Air Quality • The League supports inclusion of city officials on the governing boards of air districts and opposes efforts to delete such city representation. • The League believes cities should have the authority to establish local air quality standards and programs that are stricter than state and federal standards. The League opposes efforts to restrict such authority. • The League opposes legislation redirecting the funds authorized by Health and Safety Code Section 44223, which are currently used by local governments for locally based air quality programs. • The League opposes air quality legislation that restricts the land use authority of cities. • The League supports the requirement that both public and private diesel garbage trucks be retrofitted to reduce the amount of particulate matter pollution emitted from the trucks. (See also Integrated Waste Management Section below.) Climate Change • The League recognizes that climate change is both immediate and long term, with the potential for profound environmental, social and economic impacts to the planet and to California. Federal Fair Labor Standards Act (FLSA) • The League supports federal legislation to modify inappropriate sections of the FLSA as it relates to local governments, including, but not limited to, the administrative and professional exemptions, salary tests and the definition of hours worked. The League supports the position that the FLSA was inappropriately applied to state and local governments through court decisions and was never designed to regulate public sector employment. The waste of state and local resources in litigation argues for repeal of the FLSA as it relates to local government. Succession Planning and Mentoring • The League supports local government succession planning and mentoring programs, and encourages each League Department to actively discuss and support efforts to establish a program, and to utilize the Personnel and Employee Relations Department’s Mentoring Video as a model. The League recognizes that public sector employees will retire from service within the next five to ten years in critical positions such as department heads, managers, and supervisors. The League also recognizes that public sector employers are faced with the absence of a comprehensive, succession-planning strategy, which will impact all departments in the public sector from public safety to miscellaneous employees. Note: The League will review new legislation to determine how it relates to existing League policies and guiding principles. In addition, because this document is updated every two years to include policies and guiding principles adopted by the League during the previous two years, there may be new, evolving policies under consideration or adopted by the League that are not reflected in the current version of this document. However, all policies adopted by the League Board of Directors or the League’s General Assembly become League policy and are binding on the League, regardless of when they are adopted and whether they appear in the current version of “Summary of Existing Policies and Guiding Principles.” League of California Cities • www.cacities.org • March 2012 13 Environmental Quality 8. Coordinated Planning. State policy should encourage and provide incentive for cities to coordinate and share planning information with neighboring cities, counties, and other governmental entities so that there are agreed upon regional blueprints and strategies for dealing with greenhouse gas emissions. 9. Water Supply for New Development. Encourage exchange of water supply information between state and local agencies, including information on the impacts of climate change on state and local water supplies. 10. Recycles Content and Green Purchasing Policies. Encourage the adoption and implementation of recycled content and green procurement policies, if fitness and quality are equal, including the adoption of an Environmental Management System and authorization of local agencies to consider criteria other than only cost in awarding contracts for services. Hazardous Materials • The League supports the ability of local governments to enact local standards or regulations that are stronger than those enacted at the state and federal level. To this end, where the city fire department is the lead agency for regulating and enforcing hazardous materials laws, the League supports the provisions of existing law that permit a local fire department to adopt stronger local requirements, as long as it complies with specified procedures to enact such stronger local standards. The League opposes legislation or regulations that restrict such authority. • The League supports efforts to streamline and coordinate hazardous materials regulation among various levels of government, including city fire and county environmental health departments. The League supports the ability of city fire departments to be administrating agencies for any of the major hazardous materials laws or to be the lead agency (the Certified Unified Program Agency) under the SB 1082 program, and opposes legislation or regulations to restrict such authority. • The League opposes any efforts to restrict the ability of cities to issue building or other permits it is now authorized to issue relative to hazardous materials laws. • The League opposes any proposals that would preempt the ability of a city to deny a land use permit or restrict its ability to issue a conditional use permit for the siting of a hazardous waste facility. • Through the Global Warming Solutions Act of 2006 (AB 32 (Nuñez) Chapter 488, Statutes of 2006) California has embarked on a plan that requires the reduction of greenhouse gas emissions to 1990 levels by 2020. Although uncertainty remains about the pace, distribution and magnitude of the effects of climate change, the League recognizes the need for immediate actions to mitigate the sources of greenhouse gas emissions and has adopted the following principles: 1. Action Plans for Mitigating Greenhouse Gas Emissions. Encourage local governments to complete an inventory of greenhouse gas emissions, set appropriate reduction targets, and create greenhouse gas emission reduction action plans. 2. Smart Growth. Consistent with the League’s Smart Growth policies, encourage the adoption of land use policies designed to reduce sprawl, preserve open space, and create healthy, vibrant, and sustainable communities. 3. Green Technology Investment Assistance. Support tax credits, grants, loans and other incentives to assist the public, businesses, and local agencies that invest in energy efficient equipment and technology, and fuel efficient, low emission vehicles. 4. Energy and Water Conservation and Efficiency. Encourage energy efficiency, water efficiency, and sustainable building practices in new and existing public, residential and commercial buildings and facilities. This may include using the U.S. Green Building Council’s LEED program or similar systems. 5. Increase the Use of Clean Alternative Energy. Promote the use and purchase of clean alternative energy through the development of renewable energy resources, recovery of landfill methane for energy production and waste-to- energy technologies. 6. Reduction of Vehicle Emissions in Public Agency Fleets. Support the reduction of vehicle emissions through increased fuel efficiency, use of appropriate alternative fueled vehicles, and/or low emission vehicles in public agency fleets. Encourage the use of appropriate alternative fueled vehicles, and/or low emission vehicles in private fleets. 7. Climate Change Impacts. Encourage all levels of government to share information to prepare for climate change impacts. League of California Cities • www.cacities.org • March 201214 Environmental Quality Integrated Waste Management • The League supports continued efforts by local agencies to meet the 25% and 50% recycling and diversion provisions of the Integrated Waste Management Act of 1989 (AB 939) and believes that decisions on how to achieve those requirements are best determined at the local level, rather than by state agencies. The League believes that those jurisdictions that have made a good faith effort to comply with the requirements of AB 939 should not be subject to enforcement penalties. The League opposes the repeal of AB 939, but supports continued efforts to streamline its provisions and to assist in compliance. • The League believes that green waste used as alternative daily cover (ADC) should be eligible for limited AB 939 credit, as long as the ADC meets performance and health and safety criteria established by the California Integrated Waste Management Board (CIWMB), now the California Department of Resources, Recovery & Recycling (Cal Recycle). • The League opposes efforts to dismantle the CIWMB and transfer its functions to a department. This position is based upon the need to have public access to decision makers outside of the administrative process, similar to access that Waste Board members currently provide. The League supports inclusion of a designated local government representative on the CIWMB. • The League continues to support legislation to provide changes to AB 939 (the California Integrated Waste Management Act) that will: »Place more emphasis on implementation of waste diversion programs and less strict mathematical accounting; »Require Cal Recycle to evaluate the level of accuracy of the existing system the board uses to measure jurisdictions’ achievement of the waste diversion requirements of state law and develop appropriate policies, in consultation with local jurisdictions, to account for any inaccuracies in the system; »Encourage the development of non-burn transformation technologies by providing full diversion credit for the waste that jurisdictions send to non-burn transformation facilities; »Require the board to expand its market development activities, including providing more funding for research and development of markets for recyclable materials; and • The League opposes legislation that mandates that cities post information on the Internet regarding adoption, amendment or repeal of hazardous materials ordinances. However, the League does not object to legislation that makes such posting voluntary. The League supports the following principles related to Brownfields Revitalization: 1. The League supports state and federal legislation that would create additional fiscal resources and options to restore and develop urban and industrial brownfields contaminated by hazardous materials. The League also supports creative state and federal efforts to encourage revitalization and better use of abandoned urban and industrial brownfields, as long as local governments retain existing land use authority. 2. Cities should have the ultimate say on whether a proposed brownfield remediation project is consistent with local land use policy. The proposed use of a project (i.e., parking garage, business park, residential development) should be consistent with a city’s general plan and land use authority. 3. The clean-up level of a project should be based on its proposed use (i.e., parking garage, as oppose to residential development). 4. Mechanisms, such as restrictive covenants of deed restrictions, need to be in place to ensure that if a future use for a property is different than that which was proposed when the site was cleaned up, that the clean- up levels be re-evaluated and additional remediation be required before the new use can be approved. 5. Local agencies do not have the desire or generally the expertise to do the technical evaluation for site assessment and remediation plans. Appropriate state agencies should have that responsibility. 6. If a property owner plans to develop the site, then the owner should be required to do the necessary site assessment and clean up. League of California Cities • www.cacities.org • March 2012 15 Environmental Quality Electronic Waste • The League supports legislation implementing the concept of manufacturer responsibility for electronic waste (e-waste). This includes, but is not limited to, encouraging or providing incentives for e-waste recycling, requiring manufacturers of computer, cathode -ray tube (CRT) and other electronic products considered universal wastes, to operate or fund comprehensive, extended producer responsibility programs. Such programs should require products to be sustainably designed and labeled, offer financial incentives to consumers to properly dispose e-wastes, encourage recycling, reuse and collection programs by manufacturers, incentives to consumers to redeem or recycle e-waste, and fund a convenient collection infrastructure. • The League supports statewide and manufacturer education programs to educate consumers about e-waste and recycling efforts. • The League supports an advance disposal fee on computer and other electronic products in order to fund such manufacturer responsibility programs and local collection and recycling programs. • The League supports national efforts to address the e-waste problem. Extended Producer Responsibility (EPR) • The League supports legislation implementing producer responsibility. This includes, but is not limited to, mandating or providing incentives including funding for comprehensive producer responsibility programs for hazardous and universal wastes and products and packaging for which disposal or recycling is problematic for local governments. Single-Use Carryout Bags • The League supports in concept legislation that charges a fee for all consumers for single-use carryout bags at the point of sale; however, the League does not have a position on the amount of the fee except that is should be set to modify consumer behavior. • Cities should be eligible for moneys generated from any fee placed upon single-use carryout bags, provided those dollars are used by the city to mitigate the effects of single- use carryout bags on the storm water, solid waste diversion, visitor education and awareness, and water quality in the city. Any application for funding provided to cities by single- use carryout bag fees should be streamlined, simple and not overly burdensome. »Require Cal Recycle to staff its existing regional offices with personnel that can assist jurisdictions in carrying out the requirements of the act. • The League supports legislation and other efforts to increase the markets for recycled materials, including advance disposal fees, minimum content laws, and recycling market development zones. The League opposes legislation that requires local governments to adopt refuse fees based upon variable can rates. • The League supports efforts to strengthen curbside recycling programs and opposes efforts to weaken such programs. The League supports legislation to expand the container types included in the AB 2020-bottle bill program. • The League supports the right of cities under existing law to be designated as Local Enforcement Agencies for solid waste facility permitting, inspection and enforcement, and opposes legislation to restrict this authority or transfer it to state agencies. • The League opposes legislation that would preempt local land use authority over solid waste facilities, would restrict the ability of a city to issue a land use permit for a solid waste facility or would restrict the ability of a city to condition such facilities through the conditional use permit process. • The League does not oppose legislation that assesses fees on solid waste that is disposed of out of state, as long as the fees reflect the pro-rata portion of in-state costs. • The League opposes legislation that would authorize the Director of Cal Recycle to consider landfill capacity as a reason for denying concurrence of a solid waste facility permit and also opposes legislation that would prohibit a public agency from being certified as a Local Enforcement Agency if the public agency is also an operator of a solid waste facility. • The League opposes legislation that would authorize the Director of Cal Recycle to consider environmental justice as a basis for concurring or denying a solid waste facility permit. The League has adopted the policy that issues of environmental justice are best addressed at the local level through the local land use and public hearing process and through existing federal and state policy. • While the League supports the retrofit of public and private diesel fueled garbage trucks to reduce particulate matter air pollution (see Air Quality section), the League opposes funding such retrofits in a way that would either interfere with the existing franchise relationship between local governments and haulers or would impose a surcharge on landfills. League of California Cities • www.cacities.org • March 201216 Environmental Quality 4. Exit fees should not be charged to newly annexed municipal utility territory that was never served by an IOU (so called “greenfields”). 5. In addition, the League believes photovoltaic systems should be completely exempt from any type of exit fee. Electric Industry Restructuring • The League supports restructuring of the electricity services industry, provided it meets the following criteria: 1. Support the Concept. The League of California Cities supports the concept of electric industry restructuring if it results in lower electricity rates that continue permanently into the future. The League does not support or oppose any specific form of restructuring and believes the program ultimately implemented must satisfactorily address the adopted criteria listed below. Any new industry restructure should be based on a thorough economic analysis of the full costs and potential benefits of the alternatives under consideration. 2. Equitable Benefits. Any restructuring program should result in all ratepayers directly sharing in the benefits equitably. 3. Municipal Utilities. Any restructuring program should maintain the concept of municipal utilities. No restructuring proposal should abridge the existing authority of municipal utilities to operate or abridge the ability of cities to form municipal utilities in the future. 4. Franchise Authority. Cities should continue to have the authority to issue franchises and any program should be at least revenue neutral relative to revenue currently received from franchises. 5. Aggregation. Under any restructuring program agreed upon by the PUC or the Legislature, cities should have the opportunity to become aggregators for municipal operations or the community at large. As an aggregator, a city would be able to combine the electric loads of various users and negotiate the purchase of electricity for those users. 6. Stranded Investments. The problem of stranded investments should be resolved in a way that keeps investors, ratepayers, and generators financially whole. Any policy to deal with stranded investments for large energy producers (i.e., nuclear power) should be applicable to all other producers (i.e., independent power producers). • The League supports CEQA exemptions for single-use carryout bag bans or a programmatic EIR. • The League opposes any bill that would preempt local governments from individually banning or placing a fee on single-use carryout bags distributed within the city. Utilities • The League supports the constitutional right of municipal utilities to operate outside the jurisdiction of the California Public Utilities Commission (PUC) and opposes any legislation that would erode the ability of municipal utilities to operate, or place them under PUC control. • The League opposes legislation that dictates the mix of generating sources (i.e., hydro, coal, biomass, wind, etc.) used by municipal utilities. • The League opposes any legislation that interferes with local utility rate setting authority and opposes any legislation that restricts the ability of a city to transfer revenue from a utility (or other enterprise activity) to the city’s general fund. • The League is neutral on legislation requiring municipal electric utilities to include a “renewable portfolio standard” (RPS) in their mix of sources of electricity, as long as the requirement is the same as that which applies to investor- owned utilities. The League opposes legislation that requires municipal electric utilities to meet an RPS that is stronger than that applied to investor owned utilities. • The following principles will guide the League’s position regarding exit fees to avoid cost shifting for newly formed municipal utilities or extensions of existing municipal utilities: 1. A mechanism or venue other than the PUC should be used to determine and impose the exit fees in order to prevent PUC jurisdiction over municipal utilities. For example, exit fees might be best evaluated and incorporated by the courts as part of eminent domain and the condemnation proceeding used when a city wishes to take over the IOU’s distribution system. 2. The League does not object to fair exit fees to avoid cost shifting for customers that were actually served by an investor-owned utility. 3. Exit fees should consist of payments of a fair share of the DWR bond costs, a fair portion of the IOU under collections and a fair share of the remaining amount of the CTC (competition transition charge, left over from AB 1890). League of California Cities • www.cacities.org • March 2012 17 Environmental Quality »The League believes energy prices should encourage conservation and reward those who reduce energy use (i.e., tiered rates). »The League is concerned about the impacts of escalating energy prices on low income residents and small businesses. The League supports energy pricing structures and other mechanisms to soften the impacts on this segment of our community. »In designing rates, the state should be aware of the operational constraints of some businesses and thus their potential inability to take advantage of conservation pricing. Thus, the state should provide other incentives to conserve to businesses that cannot take advantage of other options. 4. Conservation in City Facilities. Support legislation that provides direct funding for conservation and demand reduction projects in city facilities. »Work to obtain the greatest level of funding for local governments, and work with all authors and the Administration in crafting legislation that will be most effective and beneficial to local governments. 5. Siting Energy Facilities– Incentives to Local Governments. Funding should be available to cities to streamline the siting process at the local level. »Eligible projects to receive incentive payments would not only cover new electricity generating facilities, but also projects to expand existing generation facilities, to replace them with more efficient facilities, or to build renewable projects, including photovoltaics, fuel cells or cogeneration. »In order to stimulate the development of these facilities, it will be necessary to provide additional long-term community benefits that the local government can demonstrate to its citizens. »Any city or county that approves siting of a privately developed generating facility should receive 100% of the property tax of that facility. To stimulate development of projects such as cogeneration facilities, the standby charges for the facility should be waived. »The state should provide additional financial assistance to cities and counties for such projects, which could include the cost of transmission line extension. 7. Wheeling. Any program should facilitate the wheeling of electricity between generators and users. 8. Alternative Sources. Consistent with existing League policy that supports the development of alternative energy sources, any restructuring program should incorporate support for alternative energy in order to enhance the mix of energy sources available in California, both for environmental and strategic energy security reasons. 9. Biomass. The unique problems of the biomass industry, as they relate to California’s solid waste infrastructure, should be fairly resolved in any deregulation program. 10. Social and Environmental Impacts. Consistent with existing League policy, California should not abandon its energy programs that provide social and environmental benefits. • In addition to those policy guidelines, the League agrees that cities that are aggregators should be required to follow the same consumer protection standards as other aggregators, that participation in aggregation by an electricity user should be voluntary, and that cities should have the opportunity to serve as aggregators for their municipal operations or for those residential or commercial customers who wish to participate in a city-sponsored aggregation program. • Finally, the League believes that any federal action in the area of electricity restructuring must not preempt legislation and actions in states that choose to restructure their utility industry if such federal action relates to state and local government home rule authority. This includes authority related to regulation of rights-of-way, franchises, taxing utilities and services, or to aggregate. In response to the energy crisis of 2001, the League adopted the following principles related to energy: 1. Land Use Control. Local control over land use should be inviolate. The League will oppose legislation that restricts local land use control beyond that which is already in existing law. 2. Municipal Utilities. The autonomy of municipal utilities should not be eroded. The League will oppose any legislation that harms municipal utilities. 3. Energy Prices and Rates. The League is concerned about the impacts of escalating energy prices on the overall economic health of our state, including city budgets. Although at this time the League will not get involved in individual bills dealing with technical aspects of pricing, the League believes that any solution to address the short and long term energy price situation should meet several key criteria. League of California Cities • www.cacities.org • March 201218 Environmental Quality »The League should not support legislation that would give up the existing, limited authority of cities to regulate cable and telecommunications companies as a trade-off to make it easier to form a municipal electric utility. 9. Interruptible Rates. The League should take no position on legislation dealing with changes to interruptible rates, but should watch the subject carefully. »The League should comment on legislation, as appropriate, to express concern that resolution of the issue should seek equity in how it handles classes of ratepayers and communities. Legislation should take into consideration economic gains previously made by customers on interruptible rates and should provide assistance for those caught in extreme situations. 10. Rotating Outages – Exemptions. The League should not get directly involved in bills dealing with which type of customers are exempt from rotating block outages and should not take a position on these bills. However, the League should work with police and fire chiefs to ensure that police and fire facilities are appropriately protected either legislatively or administratively, if proposals move ahead to expand the range of exempted facilities. »The League should seek legislative or administrative resolution giving advance notification to those businesses, such as some agricultural businesses, that use hazardous materials that could pose a danger if the plant is not shut down properly. »The League should seek grant or loan funding for essential services (i.e., police/fire, water/waste water) to purchase new or replace existing backup generators that are more energy efficient and less polluting. 11. Wholesale Regional Price Caps – Federal Legislation. The League should not take a position on federal legislation to give the Secretary of Energy authority to impose regional wholesale price caps on electricity. This is a mixed bag and the League should stay out of the issue. 12. Price Gouging by Electricity Suppliers. The League should send a letter to the Governor and Attorney General supporting their ongoing efforts to determine whether wholesale market abuse occurred and asking that appropriate action be taken to remedy the problem if illegal activity occurred. »The League will work to ensure that there are no negative impacts on municipal utilities from efforts to streamline energy facility siting. 6. Power Plant Siting – Other Issues. Support legislation that increases the threshold at which a city is the lead permitting agency for an energy facility from 50 to 100 MW (or above). Oppose legislation that decreases this threshold. »Take no position on proposals to streamline the facility approval process, except to suggest appropriate revisions to reflect technical comments from city experts on local government review and comment- related provisions. »Explore exempting cities with municipal utilities completely from the Energy Commission review process for all power plants proposed within their jurisdiction, regardless of the size of the facility (i.e., the municipal utility city would have lead agency authority, regardless of the size of the facility). 7. Environmental Regulation of Power Plants. The League should not get directly involved in legislative discussions and should not take a position on legislation to relax, suspend, or eliminate environmental regulation, with several exceptions. »If environmental standards are relaxed, suspended, or eliminated, the League should seek legislation to ensure that cities do not bear the burden of meeting the shortfall in environmental protection. For example, suspended or reduced waste discharge requirements for a power plant may result in increased hot or salty cooling water discharged from a power plant into a bay or stream. Publicly owned treatment works should not be required to meet a higher discharge level to offset the power plant discharge or fined as an indirect result of the increased water pollution that would result. Similar arguments can be made for air pollution burdens. There should be some sunset included for environmental waivers for re-powering of existing facilities and all new plants should be required to meet the BACT (best available control technology) standard. 8. Public Power Options. Support all bills that enhance the public power options available to cities and counties. »Condition support and/or sponsorship upon the correct language being written. Work with municipal utilities and others to ensure the provisions are drafted properly. League of California Cities • www.cacities.org • March 2012 19 Environmental Quality • Timelines for CEQA Contracts. The League supports eliminating subdivision (b) of Public Resources Code Section 21151.5, which mandates the timeline for entering into CEQA contracts. • Arbitration of Disputes. The League supports adding an arbitration option to the requirement that each county over 200,000 designate a “CEQA judge.” Among the issues that will need further refinement are whether an alternative dispute resolution process should be a condition precedent to litigation, whether the alternative dispute resolution process would be binding on participants, and how to limit the alternative dispute resolution process to CEQA adequacy issues rather than community mitigation issues. • Bounty Hunter Limitations. The League supports discouraging lawsuits that have little merit by eliminating the availability of section 1094.5 of the code of civil procedure fee recovery to petitioners or by authorizing cities to collect their fees and costs where they prevail. • Recirculation Standards. The League supports raising the threshold for recirculation of EIRs so that only new “significant unavoidable impacts” would necessitate recirculation. • Basis for Statements of Overriding Considerations. The League supports clarifying that the basis for Statements of Overriding Considerations is information contained in the record. • Compliance with Local Public Notice Requirements. The League supports legislation to require all projects proposed by state or local public agencies, including universities, community colleges, schools, counties, cities, and special districts, to comply with the identical local public notice requirements that would be applicable to projects sponsored by private developers in the jurisdiction where the project is located. Definition of a Project • Effect on the Environment. The League supports narrowing the definition of “project” to prevent CEQA lawsuits on non- environmental matters. • School Operations Exemption. The League supports exempting any school closure or student transfers from CEQA. • Categorical Exemption for Nonindustrial Infill Projects. The League supports expanding categorical exemptions to include development projects in urbanized areas that are consistent with general plans, zoning and cumulative impact projections analyzed in a Master EIR. Such projects should be limited infill and nonindustrial. California Environmental Protection Act (CEQA) Procedures and Notices • Fair Argument Test. The League strongly opposes the elimination of the fair argument test as the threshold for determining whether to prepare an Environmental Impact Report (EIR). There are a number of other reforms that will reduce CEQA’s complexity while preserving the fair argument test’s role as a planning tool. These include funding for Master EIRs and eliminating attorneys fees for petitioners. • Master EIR Funding. The League strongly supports the development of a funding source for Master EIRs. Both of the proposals contained in the Little Hoover Commission report would meet the needs of cities. • Exemption for Modified Project Renewals. The League opposes exempting the renewal or reissuance of a permit, license, or other entitlement where there is a change in the project. • Centralized Responsible Agency Notification. The League opposes shifting the responsibility to notify responsible agencies from the lead agency to the State Clearing House. • Centralized Responsible Agency Notification. The League opposes making identification of Responsible Agencies at the Notice of Preparation stage by other than the Lead Agency (e.g., the Office of Planning and Research) conclusive so that agencies not identified would be barred from later commenting on projects. • Responsible Agency Documentation. The League supports requiring that Responsible Agency comments be supported by specific referenced documentation. • Substitution of Environmental Impact Statements. The League opposes allowing an Environmental Impact Statement to be substituted for an Environmental Impact Report in any situation other than military base closures because the National Environmental Policy Act does not contain CEQA’s duty to mitigate. • Duty to Respond to Comments. The League opposes shielding lead agencies from responding to comments received more than 30 days after a Notice of Preparation (NOP) or received verbally. League of California Cities • www.cacities.org • March 201220 Environmental Quality Coastal Issues • The League opposes legislation that would permit the state to impose conditions on Local Coastal Plans developed by cities and counties. • The League supports efforts to curb frivolous appeals to local coastal decisions. • The League supports the Federal Coastal Protection Act, which prohibits additional offshore development through the year 2002. This position was based, in part, on concern about the impacts to on-shore support facilities and services by offshore development activities. • The League opposes legislation that grants authority to the Coastal Commission that is inconsistent, duplicative and overlapping with the authority of other regulatory agencies, such as regional water quality control boards or other agencies, or that grants the Coastal Commission authority outside the coastal zone. • The League affirms its commitment to local control by requesting the Coastal Commission to defer to the elected officials of a City with respect to choices in the implementation of a Local Coastal Plan that complies with the requirements of state law and regulation. Miscellaneous • The League encourages cities to consider the Ahwahnee Water Principles for Resource-Efficient Land Use when making future land use decisions. (www.lgc.org/ahwahnee/ h20_principles.html) • The League encourages state agencies to provide leadership in developing voluntary, model statewide residential green building guidelines that will provide information to local jurisdictions on how to evaluate and use different green building strategies. Additionally, the League encourages cities to adopt voluntary residential green building guidelines as a reference guide, to evaluate available green building programs and adopt those best suited for their communities, and to explore incentives to encourage green building by private developers of residential construction projects. • The League supports the right of cities to serve as lead agencies for the purposes of the Surface Mining and Reclamation Act (SMARA). Significant Environmental Effect • Significance Thresholds. The League opposes the creation of a new mandate requiring each city to develop boilerplate significance thresholds. The League also opposes a single statewide set of standards for determining significance at the local level. Instead, the League supports requiring that each EIR contain significance thresholds formally adopted by the lead agency for the project. • Consideration of Socio-Economic Factors. The League opposes adding social, economic, recreational or other factors to be considered when analyzing the significance of environmental impacts. • Indirect Effects. The League opposes amending the definition of effects to eliminate the analysis of indirect and cumulative environmental effects. • Cumulative Effects. The League supports the elimination of EIRs for projects with solely cumulatively significant impacts where the impact has been addressed by a comprehensive plan that identifies specific mitigation measures. • Cumulative Effects. The League opposes exempting projects that are subject to their own subsequent environmental review from consideration as a reasonably foreseeable future project when analyzing cumulative impacts. Alternatives • Alternative Site Requirement. The League supports eliminating the alternative site requirement for all private projects. • Level of Detail. The League supports requiring that projects of statewide, regional or area-wide significance describe at least two feasible project alternatives with a level of detail equal to the proposed project. • No Project Alternative. The League opposes the elimination of the “no project alternative.” • Environmental Impact Report (EIR).The League opposes the elimination of the fair argument test as the threshold for determining whether to prepare an Environmental Impact Report (EIR). The League strongly supports the development of a funding source for Master EIRs. The League supports adding an arbitration option to the requirement that each county over 200,000 population designate a “CEQA judge.” League of California Cities • www.cacities.org • March 2012 21 Environmental Quality Note: The League will review new legislation to determine how it relates to existing League policies and guiding principles. In addition, because this document is updated every two years to include policies and guiding principles adopted by the League during the previous two years, there may be new, evolving policies under consideration or adopted by the League that are not reflected in the current version of this document. However, all policies adopted by the League Board of Directors or the League’s General Assembly become League policy and are binding on the League, regardless of when they are adopted and whether they appear in the current version of “Summary of Existing Policies and Guiding Principles.” • Consistent with policy adopted by the National League of Cities, the League believes the appropriate venue for addressing the issue of “regulatory takings” is within the evolving judicial interpretations of the Fifth Amendment of the U.S. Constitution. »The League opposes any federal or state regulation, statute or constitutional amendment which would place restrictions on federal, state and local government actions regulating private property or requiring additional compensation beyond the continually evolving judicial interpretation of the Fifth Amendment of the U.S. Constitution. »The League will oppose any legislation that includes such a provision, regardless of what else is included in the legislation (i.e., legislation that designates a listing of an endangered species as a “regulatory taking.”). • The League supports flexibility for state and local governments to enact environmental and other standards or mandates that are stronger than the federal standards. However, the League reserves the right to question or oppose stronger standards on the merits. The League also opposes legislation that prohibits state and local governments from enacting stricter standards. • The League supports the ability of local governments to voluntarily develop and approve species habitat plans for their communities, in conjunction with willing property owners. The League opposes requiring local governments to amend their general plans to include species habitat plans developed by others but not approved by the local government. • The League supports legislation and regulation that authorizes the land application of biosolids that meet specified statewide health and safety standards. The League supports legislation that permits enactment of stronger local ordinances only if they are based upon protecting public health and safety and good science. The League opposes legislation that preempts outright stronger local ordinances, regardless if they are based on protecting public health and safety and good science. • The League supports legislation that imposes Sinclair-type fees on products in order to fund the cost of prevention or mitigation of the pollution or environmental and health impacts of such products. The League opposes legislation that would restrict the imposition of such fees at the state or local levels. League of California Cities • www.cacities.org • March 201222 Environmental Quality League of California Cities Water Policy Guidelines February 2010 TABLE OF CONTENTS I. CALIFORNIA WATER: GENERAL PRINCIPLES...................................................24 II. WATER CONSERVATION .................................................................................24 III. WATER RECYCLING ........................................................................................25 IV. WATER QUALITY .............................................................................................25 V. AREAS OF ORIGIN ..........................................................................................27 VI. WATER STORAGE ...........................................................................................27 VII. CONVEYANCE SYSTEMS ................................................................................27 VIII. FLOOD MANAGEMENT...................................................................................28 IX. GROUNDWATER .............................................................................................29 X. FISH AND WILDLIFE ........................................................................................29 XI. DRAINAGE ......................................................................................................30 XII. RECREATION ..................................................................................................30 XIII. NEW TECHNOLOGY ........................................................................................30 XIV. FINANCIAL CONSIDERATIONS ........................................................................30 XV. APPENDIX A: WATER QUALITY IMPROVEMENT INITIATIVE (2008) .......................................31 XVI. APPENDIX B: GLOSSARY ................................................................................32 League of California Cities • www.cacities.org • March 2012 23 Environmental Quality In 2008, the League formed a new Water Task Force to consider updates and revisions to the Water Guidelines the League drafted and adopted 20 years earlier. The League’s 16 Regional Divisions designated voting members; but membership on the Task Force was open to all interested city officials, and meetings were open to all interested parties. The Task Force first met in Sacramento in April 2009 and organized three working groups (Water Use, Water Supply and Water Discharges). Members of the working groups held numerous meetings by conference call over the next two months. Subsequent meetings of the full Task Force were held in June and September 2009 before the revised Guidelines were submitted to the League policy committees in January 2010, for review and approval. The Guidelines were formally approved by the League board of directors in February 2010. The California Water Guidelines are designed to be used by policy makers at all levels of government in developing future water policy for the state of California. The League encourages city, county and state officials, as well as representatives from other organizations, to review the guidelines as water policies and programs are developed. Introduction The California Water Guidelines were first adopted by the League of California Cities (The League) in 1988. The League and the County Supervisors Association of California (CSAC) developed the guidelines. Together, at the time, the two organizations represented 58 counties and 449 cities. Much has changed in the realm of water policy in the more than 20 years that have passed since the Guidelines were first adopted. The number of counties has remained at 58, but California has gained an additional 31 cities and the population of the state has increased to more than 38 million people, creating increased demands on water supply. There is growing recognition that there are better ways of managing the flow of water within California’s many watersheds and through the Delta, to prevent harmful environmental impacts while still ensuring a reliable supply of water to its citizens. Climate change is seen as having an increasingly important impact on water supply and water quality. Water shortages place renewed emphasis on the importance of water reclamation, water recycling and other means of nurturing and protecting an essential resource. In 2003, the League board created the League Water Quality Task Force to identify and evaluate waste water and storm water regulatory issues of concern to cities and to recommend steps that the League should take to address those concerns. The Task Force drafted new League policy on water quality and the League board of directors adopted its report on July 18, 2003. League of California Cities • www.cacities.org • March 201224 Environmental Quality II. WATER CONSERVATION 1. Statewide Goal. The League supports the development of a statewide goal to reduce water use by 20% by 2020 through the implementation of fair and equitable measures consistent with these principles. 2. Statewide Effort. Accomplishing water conservation and water use efficiency goals will require statewide action by all water users, including residential, commercial, industrial and agricultural water users, local and regional planning agencies, state and federal agencies, chambers of commerce, and business, commercial and industrial professional and trade associations. 3. Comprehensive Solutions. Water conservation and water use efficiency must be part of a comprehensive solution that includes local resource development and infrastructure improvements, including storage and conveyance, as part of a statewide system that promotes economic and environmental sustainability. 4. Monitoring, Reporting, and Accountability. The League supports the implementation of programs to assure prudent measurement and monitoring of water use to provide accountability and transparency toward the accomplishment of water conservation and water use efficiency goals. 5. Protect Water Rights. Implementation of water conservation and water use efficiency programs must be consistent with existing state law in that the act of conservation cannot be allowed to undermine the water rights of the entities implementing the water conservation or water use efficiency program, or interfere with existing water conservation or water use efficiency projects. 6. One Size Does Not Fit All. Water conservation and water use efficiency programs must have the flexibility to adjust to widely varying local circumstances recognizing that one size does not fit all. The League encourages each city to develop its own ordinance outlining its conservation plan. 7. Urban Water Conservation and Water Use Efficiency. In urban areas, the League advocates for the implementation of residential and commercial retrofit programs, innovative pricing strategies, water efficient landscaping, including implementation of urban Best Management Practices (BMPs). 8. Agricultural Water Use Efficiency. In agricultural areas, the League advocates incentive based programs. I. CALIFORNIA WATER: GENERAL PRINCIPLES 1. Water needs are projected to increase significantly in the future. While water is a renewable resource, it is also a finite one. 2. The League supports the development of additional groundwater and surface water storage, including proposed surface storage projects now under study if they are determined to be feasible, including but not limited to: environmentally, economically, and geographically relating to point of origin. Appropriate funding sources could include, but are not limited to user fees, bonds and federal funding. 3. Local, state and federal agencies should prepare plans for short-term water emergencies as well as long-term cooperative water management plans and policies, such as the Integrated Regional Water Management Plan (IRWMP) process. 4. All water development projects must be economically, environmentally and scientifically sound. 5. Critical California water issues cannot be solved without the cooperation of the state and federal governments. Communication and cooperation among policy groups with emphasis on finding statewide consensus is supported. 6. Adequate water quality requirements for wastewater discharge into surface water and groundwater to safeguard public health and protect beneficial uses should be supported. Beneficial water quality is fundamental to the health and welfare of California and all of its citizens. 7. The long-term viability of rivers and streams for instream uses such as fishery habitat, recreation and aesthetics must be protected. 8. The League encourages all cities to work with counties, water agencies, and special districts to facilitate water conservation, recycling and reuse efforts. 9. The League supports state water policy that allows undertaking aggressive water conservation and water use efficiency while preserving, and not diminishing, public and constitutional water rights. 10. The League supports land use as an important strategy for water supply and water quality benefits. League of California Cities • www.cacities.org • March 2012 25 Environmental Quality 2. Water Board Reforms a. The League generally supports the concept of water board reform. b. Any water board reforms should recognize the inherent differences between cities and regions in California. c. Water board reform should recognize the symbiotic relationship between regional water quality control boards and local governments. d. The League supports the retention of designated local government representatives on the regional boards and inclusion of a designated local government representative on the State Water board. e. The League supports streamlining the board process, including delegating permit authority to the executive officers, with rights of appeal, and giving greater authority to the State Water board over regional board policies and decisions. 3. Basin Plan Updates a. The League supports the option of local agencies developing funding for basin plan updates. b. The League supports comprehensive updates to the basin plans that recognize the unique and varied nature of stormwater. Basin plans need to recognize the unique and varied nature of stormwater, both wet weather and dry weather runoff. c. Basin plan updates should comply with the Porter- Cologne requirements to recognize economic impacts, local drainage conditions and scientific consensus, including source control and atmospheric deposition strategies. 4. National Pollutant Discharge Elimination System (NPDES) Permits a. The League supports reform of the States Water board’s administration of the federal NPDES program. b. The League encourages the water boards to issue permits that are reasonably achievable, based on the unique conditions of a city or region. c. The League supports regulations and legislation that promotes watershed management, that appropriately spreads the responsibility for clean water beyond the requirements that apply to point-source dischargers, municipal storm drain systems and publically-owned treatment works. III. WATER RECYCLING 1. Wherever feasible, water recycling should be practiced in urban, industrial and agricultural sectors. This includes increasing the use of recycled water over 2002 levels by at least one million acre-feet/year (afy) by 2020 and by at least two million afy by 2030. 2. Potable water should include as much use of reclaimed water and water conservation by 2030 as possible. 3. Increased recycling, reuse and other refinements in water management practices should be included in all water supply programs. IV. WATER QUALITY 1. General a. The League supports the development of objectives and standards to assure high quality water throughout California. Surface and groundwater should be protected from contamination. b. The League supports the development of economic protocols and guidelines to assist local governments and water boards in determining reasonably achievable, cost effective and environmentally sound regulations. c. The League supports the ability of cities to enact discharge and water quality requirements or standards that are stricter than state or federal standards, and opposes efforts to restrict such authority. d. When addressing contamination in a water body, water boards should place priority emphasis on clean- up strategies targeting sources of pollution, rather than in stream or end-of-pipe treatment. e. The League encourages water boards to address cross-media pollution of water, including but not limited to the problems of atmospheric deposition of water pollutants. f. The League encourages all state offices, departments and boards to comply with state policy for water quality control, including compliance with the Basin Plans. League of California Cities • www.cacities.org • March 201226 Environmental Quality d. Mandatory Minimum Penalty (MMP) • The League supports legislation to modify the MMP provision of the existing law to make them fair and equitable for local governments. This would include eliminating the provisions relied upon to compound penalties for single violations and providing economic hardship exemption for small cities (50,000 in population or less) where there has been no significant adverse impacts on the public or the environment from the alleged violation. e. Economic Analysis • The League supports legislation to develop economic protocols and guidelines to assist local government and the water boards in determining reasonably achievable, cost effective and environmentally sound regulations, as outlined in Porter-Cologne Sections 13000 and 13241. f. Basin Plans • The League supports legislation allowing local agencies to participate in funding basin plan updates. g. Water Softeners • The League supports the right for cities to enact ordinances that restrict the use of water softeners. h. Local Discharge Prohibitions • The League supports legislation that would enable cities to adopt ordinances that limit or regulate industrial discharges into local sewers and storm drains, based on limits in municipal discharge permits. 7. General Water Quality Guidelines a. Protection and maintenance of objectives and standards to assure high quality water throughout California is essential. Beneficial uses of surface and groundwater should be protected from contamination, even when treatment methods are available to meet drinking water standards. b. Local, state and federal governments and the private sector should provide for the safe management of hazardous materials, including mining leachates, to avoid pollution and degradation of both surface water and groundwater. d. The League generally opposes legislation that requires the use of numeric limits in waste discharge permits, especially in storm water permits, because of the difficulties in meeting them, problems with exceeding them, and the cost and potential enforcement impacts. e. The League supports development of a standard definition of “maximum extent practicable.” 5. Total Maximum Daily Load (TMDL) a. The League supports development of reasonably achievable, environmentally sound and cost-effective TMDL’s based on monitoring and sound science and addressing local water conditions. b. Although the League is supportive of local agency development of TMDL funding, greater emphasis needs to be given to state and federal funding of the TMDL program, including providing increased funding to local government for implementation. c. The League supports implementation of TMDLs through alternatives to the NPDES permits, consistent with the Clean Water Act and policy, such as Memorandums of Agreement between local governments and the water boards. 6. Water Quality Recommended Legislation/ Policies a. Ex-Parte Communication • The League supports public access to decision makers, including during the time that new proposed permits and permit terms are being proposed. The League also supports access to pending permitees, outside of the administrative process. b. Maximum Extent Practicable (MEP) • The League supports legislation to define MEP. c. Safe Harbor • The League supports legislation that provides immunity from fines or third-party litigation for a local government that is in compliance with maximum extent practicable iterative best management practices requirements and NPDES stormwater permit conditions. League of California Cities • www.cacities.org • March 2012 27 Environmental Quality VI. WATER STORAGE 1. The League believes that California needs to develop additional water storage and therefore believes that the construction and retention of economically feasible and environmentally sound flood control, storage and multi- use projects that will meet present and future needs should be supported. 2. The development of additional surface facilities and use of groundwater basins to store surface water that is surplus to that needed to maintain State Water Resource Control Board (SWRCB) Bay-Delta estuary water quality standards should be supported. 3. The League encourages project developers to mitigate the negative impacts of water storage projects on fishery and wildlife resources, adjacent lands, water quality and recreation. VII. CONVEYANCE SYSTEMS 1. Statewide a. Conveyance facilities including, but not limited to, the Sacramento River, whether man-made or natural, should be constructed and/or operated to minimize seepage and erosion problems and, where practicable, to restore or maintain river functions and to protect previously existing riparian habitats. They should be constructed to mitigate these problems and other adverse impacts on adjacent lands. b. The owner or purveyor of the water conveyance system should be responsible for correcting adverse impacts, i.e., erosion, seepage and sediment problems upon waterways, either anthropogenic or natural. c. Environmentally-sound methods of erosion-control should be encouraged along river banks to protect adjacent lands from flood or other erosive flows provided any adverse impacts on fish and wildlife habitat are mitigated. d. Local distribution systems should be interconnected with regional systems, where feasible, to assist in maximizing the use of local ground and surface waters during droughts and emergencies. e. Solving the water quality, levee stability and fishery problems in the Sacramento-San Joaquin Delta is a primary step in developing any plan to meet the state’s water needs. c. Adequate research funding to determine appropriate public health standards for water should be supported. d. Additional research and education in the application and use of herbicides and pesticides and alternatives to their usage as well as research to reduce industrial and household hazardous wastes should be supported. e. The importance of water quality of bays, estuaries, groundwater, and other bodies of water important to municipalities, including the problem of salt water intrusion, should be recognized. V. AREAS OF ORIGIN 1. Ultimate reasonable and beneficial water needs of all areas of origin should be assured. State law should continue to provide that only water surplus to the reasonable and beneficial needs of the areas of origin may be exported. The League supports preserving the principle of protecting the water rights of areas of origin. 2. Areas of origin protections should apply to all water sources, including groundwater. 3. Reasonable and beneficial water needs of the areas of origin should include instream needs or uses, including recreation and sediment flushing. 4. Areas of origin should be afforded financial assistance, such as the Davis-Grunsky type bonds, in developing new water facilities. 5. Projects that export water from areas of origin should not increase the cost of new local water development projects. 6. Those features of new projects that are required by state and/or federal agencies to enhance area of origin recreation, fish, wildlife, and water quality should be the financial responsibility of the state and/or federal government. 7. New policies and programs should not undermine or alter the water rights of the entities implementing the policies or programs. League of California Cities • www.cacities.org • March 201228 Environmental Quality h. Standards balancing the protection of all beneficial uses of Bay-Delta waters, including water flowing into or exported from the Delta, must be adopted by the SWRCB and enforced to protect the environmental health of the Bay-Delta system. Pollution from point and non-point sources into the Bay and Delta shall be controlled as stringently as practicable. i. Programs and facilities to assure safe drinking water for importing regions dependent on the Delta should be supported. j. The SWRCB should assure the continued monitoring for contaminants in the Delta. VIII. FLOOD MANAGEMENT 1. The League believes that our citizens have a reasonable expectation that their federal, state and local governments will work to protect them from flooding. 2. The League believes that flood protection and management is a statewide issue, involving flood infrastructure issues related to levees, urban/suburban/ rural creeks, streams and rivers, and alluvial fans. 3. The League believes that it is important to recognize that levee failures in the Sacramento-San Joaquin River Delta have water quality, water supply and economic impacts that may have statewide effects beyond the local or regional levee break situation. 4. Flood control issues require cooperative planning, evaluation and solutions that utilize a regional and statewide perspective, such as the state IRWMP process. 5. In assessing problems and proposing solutions, it is important to consider the differences between infill development and new, greenfield development. 6. The public safety and health of California citizens and the economic health of California communities and our state depend upon good flood protection. This includes the potentially devastating impacts of floods on homes and businesses. 7. The League supports efforts to improve communication, cooperation and better coordinated planning between different government agencies involved in flood management. The League believes that there must be a genuine partnership between state and local agencies in addressing flood control issues. f. The League acknowledges that the use of the Sacramento River as a conveyance system presents problems of erosion and seepage which must be addressed in the operation of existing projects and the design of future projects. 2. Delta a. Conveyance of water across the Delta should be through existing channels wherever possible. Delta transfer system improvements should be constructed and operated so as to minimize or, if possible, eliminate reverse flows in the lower San Joaquin River. b. Construction of Delta transfer facilities should not proceed until the Department of Fish and Game and the Department of Water Resources have entered into an agreement to implement measures to offset the State Water Project’s impacts on the Delta fisheries and other ecological concerns in the Bay-Delta estuary, which are shown to be adversely affected by the proposed transfer facilities. c. Implementation of an integrated program of rehabilitation and maintenance of Delta levees involving federal, state, local and user interests for the purposes of protecting the islands, waterways and other features including, but not limited to, highways, railways, water conduits, natural gas storage, etc., should be supported. Costs and responsibilities should be fairly allocated among beneficiaries of such a program. d. Until an integrated Delta levee program is initiated, the Delta levee maintenance program, (by former California Sen. Howard Way), California Water Code Sections 12980-12991, should be funded and implemented. e. Any Delta governance and/or water management structure should include local government representation from the Delta region. f. When assessing conveyance projects, the League encourages cities to consider the guidelines outlined in other areas of this document. g. Protection, as well as enhancement where practicable, of Delta water quality, while providing adequate future supplies for all segments of the state, should be required. League of California Cities • www.cacities.org • March 2012 29 Environmental Quality 4. An active state and federal role in cleaning up contaminated groundwater basins should be supported. 5. State and federal involvement, if requested, in developing groundwater management plans should include technical assistance for defining the characteristics of groundwater resources. 6. Financial assistance from state and federal governments should be made available to requesting local agencies to develop and implement their groundwater management plans. 7. Planned, joint use of surface and groundwater and development of incentives for such conjunctive use for increased efficiency should be encouraged. 8. Early development of a cost-sharing formula among all beneficiaries to fund groundwater replenishment projects should be supported. 9. The importation of additional supplemental water, consistent with Section VI Conveyance Systems, as one means of eliminating groundwater overdraft in the critically overdrafted basins should be supported. X. FISH AND WILDLIFE 1. Protection, maintenance, and restoration of fish and wildlife habitat and resources and their beneficial uses including recreational and commercial uses, should be supported. Where feasible, enhancement of fish and wildlife habitats should be provided. 2. Water projects shall mitigate for adverse impacts on fish and wildlife resources. Mitigation measure shall be on-site, if feasible; otherwise, as close as practicable to the area of adverse impact. Where practicable, such projects should incorporate programs designed to eliminate unnecessary barriers or impediments to fish migration, to stabilize areas of streambank erosion, to increase spawning and rearing habitat for fish, and to maintain riparian vegetation for cover and temperature control. 3. Protection and restoration of documented fish habitat should be supported. 8. The League believes cities must ask the right questions and have the means to obtain accurate information prior to approving development in floodplains. This involves educating elected officials and staff about whether their city is located in a floodplain, the local flood control infrastructure, the agencies that are responsible for providing flood protection, the status of levees and other structures that provide flood protection, emergency response and evacuation protocols, and how their city would be impacted by flooding. 9. The League believes that city officials should understand that a 100-year flood zone does not mean a low, once-in- 100-years risk of flooding. The designation actually means that there is a 1 percent chance of flooding in any given year. This translates to a 26 percent chance of flooding over the life of a typical 30-year mortgage. 10. The League supports a 200-year flood standard for cities in the Sacramento-San Joaquin and Central Valleys. 11. The League generally endorses the recommendations of the State’s Flood Control Task Force, especially those recommendations involved in updating the CEQA Checklist and General Plan Guidelines and building codes. 12. The State, Army Corps of Engineers (ACOE) and Federal Emergency Management Agency (FEMA) should work collaboratively with state and local governments regarding flood issues. IX. GROUNDWATER 1. The SWRCB, through the regulatory process of its regional boards, should ensure the highest possible quality and safety of groundwater by preventing contamination from point and non-point sources, especially for usable water. 2. Local drilling, sealing and abandonment ordinances for water supply and monitoring wells for the protection of groundwater and public health should be supported. 3. The principle that local entities within groundwater basins (i.e., cities, counties, special districts, and the regional water quality control boards) working cooperatively should be responsible for and involved in developing and implementing basin wide groundwater, basin management plans should be supported. The plans should include, but not be limited to: a) protecting groundwater quality; b) identifying means to correct groundwater overdraft; c) implementing better irrigation techniques; d) increasing water reclamation and reuse; and e) refining water conservation and other management practices. League of California Cities • www.cacities.org • March 201230 Environmental Quality 3. Operation and maintenance costs of recreational facilities developed in conjunction with water projects should be provided from on-site user fees and other applicable sources. Other costs incurred as a result of these recreational activities, such as law enforcement and emergency rescue, should receive appropriate assistance from state and federal sources. XIII. NEW TECHNOLOGY Development of new technology in water use, reuse, desalination, detoxification and so forth is encouraged. This should be primarily funded by the federal and state governments. Public-private partnerships in this research also should be encouraged. A high priority should be given to the protection of public health. New technology should be evaluated based on sound science. XIV. FINANCIAL CONSIDERATIONS 1. It is recognized that: a. The development and operation of water supply, water conveyance, flood control and stormwater management, water storage, and wastewater treatment facilities is frequently beyond the capability of local areas to finance; b. Since most facilities have widespread benefits, it has become traditional for federal, state, and local governments to share their costs; and c. It is necessary that such sharing be continued and that different institutional arrangements including cost sharing formulas among all beneficiaries, public-private partnerships, and user fees should be explored. 2. The requiring agency (whether it be state, federal, or otherwise) should pay for the features of projects or programs that are required that agency. 3. The League supports legislation to provide funding for stormwater, water and wastewater programs, including a constitutional amendment which would place stormwater fees in the category of water and wastewater fees, for the purposes of Proposition 218 compliance. 4. Any agency that regulates water with regard to local governments needs to be involved in the appropriate city with regard to how the city will pay for the new regulatory burden imposed by the agency. XI. DRAINAGE 1. Agricultural Drainage a. Finding long-term, economically feasible and environmentally sustainable solutions to agricultural drainage problems is essential and in the public interest. Solutions must be safe and environmentally acceptable in order to protect: • Viability of agricultural lands; • Rivers, estuaries and groundwater from potential degradation from agricultural drainage; and • Water quality for public consumption. Drainage of agricultural lands must be part of current and future agricultural water project planning and implementation. b. Both state and federal funding should be provided to investigate: a) further improvement in irrigation and drainage management ‘practices and conservation; b) evaporation ponds; c) deep-well injection; and d) desalination and other treatment technologies. An equitable cost-sharing formula for implementing solutions to existing and future drainage problems shall include state and federal governments and irrigation project beneficiaries. 2. Other (Run-Off) a. Finding safe and environmentally acceptable solutions to problems caused by run-off from non-point sources is essential and in the public interest. b. Similarly, finding safe and environmentally acceptable solutions to other drainage and run-off problems, such as those caused by mining, dairying and forest practices, is essential and in the public interest. c. Equitable cost sharing among appropriate public and private bodies for implementing solutions to urban and other run-off problems should occur. XII. RECREATION 1. Water development projects should minimize adverse impacts to existing recreational uses, and provide new recreational opportunities where feasible. 2. The state and federal governments and the recreational users should bear the recreational development costs of water projects. League of California Cities • www.cacities.org • March 2012 31 Environmental Quality 12. WQI 12: The League has no position on confirmation of regional water board conflict of interest rules with the Political Reform Act – (Note: the Subcommittee asked for a legal opinion. The question is: what are the current conflict of interest rules pursuant to AB 1234. Staff and members believe that this provision is similar to what already exists for other state boards [example: Waste Board].) 13. WQI 13: The League has no position on the establishment of civil penalties for fraudulent information with regard to reporting by permitees. 14. WQI 14: The League is generally opposed to any removal of notice and hearing requirements prior to the SWRCB referring a case to the State Attorney General for additional action. 15. WQI 15: The League has no recommendation on additional authorization of district and city attorneys to pursue civil violations (for cities over 750,000 in population). 16. WQI 16: The League believes the state should limit the number of mandatory minimum penalties (MMP) to one violation, and the population limit to qualify under the MMP law as a small, disadvantaged community for a single missing report should move from 10,0000 to 50,000 (in accordance with federal law). 17. WQI 17: The League has no recommendation on early payment of MMP violations. 18. WQI 18: The League supports enhanced ability of the Regional Water Boards to administratively enforce state Underground Storage Tank (UST) Requirements. 19. WQI 19: The League supports enhanced oversight of UST testers. 20. WQI 20: The League supports moving the SWRCB Enforcement Report deadline to July 1. 21. WQI 21: The League supports the SWRCB developing and implementing performance measures 22. WQI 22: The League supports improved data management systems for the SWRCB. 23. WQI 23: The League generally has no recommendation on the standardization of NPDES permits and believes that this issue should be worked out with the individual regional water boards. 24. WQI 24: The League generally has no recommendation regarding the update of SWRCB Strategic Plan. 25. WQI 25: The League supports SWRCB conducted training of regional water boards, provided the SWRCB both conducts the training and sets consistent standards statewide. APPENDIX A State Water Resources Control Board Water Quality Improvement Initiative (2008) 1. Water Quality Improvement Initiative Item #1 (WQI 1): The League supports applying the 10% rule “One Per Region Basis” 2. WQI 2: The League supports staggering the regional water board terms 3. WQI 3: The League has no recommendation on reducing the size of the regional water board from nine members to seven, with the exception that at least one person on the regional board should have local government experience. 4. WQI 4: The League supports delegating permitting authority to the regional water board executive officer and that the executive officer should take his or her direction from the State Water Resources Control Board (SWRCB). 5. WQI 5: The League is opposed to regional water board’s having full time chairs. 6. WQI 6: The League is opposed to the creation of a statewide council of full-time regional water board chairs. (Note: Water Discharge Subcommittee members believe that it may be helpful to combine a number of regional boards into larger regional boards to address areas that are similar (ex: Los Angeles and Orange County). A large regional board could bring more consistency to basin plan management. Any inconsistencies between the regional boards should be addressed by the state Board.) 7. WQI 7: The League supports the implementation of biennial priority setting based on the Strategic Plan, with six month updates by the regional water boards. 8. WQI 8: The League is opposed to allowing the SWRCB to make the TMDL environmental process subject to NEPA instead of CEQA. 9. WQI 9: The League supports requiring a TMDL to be affirmatively approved by the State Water Board or upon petition. 10. WQI 10: The League supports requiring the regional water board to consider costs of TMDL compliance. 11. WQI 11: The League supports authorizing the SWRCB to make changes to TMDLs, rather than remanding these decisions back to the regional water boards (Note: Subcommittee members believe that this policy should be tied into WQI#9). League of California Cities • www.cacities.org • March 201232 Environmental Quality Atmospheric Deposition: The transfer of pollutants suspended in the air to the earth’s surface. Pollutants move directly from the atmosphere into water bodies through precipitation, falling particles, or the absorption of gases into water. They also may be deposited over land and transported to water bodies via runoff. Atmospheric deposition is believed to be a significant source of various pollutants to many water bodies. Basin Plan: The Regional Water Quality Control Plan adopted by a regional water quality control board for that board’s area of responsibility in California. (See Cal. Water Code Section 13240). The basin plan establishes water quality standards, uses and other criteria for surface and ground waters. Best Management Practices (BMPs): Methods, measures, or practices designed and selected to reduce or eliminate the discharge of pollutants to surface waters from point and nonpoint source discharges, including urban runoff. BMPs include structural and nonstructural controls, and operation and maintenance procedures, which can be applied before, during, and/or after pollution producing activities. California Toxics Rule (CTR): A federal rule adopted by the U.S. EPA on May 19, 2000, which established numeric criteria for various priority pollutants for California. The rule can be found at 65 Federal Register 31682-31719, and was codified in the Code of Federal Regulations at 40 CFR 131.38. Characteristics of Groundwater Resource: Include quality, quantity, rate of renewal and yield. Clean Water Act (CWA): A comprehensive water quality statute (33 USC 1241 et seq.). The CWA was first adopted by Congress in 1972 and later amended in 1987 to apply to stormwater/ urban runoff. The CWA was designed to restore and maintain the chemical, physical, and biological integrity of the nation’s waters to support “the protection and propagation of fish, shellfish, and wildlife and recreation in and on the water.” Coliform: A group of related bacteria that are generally benign to humans. They are natural and common inhabitants of the soil and ambient waters (e.g., lakes, rivers, and estuaries), as well as the gastrointestinal tracts of animals. Compensation: Full replacement for unavoidable fish and wildlife resource losses in terms of habitat area and long term renewability of the quality and quantity of such resources. In the interest of clarification, compensation does not mean monetary payment as a substitute for replacement of resources losses.’ APPENDIX B GLOSSARY Affordable: A word used increasingly to express concern whether recipients of water will be able to meet the cost. Whether people view water as affordable will depend on many factors. Agricultural Drainage: Usually refers to installed drains to permit removal of water which accumulates within plant root zone. May be essential to maintain favorable salt balance for plant growth. May contain selenium, salinity, pesticides, herbicides, etc. Area and County of Origin Protections: Refers to legislative provisions for protecting water rights of these areas. Area of Origin Law: Applies to a watershed or area wherein water originates, or an area immediately adjacent thereto which can be conveniently supplied with water there from. Because this law was enacted as part of the Central Valley Project Act, it applies to the Sacramento River watershed. The Burns- Porter Act subsequently defined the Sacramento-San Joaquin Delta to be part of the watershed of the Sacramento River. Gives area of origin preferential rights regarding operation of federal Central Valley Project and to contract for State Water Project water and to certain rights to construct projects or make diversions, provided use is reasonable and beneficial. (California Water Code Sections 11128, 11460-11463). County of Origin Law: Prohibits State Water Resources Control Board from assignment of rights which will deprive a county in which the water originates of such water necessary for the development of the county. (California Water Code Section 10505). Delta Protection Act: Establishes that an adequate supply of water in the Delta is necessary to the peace, health, safety and welfare of the people of the state, except that delivery of such water is subject to County of Origin and Area of Origin laws. (California Water Code Sections 12200-12220). California Wild and Scenic Rivers Act and Federal Wild and Scenic Rivers Act: Establish certain rivers or sections of rivers are to be preserved in their free-flowing condition. The California law (California Public Resources Code Sections 5093.50-5093.65) allows domestic water diversion for residents of counties through which the river flows, provided there is no adverse effect upon the free-flowing character of the river. California law finds that the free-flowing state of such rivers is a reasonable and beneficial use within the meaning of the state constitution. League of California Cities • www.cacities.org • March 2012 33 Environmental Quality Enterococcus: A non-coliform bacteria group used as an indicator of the presence of fecal material in drinking and recreational waters. USEPA believes that enterococci have a better correlation with swimming-associated gastrointestinal illness in both marine and fresh waters than coliform organisms, and “die off” more slowly in saltwater. Environmentally Safe: Not a precise technical term, but used to mean actions which have little or no adverse impact. Economically Sound/Feasible: Not a precise technical term, but one that refers to a balance of costs and benefits. Formerly emphasis was placed on calculating benefit-cost ratios. Uncertainties and possible abuses in such calculations have raised questions concerning usefulness of such calculations. Problems include what types of benefits to involve as well as what costs to involve. Many, including environmentally related benefits and costs, cannot be adequately quantified. Fish and Wildlife Issues: See Compensation, Conservation, Enhancement, Fish and Wildlife resources, Instream uses, Loss prevention measures, Mitigation, Preservation, Protection, and Restoration. Fish and Wildlife Resources: Birds, mammals, fishes, amphibians, reptiles, invertebrate animals, endangered, threatened or rate native plants, their habitat area and all types of aquatic and land vegetation and other factors of the environment upon which resources are dependent. (See Fish and Game Code Section 45 for definition of fish).’ Flood Irrigation: Used to describe what is more appropriately called basin and border irrigation in which land prepared as basins or land bordered by small levees is irrigated with relatively large streams of water. Groundwater Management: The process of controlling extraction of groundwater and/or planned recharge to manage the supply and/or quantity of groundwater. Objectives of groundwater management may include minimizing (or preventing) adverse effects such as groundwater overdraft or quality degradation. (Also see conjunctive use and water management practices). Groundwater Overdraft: Where, over a period of time, groundwater extraction exceeds natural or artificial recharge. Indicator Bacteria: Bacteria that are used to assess the microbiological quality of water because, although not typically disease causing themselves, they may indicate the presence of several waterborne disease-causing organisms. The concentration of indicator bacteria is used as a measure of water safety for body-contact and for consumption of water. Conjunctive Use of Surface and Groundwater: Planned joint use of surface and groundwater. This usually involves maximizing use of surface water in wet years (with minimum groundwater pumping) and using any surplus surface water to recharge groundwater, and in dry years augmenting surface supplies by drawing on the stored groundwater. Conservation: Fish and wildlife resource loss prevention, mitigation and compensation. Conservation (of Water): Means efficient use of water. Also means reducing water losses, or eliminating waste; storing water for water use; preserving water quality. Contamination: An impairment of the quality of the waters of the state by waste to a degree which creates a hazard to the public health through poisoning or through the spread of disease. (California Water Code Section 13050) (See “Pollution”). Contamination Sources: Point Discharge: Source is identifiable, as from a pipe or drain ditch. Non-Point Discharge: Sources are more diffuse and not easily identified with well defined outlets; includes runoff from agricultural or forested land, general urban runoff, except where collected in identifiable drains. Cross-Media Pollution: The contribution or “flux” of pollution from one environmental medium to another. (For instance, the transfer of pollutants from the atmosphere to water.) Davis-Grunskv Bond: This legislation established a bond fund to facilitate financing of projects in counties with limited financial resources. Demand/Need: “Demand” usually refers to a statement of water requirements which may be projected on the basis of past water use practices. In contrast, “need” is intended to refer to water that is truly needed to satisfy purpose if water is efficiently utilized. Delta: Refers to the Sacramento-San Joaquin Delta. 700,000 acres of islands, waterways, levees and lands into which the natural runoff flows from the Sacramento, San Joaquin, Mokelumne and Consumnes river systems before either being exported or entering the San Francisco Bay and, then, the Pacific Ocean. Desalination: A process designed to treat brackish or sea water to make it useful for potable or non-potable use. Enhancement: Development or improvement of fish and wildlife resource values of the area affected by a project beyond that which would occur without the project. League of California Cities • www.cacities.org • March 201234 Environmental Quality Pollution: An alteration of the quality of the waters of the state by waste to a degree which unreasonably affects: (1) such waters for beneficial uses, or (2) facilities which serve such beneficial uses. Pollution may include contamination. (California Water Code Section 13050: Please see “Contamination”). Porter-Cologne Water Quality Control Act (Porter-Cologne): The California equivalent of the federal Clean Water Act. This legislation established that the State Water Resources Control Board (State Water Board) has the ultimate authority over state water rights, water quality policy, and the nine regional water quality control boards (regional water boards) which oversee water quality on a day-to-day basis in their geographic regions. Preservation: Maintenance and protection of fish and wildlife resources at levels that existed prior to the commencement of a (the current) project. Preservation is achieved through mitigation for avoidable resource losses and/or compensation for unavoidable resource losses and/or compensation for unavoidable resource losses. The term “preservation” is synonymous with “conservation” as used in the U.S. Fish and Wildlife Coordination Act. Preservation does not assume that restoration will occur, but it could. Project Beneficiaries: Those who gain value in some fashion from any of the following: water supply, flood control, power generation, recreation, salinity repulsion, wildlife. Protection: Department of Fish and Game appears to use this term when referring to legal enforcement by wardens. (See Preservation and Conservation). Real Water Savings: Simply means there is an “actual” savings of water which could be put to other use. Reasonable and Beneficial: Depends on facts and circumstances of each case. What is a beneficial use at one time may, because of changed conditions, become a waste of water at a later time. (Tulare Irrigation District v. Lindsay-Strathmore Irrigation District). The courts have determined the law requires an evaluation of the ascertainable facts in view of the increasing need for water conservation within California. Beneficial uses include: storing water underground if thereafter to be applied to beneficial purposes; use of water for recreation and preservation and enhancement of fish and wildlife resources. Reclaimed Water: Wastewater that has been cleaned so that it can be used for most purposes except drinking. Instream Uses: Include fish, wildlife, recreation, aesthetics, hydro- power production, dilution of contamination, waste discharge, and sediment transport. Local Entities: Includes cities, counties, water districts, joint powers, etc. Lass Prevention Measures: Designing and implementing measures to avoid immediate and long term impacts to fish and wildlife resources.’ Maximum Extent Practicable (MEP): The vaguely defined standard set forth in the CWA to be included in Municipal NPDES Permits to be complied with by municipal dischargers in order to reduce the discharge of pollutants from their municipal separate storm sewer systems. CWA Section 1342 (p)(3)(B)(iii) requires that permits for discharges from municipal storm sewers “shall require controls to reduce the discharge of pollutants to the maximum extent practicable, including management practices, control techniques and systems, design and engineering methods, and such other provisions as the Administrator or the State determines appropriate for the control of such pollutants.” Mitigation: Measures to lessen or reduce adverse effects on fish and wildlife resources through use of structural and non-structural loss prevention measures in project design and operations. (See CEQA Guidelines Section 15370)1 NEPA regulations have a functionally similar definition. NEPA definition includes restoration as a mitigation measure, however. National Pollutant Discharge Elimination System (NPDES): The program for issuing, modifying, revoking and reissuing, terminating, monitoring and enforcing wastewater and stormwater discharge permits, and imposing and enforcing pretreatment requirements, under CWA. Non-Point Source Discharge: Pollution caused by rainfall or snowmelt moving over and through the ground. As the water moves, it picks up and conveys natural and human-made pollutants, depositing them into water bodies and groundwater. Atmospheric deposition and hydromodification are also nonpoint sources of pollution. Numeric Limits: Numeric or numerically expressed narrative restrictions on the quantity, discharge rate, concentration, or toxicity units of a pollutant or pollutants that may be discharged from an NPDES permitted location or outfall. Pathogens: Disease-causing bacteria, viruses, and protozoans that are transmitted to people when they consume contaminated water. League of California Cities • www.cacities.org • March 2012 35 Environmental Quality Usable Groundwater: Refers to groundwater which can be pumped within the cost and technical constraints appropriate to the situation. Water Banking: Not a precise term. Generally refers to storing presently surplus water in groundwater basins or in surface storage facilities. Water Management Practices: Relate to the varied objectives of irrigation, municipal and industrial use. These objectives may not be compatible. In general, management practices are developed to maximize economic returns and/or to minimize (or prevent) adverse environmental impacts including water quality degradation. Conservation of supply, reuse, treatment for use and waste disposal, and the planned conjunction use of surface and groundwater are all aspects of water management. (Also see Conjunctive use and Groundwater management). Water Quality Standards and Objectives: The regional water quality boards set “objectives” in their basin planning process which are equivalent to what EPA calls “standards”. The “standards” include numerical narrative criteria and plans to implement these criteria. Water Reclamation: Usually refers to removing contaminants in water so that the water can be discharged into a receiving water without creating problems for fish, wildlife and other aspects of environment. Also, refers to water which has been treated to remove contaminants as required to permit its reuse particularly for irrigation of landscaped or agricultural areas. Way Bill (Program): Delta Levee Maintenance Program. Declares the Sacramento-San Joaquin Delta, characterized by islands and meandering waterways, as a unique resource of major statewide significance. Reasons are stated. Declares the system of levees is the key to preserving the physical characteristics of the Delta. Finds there is an urgent need for a higher degree of levee maintenance and rehabilitation throughout the Delta and ‘that the state has an interest in providing technical and financial assistance. Establishes that local agencies maintaining non-project (private) levees shall be eligible for reimbursement from the General Fund. Reimbursement shall be at 50% of cost. (California Water Code Sections 12980-12991). 303(d) List of Impaired Waterbodies: The State is required to prepare a list of water bodies that are polluted, under Section 303(d) of the CWA. Inclusion of a water body on the 303(d) list generally leads to the development of a total maximum daily load (TMDL) for the water body. Recycled Water: Municipal and/or industrial wastewater that has been treated to a sufficiently high level that it can be reused usually for non-potable purposes such as irrigating landscape and refilling aquifers. Restoration: Means to return to “original” conditions. (Selection or “original” or base condition is often source of debate.) Reverse Flows: Where direction of flow in a channel is reversed, as in the case of channels in South Delta which normally drain towards San Francisco Bay, but where pumping for export may cause flow reversal, drawing more saline water further into the Delta. Sediment Transport: Sediment of various particle sizes may be carried by moving water. The size of particles transported by water increases as velocity rises. Stormwater: Water that accumulates on land as a result of storms, and can include runoff from urban areas such as roads and roofs. Surplus Water: When used as a technical term in water contracts, this is the water that is available after entitlement water has been delivered. The amount of surplus water varies from year to year, generally according to amounts of runoff. Surplus water ordinarily is less expensive to the user than entitlement water. Reference is also made to water which is surplus to reasonable and beneficial uses of area of origin and Bay/Delta. System Expansion: Extension of existing infrastructure exclusively to serve new customers in presently unserved areas and/or increase in water supply exclusively for the same purpose. Total Maximum Daily Load (TMDL): A calculation of the maximum amount of a pollutant that an impaired water body can receive and still meet applicable water quality standards. A TMDL is to include allocations for the maximum load a particular source of a pollutant may discharge to the subject water body. TMDLs are required pursuant to Section 1313(d) of the CWA for water bodies that have first been listed as being impaired for the particular pollutant or pollutants at issue. Triennial Review: A review of water quality standards in basin plans that is required at least once every three years by Section 1313(c) (1) of the CWA and periodically under Section 13240 of the Porter-Cologne Water Quality Control Act. Ultimate: Imprecise meaning. Depends on time frame. League of California Cities • www.cacities.org • March 201236 Housing, Community and Economic Development Housing, Community and Economic Development Scope of Responsibility The principle behind the policies reviewed by the Committee on Housing, Community and Economic Development (HCED) is to foster local control of community planning decisions as they relate to land use and economic development. The issues within the purview of the HCED Committee include general plans and zoning, housing, rent control, subdivision map act, residential care facilities, other land use regulation, development fees including school fee adequacy, annexation and incorporation policy, development agreements, building standards including seismic safety standards, economic development policy including redevelopment and enterprise zones, military base closure and reuse, mobile home regulation, and sign regulation. Summary of Existing Policy and Guiding Principles Planning And Zoning • General Plans. The League supports the use of the general plan as a guide to meeting community planning needs. A city’s general plan should guide the individual city’s land use planning and strategic decision-making. A city’s general plan should not be subject to mandatory review by regional or state agencies. General plan requirements should be flexible and provide guidance to local communities without requiring inappropriate levels of detail or mandating new topics or elements. The League supports guidance by expert state agencies in a consultation format but opposes granting mandatory review, certification or other approval authority to another level of government. • Water Supply and Land Use Planning. The League supports having the best information available on the reliability of water supplies when land use decisions are made by local agencies, while protecting and retaining local land use decision-making authority. Prepared by Robert M. Hagan, Extension Water Specialist, Marcia Kreith, Program Representative, University of California Cooperative Extension, July 1987 and Ken Farfsing, City Manager, City of Signal Hill, October 2009. Sources: Some of the preceding definitions were derived from the following sources: California Wetlands Information System Website: Porter- Cologne Act Los Angeles MS4 Permit: Basin plan, best management practices, maximum extent practicable, NPDES permit RWA: Cross-media pollution Southern California Coastal Waters Research Project (SCCWRP) Website: Atmospheric deposition State Water Board Website: Numeric Limits, Triennial Review, U.S. EPA Website: California Toxics Rule, Clean Water Act, coliform, enterococcus, TMDLs U.S. Geological Service (USGS) Website: Indicator bacteria, pathogen League of California Cities • www.cacities.org • March 2012 37 Housing, Community and Economic Development »Develop a neutral dispute resolution process and fair enforcement alternatives to deal with disputes over questions of compliance; »Require state laws and policies which affect housing and land use to be internally consistent; »Establish additional legal protections to local agencies that approve affordable housing and that establish local pro- active affordable housing policies; and »Authorize communities which achieve quantifiable affordable housing production levels to self-certify their housing elements without being subject to state review. Housing Finance • The League supports legislation and state and federal programs that assist in providing financing for affordable housing, including the development of fiscal tools and incentives to assist local governments in their efforts to encourage housing and finance the infrastructure to support housing, as well as establishing an ongoing state commitment for funding affordable housing. • The League supports the re-establishment of federal tax incentives which were in effect prior to 1986 which encouraged private development and ownership of rental housing. • The League supports property tax assessment policies that match local affordable housing policies. Economic Development • Job Creation, Retention and Expansion. The League supports legislation that will provide tangible and productive tools and incentives to support job creation and retention in housing-rich, jobs-poor communities, such as the awarding of direct grants to fund the development of infrastructure that results in the creation and retention of jobs; the elimination of matching dollar requirements for economic development and infrastructure state grants; the provision of grant funding for infrastructure planning and design and the creation of economic development strategies; and, allowing cities the maximum flexibility in the use of state funds toward local priorities that support job creation. The League also encourages the state to adopt policies and programs that establish a comprehensive solution to the infrastructure and jobs/housing needs of all communities within the state. • Zoning. The League believes local zoning is a primary function of cities and is an essential component of home rule. The process of adoption, implementation and enforcement of zoning ordinances should be open and fair to the public and enhance the responsiveness of local decision-makers. State policy should leave local siting and use decisions to the city and not interfere with local prerogative beyond providing a constitutionally valid procedure for adopting local regulations. State agency siting of facilities, including campuses and office buildings, should be subject to local notice and hearing requirements in order to meet concerns of the local community. Housing Element • Housing issues should be addressed in the general plan as other planning issues are. The housing element should be prepared for the benefit of local governments and should have equal status with the other elements of the general plan. • The projections of regional and local growth and the allocations of housing units should account for state and local planning factors and should be subject to a formal hearing and appeal process to ensure that they are realistic. Cities should be allowed to work together to allocate housing units among themselves within a subregion. Appeals should be heard by politically accountable officials at the state and regional levels. • Cities should focus their efforts on facilitating the production of below market rate housing units. Local government efforts should be subject to realistic performance standards, not to arbitrary state agency review of the housing element. Local government housing efforts should be rewarded by incentives. These incentives should include streamlining by not being subject to the Department of Housing and Community Development review, priority ranking for discretionary funds, and new discretionary funds available for general fund purposes. The League supports and encourages legislation that: • Implements comprehensive reforms to the housing element process that: »Address conflicts between local growth projections and state regional housing need numbers; »Resolve the problems associated with the distribution of RHNA units within a council of governments; »Achieve improvements to the housing element review process; League of California Cities • www.cacities.org • March 201238 Housing, Community and Economic Development • The League supports state legislation to require a minimum distance of 300 feet between all new and existing residential care facilities. The League supports notification of cities about conditional release participants residing in group homes. Development Fees • The League supports providing local discretion in the assessment, collection and usage of development fees. The state should provide infrastructure funding to help local communities meet California’s growth demands and to increase housing affordability. The League opposes limiting the ability of cities to levy fees to provide for infrastructure or services. • The League recognizes that school facilities are a component of a community’s infrastructure and must be maintained to foster positive outcomes for youth and economic development. The League supports maintaining city discretion over the extent to which legislative authority should be exercised to fully mitigate impacts from development to the adequacy of school facilities. Consistent with maintaining discretion, cities should maintain the ability to condition and deny projects that the city determines inadequately mitigate impacts to community schools. • The League opposes the elimination of any development fee or tax including excise taxes. Tax shifts and initiative measures have severely limited city abilities to provide for community needs. The state must ensure that cities have adequate revenues for local infrastructure and services. Annexation and Incorporation • The League supports strengthening city control over urban boundaries. Sphere of Influence law should be modified to ban county development and to allow cities to annex logical growth. The Revenue and Taxation Code should not allow counties to block annexations in exchange for unreasonable property tax sharing agreements. In addition, cities should have expanded authority over adjacent lands outside of their sphere of influence regardless of jurisdictional lines so long as the land is not within another city’s sphere. Cities should not be required to incur costs for planning to meet infrastructure needs of unincorporated areas or leveraged to annex areas which would result in unfunded costs. • The League supports facilitating the incorporation of cities that have met procedural requirements and voter approval. The League opposes efforts by the Legislature to disincorporate a city for any reason, unless requested by the affected city. • Redevelopment. The League supports continuing flexibility in the use of redevelopment authority. Redevelopment authority has been one of the few tools that cities have been provided that encourages economic development. The League opposes limiting authority or increasing the liability of redevelopment agencies. • Enterprise Zones. The League supports the expansion of enterprise zones to assist city economic development. The definition of enterprise zones should be expanded to include a range of activities including base closure and gang suppression. Eminent Domain • The League supports enactment of fair eminent domain reforms that protect homeowners, and opposes proposals that would cripple the ability of state and local agencies to manage development. Rent Control • The League opposes legislation that restricts the ability of cities to enact rent control ordinances for mobile homes and stick-built housing that are tailored to meet local conditions and circumstances. • The League opposes legislation that would require a city to adopt a mobile home rent control ordinance. Subdivision Map Act • The League supports maximizing local control over subdivisions and public improvement financing. Discretion over the conditions and length of subdivision and parcel maps should be retained by cities. Residential Care Facilities • The League supports permitting cities to exercise review and land use regulation of group home facilities and residential care facilities in residential neighborhoods including the application of zoning, building and safety standards. State and county licensing agencies should be required to confer with the city’s planning agency in determining whether to grant a license to a community care facility. The League recognizes that better review and regulation of residential care facilities will protect both the community surrounding a facility and the residents within a facility from a poorly managed facility or the absence of state oversight. League of California Cities • www.cacities.org • March 2012 39 Housing, Community and Economic Development • Economic Reuse: The League supports incentives for broad economic reuse of closed military facilities. Cities should work on a regional and interstate basis to maintain economic productivity. Economic reuse includes both reuse of military facilities and the retooling of related industries to continue to provide jobs for residents of California’s cities. Mobile Home Regulation • The League supports initiatives that maintain cities as the enforcement authority for mobile home regulation. • The League supports the preservation of existing mobile home parks as an important source of affordable housing. Sign Regulation • The League supports the authority of cities to regulate billboards and other signage. The League opposes mandatory local abatement programs. Principles for Smart Growth: 1. Well-Planned New Growth. Recognize and preserve open space, watersheds, environmental habitats, and agricultural lands, while accommodating new growth in compact forms, in a manner that: • De-emphasizes automobile dependency; • Integrates the new growth into existing communities; • Creates a diversity of affordable housing near employment centers; and • Provides job opportunities for people of all ages and income levels. 2. Maximize Existing Infrastructure. Accommodate additional growth by first focusing on the use and reuse of existing urbanized lands supplied with infrastructure, with an emphasis on reinvesting in the maintenance and rehabilitation of existing infrastructure. 3. Support Vibrant City Centers. Give preference to the redevelopment and reuse of city centers and existing transportation corridors by supporting and encouraging: • Mixed use development; • Housing opportunities for all income levels; • Safe, reliable and efficient multi-modal transportation systems; and Development Agreements • The League recognizes voluntary development agreements as one tool for providing flexibility in development approvals. Building Standards • The League supports flexibility in the adoption and implementation of health and safety standards contained in the building codes. Statutes should maximize local control over standards applying to local conditions. The League opposes new standards imposed by statute rather than regulation. • The League opposes attempts to have multiple state agencies develop specific or subject related building standards. New building standards should be proposed through the California Standards Commission. • The League supports authorizing cities to adopt independent occupancy standards to prevent overcrowding and associated health and safety hazards, including fire-related fatalities. Housing for Homeless • Housing and programs for homeless and other extremely low- income populations are necessary to ensure quality of life and economic viability for all Californians. • Homelessness is a statewide problem that disproportionately impacts specific communities. The state should make funding and other resources available to help assure that local governments have the capacity to address the needs of the homeless in their communities. • Homeless housing is an issue that eludes a statewide, one-size-fits-all solution, and collaboration between local jurisdictions should be encouraged. • State and federal funding programs should be designed to reflect responsibilities imposed by state and federal law. Military Base Closure And Reuse • Base Closures and Reuse: The League supports local decision-making over military base closure and reuse. The affected cities independently or subregionally should work together towards efficient reuse planning. League of California Cities • www.cacities.org • March 201240 Housing, Community and Economic Development 8. Support Entrepreneurial/Creative Efforts. Support local economic development efforts and endeavors to create new products, services and businesses that will expand the wealth and job opportunities for all social and economic levels. 9. Encourage Full Community Participation. Foster an open and inclusive community dialogue and promote alliances and partnerships to meet community needs. 10. Establish a Secure Local Revenue Base. Support the establishment of a secure, balanced and discretionary local revenue base necessary to provide the full range of needed services and quality land use decisions. Note: The League will review new legislation to determine how it relates to existing League policies and guiding principles. In addition, because this document is updated every two years to include policies and guiding principles adopted by the League during the previous two years, there may be new, evolving policies under consideration or adopted by the League that are not reflected in the current version of this document. However, all policies adopted by the League Board of Directors or the League’s General Assembly become League policy and are binding on the League, regardless of when they are adopted and whether they appear in the current version of “Summary of Existing Policies and Guiding Principles.” • Retaining existing businesses and promoting new business opportunities that produce quality local jobs. 4. Coordinated Planning For Regional Impacts. Coordinate planning with neighboring cities, counties, and other governmental entities so that there are agreed upon regional strategies and policies for dealing with the regional impacts of growth on transportation, housing, schools, air, water, wastewater, solid waste, natural resources, agricultural lands and open space. 5. Support High-Quality Education and School Facilities. Develop and maintain high quality public education and neighborhood-accessible school facilities as a critical determinant in: • Making communities attractive to families; • Maintaining a desirable and livable community; • Promoting life-long learning opportunities; • Enhancing economic development; and • Providing a work force qualified to meet the full range of job skills required in the future economy. 6. Build Strong Communities. Support and embrace the development of strong families and socially and ethnically diverse communities, by: • Working to provide a balance of jobs and housing within the community; • Avoiding the displacement of existing residents; • Reducing commute times; • Promoting community involvement; • Enhancing public safety; and • Providing and supporting educational, mentoring and recreational opportunities. 7. Emphasize Joint Use of Facilities. Emphasize the joint use of existing compatible public facilities operated by cities, schools, counties and state agencies, and take advantage of opportunities to form partnerships with private businesses and nonprofit agencies to maximize the community benefit of existing public and private facilities. League of California Cities • www.cacities.org • March 2012 41 Public Safety • The League supports Emergency 911 systems to ensure cities and counties are represented on decisions affecting emergency response. • The League supports additional funding for local agencies to recoup the costs associated with fire safety in the community and timely mutual aid reimbursement for disaster response services in other jurisdictions. Emergency Services • The League supports the 2-1-1 California telephone service as a non-emergency, human and community services and disaster information resource. • The League supports “Good Samaritan” protections that include both medical and non-medical care when applicable to volunteer emergency, law enforcement, and disaster recovery personnel. The League also supports providing “Good Samaritan” protections to businesses that voluntarily place automated external defibrillators (AEDs) on their premises to reduce barriers to AED accessibility. Law Enforcement • The League supports the promotion of public safety through: »Stiffer penalties for violent offenders, and »Protecting state Citizens’ Option for Public Safety (COPS) and federal Community Oriented Police Services (COPS) funding and advocating for additional funding for local agencies to recoup the costs of crime and increase community safety. • The League opposes booking fees and continues to seek their repeal, while encouraging localities to pursue resolution of the issues with their respective counties. • The League supports a local government’s ability to double the fine for traffic violations in school zones in an attempt to reduce the speed of drivers and protect our youth. • The League supports reimbursement by the federal government to local agencies, specifically cities, for the costs associated with incarcerating deportable criminals, including the direct costs associated with processing and booking at the time of arrest. • The League supports policies that promote a victim’s right to seek restitution, create restrictions on the early release of state inmates from incarceration for the purpose of alleviating overcrowding, and limit parole hearing opportunities for state inmates serving a life sentence or paroled inmates with a violation. Public Safety Scope of Responsibility The Committee on Public Safety reviews federal and state legislation and issues related to law enforcement, fire and life safety policies, emergency communications, emergency services, disaster preparedness, Indian gaming, and nuisance abatement. Summary of Existing Policy and Guiding Principles Fire Services • The League supports the fire service mission of saving lives and protecting property through fire prevention, disaster preparedness, hazardous-materials mitigation, specialized rescue, etc., as well as cities’ authority and discretion to provide all emergency services to their communities. • The League supports and strives to ensure local control of emergency medical services by authorizing cities and fire districts to prescribe and monitor the manner and scope of pre-hospital emergency medical services, including transport through ambulance services, all provided within local boundaries for the purpose of improving the level of pre- hospital emergency medical service. • The League supports legislation to provide a framework for a solution to long-standing conflict between cities, counties, the fire service and LEMSA’s, particularly by local advisory committees to review and approve the EMS plan and to serve as an appeals body. Conflicts over EMS governance may be resolved if stakeholders are able to participate in EMS system design and evaluation and if complainants are given a fair and open hearing. • The League supports stored pressure dry chemical fire extinguishers to be serviced and recharged every six years or after each use, whichever occurs first. Additionally, the League supports requiring a licensed technician to perform the annual external maintenance examination of stored pressure dry chemical fire extinguishers. • The League opposes legislation, regulations and standards that impose minimum staffing and response time standards for city fire and EMS services since such determinations should reflect the conditions and priorities of individual cities. League of California Cities • www.cacities.org • March 201242 Public Safety Indian Gaming • The League supports the following principles that are intended to balance tribal self-reliance with the local government mandate to protect the public health and safety. »Require an Indian Tribe that plans to construct or expand a casino or other related businesses to seek review and approval of the local jurisdiction for such improvements consistent with state law and local ordinances including the California Environmental Quality Act, with the Tribal government acting as the lead agency and with judicial review in the California courts. »Require mitigation of off-reservation impacts consistent with environmental protection laws that are at least as stringent as those of the surrounding local community and CEQA. »Require written agreements between tribes and affected local agencies to ensure tribes are subject to local authority related to the infrastructure needs and services outlined above. »Require adequate compensation from the tribes to the local agency providing the government services that are required by the tribal casino or related businesses. »Ensure compensation to local agencies from the Special Distribution Fund for off-reservation mitigation coupled with other sources to ensure adequate compensation. »Require a judicially enforceable agreement between tribes and local jurisdictions on all of these issues before a new compact or an extended compact may become effective. »Establish appropriate criteria and guidelines to address future compact negotiations. »The Governor should establish and follow appropriate criteria to guide discretion of the Governor and the Legislature when considering whether to consent to tribal gaming on lands acquired in trust after October 17, 1988 and governed by the Indian Gaming Regulatory Act (25 U.S.C. § 2719). Alcohol • The League supports policies that limit the ability of minors to engage in alcohol consumption, and limit youth access to alcoholic beverages, so long as related state-mandated programs or services provide for full reimbursement to all local agencies. • The League supports parolee search and seizure terms, which aids local law enforcement’s ability to manage paroled offenders. • The League supports increased penalties for metal theft, and recognizes that statewide regulation is needed to discourage “jurisdiction shopping”. The League also supports increased record-keeping and reporting requirements for junk dealers, including the collection of thumbprints from sellers. Emergency Communications Interoperability • The League supports activities to develop and implement statewide integrated public safety communication systems that facilitate interoperability and other shared uses of public safety spectrum with local, state and federal law enforcement, fire, emergency medical and other public safety agencies. Wildland Urban Interface • The League supports activities to cooperate, coordinate, and communicate in the development of better land use policies and wildland fuel management programs to decrease impacts to public health and safety resulting from wildland urban interface fires. Nuisance Abatement • The League supports enhanced local control over public nuisances including, but not limited to: »Adult entertainment facilities; »Problem alcohol establishments; and »Properties where illegal drugs are sold. Violence • The League supports the reduction of violence through strategies that address gang violence, domestic violence, youth access to tools of violence, including but not limited to firearms, knives, etc., and those outlined in the California Police Chiefs Policy Paper endorsed by the League Board of Directors. • The League supports the use of local, state, and federal collaborative prevention and intervention methods to reduce youth and gang violence. League of California Cities • www.cacities.org • March 2012 43 Public Safety Corrections • The League supports constitutional protections for state funded corrections realignment programs, so long as it includes funding for local police department needs. The League also supports increasing city representation and participation on the Community Corrections Partnerships, who are charged with developing local corrections plans. Miscellaneous • The League opposes reductions to city authority to regulate needle and syringe accessibility and exchange programs. • The League supports a single, efficient, performance-based state department (the California Emergency Management Agency) to be responsible for overseeing and coordinating emergency preparedness, response, recovery, and homeland security activities. • The League asks any company manufacturing or marketing or planning to manufacture or market colored-tread tires in California to voluntarily abandon such a product line and thereby prevent the public safety, environmental and social problems these tires can potentially cause. • The League warns those individuals who advocate or perpetrate hate, not to test the cities’ resolve to oppose them as each city is encouraged to vigorously pursue a course of investigation, apprehension, prosecution, conviction, and incarceration of all those who participate in hate crimes. Note: The League will review new legislation to determine how it relates to existing League policies and guiding principles. In addition, because this document is updated every two years to include policies and guiding principles adopted by the League during the previous two years, there may be new, evolving policies under consideration or adopted by the League that are not reflected in the current version of this document. However, all policies adopted by the League Board of Directors or the League’s General Assembly become League policy and are binding on the League, regardless of when they are adopted and whether they appear in the current version of “Summary of Existing Policies and Guiding Principles.” • The League supports local policies that hold social hosts responsible for underage drinking that occurs on property under their possession, control, or authority. • The League supports additional penalties for repeat driving under the influence (DUI) offenders that include, but are not limited to, permanent revocation of an individual’s drivers license. Marijuana Regulation • The League opposes the legalization of marijuana cultivation and use for non-medicinal purposes. • Reaffirming that local control is paramount, the League holds that cities should have the authority to regulate medical marijuana dispensaries, cooperatives, collectives or other distribution points if the regulation relates to location, operation, or establishment to best suit the needs of the community. • The League affirms that revenue or other financial benefits from creating a statewide tax structure on medical marijuana should be considered only after the public safety and health ramifications are fully evaluated. • While the value of marijuana as a physical or mental health treatment option is uncertain, the League recognizes the need for proactive steps to mitigate the proliferation of unlawful medical marijuana dispensaries, cooperatives, collectives and other access points acting outside state or local regulation. Graffiti • The League endorses the “Tag You Lose” anti-graffiti campaign and encourages other cities to implement this program into their existing anti-graffiti programs. • The League supports increased authority and resources devoted to cities for abatement of graffiti and other acts of public vandalism. Sex Offender Management • The League supports policies that will assist local law enforcement with the comprehensive and collaborative management of sex offenders, including tools for tracking the location of sex offenders within local jurisdictions, so long as state-mandated programs provide for full reimbursement to all local agencies. League of California Cities • www.cacities.org • March 201244 Revenue and Taxation »Cities require constitutional protection of their revenue sources in order to provide insurance against diversion by the state of these revenues in the future for non-municipal purposes. »Major reforms in the unfunded mandate reimbursement process should be enacted to make it more workable and meaningful. Legislature or the Voters • Local Authority and Accountability. To preserve local authority and accountability for cities, state policies must: »Ensure the integrity of existing city revenue sources for all cities, including the city share and situs allocation, where applicable, of property tax, sales tax, vehicle license fees, etc. »Protect the authority of local governments to collect revenues from telecommunications providers and ensure that any future changes are revenue neutral for local governments. »Oppose any state or federal legislation that would pre- empt or threaten local taxation authority including but not limited to Utility User’s Taxes. »Allow every level of government to enjoy budgetary independence from programs and costs imposed by other levels of government. »Authorize a simple majority of the voters in a city or county to establish local priorities, including the right to increase taxes or issue general obligation bonds. »Offer incentives to reward cities achieving program goals rather than withhold or reduce revenues to accomplish targets. • State Legislative and Budget Reforms. To stabilize state funding and programs and reverse the trend of the state’s reliance on local revenues to solve the state’s fiscal crises, the state should implement fiscal and legislative reforms which may include for consideration the following: »A two-year spending plan with the first session focused on expenditures over the period. »Oversight hearings that review programs for savings, duplication or gaps in services. »Limits on the number of bills that legislators may introduce. »A prudent reserve fund. Revenue and Taxation Scope of Responsibility The Committee on Revenue and Taxation reviews issues related to finance administration, taxation reform, revenue needs, and revenue sources at the federal, state and local levels. Summary of Existing Policy and Guiding Principles Cities and the League • Preamble. Inherent in these recommendations is the underlying principle that meaningful fiscal reform should allow each level of government to adequately finance its service responsibilities, with each being accountable to taxpayers for its own programs. • Efficiency. Cities and the League should continue to emphasize efficiency and effectiveness, encouraging and assisting cities to achieve the best possible use of city resources. • Authority and Accountability. Cities must locally achieve political authority and accountability for revenues raised and services provided. For accountability, revenues should be logically linked to traditional and emerging responsibilities. Cities must effectively communicate the good news about city programs and operations, as well as information concerning financial conditions and city responsibilities. • Alliances. Cities should seek alliances with counties, schools, other cities, employee organizations, other local agencies, and business and professional organizations to support cooperation, sound financial policies and joint action. • Initiative. Cities and the League are prepared to use the statewide initiative process, if necessary, to secure fiscal independence and a sound intergovernmental financial structure. Initiative efforts should, to the extent feasible, incorporate and, in no case violate, the principles developed by the Fiscal Reform Task Force as follows: »Cities require a greater share of the property tax and other reliable, discretionary revenues in order to finance local services to property. League of California Cities • www.cacities.org • March 2012 45 Revenue and Taxation Reduce Competition • Revenue from new regional or state taxes or from increased sales tax rates should be distributed in a way that reduces competition for situs-based revenue. (Revenue from the existing sales tax rate and base, including future growth from increased sales or the opening of new retail centers, should continue to be returned to the point of sale.) • The existing situs-based sales tax under the Bradley Burns 1% baseline should be preserved and protected. Restrictions should be implemented and enforced to prohibit the expansion of questionable businesses formed to circumvent the principle of situs-based sales and used to divert sales tax revenues from other regions in return for favorable treatment. Funding for Counties • Counties require additional funding if they are to fulfill their state-mandated and traditional roles. • As legal agents of the state, county expenditures in that capacity should be funded by the state. Their local programs should be financed locally. • The concept of “self-help” for counties should be expanded. An example might be that counties could receive certain state funding if they raise a specified level of revenue locally. • To alleviate competition among cities and counties, funding for counties should be accompanied by agreements on new development in undeveloped areas within the cities’ sphere of influence. Regional Revenues • Local government issues, programs, and services do not always recognize local government jurisdictional boundaries. In cases where regional issues, programs, and services are identified, multi-jurisdictional revenues should then be identified and implemented. As an example, the sales tax has been considered and used by many countywide areas to address multi-jurisdictional transportation issues. • Support regional cooperation on common interests and goals by providing access to share incremental growth in ERAF property tax. »Official records kept of all Assembly official meetings. »A balanced deficit reduction approach, which could include temporary revenue increases dedicated solely to retiring short-term debt, spending cuts, short-term borrowing and multi-year spending limitations. »Long term restructuring measures, including increased local government property tax shares to create balanced growth and separate budget detail of all state expenditures at local level. State Mandates • The state must provide full and prompt reimbursement to all local agencies for all state-mandated programs and/or infractions and losses associated with local revenue shifts. • Local agencies must be authorized to petition the Commission on State Mandates immediately after legislation is chaptered for determination of eligibility for reimbursement, and reserve the right to directly pursue court intervention without an administrative appeals process. • Reforms are needed in the mandate approval and reimbursement process. • The State should be prohibited from deferring mandate payments. • Unless specifically requested by a city, no new duties, responsibilities or obligations should be assigned to a city or cities under state realignment. Additional Revenue • Additional revenue is required in the state/local revenue structure. There is not enough money generated by the current system or allocated to the local level by the current system to meet the requirements of a growing population and deteriorating services and facilities. • When disasters occur in various areas of the state, state government has traditionally stepped in to assist with recovery efforts through various means, including the passage of legislation to provide income and property tax relief to affected individuals and businesses, and reimbursing local governments for their losses. The League supports disaster recovery legislation that includes mitigation for losses experienced by local governments. The League also supports establishing a federal debt guarantee program that supports state catastrophe insurance programs for post-event debt that they incur as a result of paying for insured losses caused by major natural catastrophes. League of California Cities • www.cacities.org • March 201246 Transportation, Communication and Public Works Transportation, Communication and Public Works Scope of Responsibility The Committee on Transportation, Communication and Public Works reviews both state and federal legislation as it relates to issues of transportation funding, construction, public works, telecommunications, and other related areas. Summary of Existing Policy and Guiding Principles Transportation • The League supports additional funding for local transportation and other critical unmet infrastructure needs. One of the League’s priorities is to support a continuous appropriation of new monies directly to cities and counties for the preservation, maintenance and rehabilitation of the local street and road system. The League also supports a permanent shift of the sales tax on gasoline for transportation purposes and an allocation formula equivalent to 40/40/20 split of 40 percent to cities and counties, 40 percent to STIP and 20 percent to transit. • The League supports enhanced autonomy for local transportation decision-making and pursues transportation policy changes that move more dollars and decisions to local policy leaders. The League supports spending transportation moneys for transportation purposes. The League will seek the maximum share of available funding for local transportation programs. The League supports implementation of federal transportation funding re-authorization legislation in a manner that supports these principles. • The League supports bicycle and pedestrian access with maximum local flexibility to prioritize this transportation need, as long as funding is available directly for it and other transportation priorities are not affected. Furthermore, this funding should not compete with preservation of the road system in light of the identified $71.4 billion in unmet needs on the city and county street and road system, as identified in the California Statewide Local Streets and Roads Needs Assessment completed in 2009. Federal Streamlined Sales and Use Tax Agreement (SSUTA) • There are more questions than answers for California cities about potential state participation in the SSUTA. The SSUTA offers many more risks for California cities than benefits. Thus, the League should: 1. Continue to monitor developments of the SSUTA and related federal legislations, but not support any additional efforts that would lead to California joining the agreement. This position can always be revisited at a future point if events change. 2. Strongly oppose any federal effort that attempts to force California to conform to the Agreement, or amendments to federal legislation that would directly undermine California’s utility user tax structure. 3. Work with the State Board of Equalization and other parties on alternative efforts to increase the collection of use taxes within California. Share the League’s analysis of the SSUTA with interested parties, exchange information on use tax collection issues with municipal Leagues in other states, including those states with tax structures similar to California. Note: The League will review new legislation to determine how it relates to existing League policies and guiding principles. In addition, because this document is updated every two years to include policies and guiding principles adopted by the League during the previous two years, there may be new, evolving policies under consideration or adopted by the League that are not reflected in the current version of this document. However, all policies adopted by the League Board of Directors or the League’s General Assembly become League policy and are binding on the League, regardless of when they are adopted and whether they appear in the current version of “Summary of Existing Policies and Guiding Principles.” League of California Cities • www.cacities.org • March 2012 47 Transportation, Communication and Public Works Telecommunications • The League supports a state tax levied on direct broadcast satellite television service providers if the proceeds are distributed to support local public safety programs consistent with a geographic distribution methodology that reflects households using this service, and provided that the tax is repealed should the revenues be diverted by the state for another purpose. • Traditional franchising at the local level has served the valuable purpose of tailoring service to unique local conditions and needs and assuring responsiveness of providers to consumers. The continued involvement of local government in any new state or federal regulatory scheme by way of locally negotiated agreements is an essential component of telecommunications regulations, best serves the needs of consumers, and is consistent with the goal of providing consumers greater choice in telecommunications options. Any new state or federal standards must conform to the following principles: 1. Revenue Protection • Protect the authority of local governments to collect revenues from telecommunications providers and ensure that any future changes are revenue neutral for local governments. • Regulatory fees and/or taxes should apply equitably to all telecommunications service providers. • A guarantee that all existing and any new fees/taxes remain with local governments to support local public services and mitigate impacts on local rights-of-way. • Oppose any state or federal legislation that would pre-empt or threaten local taxation authority 2. Rights-of-Way • To protect the public’s investment, the control of public rights-of-way must remain local. • Local government must retain full control over the time, place and manner for the use of the public right-of-way in providing telecommunications services, including the appearance and aesthetics of equipment placed within it. 3. Access • All local community residents should be provided access to all available telecommunications services. • The League opposes requiring a city or parking processing agency to automatically cancel notices of parking violations, prior to a request from a vehicle owner, if the violation does not substantially match the corresponding information on the vehicle registration. Public Works • The League supports retaining maximum flexibility for timely and cost-effective completion of public works projects. The League supports innovative strategies including public private partnerships at the state and local levels to enhance public works funding. • The League supports efforts to divert products that contribute to decreased capacity and increased maintenance costs at wastewater treatment facilities. Vehicles • The League opposes all efforts that allow vehicles and vehicle operators on the road that will jeopardize the integrity of the public infrastructure or the health and safety of the motoring public. The League supports all efforts to retain maximum control of the local street and road system. The League supports traffic safety enhancements such as motorcycle helmets, child restraints, seat belt and speed limit laws. • The League opposes any efforts to increase truck size or weight. The size and weight of trucks is important because it affects the stability and control of the truck, the way it interacts with other traffic, and the impact it has when colliding with other vehicles. Truck safety is particularly important because these vehicles share city streets and county roads with users — such as, motorists, pedestrians, cyclists, motorcyclists, and bus riders. • The League encourages cities to promote safe driving across California and the education of the general public about the dangers of texting while driving. Contracts • The League supports maintaining maximum local flexibility in the area of contracting and contract negotiations. The League supports changes to law that allow cities options to use design-build contracting and other innovations designed to bring efficiency to public contracting. The League also supports contracting out with private entities to increase project delivery efficiency and affordability. League of California Cities • www.cacities.org • March 201248 Transportation, Communication and Public Works and receive compensation for its use. The League supports the innovation and economic development potential of the “information superhighway” and the many possible benefits in the areas of telecommuting and productivity it promises. The League will work with the California Public Utilities Commission, the various telephone companies and federal regulatory agencies to improve telephone area code planning in California. Air Pollution • The League will monitor developments and the ramifications of efforts to regulate air quality and related congestion strategies as it is related to transportation. Note: The League will review new legislation to determine how it relates to existing League policies and guiding principles. In addition, because this document is updated every two years to include policies and guiding principles adopted by the League during the previous two years, there may be new, evolving policies under consideration or adopted by the League that are not reflected in the current version of this document. However, all policies adopted by the League Board of Directors or the League’s General Assembly become League policy and are binding on the League, regardless of when they are adopted and whether they appear in the current version of “Summary of Existing Policies and Guiding Principles.” • Telecommunications providers should be required to specify a reasonable timeframe for deployment of telecommunications services that includes a clear plan for the sequencing of the build-out of these facilities within the entire franchise area. 4. Public Education and Government (PEG) Support • The resources required of new entrants should be used to meet PEG support requirements in a balanced manner in partnership with incumbent providers. • For cities currently without PEG support revenues, a minimum percentage of required support needs to be determined. 5. Institutional or Fiber Network (INET) • The authority for interested communities to establish INET services and support for educational and local government facilities should remain at the local level. 6. Public Safety Services • The authority for E-911 and 911 services should remain with local government, including any compensation for the use of the right-of-way. All E-911 and 911 calls made by voice over internet protocol shall be routed to local public safety answering points (PSAPs); i.e., local dispatch centers. »All video providers must provide local emergency notification service. 7. Customer Service Protection • State consumer protection laws should continue to apply as a minimum standard and should be enforced at the local level. Local governments should retain the authority to assess penalties to improve customer service. 8. Other Issues • Existing telecommunications providers and new entrants shall adhere to local city policies on public utility undergrounding. • The League supports the authority of cities to zone and plan for the deployment of telecommunications infrastructure. The League supports the ability of cities to maintain and manage the public right-of-way League of California Cities • www.cacities.org • March 2012 49 HOW YOU CAN GET INVOLVED ü Visit the League Web site: www.cacities.org • Issues and advocacy; • News and information; and • Education, conferences and networking. ü Subscribe to CA Cities Advocate, the League’s e-newsletter Stay up-to-date on major issues impacting local government. If you would like to automatically receive updates on legislative and policy issues that affect California cities, you may subscribe to the League’s CA Cities Advocate e-newsletter. It’s easy to subscribe on the League’s Web site: www.cacities.org/cityadvocateweekly. ü Sign-up for League listserves Listserves are a great resource for sharing information, asking questions or getting help. They are intended to facilitate communication and information sharing among city officials. Don’t miss out on important information that affects local government and your professional development. Sign up is easy on the League’s Web site: www.cacities.org/listserv. ü Use the Bill Search function to stay informed on key legislation. It can be found on the home page under Find a Bill, or go directly to: www.cacities.org/billsearch • Search for all bills in the current legislative session (2009-10), or prior sessions. Search by bill number, author, topic word, or key word. • On this page (www.cacities.org/billsearch), you can also link directly to League policy areas. Here you will find bills that the League is tracking, as well as the registered positions (Support, Oppose or Watch), sample letters and the legislative representative assigned to the bill. Note: The League’s standard position on tracking legislation is “watch” until such time that we take an official position. üLearn more about the League The League produces brochures and other materials to help inform our members, law makers, the press and the general public about the organization’s mission, work and goals. To view League marketing materials, visit: www.cacities.org/learnmore. ATTACHMENT B Utilities’ Legislative Policy Guidelines for 2012 Advocacy positions taken in alignment with these guidelines will be subject to the approval of the Utilities Director or City Manager as per the City’s legislative advocacy process ALL UTILITIES Goals 1. Preserve/enhance local accountability in the control and oversight of matters impacting utility programs and rates for our customers while balancing statewide climate protection goals. 2. Support legislation that makes bold progress in cost effectively reducing greenhouse gas (GHG) emissions, and recognizes early voluntary action. 3. Support efforts to maintain or improve the reliability of the supply, transmission, storage and distribution/collection infrastructures. 4. Maintain the City of Palo Alto Utilities’ (CPAU’s) ability to provide safe, reliable, sustainable, and competitively-priced utility services. Legislative Policy Guidelines Venue Goals 1. Local Accountability 2. Climate Protection 3. Reliability & Infrastructure 4. Service & Cost Control 1. Advocate goals through active participation in joint action efforts. Federal, State, and Regional 2. Communicate the City’s record on environmental and energy efficiency programs with Legislature, California Energy Commission (CEC), California Air Resources Board (CARB), and Natural Resources Defense Council (NRDC) via California Municipal Utilities Association (CMUA), Northern California Power Agency (NCPA), and the Bay Area Water Supply and Conservation Agency (BAWSCA). State 3. Support legislation that will result in the most cost-effective reduction of GHG emissions, recognition of early action, and inclusion of more efficient solutions, such as cogeneration, distributed resources, and demand control programs, in integrated resource plans. Federal, State, and Regional Utilities Legislative Policy Guidelines for 2012 1. Local Accountability 2. Climate Protection 3. Reliability & Infrastructure 4. Service & Cost Control 4. Promote utility legislation and regulations that support reasonable reliability standards and compliance requirements, and effective and consistent reporting requirements, customer communications, and goal- setting. Federal, State, and Regional Reliability Councils 5. Oppose cost shifts from Federal or State budgets and California Public Utilities Commission (CPUC) jurisdictional utilities through active participation in CMUA and NCPA legislative activities. Federal, State, and CPUC 6. Advocate for State and Federal grants for local and regional applications of energy efficiency, conservation, renewable resources, fiber, wastewater collection systems and recycled water projects. Federal and State 7. Maintain right of way access for utility infrastructure. Federal and State 8. Protect the value of existing assets and contracts and local regulatory approvals of same. Federal and State Page 2 of 11 Utilities Legislative Policy Guidelines for 2012 WATER Goals 1. Increase the security and reliability of the regional water system owned and operated by the San Francisco Public Utilities Commission (SFPUC). 2. Maintain the provision of an environmentally sustainable, reliable supply of high quality water at a fair price. 3. Support ability of municipal utilities to develop and manage their own conservation and efficiency programs and retain authority over ratemaking, including the ability to optimize volumetric and fixed charges to balance the goals of revenue certainty and water use efficiency. 4. Support efficiency and recycled water programs in order to minimize the use of imported supplies. Legislative Policy Guidelines Venue Goals 1. Reliable infrastructure 2. Supplies at fair cost 3. Local Authority 4. Minimize imports 1. Advocate goals through active participation in the Bay Area Water Supply and Conservation Agency (BAWSCA) and California Municipal Utilities Association (CMUA), with support from Palo Alto staff for BAWSCA and the San Francisco Bay Area Regional Water System Financing Authority (RFA). Local, Regional & State 2. Participate in California Urban Water Conservation Council (CUWCC) Best Management Practice (BMP) revisions and development to ensure that aggressive and cost-effective efficiency goals are incorporated and operating proposals are reasonable, achievable, and cost-effective. State 3. Advocate to ensure that legislative actions regarding the Hetch Hetchy Reservoir and conveyance system include the following requirements: timely rebuilding of the regional water system; maintains the quality of delivered water; minimizes any increase in the cost of water; creates no additional exposure to more frequent or severe water shortages; supports the existing water system and its operation. Local, Regional & State Page 3 of 11 Utilities Legislative Policy Guidelines for 2012 1. Reliable infrastructure 2. Supplies at fair cost 3. Local Authority 4. Minimize imports 4. Advocate for interpretations or implementation of Water Code provisions (such as those enacted by AB 1823 (2002), AB 2058 (2002) and SB 1870 (2002)) that maintain or reinforce the authorities and protections available to the City and BAWSCA members outside of San Francisco. Local, Regional, and State 5. Support provision of sufficient resources for BAWSCA to enable it to advocate for: an environmentally sustainable, reliable supply of high quality water at a fair price; preservation of Palo Alto’s existing contractual water allocation and transportation rights on the SFPUC Hetch Hetchy system; regional planning for conservation, recycled water, and other water supply projects. Local and Regional 6. Advocate for: actions that preserve Palo Alto’s existing contractual rights supporting actions that preserve local control over water use and limit encroachment from outside jurisdictions Local and Regional 7. Support infrastructure security and reliability including an interconnection between the SCVWD West Pipeline with the SFPUC’s Bay Division Pipelines 3 and 4. Regional, and State 8. Support notification requirements that aid residents/customers but do not inflict undue or unobtainable requirements on the utility. State 9. Support local control of public benefit funds funding levels and program design. State 10. Support beneficiary pays methodologies to prevent taxes or fees, in particular those imposed on SFPUC customers, to fund infrastructure improvements and costs of other water sources such as the Delta. State 11. Advocate for financing or funding for water conservation programs and recycled water projects that meet end-use needs and conserve potable water and oppose legislation that would reduce such funding. Regional, State and Federal Page 4 of 11 Utilities Legislative Policy Guidelines for 2012 GAS Goals 1. Preserve/enhance the ability of municipal utilities to develop their own demand side efficiency and conservation programs, alternative gas supplies, and rate structure. 2. Support efforts to reduce greenhouse gas emissions and protect the environment. 3. Increase the security and reliability of the gas supply and transmission infrastructure. This includes retaining access to intra- and interstate gas transmission systems to reliably serve customers. 4. Preserve just and reasonable utility rates/bills. Legislative Policy Guidelines Venue Goals 1. Local Authority 2. Environ- ment 3. Reliability of Infrastructure 4. Cost Control 1. Advocate most of these goals mainly through the American Public Gas Association (APGA) with minor support from Palo Alto staff. Primarily Federal with minor advocacy at State level 2. Work with Northern California Power Agency (NCPA) and California Municipal Utilities Association (CMUA) to the extent that the City’s goals as a gas distributor align with generators’ use of natural gas. Federal and State 3. Support increased production/incentives for renewable gas supplies from in or out of state. Federal and State 4. Advocate for financing or funding for cost- effective natural gas efficiency and solar water heating end uses. Federal and State 5. Support market transparency and efforts to eliminate market manipulation through reasonable oversight Federal 6. Support municipal utilities’ ability to enter into pre-pay transactions for gas supplies. Federal 7. Support efforts to improve pipeline safety in light of recent incidents on the PG&E system and elsewhere. Work with partners to discourage extension of CPUC regulatory authority over municipal gas operations. Oppose legislative proposals resulting in unreasonable costs for Palo Alto’s customers. Federal and State Page 5 of 11 Utilities Legislative Policy Guidelines for 2012 ELECTRIC Goals 1. Preserve/enhance the ability of municipal utilities to exercise local accountability and oversight over matters impacting customer service, programs (such as demand side efficiency and conservation programs), and rate structure. 2. Preserve/enhance the reliability and security of infrastructure. 3. Support legislation that makes bold progress in cost effectively reducing greenhouse gas emissions and encourages early voluntary action. 4. Preserve just and reasonable utility rates/bills. Legislative Policy Guidelines Venue Goals 1. Local Accountability 2. Reliability 3. GHG Reduction 4. Cost Control 1. Advocate goals through Northern California Power Agency (NCPA), California Municipal Utilities Association (CMUA), American Public Power Association (APPA), Transmission Agency of Northern California (TANC), and Bay Area Municipal Transmission Group (BAMx) with support from Palo Alto staff to speak with a coordinated voice. Federal and State 2. Support NCPA’s legislative initiative to streamline the state regulatory reporting responsibilities, to eliminate duplicative data and report submittals to multiple state regulatory agencies, including the CEC, CARB, and the California Independent System Operator (CAISO). State 3. Advocate for legislation/regulations that provide local control and support for: cost-effective clean distributed generation and cogeneration projects, and standards for connecting such resources to the local distribution system; cost-effective electric efficiency programs; implementation of renewable portfolio standards; cost-effective storage integration; direct access requirements; smart meters and smart grid design and implementation, and public benefit funds (as allowed in AB1890 (1996)). Federal and State Page 6 of 11 Utilities Legislative Policy Guidelines for 2012 1. Local Accountability 2. Reliability 3. GHG Reduction 4. Cost Control 4. Support cap-and-trade market designs that: protect consumers from the exercise of market power; allocate allowances that help mitigate impacts to Palo Alto customers while providing incentives for utilities to move to lower GHG emission portfolios; provide flexible compliance mechanisms such as banking & borrowing of allowances; allocate funds generated from cap-and-trade markets to GHG related activities, not as a revenue source for state or federal general funds. Federal and State 5. Support legislation for renewable portfolio standards that: promote the 33% goal for the state; maintain local compliance authority; allow utilities to pursue low cost alternatives by utilizing existing transmission system to access out-of-state resources, including use of Renewable Energy Certificates (RECs); prevent double jeopardy in the assessment of penalties for non-compliance; and restrict extension of CEC jurisdiction over Publicly Owned Utilities. Local and State 6. Support/encourage transmission, generation, and demand-reduction projects and solutions including advocating for financing or funding solutions/options for projects that: enhance/ensure reliability; ensure equitable cost allocation (including protection against imposition of state-owned electric contract costs on municipal utility customers); improve procurement flexibility (e.g. resource adequacy rules that ensure reliability and provide flexibility in meeting operational requirements or flexibility in meeting State renewable portfolio standards); improve market transparency (particularly transparency of IOU’s transmission and procurement planning and implementation activities); and lower the environmental impact on the Bay Area and the Peninsula. Local, State, and Federal Page 7 of 11 Utilities Legislative Policy Guidelines for 2012 1. Local Accountability 2. Reliability 3. GHG Reduction 4. Cost Control 7. Advocate for Congressional, legislative, or administrative actions on matters impacting costs or operations of the Western Area Power Administration such as: support of Congressional Field Hearings to explore modernizing flood control strategies, river regulation and generation strategies at Central Valley Project (CVP) plants to enhance generation, water delivery, flood control and fisheries; protection of the status of Western Power Marketing Administration and cost-based rates; provisions for preference customers’ first take at land available with economic potential for wind farms; and balancing efforts for competing environmental improvements in rivers and Delta conditions with water supply and hydropower impacts. Federal, State and Regional 8. Advocate for Congressional, legislative, or administrative actions on matters relating to overly burdensome reporting and compliance requirements established by the North American Reliability Corporation (NERC), the Federal Energy Regulatory Commission (FERC) or the Western Electricity Coordinating Council (WECC). Federal, State and Regional 9. Support fair and reasonable assessment of grid reliability established by NERC, WECC, or FERC and seek Congressional remedies (if needed) for punitive application of fees and fines. Federal and Regional 10. Work with California Independent System Operator (CAISO) or through FERC: to give buyers of renewable intermittent resources relief from imbalance penalties; and to promote financial and operational changes that result in timely and accurate settlement and billing. Federal and State Page 8 of 11 Utilities Legislative Policy Guidelines for 2012 1. Local Accountability 2. Reliability 3. GHG Reduction 4. Cost Control 11. Monitor cyber security issues to ensure that CPAU, which currently does not have critical cyber assets, is not subject to NERC cyber security standards and support NCPA to protect it and its member agencies from unnecessary cyber security regulations. Federal and Regional Page 9 of 11 Utilities Legislative Policy Guidelines for 2012 WASTEWATER COLLECTION Goals 1. Increase the reliability of the local wastewater collection systems. 2. Maintain the provision of an environmentally sustainable, reliable high quality wastewater collection service at a fair price. 3. Support ability of municipal utilities to develop and manage their own conservation and efficiency programs and retain authority over ratemaking, including the imposition of non-volumetric customer meter or infrastructure charges for wastewater collection service. 4. Support equal comparisons of wastewater collection systems by regulatory agencies in order to minimize and reduce onerous, costly and time-intensive reporting requirements and improve value and accuracy of information reported to the public. Legislative Policy Guidelines Venue Goals 1. Reliable infrastructure 2. Maintain service 3. Local Authority 4.Valuable Reporting 1. Advocate goals through active participation in the Association of Bay Area Governments (ABAG). Local, Regional & State 2. Advocate to ensure that legislative actions regarding the comparison of wastewater collections systems for future regulations include the following requirements: timely rebuilding of the local wastewater systems; maintains the quality of delivered wastewater collection service; minimizes any increase in the cost of wastewater collection service; creates no additional exposure to more frequent or severe wastewater overflows; supports the existing wastewater collections systems and their operation. Local, Regional & State 3. Support provision of sufficient resources for ABAG to enable it to advocate for: environmentally sustainable, reliable wastewater collection service at a fair price; regional comparisons of wastewater collection projects for future state grant funding. Local and Regional Page 10 of 11 Utilities Legislative Policy Guidelines for 2012 Page 11 of 11 1. Reliable infrastructure 2. Maintain service 3. Local Authority 4.Valuable Reporting 4. Support infrastructure security and reliability including equitable allocation of funds for increasing the security of infrastructure. Regional, and State 5. Advocate for funding for wastewater collections system projects that reduce overflows and improve collection system efficiency. Regional, State and Federal City of Palo Alto State Legislative Bills of Interest Wednesday, May 02, 2012 Administrative Services Department AB 1050 (Ma D) Telecommunications: prepaid mobile telephony services: taxes and fees. AB 1191 (Huber D) Local government finance. SB 89 (Committee on Budget and Fiscal Review) Vehicles: vehicle license fee and registration fee. City Attorney's Office AB 1275 (Torres D) California Public Records Act: exemption: emergency 911 telephone calls. SB 1002 (Yee D) Public records: electronic format. SB 1110 (Rubio D) Public records. City Auditor's Office SB 1336 (Yee D) Improper governmental activities: investigations: confidentiality. Community Services Department AB 1562 (Jeffries R) Fire prevention and suppression: county inmate fire crews. Human Resources Department AB 1203 (Mendoza D) Public employee organizations: members: paid leaves of absence. AB 1551 (Torres D) Insurance: public safety employees: accidents. AB 1808 (Williams D) Meyers-Milias-Brown Act: public employees. AB 1831 (Dickinson D) Local government: hiring practices. Planning and Community Environment AB 57 (Beall D) Metropolitan Transportation Commission. AB 1444 (Feuer D) Environmental quality: record of proceedings. AB 1642 (Gordon D) County recorder: recordation of documents. AB 1897 (Campos D) Land use: general plan: access to healthy food. SB 1220 (DeSaulnier D) Housing Opportunity and Market Stabilization (HOMeS) Trust Fund Act of 2012. Public Works Department AB 1442 (Wieckowski D) Pharmaceutical waste. AB 2231 (Fuentes D) Sidewalks: repairs. SB 965 (Wright D) State Water Resources Control Board and California regional water quality control boards: ex parte communications. Rail AB 1455 (Harkey R) High-speed rail. AB 1574 (Galgiani D) High-speed rail. SB 985 (La Malfa R) Transportation bonds. SB 1189 (Hancock D) The Safe, Reliable High-Speed Passenger Train Bond Act for the 21st Century: project funding. SB 1533 (Padilla D) Electricity: energy crisis litigation. Utilities Department AB 1514 (Lowenthal, Bonnie D) Excavations: subsurface installations: violations. AB 1532 (John A. Pérez D) California Global Warming Solutions Act of 2006: Greenhouse Gas Reduction Account. AB 1711 (Galgiani D) Energy resources: energy savings program. AB 1750 (Solorio D) Rainwater Capture Act of 2012. AB 1771 (Valadao R) Renewable energy resources: hydroelectric generation. AB 1868 (Pan D) Renewable energy resources. AB 1900 (Gatto D) Renewable energy resources: biomethane. AB 1906 (Nestande R) California Global Warming Solutions Act of 2006: market-based compliance mechanisms: utilities. AB 2117 (Gorell R) Waste discharge requirements: stormwater. AB 2167 (Hill D) Bay Area Water Supply and Conservation Agency: financial matters. AB 2196 (Chesbro D) Renewable energy resources. AB 2227 (Bradford D) Local publicly owned electric utilities: State Energy Resources Conservation and Development Commission: reporting. AB 2234 (Hill D) Electricity net energy metering. AB 2249 (Buchanan D) Solar Water Heating and Efficiency Act of 2007. AB 2390 (Chesbro D) Electricity: biomass: incentive programs. AB 2398 (Hueso D) Water recycling. AB 2404 (Fuentes D) California Global Warming Solutions Act of 2006: Local Emission Reduction Program. AB 2516 (Bradford D) Independent System Operator. AB 2556 (Allen D) Electrical lines: trimming of trees. AB 2559 (Buchanan D) Natural gas pipelines: pipeline integrity management. AB 2644 (Butler D) Building standards: electric vehicle charging stations. SB 594 (Wolk D) Energy: net energy metering. SB 971 (Cannella R) Renewable energy resources. SB 1130 (De León D) Energy: energy assessment: commercial buildings: retrofitting. SB 1268 (Pavley D) Energy: energy conservation assistance. SB 1496 (Simitian D) Energy: State Energy Resources Conservation and Development Commission: natural gas. SB 1572 (Pavley D) California Global Warming Solutions Act of 2006: Greenhouse Gas Reduction Account. Page 1 / 2 City of Palo Alto State Legislative Bills of Interest Wednesday, May 02, 2012 Administrative Services DepartmentAB 1050 (Ma D) Telecommunications: prepaid mobile telephony services: taxes and fees.AB 1191 (Huber D) Local government finance.SB 89 (Committee on Budget and Fiscal Review) Vehicles: vehicle license fee and registration fee. City Attorney's OfficeAB 1275 (Torres D) California Public Records Act: exemption: emergency 911 telephone calls.SB 1002 (Yee D) Public records: electronic format.SB 1110 (Rubio D) Public records. City Auditor's OfficeSB 1336 (Yee D) Improper governmental activities: investigations: confidentiality. Community Services DepartmentAB 1562 (Jeffries R) Fire prevention and suppression: county inmate fire crews. Human Resources DepartmentAB 1203 (Mendoza D) Public employee organizations: members: paid leaves of absence.AB 1551 (Torres D) Insurance: public safety employees: accidents.AB 1808 (Williams D) Meyers-Milias-Brown Act: public employees.AB 1831 (Dickinson D) Local government: hiring practices. Planning and Community EnvironmentAB 57 (Beall D) Metropolitan Transportation Commission.AB 1444 (Feuer D) Environmental quality: record of proceedings.AB 1642 (Gordon D) County recorder: recordation of documents.AB 1897 (Campos D) Land use: general plan: access to healthy food.SB 1220 (DeSaulnier D) Housing Opportunity and Market Stabilization (HOMeS) Trust Fund Act of 2012. Public Works DepartmentAB 1442 (Wieckowski D) Pharmaceutical waste.AB 2231 (Fuentes D) Sidewalks: repairs.SB 965 (Wright D) State Water Resources Control Board and California regional water quality control boards: ex parte communications. RailAB 1455 (Harkey R) High-speed rail.AB 1574 (Galgiani D) High-speed rail.SB 985 (La Malfa R) Transportation bonds.SB 1189 (Hancock D) The Safe, Reliable High-Speed Passenger Train Bond Act for the 21st Century: project funding.SB 1533 (Padilla D) Electricity: energy crisis litigation. Utilities Department AB 1514 (Lowenthal, Bonnie D) Excavations: subsurface installations: violations. AB 1532 (John A. Pérez D) California Global Warming Solutions Act of 2006: Greenhouse Gas Reduction Account. AB 1711 (Galgiani D) Energy resources: energy savings program. AB 1750 (Solorio D) Rainwater Capture Act of 2012. AB 1771 (Valadao R) Renewable energy resources: hydroelectric generation. AB 1868 (Pan D) Renewable energy resources. AB 1900 (Gatto D) Renewable energy resources: biomethane. AB 1906 (Nestande R) California Global Warming Solutions Act of 2006: market-based compliance mechanisms: utilities. AB 2117 (Gorell R) Waste discharge requirements: stormwater. AB 2167 (Hill D) Bay Area Water Supply and Conservation Agency: financial matters. AB 2196 (Chesbro D) Renewable energy resources. AB 2227 (Bradford D) Local publicly owned electric utilities: State Energy Resources Conservation and Development Commission: reporting. AB 2234 (Hill D) Electricity net energy metering. AB 2249 (Buchanan D) Solar Water Heating and Efficiency Act of 2007. AB 2390 (Chesbro D) Electricity: biomass: incentive programs. AB 2398 (Hueso D) Water recycling. AB 2404 (Fuentes D) California Global Warming Solutions Act of 2006: Local Emission Reduction Program. AB 2516 (Bradford D) Independent System Operator. AB 2556 (Allen D) Electrical lines: trimming of trees. AB 2559 (Buchanan D) Natural gas pipelines: pipeline integrity management. AB 2644 (Butler D) Building standards: electric vehicle charging stations. SB 594 (Wolk D) Energy: net energy metering. SB 971 (Cannella R) Renewable energy resources. SB 1130 (De León D) Energy: energy assessment: commercial buildings: retrofitting. SB 1268 (Pavley D) Energy: energy conservation assistance. SB 1496 (Simitian D) Energy: State Energy Resources Conservation and Development Commission: natural gas. SB 1572 (Pavley D) California Global Warming Solutions Act of 2006: Greenhouse Gas Reduction Account. Page 2 / 2 City of Palo Alto (ID # 2825) City Council Staff Report Report Type: Consent Calendar Meeting Date: 5/7/2012 May 07, 2012 Page 1 of 1 (ID # 2825) Summary Title: 2nd Reading: Ordinance Amendment for Sandhill Road DA Title: Second Reading: Adoption of an Ordinance Approving an Amendment to the 1997 Sand Hill Road Development Agreement to Extend the Lease on El Camino Park and to Remove Approximately 10.25 Acres of Land (Searsville and Fremont Roads) in Santa Clara County from Special Condition Area B to be used for Central Energy (Cogeneration) Facility. From: City Manager Lead Department: Planning and Community Environment This is the Second Reading for the Adoption of the Ordinance. There are no changes to the Ordinance. Prepared By: Zariah Betten, Administrative Assistant Department Head: Curtis Williams, Director City Manager Approval: ____________________________________ James Keene, City Manager City of Palo Alto (ID # 2810) City Council Staff Report Report Type: Consent Calendar Meeting Date: 5/7/2012 May 07, 2012 Page 1 of 1 (ID # 2810) Summary Title: 2nd Reading Adopt Ordinance CalPERS Contract Title: Second Reading: Adoption of Ordinance to Amend the Contract Between the Board of Administration of the California Public Employees’ Retirement System (CalPERS) and the City of Palo Alto to Implement California Government Code Section 20475: Different Level of Benefits Provided for New Employees, Section 21363.1: 3.0% @ 55 Full Formula, Section 20037: Three Year Final Compensation, and Without Section 20692: Employer Paid Member Contributions for Safety Fire Employees( 1st Reading passed 3-5-12, 8-0 Yeh absent) From: City Manager Lead Department: Human Resources This is a second reading of the Ordinance which was first heard on March 5, 2012 and passed 8-0, Yeh absent. Prepared By: Sandra Blanch, Interim Director, Human Resources Department Department Head: Sandra Blanch, Interim Director, Human Resources Department City Manager Approval: ____________________________________ James Keene, City Manager City of Palo Alto (ID # 2671) City Council Staff Report Report Type: Consent Calendar Meeting Date: 5/7/2012 May 07, 2012 Page 1 of 3 (ID # 2671) Summary Title: Media Center Agreement Amendment Title: Approval of Amendment No. 2 to Agreement Between the City of Palo Alto and the Midpeninsula Community Media Center, Inc. in the Amount of $50,000 From: City Manager Lead Department: IT Department Recommendation Staff recommends that the City Council approve and authorize the City Manager to execute amendment number two to the agreement between the City of Palo Alto and the Mid- Peninsula Community Media Center, Inc. (Media Center), in the amount of $50,000, bringing the total contract value to $175,000 in fiscal year 2011-12. Background The City’s Cable Television Ordinance provides that the City may designate a nonprofit Community Access Organization to operate and administer its Public, Education, and Government (PEG) facilities, equipment and channels. Since the early 1990’s the Media Center (formerly the Mid - Peninsula Access Corporation) has served as the Community Access Organization for the City. In this role, the Media Center operates and manages the City’s public and government access cable channels numbers 26, 27, 28, 29, 30; broadcasts local community programs; offers video production classes and workshops to community members; and provides local election coverage. Palo Alto forwards PEG access fees received from franchise holders (currently AT&T and Comcast) to the Media Center in support of a portion of these services. On June 6, 2011, the City entered into a new multi-year agreement with the Media Center in the amount of $100,000 per year. A contingency of $25,000 was also approved, for a total contract value of $125,000 per year. This agreement funds: 1) cablecasting of Palo Alto City Council, Council Committee and Board and Commission meetings; 2) programming of Palo Alto special events, programs and activities; 3) Institutional Network (I-Net) management services; and 4) web indexing and archiving services. Discussion May 07, 2012 Page 2 of 3 (ID # 2671) In April, 2012, the City entered into amendment number one to the Agreement with the Media Center, utilizing contract contingency funds of $25,000. This brought the total contract value to $125,000 in fiscal year 2011-12. Staff requests that the Council approve amendment number two to the Agreement with the Media Center to add another $50,000, bringing the total contract value to $175,000 in fiscal year 2011-12. This funding is needed to cover additional costs for Council and Council Committee meeting coverage. There have been a larger number of (and longer - starting at 6 p.m. instead of 7 p.m.) City Council and Council Committee meetings (e.g., new Rail Corridor Study Task Force, Council Rail Committee, etc.) this fiscal year. Specifically, the average length of City Council meetings has increased by 15 percent in fiscal year 2011-12, and the number of meetings overall has increased by 3 percent, from the prior year. In addition, there has been an increase in off-site meetings that requires additional equipment and staff set-up time and cost. I-Net network management costs have also increased this fiscal year due to the need to replace an I-Net switch and to cover the loss of network operations support that was provided by a Palo Alto resident on a volunteer basis in the past. Finally, there has been a delay in the transition of web indexing and archiving services to the City’s IT Department. Resource Impact Funds for the agreement are part of the Information Technology Department’s FY 2011-12 Operating Budget. These expenditures are offset by franchise fee revenue received from Comcast and AT&T, which amounted to $789,898 in calendar year 2011. I-Net network management costs are paid for by Cable Joint Powers Agency members. Policy Implications This agreement does not represent any change to existing City policies. Environmental Review Approval of this agreement does not constitute a project under the California Environmental Quality Act (CEQA); therefore, no environmental assessment is required. Attachments: C11140303 Amend No 2 Signed by Vendor 04302012 (PDF) Prepared By: Melissa Cavallo, Financial Analyst Department Head: Jonathan Reichental, Chief Information Officer City Manager Approval: ____________________________________ May 07, 2012 Page 3 of 3 (ID # 2671) James Keene, City Manager City of Palo Alto (ID # 2531) City Council Staff Report Report Type: Consent Calendar Meeting Date: 5/7/2012 May 07, 2012 Page 1 of 4 (ID # 2531) Summary Title: Underground District No. 47 Resolution Title: Adoption of a Resolution of Intent to Establish Underground Utility District No. 47( Middlefield Road/ Addison Ave/ Cowper Street/ Homer Ave) by Amending Section 12.16.020 of the Palo Alto Municipal Code From: City Manager Lead Department: Utilities Recommendation Staff recommends that the Council adopt the attached Resolution of Intent to establish Underground Utility District No. 47 (UUD 47) by amending Section 12.16.020 of Chapter 12.16 of Title 12 of the Palo Alto Municipal Code. Background The Electric Utility’s undergrounding project areas are selected and recommended to Pacific Bell Telephone Company dba AT&T California (AT&T) and Comcast of California IX, Inc. (Comcast), the two other entities participating in undergrounding projects, based on the age and maintainability of the existing overhead electric system. AT&T and Comcast determine whether the recommended areas meet their criteria for undergrounding based on guidelines established by the California Public Utilities Commission (CPUC) and qualify for financial contribution to the project. UUD 47 is bounded by Middlefield Road, Addison Avenue, Cowper Street, and Forest Avenue (see Attachment B). The area proposed as UUD 47 integrates with the existing neighborhood, where the overhead utility lines are already underground, and is one of the few remaining areas that meet both City and CPUC guidelines for undergrounding overhead utility lines and therefore where AT&T and Comcast will share in the cost of construction. At Council’s request, Staff is in the process of developing a comprehensive plan and strategy for undergrounding the overhead utilities for the remainder of the City. The attached Attachment C provides additional background and history on undergrounding of electric utilities. Discussion The formation of UUD 47 will result in the removal of 34 utility poles and provide underground service to 82 properties, mostly residential, of which a small percentage are commercial May 07, 2012 Page 2 of 4 (ID # 2531) properties. Completion of formation of UUD 47 will eliminate overhead distribution lines in an area bordered by existing underground utility districts, enhance reliability of the electric distribution system, and improve street-view aesthetics. Once the underground utility district is created, the Utilities Department will design and obtain bids for the installation of the underground substructure required prior to placing the overhead electric, telephone, cable TV (CATV), street light and City communication facilities underground. After the new underground systems (cable, transformers, switches, etc.) have been installed, the property owners will connect to the new underground system, utilizing their own contractors. City crews will then remove the overhead power lines, and telephone crews will complete the project by removing the remaining telephone and CATV overhead facilities and the poles. City staff is currently in discussion with AT&T concerning the allocation of costs and responsibilities for joint trench applications. As both parties agree that joint participation on projects is mutually beneficial, these discussions should not have an impact on the timeline of the project. The discussions are on-going, but staff does not foresee a significant change in cost allocation for projects with joint trench participation from AT&T. On February 1, 2011, a letter was sent to the property owners in the proposed district, introducing the project and inviting them to a meeting. During the March 10, 2011 meeting (attended by 19 property owners), staff explained the details of the project and answered questions from the property owners. A questionnaire, which was included with the letter, was used to determine the level of support for the project. Staff has received completed questionnaires from 33 property owners, 17 (52%) of whom are in favor of the project, 12 (36%) of whom are not in favor of the project, and 4 (12%) having no preference. Timeline The first step in the establishment of the district is the Council’s adoption of a Resolution of Intent to establish Underground Utility District No. 47. The Resolution defines the district boundaries and sets a time and place for a public hearing on the matter. The public hearing has been tentatively scheduled for the City Council meeting on July 23, 2012. At the public hearing, the property owners will have an opportunity to comment on the project. The adoption of the Resolution of Intent will also serve as a formal action that is required by AT&T and Comcast prior to starting engineering design. Action Date 1. Resolution of Intent to establish Underground District No. 47 May 7, 2012* 2. Letter to property owners with Resolution of Intent, Payment Option Plan, Service Conversion cost Estimate, and update May 14, 2012 May 07, 2012 Page 3 of 4 (ID # 2531) 3. Request the preparation of the Ordinance to establish underground district June 22, 2012* 4. Public Hearing July 23, 2012* 5. Second Reading of Ordinance August 6, 2012* 6. Letter to property owners with approved Ordinance, Chapter 12.167 of Municipal Code, and update September 7, 2012 7. Award of construction contract and Joint Construction Agreement with AT&T/Comcast January 2013* 8. Substructure (conduits, vaults, etc.) installation by Contractor February 2013 through July 2013 9. Installation of underground facilities (cable, switches, etc.) August 2013 through October 2013 10. Resolution determining properties electing to pay service conversion cost over a period of 10 years December 2013* 11. Service conversion work by property owners January 2014 through March 2014 12. Pole removal and project completion June 2014 through August 2014 * Denotes Council Action Resource Impact Funds for UUD 47 are included in the FY 2008-09 and 2009-10 Utilities Department Electric Capital Improvement Program budget. Due to resource constraints this project was not started during the year it was budgeted. Funds allocated for this project have been carried forward into FY 2011-12 & 2012-13. The only cost to the property owners will be that of replacing the overhead service drops to their buildings with underground service. It is estimated that the average cost per property owner will be approximately $5,000. Property owners will be offered the option of financing their service conversions under Section 12.16.091 of Palo Alto Municipal Code which provides for City loans to property owners to fund the service conversions. Property owners repay the loan and administrative costs, which are added to their property tax bills, over a ten-year period, at an interest rate approved by the Council. Policy Implications The resolution of intent does not represent any change to existing City policy and is consistent with the Council-approved Utilities Strategic Plan to invest in utility infrastructure to deliver reliable service. Environmental Review May 07, 2012 Page 4 of 4 (ID # 2531) This project is categorically exempt from CEQA under Section 15302(d) (conversion of overhead electric utility distribution system facilities to underground). Attachments: Attachment A - Resolution of Intent for Underground Utility District 47 (PDF) Attachment B - UG 47 (Boundary Map) (PDF) Attachment C - Background & History on Undergrounding of Electric Utilities (PDF) Prepared By: Patrick Valath, Management Specialist Department Head: Valerie Fong, Director City Manager Approval: ____________________________________ James Keene, City Manager *NOT YET APPROVED* 1 120320 dm 0073735 Resolution No. Resolution of the Council of the City of Palo Alto Declaring its Intention to Establish Underground Utility District Number 47 (Portions Of Homer, Cowper, Addison, Middlefield, Channing And Webster) By Amending Section 12.16.020 Of Chapter 12.16 of Title 12 of the Palo Alto Municipal Code The Council of the City of Palo Alto does RESOLVE as follows: SECTION 1. In its opinion, the public necessity, health and safety require, and it is the intention of the Council, pursuant to Section 12.16.040 of Chapter 12.16 of Title 12 of the Palo Alto Municipal Code (“Code”), to amend Section 12.16.020 of Chapter 12.16 of the Code, by ordering the establishment of an Underground Utility District (“District”) and to prohibit the construction in and require the removal from the proposed District of all poles and overhead lines and associated overhead structures used or useful in supplying electric, communication or similar and associated services. SECTION 2. The number of the proposed District is Underground Utility District Number 47 of the City of Palo Alto, commonly known to include street and avenue portions of Homer, Cowper, Addison, Middlefield, Channing and Webster. SECTION 3. The description of the area comprising the District is as follows: “All of the area in the County of Santa Clara, City of Palo Alto, encompassing the areas contiguous with portions of the following avenues, roads, and streets: Homer, Cowper, Addison, Middlefield, Channing and Webster, all as more particularly described on that certain map entitled “Proposed Underground Utility District No. 47 Homer/Cowper/Addison/ Middlefield/Channing/Webster,” on file in the office of the City Clerk.” SECTION 4. From and after the effective date of the establishment of the proposed District, no person or utility shall erect or construct within the District any pole, overhead lines or associated overhead structure used or useful in supplying electric, communication or similar associated services. SECTION 5. Within ninety (90) days from the date of the completion and acceptance of the proposed underground facilities within the District to be constructed by the City of Palo Alto, Comcast of California IX, Inc. and Pacific Bell Telephone Company dba AT&T California, all poles and overhead lines and associated structures used or useful in supplying electric, communication or similar and associated services in the proposed District shall be removed, and from and after the date no person or utility shall use or maintain such facilities within the proposed District. Additional notice shall be given after the completion date has been precisely determined. *NOT YET APPROVED* 2 120320 dm 0073735 SECTION 6. NOTICE IS HEREBY GIVEN that Monday, the 23rd day of July, 2012, at the hour of 7:00 p.m., in the regular meeting place of its City Council, Civic Center, Palo Alto, California, is hereby fixed as the time and place when and where the Council shall hear all protests and receive evidence for and against the action herein proposed, and when and where the Council shall consider and finally determine whether the public necessity, health and safety require the establishment of the District and the removal of poles, overhead wires, and associated overhead structures, and the underground installation of wires and facilities for supplying electric, communication and similar or associated services in the District hereinabove described. SECTION 7. At the public hearing, all persons interested shall be given an opportunity to be heard. The hearing may be continued from time to time as determined by the Council. SECTION 8. The Electrical Engineering Manager, Department of Utilities, City of Palo Alto, is hereby designated as the person to answer inquiries regarding the protest proceedings, to be had herein and may be contacted during regular office hours at 1007 Elwell Court, Palo Alto, California, 94303, or by calling (650) 566-4543. SECTION 9. The City Clerk shall give notice of the public hearing by publishing notice of the public hearing and the director of utilities shall mail copies of this resolution to all property owners within the proposed District as shown on the last equalized tax roll of the City, and to all utilities supplying electric, communication or similar or associated services within the proposed District, the mailing to be completed at least thirty (30) days prior to the date of the public hearing. The Clerk is authorized to include in the notice to be mailed a statement to the effect that any affected property owner has the option of paying the cost of converting his or her or their service connection to underground locations over a period of years. Such notice shall conform to Section 12.16.092 of Chapter 12.16 of Title 12 of the Code. // // // // // *NOT YET APPROVED* 3 120320 dm 0073735 SECTION 10. This project is categorically exempt from CEQA under Section 15302(d) (Conversion of overhead electric utility distribution system facilities to underground). INTRODUCED AND PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: ______________________________ _________________________ City Clerk Mayor APPROVED AS TO FORM: APPROVED: ______________________________ _________________________ Senior Asst. City Attorney City Manager _________________________ Director of Utilities ATTACHMENT B City of Palo Alto (ID # 2558) City Council Staff Report Report Type: Consent Calendar Meeting Date: 5/7/2012 May 07, 2012 Page 1 of 5 (ID # 2558) Summary Title: Revision to Community Center Rules Title: Approval of Revisions to Regulations of the City of Palo Alto Regarding Prohibited Conduct at or in Community Centers, Theaters, Interpretive Buildings and the Art Center From: City Manager Lead Department: Community Services Executive Summary Since 1998, the Community Services Department has used Council-adopted rules of conduct for the City’s community centers, theatres, museums and nature centers in order to establish standards of appropriate behavior and use of facilities by the public. These established rules have also helped to ensure that visitors are kept safe and are treated consistently and fairly when attending classes, performances or public functions. Three recent public concerns at the Lucie Stern Community Center, Cubberley Community Center and the Mitchell Park Community Center (under construction) have called attention to either language in sections of the existing rules that is vague or difficult for staff and the public to interpret; standards for the storage of personal belongings on City property that are absent from the rules; or standards for smoking near civic buildings that need to be modified to meet LEED building standards. These Community Center rules were last updated in 2006. Staff strives to review and update these rules as necessary to keep them relevant to facility uses and community needs. Recommendation Staff and the Parks and Recreation Commission recommend that Council adopt the attached revisions to the Rules and Regulations regarding prohibited conduct at or in community centers, theaters, interpretive buildings and art center May 07, 2012 Page 2 of 5 (ID # 2558) (Attachment A). Background An interdepartmental Building Regulations Committee composed of representatives of the Community Services Department and City Manager’s Office was created by the City Manager in August 1997. The charge of this committee was to develop rules of decorum and regulations for the safe and effective use of City facilities by the public. These regulations were deemed necessary as facilities were at times being used by some members of the public in ways that interfered with the mission and function of City programs and services, resulting in complaints from the public at large. A set of well-defined and enforceable regulations has greatly helped City staff respond to patron complaints and work with facility visitors to encourage appropriate conduct in all City facilities. On July 27, 1998, the City Council amended Palo Alto Municipal Code Section 2.08.050 to enable the City Manager to prescribe and enforce regulations for the entry into, or use by members of the public, of any City real property, building, park, or other facility. On September 4, 1998, regulations were adopted governing the appropriate use of community center facilities, which includes the Art Center, Community Theatre, interpretive centers (Baylands, Arastradero Preserve, and Foothills Park), Junior Museum & Zoo, community centers (Cubberley, Mitchell, and Stern) and the Children’s Theatre. Staff committed to the City Council that we would keep these rules and regulations current and relevant to customer use patterns as well as responsive to emerging recreational and visitor needs. The rules were subsequently revised May 1, 2006 to add new sections. In the past year staff has encountered problems with a few disruptive visitors that have prompted us to again update the Community Center rules. One visitor has repeatedly caused disturbances by loudly protesting in front of the Community Theatre during productions of the Palo Alto Players and has unduly interfered with patrons entering the theatre. A second problem has arisen with the continue stashing of shopping carts full of personal items in the Stern and Cubberley hallways by transient persons. Both of these incidents have called our attention to either inadequate definitions in the current rules, or inadequate provisions in the rules to address misuse of public places. May 07, 2012 Page 3 of 5 (ID # 2558) These rules have been carefully reviewed by Community Services management staff, representatives of TheatreWorks, West Bay Opera and Palo Alto Players, the City Attorney’s Office, and by advocates for the homeless, to ensure that the rules are fair, enforceable and reasonable. On April 24, 2012, staff presented the proposed rules to the Parks and Recreation Commission, with edits from the Rules & Regulations Subcommittee of the Commission. The Commission reviewed the suggested changes and voted 6 to 0 (Commissioner Ashlund absent) to recommend the adoption of the rules by the City Council. The Commission’s changes are high-lighted in red underscored text in the attached copy. The original suggestions for amended language are high- lighted in yellow. Discussion Staff has made changes to the Community Center Rules and Regulations in order to keep them relevant and reflective of City policies, including changes to reflect the current organizational structure of Community Services Department. Attachment A contains the rules and regulations with the changes and additions highlighted in red (Commission amendments) and yellow (original staff recommendations). The most significant changes to the rules include more clear definitions of “threatening, loud and raucous, intimidating language or conduct” around community center visitors or patrons; limitations on the storage of personal property in and around community centers; and the increase of the distance that smokers must stand beyond community center entrances. Section 1: The Parks and Recreation Commission Subcommittee recommended adding the phrase “including courtyards, doorways and walkways” to be consistent with new staff-recommended language in Section 14 that helps make it clear that the rules affect both the interior of the buildings as well as public access and entry ways. Section 6: The Subcommittee recommends adding “kitchens” to restrooms as restricted areas for members of the public to bathe or to wash or dry personal laundry. This recommendation is intended to ensure the sanitation of food preparation and storage areas. May 07, 2012 Page 4 of 5 (ID # 2558) Section 7: As in Section 1, the Subcommittee recommends adding the phrase “including courtyards, doorways and walkways” to be consistent with new staff- recommended language in Section 14 that helps make it clear that the rules affect both the interior of the buildings as well as public access and entry ways. Staff has added the phrase “significantly interfere with the use of the facilities by patrons” or visitors in order to distinguish the behavior from what would be typical behavior for the particular activity. For example, the noise during a public lecture would be less loud that during a typical martial arts training class. The City Attorney’s Office has recommended that in order to take action, staff must verify that the disturbing behavior is “significantly” different than the behavior of other program participants or visitors. Section 8: The Subcommittee recommends adding the phrase “including courtyards, doorways and walkways” to be consistent with new staff- recommended language in Section 14 that helps make it clear that the rules affect both the interior of the buildings as well as public access and entry ways. Section 14: Staff recommends adding the phrase “courtyards, doorways and walkways” to help make it clear that the rules affect both the interior of the buildings as well as public access and entry ways. Section 17: Staff recommends that the distance from doorways that visitors are prohibited to smoke be increased from twenty feet to twenty-five feet in order that new LEED-certified buildings (such as the new Mitchell Park Community Center) are in compliance with LEED standards of at least twenty-five feet. Section 18: This is a new section that restricts the placement or parking of personal belongings around community centers to no period longer than thirty minutes. Exceptions are made for the storage of materials in classrooms and student-assigned lockers. This rule is intended to discourage the storage of large amounts of personal belongings at community centers by patrons or visitors. This rule will help staff and facility users to control the frequency with which people store shopping carts in hallways, corridors and courtyards. The Subcommittee recommends adding the phrase “including courtyards, doorways and walkways” to be consistent with new staff-recommended language in Section 14 that helps make it clear that the rules affect both the interior of the buildings as well as public access and entry ways. Timeline, Resource Impact May 07, 2012 Page 5 of 5 (ID # 2558) There is no resource impact associated with the adoption of the revised Community Center Rules and Regulations. Once approved by the City Council, the amended rules will posted on the City’s web site for easy public reference; copies will be distributed to staff for training and implementation; and the rules will go into effect within thirty days. Policy Implications These revisions to the existing administrative Community Center Regulations are consistent with City policy to define and enforce certain standards of behavior in City facilities in order to ensure appropriate use and enjoyment of these facilities for the public at large. Environmental Review These changes in the Community Center Regulations are not a project as defined by the California Environmental Quality Act (CEQA) and are not subject to CEQA requirements. Attachments: Attachment A -Updated Community Center Rules and Regulations - with high-lights (DOC) Prepared By: Greg Betts, Director, Community Services Department Head: Greg Betts, Director, Community Services City Manager Approval: ____________________________________ James Keene, City Manager 121030 dm 0073714 REGULATION OF THE CITY OF PALO ALTO REGARDING PROHIBITED CONDUCT AT OR IN COMMUNITY CENTERS, THEATERS, INTERPRETIVE BUILDINGS AND ART CENTER As authorized by Palo Alto Municipal Code section 2.08.050, the following regulation is adopted, to be effective fifteen days following submission to Council made the date stated below. In order to preserve and provide public access to City of Palo Alto recreation, art, science, theater and cultural services provided at City community centers, theaters, interpretive buildings, and Art Center, the following conduct which interferes with those services is prohibited and may be grounds for removal from and denial of access to City community and art centers, theaters and interpretive centers. Violation of these regulations will not be considered a violation of municipal law subject to criminal penalties, although the conduct may independently be punishable as a crime under federal or state law. Community centers, theaters, interpretive centers, and Art Center (individually, a “covered facility” and collectively, "covered facilities") are defined to include all buildings and premises of the Lucie Stern Community Center, Children's Theatre, Community Theatre, Junior Museum & Zoo, Mitchell Park Community Center and Field House, Art Center, Peers Park Field House, Lucy Evans Baylands Nature Interpretive Center, Pearson Arastradero Preserve Gateway Center and Foothills Park Interpretive Center. "Covered facilities" also include those public buildings of the Cubberley Community Center except those rooms which are governed by the terms of individual lease agreements for exclusive use. A “special event” function is defined as any class, lecture, program, theatre production, or a special-use event specifically permitted by the Director of Community Services (“Director”) that is produced, sponsored, co-sponsored, or permitted by the City of Palo Alto. Persons attending special event functions are included as persons “specifically authorized by City Staff.” 1. No person other than authorized City staff or other persons specifically authorized by City staff shall enter or remain in the covered facilities, including courtyards, doorways and walkways, after posted closing hours. 2. No person shall enter areas of the covered facilities posted or noticed for use by “City staff only” other than authorized City staff or other persons specifically authorized by City staff. 3. No person shall obstruct any covered facilities entrances or exits, aisles or program areas in any manner which impedes public access, the free passage of any other person, or presents a physical safety hazard. This restriction shall not apply to City staff or contractors utilizing building entrances, exits, or aisles for maintenance or repair or for loading or unloading of materials. 4. No person shall bring a bicycle, tricycle or similar wheeled conveyance into the public areas of the covered facilities or leave such devices at the entrances or exits of the buildings in a manner which impedes or restricts public access, the free passage of any other person, or presents a physcial safety hazard, or in any way physically damages a facility or premises. This restriction shall not apply to persons utilizing wheelchairs or similar medically-required devices within the covered facilities. Covered facilities’ patrons may use children's strollers or similar conveyances when necessary to transport young children into and within the buildings provided they are used in a manner or location that does not impede or restrict public access, the free passage of any person, present a physical safety hazard, or in any way physically damage a facility or premises. City staff may, however, store such conveyances in accordance with department procedures. 5. No person shall bring any animal into the covered facilities other than service animals assisting individuals with disabilities or animals under the control of a police officer, animal handler authorized by City staff or performer authorized by City staff to attend a special event conducted in the covered facilities. 6. No person shall use covered facilities restrooms or kitchens (excluding shower rooms or locker rooms expressly provided for this purpose) for bathing (except for washing of hands and face), or washing or drying of clothes or 121030 dm 0073714 utensils unless to assist City staff or authorized by City staff. No person shall use covered facilities restrooms or public areas for meal or food preparation unless to assist City staff or authorized by City staff. 7. No person shall engage in running, skateboarding, roller skating or otherwise use coasting devices in covered facilitesfacilities, including in courtyards, doorways or walkways.. No person shall engage in loud and raucous conduct on covered facilities premises sufficiently close to covered facilities"buildings so as to significantly interfere with the use of the facilities by patrons, visitors or City staff. Noise from participants in special events may be exempted. 8. No person shall engage in threatening, loud and raucous, intimidating language or conduct directed at patrons, visitors or City staff on covered facilities premises, including in courtyards, doorways or walkways, in any manner which significantly interferes with the use of facilities by other patrons, visitors or City staff. 9. No person shall enter into or remain within covered facilities emitting offensive odors (including bodily odors, perfumes, etc.) which unreasonably interfere with the use of covered facilities' services by other patrons, visitors or City staff. 10. No person shall move, alter or rearrange covered facilities furniture or equipment, including altering the configuration or settings of computer equipment or programs, for their personal use (other than for medically required purposes) without the authorization of covered facilities staff. 11. No person shall eat food or drink liquids (except water in enclosed containers or medically required food or beverage) in areas of the covered facilities that have posted “no food allowed,” other than at special events. Food or beverage of any type, with the exception of water in a covered contatiner, is strictly prohibited in theatre auditoriums and Art Center exhibition galleries. Use of food and beverage in meeting rooms and other rented areas within covered facilities will be regulated by the specific terms of the facility use agreement. 12. No person shall solicit or exchange funds or donations from patrons, visitors, or staff within the "covered facilities" other than through posting of solicitation information on areas specifically provided and posted for that purpose by City staff. Support organizations working on behalf of covered facilities or City staff who have been specifically designated and authorized by the Director may conduct charitable solicitations in locations and at times and in a manner authorized by City staff. Covered facility renters may conduct fund raising events, solicit funds or disseminate information in locations and at times and in a manner regulated by the specific terms of each facility and the facility use agreement. This regulation shall not apply to Cubberley Community Center tenants. 13. No person shall sell, offer to sell, exchange money for products or services, or display for the purpose of sale any commercial product, service, or device within the covered facilities or upon those premises other than through posting of information on areas specifically provided and posted for that purpose by City staff, or at events authorized by a facility use agreement or City staff. Support organizations working on behalf of covered facilities which have been specifically designated and authorized by the Director of Community Services may conduct commercial transactions supporting City purposes in locations and at times and in a manner authorized by City staff. Covered facility renters may conduct commercial transactions or offer products for sale in locations and at times and in a manner regulated by the specific terms of each facility and the facility use agreement. This regulation shall not apply to Cubberley Community Center tenants. 14. No person shall camp on covered facilities premises including in courtyards, doorways or walkways, unless that person is a part of a registered class or summer camp or specifically designated and authorized by the Director of Community Services as part of a special event. Camping means the use of any portion of covered facilities’ premises for living accommodation purposes. 15. Anyone who repeatedly occupies covered facilities and premises while sleeping in excess of thirty minutes after being requested not to do so will be considered to intend to use the covered facility for sleeping purposes. No person 121030 dm 0073714 other than a child under the age of four years shall use covered facilities primarily for sleeping purposes as this may unreasonably interfere with the use of covered facility services by other patrons or City staff. 16. No person shall use sound, light generating, or amplifying devices within covered facilities and premises in any manner which interferes with the conduct of City business or with any in-progress meeting or special event except in those instances where sound, light generating, or amplifying devices are used by City staff or authorized by City staff in order to conduct City business. 17. No person shall smoke within twenty five feet (25 feet) of any entrance or door of any City community center, theatre, art center, museum, interpretive center or other covered facility. 18. Anyone who repeatedly places personal belongings in or around covered facilities, including in courtyards, doorways or walkways, in excess of thirty minutes after being requested not to do so will be considered to intend to use the covered facility for storage purposes. No person shall use covered facilities primarily for storage purposes, unless that person has been assigned a locker, closet or storage unit by City staff as part of participating in a registered class or program. 19. No person shall use electrical, phone, data communication or cable receptacles in covered facilities for private use, unless that person is using the receptacle to power a phone, laptop, tablet or device of similar nature or that person has prior staff permission and is complying with the terms of a special use permit granted by the Community Services Department. adopted 9/4/1998 revised 5/1/2006 revised x/x/2012 121030 dm 0073714 COMMUNITY CENTER RULE ENFORCEMENT AND APPEALS Applicable to Regulations of the City of Palo Alto Regarding Prohibited Conduct in Community, Theatres, Interpretive Buildings, and Art Center (Covered Facilities) In order to be fair and equitable in the application of City community building regulations and to provide a written record of the enforcement of these regulations, the following procedures will be applied by Community Services staff. Staff will at all times endeavor to correct inappropriate customer behavior in a polite, respectful, and problem-solving manner. Cause to Expel Persons from Community Centers, Theatres, Interpretive Buildings, and Art Center (Covered Facilities) and Not Allow Their Return the Same Day Prior to beginning the following procedure, the visitor/customer should be invited to speak privately with the staff member or supervisor. Staff should explain the importance of building regulations and how violation of the regulations affects other visitors or programs. The visitor should understand that continued or repeated violation of the rules may result in suspension of visitor privileges, including being asked to leave the building or premises. 1. Inform the person that despite past warnings, violation of one or more regulations has occurred again, and the person must leave the building or premises. The expulsion does not limit the person from entering other Community Services facilities. 2. Reiterate to the visitor/customer that their cooperation is important. If the person feels the expulsion is unfair or unreasonable, suggest the intervention of a supervisor to hear his or her objection to the staff action. The supervisor will consider the visitors appeal and then decide appropriate action. The supervisor's decision will be final. 3. If a supervisor is not available at the facility where the violation of the regulations has occurred, a Community Services management employee from another facility may hear the person's objection to the staff action, and then decide appropriate action. Although face to face discussions are preferred, if necessary, a supervisor from another facility may consider the appeal by phone. 4. The final action of each incident, together with the visitor/customer's objections, must be reported on an 'Incident Report Form' and be reviewed by either the Division Manager of Arts and Science, Recreation, or Open Space. Parks and Golf. Repeated violations by the same individual 1. If a person repeatedly violates any one or more regulations, and has been warned and requested to leave the building or premises within the past ninety days, it may be necessary to suspend that person from that particular facility for longer than one day. If this is the case, the person will be informed of the length of the suspension, which would depend on the number of times staff has had to ask the person to leave the facility in the past 90 days. The expulsion does not limit the person from entering other Community Services facilities. 2. The second expulsion from a facility within ninety days will be for three days. The third expulsion from the same facility will result in a seven day suspension. The fourth expulsion from the same facility will result in a fourteen day suspension, as well as other possible remedies to the conflict. 3. As with any situation involving expulsion from a covered facility, if the person feels the expulsion is unfair or unreasonable, suggest the intervention of a supervisor to hear his or her objection to the staff action. The person should request this hearing at the time the suspension decision is made. The supervisor will consider the visitors appeal and then decide appropriate action. The supervisor's decision is final. 121030 dm 0073714 4. If for some reason additional information about an incident needs to be gather before a decision to suspend is made, in all cases staff will make a final decision within two days of the decision to suspend. 5. If a supervisor is not available in the facility where the violation of the regulations has occurred, the matter will be appealed to either Division Manager of Arts and Science, Recreation and Golf, or Open Space and Parks. The Director's decision will be final. 6. Each final action taken must be reported on an 'Incident Report Form' and reviewed by either the Division Manager of Arts and Science, Recreation and Golf, or Open Space and Parks. 7. A copy of written records shall be maintained in the Community Services Administration offices at the Lucie Stem Community Center. 7/27/1998 Revised May 1, 2006 City of Palo Alto (ID # 2814) City Council Staff Report Report Type: Action ItemsMeeting Date: 5/7/2012 May 07, 2012 Page 1 of 3 (ID # 2814) Summary Title: BID Re-Authorization Title: Public Hearing to Hear Objections to the Levy of Proposed Assessments on the Palo Alto Downtown Business Improvement District and Adoption of a Resolution Confirming the Report of the Advisory Board and Levying Assessment for Fiscal Year 2013 on the Downtown Palo Alto Business Improvement District From: City Manager Lead Department: City Manager Recommendation Staff recommends that the City Council: 1. Hold a public hearing on the levy of proposed assessments in Fiscal Year 2013 in connection with the Downtown Palo Alto Business Improvement District; and 2. Approve a resolution confirming the report of the Advisory board and levying an assessment for Fiscal Year 2013 on the Downtown Palo Alto Business Improvement District. Background On April 23, 2012, the City Council Adopted a resolution preliminarily approving the report filed by the Palo Alto Downtown Business Improvement District Advisory Board for the Fiscal Year 2013; Adopted a resolution of intention to levy the annual assessment for 2012-2013; and Set May 7, 2012 at 7:00pm, or soon thereafter, as the date and time for the public hearing on the levy of the proposed assessments. Discussion The City Council is required to annually hold a public hearing, approve the Advisory Board Annual report, and determine whether or not to levy the annual assessment for May 07, 2012 Page 2 of 3 (ID # 2814) the Palo Alto Downtown business Improvement District (BID). The BID is required by State law to be authorized annually. As such, it is not possible under state BID law to implement capital projects that extend longer than one year. Traditionally, funds generated from Business Improvement Districts are used for marketing, promotions, maintenance, and beautification of business districts. The assessments levied on businesses in the BID are based on the size, type, and location of downtown businesses. Based on a cost-benefit analysis, retailers and restaurants pay a larger assessment because they receive more benefit from the activities undertaken in the business district. For example, a small-large retailer/ restaurant would pay $225 to $450, while a small-large professional business (architect, accountant, etc) pay in the $50 to $225 range. Professional businesses pay the least since they receive less benefit from the BID. Absent a majority protest at the public hearing, the Council may adopt a resolution approving the report for Fiscal Year 2013 as filed or as modified by the Council at the conclusion of the public hearing. The adoption of the resolution constitutes the levying of the BID assessments for Fiscal Year 2013. The staff report (April 23, 2012) is attached and describes the actions related to the BID, including the report of the Palo Alto Downtown Business and Professional Association (PADBPA) to the City Council (Attachment 1). Attached is the Council Resolution approving the BID for Fiscal Year 2013 including required exhibits. Last year Council requested more detailed maps in addition to those required for the resolution. A more detailed map is attached as Attachment 3. Resource Impacts Adoption of the proposed BID budget does not directly impact City revenue. BID assessments are restricted to exclusive use by the BID. A healthy BID will typically encourage growth of the retail community and consequently result in additional sales tax revenue for the City. Minimal staff effort is expended annually to administer the collection of the BID. Staff will continue to monitor adminitrative time devoted to the collection of BID assessments to assure that City costs do not exceed estimates for these services. The cost and collection of BID assessments past 60 days is absorbed by the BID. The Attorney’s Office will continue to provide legal oversight to the BID during the annual reathorization process. Administrative Services and/or Planning Department staff provide assistance in the collection of BID assessments. The Economic Development Manager will continue to provide oversight of the BID and will prepare the annual reauthorization. May 07, 2012 Page 3 of 3 (ID # 2814) Environmental Review This action by the City Council does not meet the definition of a project under Section 21065 of the California Environmental Quality Act, and therefore no environmental assessment is necessary. Attachments: BID CMR with Update and Attch_FY2013 (PDF) 0130964 RESO Confirming Rpt of BID For FY 2013 (DOC) BID Map and Fee Schedule (Exhibit A & B)_2 (PDF) Prepared By: Thomas Fehrenbach, Econ Dev Mgr Department Head: James Keene, City Manager City Manager Approval: ____________________________________ James Keene, City Manager City of Palo Alto (ID # 2763) City Council Staff Report Report Type: Consent Calendar Meeting Date: 4/23/2012 April 23, 2012 Page 1 of 4 (ID # 2763) Summary Title: BID Preliminary Re-Authorization Title: Preliminary Approval of the Report of the Advisory Board for Fiscal Year 2013 in Connection with the Palo Alto Downtown Business Improvement District and Adoption of Resolution Declaring its Intention to Levy an Assessment Against Businesses within the Downtown Palo Alto Business Improvement District for Fiscal Year 2013 and Setting a Time and Place for a Public Hearing on May 7, at 7:00 PM or Thereafter, in the City Council Chambers From: City Manager Lead Department: City Manager Recommendation Staff recommends that City Council: (a) Preliminarily approve the Business Improvement District (BID) Advisory Board’s 2013 Budget Report for the BID (Attachment 1) and; (b) Adopt a Resolution of Intention to Levy Assessments in the Palo Alto Downtown Business Improvement District for Fiscal Year 2012, setting a date and time for the public hearing on the levy of the proposed assessments for May 7, 2012, at 7:00 PM, or thereafter, in the City Council Chambers (Attachment 3) Executive Summary This Council action includes a preliminary approval of the BID Board’s annual report, and sets a time and place for a public hearing for the staff presentation, and to determine any objections to the assessments. Since the BID inception in 2004, a number of activities consistent with State BID law have been accomplished by the Palo Alto Downtown Business and Professional Association (PADBPA), the entity with which the April 23, 2012 Page 2 of 4 (ID # 2763) City contracts to provide services to the 800+ businesses assessed in the Downtown. These include addressing the three main issues facing downtown businesses: cleanliness, safety, and attractiveness, as well as participation in zoning and other matters affecting downtown businesses. Assessments for BID businesses are based on the size, type and location of the business. Assessments range from $50 for individually owned professional businesses to $500 annually for financial institutions. The PADBPA has monthly open meetings governed by the Ralph M. Brown Act which any business or individual can attend. At last year’s re-authorization hearing, some Councilmembers asked staff to evaluate the possible expansion of the BID area and adjustments to the fee structure. Staff consulted with the PADBPA Board who did not favor expanding the boundaries or adjusting fees at this time. Legal staff has informed us that expansion of the boundaries will require re-establishment of the District including the expanded area which may require a vote of the entire assessment district. Background The Palo Alto Downtown Business Improvement District (BID) was established by the City Council in 2004 pursuant to the California Parking and business Improvement Area Law to promote the economic revitalization and physical maintenance of the Palo Alto Downtown business district. The Council appointed the Board of Directors of the Palo Alto Downtown Business and Professional Association (PADBPA), a non- profit corporation, as the Advisory Board for the BID. The Board’s purpose is to advise the Council on the method and basis for levy of assessments in the BID and the expenditure of revenues derived from the assessments. Pursuant to BID law, the Advisory Board must annually submit to the Council a report that proposes a budget for the upcoming Fiscal Year for the BID. The report must: 1) propose any boundary changes in the BID; 2) list the improvements and activities to be provided in the Fiscal Year; 3) estimate the cost to provide the improvements and activities; 4) set forth the method and basis for levy of assessments; 5) identify surplus or deficit revenues carried over from the prior Fiscal Year; and 6) identify amounts of contributions from sources other than assessments. April 23, 2012 Page 3 of 4 (ID # 2763) The Council must then: 1) review the report and preliminarily approve it as proposed or as changed by the Council; 2) adopt a resolution of intention to levy the assessments for the upcoming Fiscal Year; and 3) set a date and time for the public hearing on the levy of assessments in the BID. Absent a majority protest at the public hearing on May 2, 2011, at the conclusion of the public hearing, the Council may adopt a resolution confirming the report for Fiscal Year 2012 as filed or as modified by the Council. The adoption of the resolution constitutes the levying of the BID assessments for Fiscal Year 2012. Discussion The Advisory Board has prepared a report (Attachment 1) for the Council’s consideration which includes the proposed budget for the Palo Alto Downtown BID for Fiscal Year 2013. As required by BID law, the report has been filed with the City Clerk and contains a list of the improvements, activities, and associated costs proposed in the BID for Fiscal Year 2012. The Advisory Board has recommended no change in the BID boundaries or the method and basis for levying assessments. A map of the BID and assessment schedule is attached (Attachment 2). The proposed assessments in the BID for Fiscal Year 2013 are the same as the assessments in Fiscal Year 2012. No increases are proposed. The budget report for Fiscal Year 2013 was reviewed and approved by the Palo Alto Downtown Business and Professional Association at its board meeting on March 28, 2012. Resource Impact Adoption of the proposed BID budget does not directly impact City revenue. BID assessments are restricted for use exclusively by the BID. It is anticipated that a healthy BID will encourage vitality in the retail community and consequently result in additional sales tax revenue for the City. Some staff effort is expended annually to administer the collection of the BID. Staff will continue to monitor staff administrative time devoted to the collection of BID assessments to assure that City costs do not exceed April 23, 2012 Page 4 of 4 (ID # 2763) estimates for these services. The cost and collection of BID assessments past 60 days is borne by the BID. The Attorney's Office will continue to provide legal oversight to the BID during the annual reauthorization process. Administrative Services staff provides assistance in the collection of BID assessments. The Economic Development Manager will continue to provide oversight to the BID and will prepare the annual reauthorization. Environmental Review This action by the City Council does not meet the definition of a project under Section 21065 of the California Environmental Quality Act, and therefore no environmental assessment is necessary. Attachments: PAd Annual Report 2012-13 (DOC) Bid Map and Fee Schedule (Exibit A & B) (PDF) 0130950 RESO Declaring Intention to Levy BID FY13 (PDF) Prepared By: Thomas Fehrenbach, Econ Dev Mgr Department Head: James Keene, City Manager City Manager Approval: ____________________________________ James Keene, City Manager 1 Introduction This report from the Advisory Board of the Palo Alto Downtown Business & Professional Association (“PAd”) was prepared for City Council to review for the annual reauthorization of the Downtown Palo Alto Business Improvement District (“BID”) pursuant to Section 36533 of the Parking and Business Improvement Law of 1989 (Section 36500 and following of the California Streets and Highways code) (the “Law”). This report is for the proposed fiscal year for the BID commencing July 1, 2012 and ending June 30, 2013. (“Fiscal Year 2012-13”). As required by the Law, this report contains the following information: I. Any proposed changes in BID boundaries and benefit zones within the BID; II. The improvements and activities to be provided for Fiscal Year 2012-13; III. An estimate of the cost of providing the improvements and the activities for Fiscal Year 2012- 13; IV. The method and basis of levying the assessment in sufficient detail to allow each business owner to estimate the amount of the assessment to be levied against his or her business for Fiscal Year 2012-13. V. The amount of any surplus or deficit revenues to be carried over from a previous fiscal year. VI. The amount of any contributions to be made from sources other than assessments levied pursuant to the Law. Submitted by Anne E. Senti-Willis, Chair, and Russell S. Cohen, Executive Director on behalf of the Advisory Board (“Advisory Board”) of the Palo Alto Downtown Business & Professional Association (“PAd”). The Advisory Board approved this report on March 28,, 2012. Received on file in the Office of the City Clerk of the City of Palo Alto on March 29, 2012. 2 Section I: BID boundaries and Benefit Zones There have been no changes in the BID boundaries or benefit zones within the BID and no changes are proposed. The current boundaries are depicted on the map below. The area of the BID is referred to as “Downtown” 3 2011-12 FISCAL YEAR IN REVIEW “Keeping Downtown Palo Alto Safe, Spotless and Successful.” Identified approximately $25K in new assessments by updating data base Included letter to new businesses with first invoice helping to educate and inform them about PAd Included letter with second invoice to all businesses within district Increased street cleaning schedule and improved street cleaning equipment resulting in noticeable improvements Increased police presence with addition of dedicated patrol officers downtown Recruited new board members Initiated Cogswell Plaza improvements, work plan approved and renovations begin in Spring/Summer 2012 Developed rules of engagement for Lytton Plaza with Parks Department. Launched PAd Facebook page Completed annual financial audit Conducted “on the street” surveys regarding Downtown general issues Recruited media coverage including “Eye on The Bay” ( KCBS) and “Around the Bay” ( KNTV-NBC) live remote Gathered approx. 140 email addresses from Downtown businesses Assumed responsibility for the Chamber Parking Committee which in turn has helped to develop Downtown parking policy enhancements Initiated monthly meetings with City of PA Economic Development Manager as well as monthly meetings with Chief Parking Official. Designed and placed advertising in Palo Alto Weekly and Palo Alto online Designed and managed media coverage and vendor participation for: “The Downtown Palo Alto Clean, Green Street Scene” and “The Downtown Palo Alto Light the Night Holiday Tree Lighting” event Worked with merchants, restaurants and City staff for the first ever closure of University Ave for “World Music Day” Initiated the “Downtown Crown.” A symbolic gift presented to new businesses upon their grand opening. Five crowns have been presented during calendar year 2011 4 Conducted PAd breakfast roundtable entitled, ” In Pursuit of the Perfect Public Parking Program” with featured speakers from the City of San Francisco’s Transportation Commission, City of Palo Alto and Redwood City Partnered with city of Palo Alto on Gran Fondo, United Nations Association Film Festival, Giants Championship Trophy in Lytton Plaza and Parade of Champions events Conducted board member brainstorming and prioritization goal setting offsite. Media coverage included at least 10 articles on Downtown events and issues. 5 Section II: Improvements and Planned Activities for Fiscal Year 2012-13 Programs, Events and Activities: A more attractive Downtown: Continued robust cleaning schedule along with improved cleaning equipment including a higher pressure, hot water device to allow for gum removal through a partnership with the City of Palo Alto and its vendors. An active lamppost banner schedule is in place for both spring and summer and is in development for fall and winter. New banner ordinance language is in development. Lighting and landscaping improvements for Cogswell Park will commence in May 2012. Rules of engagement regarding amplified music and permitting for Lytton Plaza are under development with a recommendation from the Parks and Recreation commission forthcoming. Work continues with the Palo Alto Police Department to address aggressive panhandling and loitering conflicts. Work continues with the Downtown Streets Team, North County Alternative Services, InnVision, Palo Alto Police Department and the City of Palo Alto Public Works Facilities and Operations Divisions to address both area cleanliness and area’s complex transient population issues, with special emphasis on Downtown public parking garages and alleyways. Landscaping enhancements along University Avenue in partnership with the city of Palo Alto landscape architect. Work scheduled to begin Spring 2012. Twinkle lights in Lytton Palza upgraded to solar timers while street trees remain on traditional timers enabling better control of electricity in Lytton Plaza. Work with the City of Palo Alto Economic Development Manager to develop and implement restaurant outdoor seating guidelines and process. Flagpoles displaying American Flags during national holidays on lamp posts is under development with the city of Palo Alto Public Works division. Enhancing downtown with a preponderance of public art, including art in vacant storefronts in under development through a partnership with The City of Palo Alto Art Commission, ArtHere and others. “First /Art Crawl” under consideration of reemergence. A more informed Downtown: Work is underway to create a Downtown Ambassador program. Currently the Downtown Streets Team (DST) administers a tiered system employing participants to clean Downtown 6 streets and alleyways in exchange for food and housing vouchers. Participants are rewarded and promoted through tiers based on performance. The introduction of a new tier, “Downtown Ambassador,” will become the ultimate reward. These “Ambassadors” will be neatly uniformed and well educated about Downtown events and businesses. They will function as Downtown concierges for visitors and patrons of Downtown Palo Alto. Funding will come from multiple private/public partnerships. Revitalization of the block captain program is under discussion. “rBlock” geographic communications tool under beta testing by city of Palo Alto and PAd to test efficiency of this method of mass communication. Continued board member recruitment/development is underway with special attention given to diversity. Desired diversity would include a variety of business types represented on the board, including but not limited to Financial, Technology, Retail, Medical, Restaurant, Real Estate, and Hospitality as well as at least one representative from more distant points within the district. Providing information through a printed walking map of Downtown is under development Providing information and branding of Downtown through publication of “Made in DOWNTOWN Palo Alto” is under development. A more connected Downtown: Web presence: Re-engineer website to communicate with district members. Re-branding of PAd to be included in website redesign B2B focused. This refocus will allow members to build relationships amongst fellow members of the district, be better informed about events, issues and programs that affect their businesses directly. Give business of all kinds a better connection to PAd for specific advocacy needs. Web site will function as a portal for archival information—minutes, agendas and a members’ only contact list. Social media may be employed to provide a more immediate outreach opportunity to members and the public. A comprehensive email database is being developed in order to design an effective electronic communication strategy. Surveys Both electronic and on the street, personal outreach and surveys are ongoing in order to determine what successes can be capitalized upon and what concerns need to be addressed regarding doing business in Downtown Palo Alto. Partnerships 7 Building relationships with Stanford Dean of Student Activities, Athletic Events Marketing Director, Office of Government and Community Relations and University Real Estate Office to enhance connectivity and encourage Stanford visitors and community members to come Downtown. Other partnership discussions underway include, Palo Alto Community Fund, Palo Alto Institute, Palo Alto Art Center, Kiwanis, Palo Alto Chamber of Commerce and more. Outreach Through vigorous outreach, the PAd member database has been updated and made more accurate resulting in approximately 160 new member listings representing approximately $20,000 in additional assessments. Ongoing outreach to members regarding issues that might affect the success of their day-to-day activities, (i.e. construction updates, special events, street closures, temporary sidewalk obstructions, etc.) Note: SF Giants Trophy appearance downtown and Parade of Champions event are examples of this face-to-face, personal outreach effort. A more efficient Downtown: Continued improvement of way-finding signage including but not limited to public parking way-finding and additional bike arcs/racks and corrals. Supporting the ongoing efforts to streamline the permitting process through the City of Palo Alto Development Center. PAd now administers and facilitates the former Palo Alto Chamber of Commerce Parking Committee as much of the work plan discussed by this committee is downtown-centric. A more active Downtown: The second annual Earth Day celebration called “The Downtown Palo Alto Clean Green Street Scene” will be held April 20, 2012. Support, promote and expand World Music Day. Support and promote The Palo Alto Gran Fondo Bicycle Ride and Taste of Palo Alto. Support the efforts of the San Mateo County Convention and Visitors Bureau and ongoing Stanford events and opportunities to drive more visitors to Downtown Palo Alto from the Stanford campus. Help promote United Nations Association Film Festival, Stanford Jazz Summers, Palo Alto Institute Film Festival and TheaterWorks programs. Transition oversight and promotion of a vibrant and well-used Lytton Plaza from the Friends of Lytton Plaza. 8 New events to attract visitors and encourage neighbors to visit downtown Palo Alto more often are under development through subcommittees of the PAd. 9 Section III: Budget for 2012-13 The total funds available for activities for this fiscal year are estimated to be $29,715. The budget for providing the activities is set forth as follows: BID 2012/13 Budget INCOME Total Non-Assessment Sources Assessments $160,000 Allowance for Uncollectible Assessments ($35,000) Other Revenue $12,600 $12,600 09-10 Surplus Carryover $50,000 TOTAL INCOME $187,600 $12,600 EXPENSES Operating Expenses Staff Salaries Executive Director Salary $66,000 Payroll taxes and expense $6,600 Office Supplies & Expenses $2,000 Internet/Website Maintenance $500 Telephone $900 Rent $3,120 Reauthorization Advertising $2,000 Audit-Tax Returns $5,700 Legal $1,000 $1,000 Insurance - Liability $1,800 Workman's Comp $1,000 Nominating $1,500 Contingencies $2,000 Subtotal -- Operating Expenses $94,120 $1,000 Programs, Marketing and Events Banners $7,500 $2,000 Breakfast Roundtables $5,700 $4,100 Events $7,000 $3,500 Member Outreach & Communication $11,250 $2,000 Downtown Streets Team $5,000 District Improvement $57,030 Subtotal --Programs, Marketing & Events $93,480 $11,600 TOTAL EXPENSES $187,600 $12,600 10 Section IV: Method and Basis of Levying the Assessment Cost Benefit Analysis / Bid Assessments The method and basis of levying the assessment is provided in sufficient detail to allow each business owner to estimate the amount of the assessment to be levied against his or her business for Fiscal Year 2012-13 and is not changed from the FY 2011-12 assessment. There have been no changes made to the Cost-Benefit Analysis or to the BID Assessments since they were approved by City Council on February 2, 2004. The method of calculation used to determine the cost and benefit to each business located in the BID is described below. The BID assessments are based on three criteria: the type of business, the location of the business and the size of the business. It has been consistently demonstrated that the typical BID program places a higher priority on activities such as commercial marketing. As a result, the retail and restaurant establishments in the BID are assessed more than service and professional businesses in the district. While service-oriented businesses benefit from a BID less than retailers and restaurateurs, they benefit more than professional businesses such as medical, dental, architectural, consultant and legal offices with their minimal advertising and promotion needs. For these reasons, various business types are assessed according to the benefit that they receive from the BID, as follows: Retail and Restaurant 100% of base amount Service 75% of base amount Professional 50% of base amount Exceptions to this rule include financial institutions that are traditionally charged a flat rate regardless of location or size and lodging businesses that are typically charged by total rooms. The location of a business also determines the degree of benefit that accrues to that business. Centrally located businesses tend to benefit more, as do businesses located on the ground floor. For this reason, A and B benefit zones have been identified for the BID. In Palo Alto, Zone A benefit businesses are assessed 100% of the base benefit assessment while Zone B businesses are assessed 75%. A third criterion is used in the BID to determine benefit. This criterion, the size of the business, takes into consideration the number of full time employees employed by the business. Please refer to Attachment 1 for a more complete understanding of the application of these three variables to establish BID benefit. Attachment 2 is the BID assessment for each business located within the BID boundaries. Applying the criteria identified in Attachment 1, a summary of the assessment that applies to each business by size, type and location is outlined. In addition to the Cost-Benefit Analysis, the assessments include the following criteria: 11 An exemption for “single person professional businesses” that have 25% or fewer full time equivalent (“FTE”), including the business owner. This covers employees who work less than 10 hours a week (based on a 40 hour work week; an FTE equals approximately 2000 hours annually) An assessment specifically for “single person businesses” that have 26% FTE to 1 FTE in the professional business category of the BID (An FTE equals approximately 2000 hours annually) The tiering of other professional businesses by size based (according to benefit) on the “single person business” criteria This outline provides information by which a business can determine its annual assessment based on objective criteria. Except where otherwise defined, all terms shall have the meanings identified below: Definitions of Business Types in the Downtown Business Improvement District Retailers and Restaurants: Businesses that buy or resell goods such as clothing stores, shoe stores, office supplies as well as businesses that sell prepared food and drink. Service Businesses: Businesses that sell services such as beauty or barber shops, repair shops, most automotive businesses, dry cleaners, art and dance studios, printing firms, film processing companies, travel agencies, entertainment businesses such as theatres, etc. Hotel and Lodging: These include businesses that have as their main business the lodging of customers. This is restricted to residential businesses that provide lodging services to customers for less than 30 days. Professional Businesses: Businesses that require advanced and/or specialized licenses or academic degrees such as architects, engineers, attorneys, chiropractors, dentists, doctors, accountants, optometrists, realtors, insurance brokers, venture capital firms, consultants, advertising and marketing professionals and mortgage brokers and similar professions. Financial Institutions: Includes banking, savings and loan institutions and credit unions. Additional clarification on business definitions will be defined according to Section 18.04.030 (Definitions) of the Palo Alto Municipal Code. The Advisory Board recommends that the following businesses be exempt from the BID assessment: New businesses established in the BID area following the annual assessment for the year in which they locate in the BID area Non-profit organizations Newspapers “Single person professional businesses” that have 25% or less FTE, including the business owner The Assessment calculated shall be paid to the City no later 30 days after receipt of the invoice with the amount of the annual assessment sent by the City. A second notice will be mailed as a reminder to businesses that have not remitted payment by that date. Late payment will be subject to a 10% late fee. 12 Section V: Revenue Surplus or Deficit Based on the revenue balance on 02/28/12 of $103,225, the PAd expects a surplus carryover of $50,000. Expected expenses for the remainder of FY 11-12 are as follows: Current Revenue Balance $103,225 Expected expenses for remaining FYE6/30/2012 Staff Salaries $25,000 Elections & Annual Report $3,500 Office & Operating Expenses $10,000 Outside Audit $4,000 Reauthorization Advertising $2,500 Downtown Streets Team $5,000 Rent $1,300 Total Expected Expense $51,300 Expected Carryover $50,000 Section VI: Non-assessment Income It is estimated that $ 12,600.00 will be raised in fundraising, and sponsor support. Additionally, anticipate in kind contribution towards expenses for Fiscal Year 2012-13. Projected Income for Fiscal Year 2012-13 Roundtable Breakfasts (donation) $4,100 Legal (donation) $1,000 Banners $2,000 Events $3,500 Member Outreach & Communication $2,000 Total $12,600 13 Section VII: PAd Board of Directors by Business Type Retailers and Restaurants Alice Duetsher, Shady Lane Gifts Whitney Denson, Five Ten Gifts Georgie Gleim, Gleim the Jeweler Jeff Selzer, Palo Alto Bicycles Cornelia Pendelton, University Art Hotel and Lodging Barbara Gross, Garden Court Hotel Service Businesses Robert Peterson, Peterson Architects Financial Institutions Deborah Pappas, Borel Private Bank & Trust Company Professional Organizations Anne E. Senti-Willis, Thoits, Love, Hershberger & McLean Non Profit Organizations Chris Richardson, Downtown Streets Team Meredith Hagedorn, Dragon Theater LIAISONS Palo Alto Chamber of Commerce Paul Wright, President & CEO Downtown Streets Team Eileen Richardson, Executive Director City Of Palo Alto Greg Scharff, Palo Alto City Council Thomas Fehrenbach, Manager of Economic Development 1 Attachment 1 ATTACHMENT 1 A General Statement Regarding Cost-Benefit Analysis For BID Businesses Using The Traditional Three Criteria Formula Criteria 1) Type of Business: Statement Concerning Cost-Benefit Formula For BID Businesses Regarding Type Of Business: In a review of 200 California Business Improvement Districts, it is consistently demonstrated that the typical BID Program places a higher priority on Commercial Marketing Programs than on Civic Beautification and Commercial Recruitment Programs. With that trend in mind, retail and restaurant businesses, with their emphasis on, and need for, commercial marketing, are traditionally assessed more than less marketing-sensitive service-oriented or professional-oriented businesses. However, while service-oriented businesses benefit from a BID less than retailers and restaurateurs, they benefit more, (from commercial marketing programs), than professional businesses such as medical, dental and legal offices with their minimal advertising and promotion needs. Therefore, set forth below, is an example of how various business types might be considered regarding the computation of the annual benefit assessment. • Retail and Restaurant: 100% of base amount • Service: 75% of base amount • Professional: 50% of base amount Exceptions to this rule include financial institutions that are traditionally charged a flat rate regardless of location or size and lodging businesses that are typically charged by total rooms. Lodging businesses are assessed based on the total number of rooms because it is a more equitable manner of determining size. Many lodging businesses have many part time employees, but revenues are based on the room occupancies of the hotel, not the goods sold or serviced provided by employees. Criteria 2) Location of Business: Statement Concerning Cost-Benefit Formula For BID Businesses Regarding Location of Business: It has also been consistently demonstrated that the more centrally located businesses tend to benefit from BID activities and services to a greater degree than businesses located toward the periphery of the proposed BID boundaries. Events and activities tend to originate in the central core of the Downtown area and spread benefit to the outer areas with diminishing energy and impact, much like the ripple effect of a stone tossed into a body of calm water. Furthermore, ground floor businesses tend to benefit to a greater degree than businesses located in upper floors. Therefore, in some cases, a new BID's annual benefit assessment formula also takes these street level criteria into account. As mentioned above, special events, fairs, festivals and other activities tend to take place within, or along, the Main Street core rather than in the areas at the periphery of the Downtown core. Additionally, BID-sponsored seasonal decorations, public art projects, street banners and street furniture tend to be located within the immediate core area. 2 Attachment 1 Therefore, businesses located within the most central area of the proposed BID are considered to be within "Zone A" which should be considered the primary benefit zone. There is typically a "secondary zone" or "Zone B" within most proposed BID areas. This area receives less benefit than Zone A and should be assessed accordingly. An example of how different zones might be treated regarding the computation of the annual benefit assessment is as follows. • Zone A: 100% of base benefit assessment • Zone B: 75% of base benefit assessment In the case of Downtown Palo Alto, it is recommended that all Zone A upper floor businesses, as well as any other businesses located at the periphery of the proposed BID, be considered as Zone B businesses. Please refer to the map in Attachment I. Criteria 3) Size of Business: Statement Concerning Cost-Benefit Formula For BID Businesses Regarding Size of Business: In approximately 50% of newly established BIDs, a third assessment criterion is used. This criterion involves the size of each individual business that is based upon the businesses’ total number of full-time employees. Full-time employees are those working a total of 2,000 hours per year. Part-time employees are grouped into full-time job positions, i.e., two half-time employees total one full-time. Fractions are rounded down to the nearest whole number with no less than one person as a minimum for business. An example of how various business sizes might be treated regarding the computation of the annual benefit assessment is as follows: Retail/Restaurants Service Businesses Small 50% of base amount Under 6 FTE* Under 4 FTE Medium 75% of base amount 6 to under 11 FTE 4 to under 7 FTE Large 100% of base amount 11 or more FTE 7 or more FTE * FTE = full time employees Additionally, an exemption was established for “single person professional businesses” that have 25% or less FTE, including the business owner. This covers employees who work less 10 hours a week (based on a 40 hour work week) Since “single person businesses” that have 26% FTE to 1 FTE in the professional business category of the BID benefit the very least from the assessment, their assessments have been tiered by size based (according to benefit) on the new “single person business” criteria. 1 Attachment 2 ATTACHMENT 2 Downtown Palo Alto Business Improvement District Annual BID Assessments ZONE A ZONE B (75% of Zone A amount) Restaurants & Retailers Under 6 FTE (50% of base amount) $225 $170 6 to under 11 FTE (75% of base amount) $340 $260 11 or more FTE (100% of base amount) $450 $340 Service Businesses Under 4 FTE (50% of base amount) $170 $130 4 to under 7 FTE (75% of base amount) $260 $200 Over 7 FTE (100% of base amount) $340 $260 Professional Businesses 25% or fewer FTE, including owner (0% of base amount) Exempt Exempt 26% FTE to under 1 FTE (25% of base amount) $60 $50 2 to 4 FTE (50% of base amount) $110 $90 5 to 9 FTE (75% of base amount) $170 $130 10+ FTE (100% of base amount) $225 $170 Lodging Businesses Up to 20 rooms (50% of base amount) $225 $170 21 to 40 rooms (75% of base amount) $340 $260 41+ rooms (100% of base amount) $450 $340 Financial Institutions $500 $500 Note 1: For retail, restaurant, service, and professional businesses, size will be determined by number of employees either full-time or equivalent (FTE) made up of multiples of part-time employees. A full FTE equals approximately 2000 hours annually. Lodging facilities will be charged by number of rooms available and financial institutions will be charged a flat fee. Note 2: Second floor (and higher) businesses located within Zone A will be assessed the same as similar street-level businesses located within Zone B. Note 3: Assessment amounts are rounded to the nearest ten dollars. The minimum assessment will be $50.00. Not Yet Approved 120327 jb 0130950 1 Resolution No. _____ Resolution of the Council of the City of Palo Alto Declaring Its Intention to Levy an Assessment Against Businesses Within the Downtown Palo Alto Business Improvement District for Fiscal Year 2013 and Setting a Time and Place for May 7, 2012 at 7:00 PM or Thereafter, in the Council Chambers THE CITY COUNCIL OF THE CITY OF PALO ALTO DOES HEREBY FIND, DECLARE, AND ORDER AS FOLLOWS: SECTION 1. The Parking and Business Improvement Area Law of 1989 (the "Law"), California Streets and Highways Code Sections 36500 et seq., authorizes the City Council to levy an assessment against businesses within a parking and business improvement area which is in addition to any assessments, fees, charges, or taxes imposed in the City. SECTION 2. Pursuant to the Law, the City Council adopted Ordinance No. 4819 establishing the Downtown Palo Alto Business Improvement District (the "District") in the City of Palo Alto. SECTION 3. The City Council, by Resolution No. 8416, appointed the Board of Directors of the Palo Alto Downtown Business & Professional Association, a California nonprofit mutual benefit corporation, to serve as the Advisory Board for the District (the "Advisory Board"). SECTION 4. In accordance with Section 36533 of the law, the Advisory Board prepared and filed with the City Clerk a report entitled "Downtown Palo Alto Business Improvement District, Annual Report 2012-2013" (the "Report”). The City Council hereby preliminarily approves the report. SECTION 5. The boundaries of the District are within the City limits of the City of Palo Alto (the "City") and encompass the greater downtown area of the City, generally extending from El Camino Real to the East, Webster Street to the West, Lytton Avenue to the North and Addison Avenue to the South (east of Emerson Street, the boundaries extend only to Forest Avenue to the South). Reference is hereby made to the map of the District attached hereto as Exhibit "A" and incorporated herein by reference for a complete description of the boundaries of the District. SECTION 6. The City Council hereby declares its intention, in addition to any assessments, fees, charges or taxes imposed by the City, to levy and collect an assessment against businesses within the District for fiscal year 2013 (July 1, 2012 to June 30, 2013). Such assessment is not proposed to increase from the assessment levied and collected for the prior fiscal year. The method and basis of levying the assessment is set forth in Exhibit "B" attached hereto, and incorporated herein by reference. Not Yet Approved 120327 jb 0130950 2 SECTION 7. The types of improvements to be funded by the levy of an assessment against businesses within the District are the acquisition, construction, installation or maintenance of any tangible property with an estimated useful life of five years or more. The types of activities to be funded by the levy of an assessment against businesses within the District are the promotion of public events which benefit businesses in the area and which take place on or in public places within the District; the furnishing of music in any public place in the District; and activities which benefit businesses located and operating in the District. SECTION 8. New businesses established in the District after the beginning of any fiscal year shall be exempt from the levy of the assessment for that fiscal year. In addition, non-profit organizations, newspapers and professional "single-person businesses," defined as those businesses which have 25% or less full time equivalent employees, including the business owner, shall be exempt from the assessment. SECTION 9. The City Council hereby fixes the time and place for a public hearing on the proposed levy of an assessment against businesses within the District for fiscal year 2013 as follows: TIME: 7:00 p.m. or soon thereafter DATE: Monday, May 7, 2012 PLACE: City Council Chambers 250 Hamilton Avenue Palo Alto, California 94301 At the public hearing, the testimony of all interested persons regarding the levy of an assessment against businesses within the District for fiscal year 2013 shall be heard. A protest may be made orally or in writing by any interested person. Any protest pertaining to the regularity or sufficiency of the proceedings must be in writing and shall clearly set forth the irregularity or defect to which the objection is made. Every written protest must be filed with the City Clerk at or before the time fixed for the public hearing. The City Council may waive any irregularity in the form or content of any written protest and at the public hearing may correct minor defects in the proceedings. A written protest may be withdrawn in writing at any time before the conclusion of the public hearing. Each written protest must contain a description of the business in which the person subscribing the protest is interested sufficient to identify the business and, if a person subscribing is not shown on the official records of the City as the owner of the business, the protest shall contain or be accompanied by written evidence that the person subscribing is the owner of the business. A written protest which does not comply with Not Yet Approved 120327 jb 0130950 3 the requirements set forth in this paragraph will not be counted in determining a majority protest (as defined below). If, at the conclusion of the public hearing, written protests are received from the owners of businesses in the District which will pay 50 percent or more of the assessments proposed to be levied and protests are not withdrawn so as to reduce the protests to less than 50 percent (i.e., there is a majority protest), no further proceedings to levy the proposed assessment, as contained in this resolution of intention, shall be taken for a period of one year from the date of the finding of a majority protest by the City Council. If the majority protest is only against the furnishing of a specified type or types of improvement or activity within the District, those types of improvements or activities shall be eliminated. SECTION 10. For a full and detailed description of the improvements and activities to be provided for fiscal year 2013, the boundaries of the District and the proposed assessments to be levied against the businesses within the District for fiscal year 2013, reference is hereby made to the Report of the Advisory Board. The Report is on file with the City Clerk and open to public inspection. SECTION 11. The City Clerk is hereby authorized and directed to provide notice of the public hearing in accordance with law. // // // // // // // // // // // // Not Yet Approved 120327 jb 0130950 4 SECTION 12. The Council finds that the adoption of this resolution does not meet the definition of a project under Section 21065 of the California Environmental Quality Act and, therefore, no environmental impact assessment is necessary. INTRODUCED AND PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: __________________________ _____________________________ City Clerk Mayor APPROVED AS TO FORM: APPROVED: __________________________ _____________________________ Senior Assistant City Attorney City Manager _____________________________ Director of Administrative Services _____________________________ Director of Planning and Community Environment Submitted by staff at places at the April 23, 2012 meeting correcting CMR #2763, Page 3. Current: The Council must the: 1) review the report and preliminarily approve it as proposed or as changed by the Council; 2) adopt a resolution of intention to levy the assessments for the upcoming Fiscal Year; and 3) set a date and time for the public hearing on the levy of assessments in the BID. Absent a majority protest at the public hearing on May 2, 2011, at the conclusion of the public hearing, the Council may adopt a resolution confirming the report for Fiscal Year 2012 as filed or as modified by the Council. The adoption of the resolution constitutes the levying of the BID assessments for Fiscal Year 2012. Corrected: The Council must the: 1) review the report and preliminarily approve it as proposed or as changed by the Council; 2) adopt a resolution of intention to levy the assessments for the upcoming Fiscal Year; and 3) set a date and time for the public hearing on the levy of assessments in the BID. Absent a majority protest at the public hearing on May 7, 2012, at the conclusion of the public hearing, the Council may adopt a resolution confirming the report for Fiscal Year 2013 as filed or as modified by the Council. The adoption of the resolution constitutes the levying of the BID assessments for Fiscal Year 2013. Not Yet Approved 120327 jb 0130950 1 Resolution No. _____ Resolution of the Council of the City of Palo Alto Confirming the Report of the Advisory Board and Levying an Assessment for Fiscal Year 2013 on the Downtown Palo Alto Business Improvement District THE CITY COUNCIL OF THE CITY OF PALO ALTO DOES HEREBY FIND, DECLARE, AND ORDER AS FOLLOWS: SECTION 1. The Parking and Business Improvement Area Law of 1989, California Streets and Highways Code Sections 36500 et seq. (the “Law”), authorizes the City Council to levy an assessment against businesses within a parking and business improvement area which is in addition to any assessments, fees, charges, or taxes imposed in the City. SECTION 2. Pursuant to the Law, the City Council adopted Ordinance No. 4819 establishing the Downtown Palo Alto Business Improvement District (the "District") in the City of Palo Alto. SECTION 3. The City Council, by Resolution No. 8416, appointed the Board of Directors of the Palo Alto Downtown Business & Professional Association, a California nonprofit mutual benefit corporation, to serve as the Advisory Board for the District (the "Advisory Board"). SECTION 4. In accordance with Section 36533 of the law, the Advisory Board prepared and filed with the City Clerk a report entitled "Downtown Palo Alto Business Improvement District, Annual Report 2012-2013" (the "Report”), and, by previous resolution, the City Council preliminarily approved such report as filed. SECTION 5. The boundaries of the District are within the City limits of the City of Palo Alto (the "City") and encompass the greater downtown area of the City, generally extending from El Camino Real to the West, Webster Street to the East, Lytton Avenue to the North and Addison Avenue to the South (east of Emerson Street, the boundaries extend only to Forest Avenue to the South). Reference is hereby made to the map of the District attached hereto as Exhibit "A" and incorporated herein by reference for a complete description of the boundaries of the District. SECTION 6. The City Council has adopted a Resolution of Intention, Resolution No. 9243 declaring its intention to levy and collect an assessment for fiscal year 2013 against the businesses in the District. SECTION 7. Following notice duly given pursuant to law, the City Council has held a full and fair public hearing regarding the levy and collection of an assessment within the District for fiscal year 2013. All interested persons were afforded the opportunity to hear and be heard regarding protests and objections to the levy and collection of the assessment for fiscal year 2013. The City Council finds that there was Not Yet Approved 120327 jb 0130950 2 no majority protest within the meaning of the Law. All protests and objections to the levy and collection of the assessment and any and all protests and objections are hereby overruled by the City Council. SECTION 8. Based on its review of the Report, a copy of which has been presented to the City Council and has been filed with the City Clerk, and other reports and information, the City Council hereby finds and determines that (i) the businesses in the District will be benefited by the expenditure of funds raised by the assessment (ii) the District includes all of the businesses so benefited; and (iii) the net amount of the assessment levied within the district for the 2013 fiscal year in accordance with the Report is apportioned by a formula and method which fairly distributes the net amount in proportion to the estimated benefits to be received by each such business. SECTION 9. The City Council hereby confirms the Report as originally filed by the Advisory Board. New businesses established in the District after the beginning of any fiscal year shall be exempt from the levy of the assessment for that fiscal year. In addition, non-profit organizations, newspapers and professional "single-person businesses," defined as those businesses which have 25% or less full time equivalent employees, including the business owner, shall be exempt from the assessment. SECTION 10. The Adoption of this resolution constitutes a levy of an assessment for the fiscal year 2013 (commencing July 1, 2012, and ending June 30, 2013). The assessment formula, including the method and basis of levying the assessment, is set forth in Exhibit “B” attached hereto and incorporated herein by reference. New businesses established in the District after the beginning of any fiscal year shall be exempt from the levy of the assessment for that fiscal year. In addition, non-profit organizations, newspapers and professional "single-person businesses," defined as those businesses which have 25% or less full time equivalent employees, including the business owner, shall be exempt from the assessment. SECTION 11. The City Council hereby declares that the proposed uses of the revenues derived from the assessments levied against the businesses in the District are for the following facilities and activities: The types of improvements to be funded by the levy of an assessment against businesses within the District are the acquisition, construction, installation or maintenance of any tangible property with an estimated useful life of five years or more. The types of activities to be funded by the levy of an assessment against businesses within the District are the promotion of public events which benefit businesses in the area and which take place on or in public places within the District; the furnishings of music in any public place in the District; and activities which benefit businesses locating and operating in the District. // // // Not Yet Approved 120327 jb 0130950 3 SECTION 12. The Council finds that the adoption of this resolution does not meet the definition of a project under Section 21065 of the California Environmental Quality Act and, therefore, no environmental impact assessment is necessary. INTRODUCED AND PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: __________________________ _____________________________ City Clerk Mayor APPROVED AS TO FORM: APPROVED: __________________________ _____________________________ Senior Assistant City Attorney City Manager _____________________________ Director of Administrative Services Not Yet Approved 120327 jb 0130950 4 Not Yet Approved 120327 jb 0130950 5 934 - 9 4 4 927 932 233 281 933 - 9 3 7 943 327 1001 94 2 469 475 74 4 459 832 801 A P T 1 - 5 427-453 920 912 362 370 900 838 846 471 459 835 - 8 5 5 460 81 5 840 836 834 845 400 803 928930 931 933 835 - 8 3 7 831 - 8 3 3 451453 802800 81 0 - 8 1 6 81 8 - 8 2 0 82 8 - 8 3 0 817 - 8 1 9 82 3 - 8 2 5 567-569 559563 536 526 100 1 101 1 - 540 483 904 912 468 918 926 537 965-971505-507 519-521 939-945 931-935 923-925 518-520 539541543 515-517 809 811 420 1001 1011 1010 376 370 980960 990 34 354 326 426 4 1000 448 944 471 483948952 959947925 915 933 935 425-443 451449 463-465 936-940 458 460 440 428426 527-533 543 551 510520 558-560 903 825 837 581 575 940934 813-823 501-509 511-519 521-529 531-539 541-547 556 596 904 926 561-567 569 845 580 574 566 991- 997 136 610 116-122 150 535529 525 542516140 102 116 124 163 145 566 556 167 528 643635 635 645- 685 660- 666 620 180 164 158156 624628 632 636 640 644 617 621 151-165 171-195 203 642640 636 200 151 115 125 135 514 101 440 444 436432 427 425 117119 630616 208 228220 240-248 575 530- 534 536 540 552 177 156 201 209215 225 595 229231 611-623 180 508500 625-631 170 172-174 542544 538- 542 552 548 546 541- 547 230-238 734 723 721 702- 730220-244 744 701 731 755757 771 200 160 728-732 762- 776740-746 250 275 270 255741 265 724 730 651 221-225 227 668 707 205 201203 451449 209 219 221 233 235450 460 470 442 444 400 420 430 411 425 429 185 165 181 412 250 420 245 171-169 441- 445 435- 439 346344 333335 342 344 431 460 450 235530 220 220 B 222 240 514278 274270 250 545 540 251485255 271 281 300 310 301 581 259-267 533535537 261 267 518-526 532- 536 520-526 530-536 271 281 252 270 240-248 202- 216 228226 234238 244 242 210- 216 228- 234 223- 229 209215 247-259 240 232230 311-317 251 344 326 340 337339 323317 400 420 332330 314 353 355 367 305 347 265272-278 418 319 321- 341 328 330 300- 310 431401 366 436 426 #1-7 369 335 319 390 301 315 375 307- 311 325330 332 1&2330 1-3 324 326316 318 373- 377 416- 424 361 338 340 560 345 321325 315 529 285 555 650636 628 1-12 628 A-E 385 365 375380 345 664 325650-654 661635300 690 675 555541-549533 535- 539 318-324 326 352 425 439-441 435429 425 415-419 405403453 461 383460 502 510 526 520 540 499 467 459 439 425 555 400 436-452 456 379 370-374 376 380-382 384-396 550-552 364 360 431 440-444 423 499 475 421-423 431-433 432428 460-476 450 635 446 430 400 745 720706 385744 734 724-730 720 712 704 360 351 315737 332 300 653 -681 683 685 512 501619 609605 518 482486 496 610 630 455 400 651-687 543-545 532534 542544 550 552 554556 558560562564 635-6 643-6 470 313 334 333 325326 342 303301 229 336 308 310 312 316 318 311 331 315 319 317 321 335 228220 356-360 347-367 351357 369-379360 258- 296 350 210 204 302- 316 379310 320 328 332 340 437 412 311 A-B 404 313 325 327 333 407 401385 411 452 378-390 360 - 1A - 1C360 - 2A - 2C360 - 3A - 3C360 - 4A - 4C360 - 5A - 5C360 - 6A 344-348 418420 482 328 456 321 325 330204 218 236 240 250- 252 477 475 467 457 453249235225221 201 60 275 505-509 239- 243 209- 213 210- 214 513-519 460 474472228- 230 535 558 201 16 12 20 209 215 223 231 521 80 239-245 530-540 544-554 212- 216 218-222 333 335- 337 351 457451 465463 489-499360 530 480 420 430 480 463 451443437411 405 419405401 441 480-498 347 351 355 359 525 430 473 332- 342 425415 400 570568 556 550 543 327321315305 343 515 525 551 555 328 309-311 518-528 536-540 552-554 558-562 573 A-E 591-599 557-571 330-332 318-320 406-418 417 542 548568 524 550 500-528 578 564 550 546 540 530 531-535 541 505 525 537 555 565 571 530 619-6 520 440-446 579 567 523610 600 555 581 420-438 437 566 224 228 A-F 244 579 575 565 559 251 355 A-J 335329 604 576 566 345-347 243245 25725920921922723502 505 610-616 727 678 676 674672 642 636-638 567 555 711 701705 725 525 759 730 718 734 738-740 760 746-750 701 721-7 600 827 835 899 850 530 609 759 751753 7 737-62611 601 600 1013 10041000 1006 1001 623 137 145 700 780 790 744 111700 753100 825805 33 51 75 63 841 44 675 49 41 711 799 703 100 101 139654 625 160 1001 1005 1009 1010 1004 930 975 945929931 948 181 940 960 145900 955 999875 853 925 81 855 901-907 909 87 98 917 921 925 735 849 707 847 842828 820248 230-232 212 825 829 833 839 800 812 818 882 165831 801 815 809801 841 791153 718 774 761 795745 201 209 834836 845 895 926 190 934 942 948 203 209 219 225 929200 240 904 910 926 270 935 904 909 909A 217 222 148 171 421 130 312 318 324 317 301 186 192 323 329 151 325 329 334 131 129 355301 235 258 212 163 115 291247 210 201 207 64 202 235 251 249 252 247 244250 177220 261 251-257 205245 231225213205 70 2 206 234240 183 251 270 241-247 215- 237 210- 216 219 235 62 202 245 54 52 50 203 215 221 313-317318 220- 224 238 542-550 531-539 532 759 223-239 905 911-917907 188 190 251- 293 202 206 208 210 212 216 220 1008 275 539 201 400 27 168 865857 302 324 340 795 848 918 903 903A 408 412 440 483A - F 435 751 735 745 532 210 727 733 335 328 330 345 214 350 800 806 441 441A 230302 306 308 312 316 301 303 305 307 309 325 251 807 821 829 801 818-824 420 424 430 832A 832 842A 842 852A 852 862A 862 872A 872 351A 351 355A 355 359A 359 363A 363 367A 367 425 911 943 951 918 936 940 944 271 253 241 301 319 919A 919 935 949 928 936 940-946 353 264 367 361 310 1005 1010 423425413 - 419 457-467 469-471473-481 454 729 A-D 733-743 734-740 724-732 936 824-828 920 949 943941 715 95 445 324 328 545 590 425447 827 565 585 595 904 315 507 561 706 536 200 100 280-290 150 158164 276 516 698 161 159 157777 132 127 180 528 120 247 372 524 548550 538 152 345 336 515 658 227 27 29 539 115 135 321 558 #200-202 558 #C & D 965 140 350 808 915 461 435433 945 1012 421 727 A-C 218 255 206 739 260 840 650 642 351 451 551 375 530 643 415 12 700 802 99 89 87 901 560564568572576580584588592594 906 908 910 912 914 916 918920 922 924 548 423 668 901 305 -313 423 405 352354 611 320322 346 323 471 484 528 426 264 430 1001 508 756 - 760 940 930 544546 515 7 745 7 549 211 213 151 160 257 433-457 482 330 349 401 539 440 691 755 67 312 202 651 443 445 447 716 218 398 998 262 335 218 640-646506 327 469 303 401 403 254 401 91 40 101 819 301 725 595 705 541 Qu arry Road Home r Avenue Lane 8 West Medical Foundation Way Lane 7 West Lane 7 East Encina Avenue El Camino Real Urban Lane Wells Avenue Forest Avenue High Street Emerson Street Ch a n n i n g A v e n u e Alma Street El Camino Real Mitchell Lane Everett Avenue Lytton Avenue Lane 15 E High Street Alma Street Bryant Street Lane 6 E Lane 11 W La n e 21 High Street Gilman Street Hamil t on Avenue Univ ersit y Avenue Bryant Court Lane 30 Florence Street Kipling Street Tasso Street Cowper Street Everett Avenue Waverley Street Cowper Street Webster Street Everett Court Lytton Avenue Lane A West L L La Addis on Avenue Forest Avenue Downing Lane Homer Avenue La Lane 39 Lane 56 Hamilt on Avenue Webster Street Waverley Street Kipling Street Bryant Street Ramona Street Addis on Avenue Scott Street Webster Street Cowper Street Addison Avenue Channing Avenue Ramona Street Pa ulsen Ln Lane 15 E Lane 20 W Lane 20 E Univ ersit y Avenue CalTrain ROW Emerson Street Waverley Street Kipling Street Bryant Street Ramona Street Palo Road ay Pear Lane Lane 12 W Lane 5 E Everett Avenue Homer Av enue Emerson Street tal m D r iv e Alma Street Lytton Avenue This map is a product of the City of Palo Alto GIS This document is a graphic representation only of best available sources. Legend abc Zone A (Ground Floor) - Zone B (Upper Floors) abc Zone B 0'500' Downtown Palo Alto Business ImprovementDistrict Area Map CITY O F PALO A L TO I N C O R P O R ATE D C ALIFOR N IA P a l o A l t oT h e C i t y o f A P RIL 16 1894 The City of Palo Alto assumes no responsibility for any errors ©1989 to 2012 City of Palo Alto rrivera, 2012-04-30 16:57:54CPA BID (\\cc-maps\gis$\gis\admin\Personal\rrivera.mdb) City of Palo Alto (ID # 2526) City Council Staff Report Report Type: Action ItemsMeeting Date: 5/7/2012 May 07, 2012 Page 1 of 5 (ID # 2526) Council Priority: City Finances Summary Title: Long Range Financial Forecast 2012-2022 Title: Acceptance of the Long Range Financial Forecast for Fiscal Years 2012 to 2022 From: City Manager Lead Department: Administrative Services Recommendation Staff recommends that the Council review, comment on, and accept the attached forecast of revenues and expenses. Background Attached to this report is the City’s updated General Fund Long Range Financial Forecast (LRFF) for fiscal years 2012 through 2022. The LRFF identifies key issues that will guide the upcoming 2012-2013 budget process and affect the City’s future financial condition. A first draft of the LRFF was presented to the Finance Committee on February 28, 2012. They recommended that Council accept the LRFF pending specific modifications to the model which they directed staff to make before presenting to Council: 1. Include $2.2 million per year in additional infrastructure investment to address additional “keep-up” needs 2. Reduce the annual amount set aside for Retiree Medical Annual Required Contribution to reflect the three assumption changes the Committee authorized earlier that evening. In FY 2012 this reduction is $0.63 million, and in FY 2013 the reduction is $1.0 million. 3. Remove any assumed employee concessions that have not already been negotiated. For example, do not assume in the model that the May 07, 2012 Page 2 of 5 (ID # 2526) Miscellaneous group will begin paying its entire employee share of pension rates. This removed $14.3 million in savings from the ten-year model presented on February 28. 4. On the other hand, assume that any concessions already approved, or well in progress, will continue through the length of the forecast. Palo Alto Police Officers and Fire Chief Association concessions’ savings from 2014 to 2022 added about $14 million in savings over the ten years. 5. Include additional expenses expected from library remodels. Of the coming work, Library staff was able to derive estimates only for the Mitchell Park and Main Library projects. These cost impacts are incorporated into the model, adding $8.0 million in costs over the ten-year forecast. The above changes have been incorporated into the Forecast now being presented to Council. Discussion The economy has finally begun to show some longer-term improvement, both at the national and state levels. National unemployment is down to 8.3% as of January 2012, and state unemployment reached 10.9 percent in January, its lowest level since 2009. Gross Domestic Product and Gross State Product are both showing consistent growth, as are venture capital investment and new technology jobs in Silicon Valley. Even more positive is that Silicon Valley is leading the state in job growth. Less positive is the number of still-unemployed: 13 million nationwide, of which 5.5 million have been unemployed for 6 or more months; and 2 million Californians. Correspondingly, the City’s revenue projections are more positive than they have been in a few years. However, benefit costs continue to outpace the rate of revenue growth. Though the City has made considerable progress in addressing the structural deficit, there is still more work to be done. A report to Council in December 2011 from the Infrastructure Blue Ribbon Commission (IBRC) addressed the long-standing shortfall in infrastructure investment. The IBRC report recommended that the City try to find $41.5 million to fund its “catch-up” projects; invest an additional $2.2 million per year to more May 07, 2012 Page 3 of 5 (ID # 2526) adequately fund its capital operating and maintenance (“keep-up”) costs, and seek voter approval to fund a new public safety building and rebuild the MSC, among other City facilities. At the Finance Committee’s direction, the LRFF Base Model includes the additional $2.2 million per year recommended for “keep-up.” The remaining needs identified in the IBRC report – $4.2 million per year for “catch-up” and an estimated $211 million for new construction – are not incorporated into the Forecast. The Base Model is summarized in the chart below. It shows a balanced budget in FY 2012, after a $2.3 million draw on the Budget Stabilization Reserve, and a projected deficit of $1.0 million in FY 2013. For fiscal years 2013 to 2022 (ten years), the combined deficits are projected at $88.2 million. 2012-2022 LRFF - SUMMARY OF BASE MODEL FY 2012 Projected FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 TOTAL REVENUES 150,203 150,978 154,887 158,830 163,765 168,727 173,930 179,931 186,294 191,718 197,901 TOTAL EXPENDITURES 153,988 152,000 158,628 164,623 170,860 177,310 184,000 190,997 197,878 205,530 213,320 GRAND NET SURPLUS (DEFICIT) $ (0) $ (1,022) $ (3,741) $ (5,794) $ (7,095) $ (8,583) $ (10,070) $ (11,065) $ (11,584) $ (13,812) $ (15,419) Two directives from last year’s Council are incorporated into the Base Model: (1) assume medical costs will increase by 10 percent per year, and (2) assume that PERS rates will increase 3 percent each year beyond FY 2015. Note that PERS actuarial reports provided the base PERS rates used for FY 2013-2015; staff added another 1.5 to 2.5 percent as a result of the PERS Board’s decision on March 14 2012 to adopt a lower discount rate. Given the PERS discount rate change, it might be overly conservative to assume additional PERS rate increases of 3% per year after 2015. The lower discount rate assumption will cause pension rates to rise beginning in FY 2014 by 1-2% for Miscellaneous employees and by 2-3% for Safety employees. Council’s recommendation last year that staff assume “the worst” – i.e., an annual increase of 3% - has partly come true via this discount rate change. Therefore, easing this May 07, 2012 Page 4 of 5 (ID # 2526) “worst case” assumption by 1 to 1.5 percentage points may be defensible. If Council chooses to assume increases of 1.5% instead for FY 2016-2022, the averted costs would be $25.7 million. Unlike the Forecast presented to the Finance Committee on February 28, this version of the Forecast incorporates Proposed FY 2013 Budget figures, including $2.6 million in one-time savings due to frozen positions, along with $1.6 million in one-time expenses. In the Base Model, these savings and costs are backed out after FY 2013 to project the remaining years of expenditures – contributing to the cumulative deficit of $88.2 million over ten years. An Alternate Scenario (pages 22-23) assumes the one-time frozen positions are made permanent, which reduces the projected gaps by $29.5 million – bringing the combined deficit to $58.7 million. The model includes savings from recent concessions achieved with the International Association of Firefighters (IAFF) and the Fire Chiefs Association (FCA) as well as from the tentative agreement with the Palo Alto Police Officers Association (PAPOA). As directed by the Finance Committee on February 28, 2012, no concession savings are assumed if not already negotiated with the bargaining unit. Lastly, the Forecast incorporates anticipated savings resulting from library closures at Main and Mitchell Park during construction, as well as additional operating costs after project completion. In FY 2013, the Library Department anticipates $0.45 million in salary and benefit savings during the remodeling of the two libraries, partly offset by an additional $0.34 million in expenses. In FY 2014, salary and benefit savings are expected to be completely offset by additional expenses and from FY 2015 onwards, an additional $1 million in expenses are anticipated due to the completed Mitchell Park and Main Library projects. As we say each year, this Forecast is not a prediction. It is a snapshot contingent upon a number of assumptions. It is staff’s hope that by examining this snapshot, Council members and staff may identify issues that must be addressed in the near term to improve the City’s long-term outlook. May 07, 2012 Page 5 of 5 (ID # 2526) Resource Impact As with any financial forecast, the fiscal impacts shown are estimates. Estimates of future deficits and surpluses, as well as the estimated costs of future financial challenges, are meant to guide future policy and budget decisions. While staff incorporates salary increases for forecasting purposes, there is no obligation to implementing these increases unless committed to during negotiations. Staff introduced to the Council the Proposed FY 2013 Budget on April 30, 2012 and will continue with the 2012-13 budget process. Policy Implications The Long Range Financial Forecast is a tool for Council’s use in making policy decisions regarding the allocation of resources. Environmental Review This report does not require California Environmental Quality Act (CEQA) review. Attachments: This page has intentionally been left blank (PDF) Attachment A: Long Range Financial Forecast 2012-2022 (PDF) Attachment B: Excerpt Minutes from Finance Committee Meeting Feb. 28 2012 (PDF) Prepared By: Nancy Nagel, Senior Financial Analyst Department Head: Lalo Perez, Director City Manager Approval: ____________________________________ James Keene, City Manager This page has intentionally been left blank. City of Palo Alto 2012 LONG RANGE FINANCIAL Fiscal Years 2012 to 2022 FORECAST Draft Council Version—May 7, 2012 TABLE OF CONTENTS I. EXECUTIVE SUMMARY 1 II. ECONOMIC OUTLOOK 3 III. UPDATED MODEL 7 CHARTS: - 2012-2022 BASE MODEL 18 - PERCENTAGE CHANGES IN BASE MODEL 20 IV. ALTERNATE SCENARIO 22 VI. ENDNOTES 30 V. CHALLENGES & CONCLUSIONS 24 City of Palo Alto 2012 EXECUTIVE SUMMARY I. EXECUTIVE SUMMARY This report is the City’s updated Long Range Financial Forecast (LRFF) for the fiscal years 2012 through 2022. The LRFF identifies key issues that impact the upcoming FY 2013 Budget process as well as the City’s future financial condition. It also allows Council and staff to explore some “what‐if” scenarios to see what alternative assump‐ tions would do to the City’s bottom line. The economy has finally begun to show longer‐term improvement both at the national and state levels. By Janu‐ ary 2012, national unemployment had decreased to 8.3 percent, and state unemployment reached 11.1 percent in December 2011, its lowest level since 2009. Gross Domestic Product and Gross State Product both showed con‐ sistent growth, as did venture capital investment and new technology jobs in Silicon Valley. Even more positive was that Silicon Valley led the state in job growth. Less positive was (and is) the number of still‐unemployed: 13 million nationwide, of which 5.5 million have been unemployed for 6 or more months; and 2 million in California. The City’s revenue projections look rosier than they have for a couple years, but benefit costs continue to outpace the rate of revenue growth. A new actuarial valuation of the City’s unfunded retiree medical liability indicated that the General Fund needs to set aside an additional $2.0 million* in FY 2012 to fund that liability. The City still has its work cut out for it in addressing its structural deficit. In December 2011, the Infrastructure Blue Ribbon Commission (IBRC) presented to Council a report addressing the under‐funding of the City’s infrastructure. The IBRC report recommended that the City fund $41.5 million to in “catch‐up” projects; invest an additional $2.2 million per year to more adequately fund its capital operating and maintenance (“keep‐up”) costs, and seek voter approval to fund a new public safety building and rebuild the MSC, among other reconstruction projects — to the tune of $210 million. These recommendations are being reviewed and discussed at the Special Council Retreats. Meanwhile, as requested by the Finance Committee in February, the Forecast incorporates the additional $2.2 million per year in infrastructure investment for “keep‐up” needs. Other categories of needs defined by the IBRC Report—the $4.2 million per year in “catch‐up” needs and the $210 million in new construction needs—are not incorporated into the Forecast. The Base Model is summarized in the chart at the top of page 2. It shows a balanced budget in FY 2012 after a rec‐ ommended $2.3 million draw on reserves, and a deficit of $1.0 million in FY 2013. The City added $4 million to the Budget Stabilization Reserve in FY 2011, so there is room for a commensurate withdrawal in FY 2012. The report assumes Council will approve this request for forecasting purposes. For FY 2013 to 2022 (ten years), the combined deficits are projected at $88.2 million. *$2.0 million figure is the difference between the recommended Annual Required Contribution from the January 2011 actuarial valuation and that of the prior, 2009 valuation. It incorporates assumption changes approved by Council on April 16, 2012. This Forecast is not a prediction. It is a snapshot contingent upon a number of assumptions. 2 City of Palo Alto 2012 2 Two directives from last year’s Council are incorporated into the Base Model: (1) assume 10 percent annual medi‐ cal cost increases, and (2) assume 3 percent annual increases in PERS rates from FY 2016 onwards. Note that PERS actuarial reports provided the base PERS rates used for FY 2013‐2015; staff added another 1.5 to 2.5 percent as a result of PERS’s reduced discount rate assumption. Staff suggests that a lower PERS rate increase assumption in the out years may be valid (for example 1.5 percent per year), given the discount rate change and higher rates al‐ ready included in the Forecast. Details on the PERS calculations are outlined on page 15 of this report. In addition, the Forecast includes Proposed FY 2013 Budget figures, including $2.6 million in one‐time savings due to frozen positions and $1.6 million in one‐time expenses. In the Base Model, these savings and costs are backed out after FY 2013 to project the remaining years of expenditures. An Alternate Scenario (pages 22‐23) assumes the one‐time frozen positions become permanent, with a reduction in cumulative deficits of $29.5 million. The model includes savings from recent concessions achieved with the International Association of Firefighters (IAFF) and the Fire Chiefs Association (FCA) as well as from the potential agreement with the Palo Alto Police Offi‐ cers Association (PAPOA). As directed by the Finance Committee on February 28, 2012, no concession savings are assumed if not already negotiated with the bargaining unit. Lastly, the Forecast incorporates anticipated savings resulting from library closures at Main and Mitchell Park dur‐ ing construction, as well as additional operating costs after project completion. In FY 2013, the Library Depart‐ ment anticipates $0.45 million in salary and benefit savings during the remodeling of the two libraries, partly off‐ set by an additional $0.34 million in expenses. In FY 2014, salary and benefit savings are expected to be com‐ pletely offset by added expenditures, and from FY 2015 onwards, an additional $1 million in expenses are antici‐ pated due to the completed Mitchell Park and Main Library projects. (See Endnotes Number 19 on page 30 for breakout of new library costs and savings incorporated into the model.) As we say each year, this Forecast is not a prediction. It is a snapshot contingent upon a number of assumptions, all of which are outlined in the report. It is staff’s hope that by examining this snapshot, Council members and staff may identify issues that must be addressed in the near term to improve the City’s long‐term outlook. EXECUTIVE SUMMARY 2012-2022 LRFF - SUMMARY OF BASE MODEL FY 2012 Projected FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 TOTAL REVENUES 150,203 150,978 154,887 158,830 163,765 168,727 173,930 179,931 186,294 191,718 197,901 TOTAL EXPENDITURES 153,988 152,000 158,628 164,623 170,860 177,310 184,000 190,997 197,878 205,530 213,320 GRAND NET SURPLUS (DEFICIT) $ (0) $ (1,022) $ (3,741) $ (5,794) $ (7,095) $ (8,583) $ (10,070) $ (11,065) $ (11,584) $ (13,812) $ (15,419) City of Palo Alto 3 2012 3 II. ECONOMIC OUTLOOK Based on information available as of February 9, 2012 NATIONAL: The economy ended 2011 on a surprising upswing. After months of concern about a return to recessionary condi‐ tions, most analysts now rule out another recession. The number of people applying for unemployment benefits reached 366,000 in the second week in December, down from a peak of 659,000 in March 2009. Employers added 100,000 jobs five months in a row, the longest streak since 2006, capped by a 200,000 increase in December and a 243,000 increase in January 2012. The national unemployment rate fell from 9 percent in October to 8.3 percent in January, the lowest in nearly three years.1,4 Moreover, 2011 was a record year for the nation’s retailers; sales totaled $4.7 trillion – a gain of nearly 8 percent over 2010, the largest percentage increase since 1999. On the flip side, December sales were just 0.1 percent above November’s.2 Holiday spending was heavily fueled by discounts, raising concern about what it would take to get shoppers to spend again in coming months.3 Looking forward to the rest of 2012, economists are cautious, and do not expect growth in 2012 to keep pace with the fourth quarter of 2011. Historically, consumption accounts for 70 percent of Gross Domestic Product (GDP), with government contributing about 20 percent, so consumer spending has to “ignite” for growth to take off. However, inflation‐adjusted weekly earnings dropped 1.8 percent from November 2010 to November 2011, and more than 40 percent of the new jobs in the last two years have been in low‐paying sectors like retail and hospi‐ tality. So analysts are concerned that the rate of consumer spending shown in the 4th quarter of 2011 may not be sustainable.5 Consumers have several reasons to be cautious. More than one in five borrowers still owe more than their homes are worth. Turmoil in the stock markets in the late summer and early fall caused a $2.4 trillion decrease in house‐ hold wealth, and many people who borrowed heavily during the boom to make big purchases are still repaying debt and cannot win approval for new loans.5 On the positive side, employ‐ ment growth has begun to look like a sustainable trend. While the unemployment rate dropped to 8.3 percent in January, the underemployment rate, which includes people who can find only part‐time work and those who have stopped looking for ECONOMIC OUTLOOK …”According to the US Labor Department, state governments sliced 49,000 jobs over the past year while local governments whacked 210,000 jobs. The result is that state and local gov‐ ernment job cuts have become a drag on job recovery in a way they weren’t during the last two recessions.” —Chris O’Brien, “Government job loss having huge eco‐ nomic impact, “San Jose Mercury News,” Dec. 22, 2011 4 City of Palo Alto 2012 4 work, also declined to 15.2 percent, down from 16.6 percent one year ago. Yet as a January 6 New York Times article put it, there remains “a deep hole to climb out of. There are still more than 13 million jobless Americans, 5.5 million of whom have been unemployed for half a year or more. And even those finding work are often taking salary cuts, with job creation concen‐ trated in low‐wage sectors.”6 LOOKING FORWARD Beacon Economics, in its December 2011 quarterly economic forecast, predicted that national unemployment lev‐ els would remain above 8 percent for the rest of 2012, and stay above 7.5 percent through all of 2013.7 Three dozen private, corporate, and academic economists recently predicted the economy (as measured by the GDP) would grow 2.4 percent in 2012, following a rate of about 2 percent in 2011. 8 The UCLA Anderson Forecast had a more sober prediction: a sub‐2 percent growth rate for most of 2012, followed by a 3 percent growth rate in 2013.9 Citigroup also forecasted slower, 2 percent expansion in 2012.10 CALIFORNIA The state unemployment rate dipped to 11.1 percent in December 2011, its lowest rate since 2009. Even more encouraging was the fact that job growth was broad‐based, with strongest growth in construction (a new entrant in the growing industry club), information, professional and business services, educational and health services. In December 2010, the state unemployment rate was 12.5 percent, having remained at or above 12 percent from August 2009 until April 2011.11 The California recovery has been noteworthy for the disparity between the pace of growth in its various regions. The Anderson Forecast described the following in September 2011: “Coastal California enjoys a recovery rooted in exports, innovation and knowledge communities, while Inland California continues to suffer from a glut of housing and a contraction in government spending.”12 That outlook has improved somewhat with the Central Valley now projected to finally see its economy recover in 2012. 10 Most recently, in December, after leading the employment recovery with 15 consecutive months of job growth, the San Jose region posted a monthly decline of 1,200 jobs. In fact, much of the job growth across the state shifted to Southern California, with Los Angeles, the Inland Empire (east of Los Angeles), and San Diego posting the largest gains. 13 Positive Recovery Signs include:14 • Consistent Growth—State has seen 21 straight months of uninterrupted growth in GDP. • State Exports—State exports rose 12.7 percent over this time last year. The boost in exports has been ECONOMIC OUTLOOK “ Many of the jobs created in October 2011 were primarily at small and medium‐sized companies. Businesses with fewer than 49 workers contributed 58,000 to the net monthly increase, while businesses with over 500 workers had zero net increase in their payrolls.” —Cutwater Asset Management, “Monthly Market Review,” Oct. 2011 City of Palo Alto 5 2012 5 ECONOMIC OUTLOOK led by technology products, though the state’s agricultural sec‐ tor has posted strong gains as well. • Venture Capital Investment— Since hitting a low of $1.7 billion in the first quarter of 2009, new venture capital investment has risen nearly 118 percent. Areas of Concern include:14 • Skills Mismatch in the Labor Mar‐ ket — According to Beacon Eco‐ nomics, “there is a real dichotomy between the skill sets of the work‐ ers in...sectors that were pum‐ meled by the downturn and the skill sets required by the sectors that are leading California out of the recession…” • Disproportionate Impact of Recession on Lesser Educated — More than 17 percent of all adults over the age of 25 who have less than a high school diploma were unemployed last year, compared with roughly 5 percent of all Californians with a graduate or professional degree. What might explain this phenomenon? Again, Beacon Economics explains, “Construction, real estate, and retail trade were among the hardest‐ hit sectors in the region in terms of job losses. These sectors traditionally have low educational require‐ ments and pay relatively low wages, which are two of the predominant characteristics of our unem‐ ployed population.” • Continued Unemployment—More than 2 million working‐age Californians remain without jobs and the state remains well above the national jobless rate of 8.3 percent. BAY AREA The Bay Area has enjoyed a quicker recovery than the state as a whole, but the recovery has been uneven among cities in the area. Several Silicon Valley cities – particularly San Jose, Sunnyvale, Mountain View and Palo Alto— showed the biggest jumps in the employment level between August 2009 and August 2011. “Driving the differing recovery outcomes is one overriding factor, say economists: the technology industry. Large tech companies such as Apple Inc. and Google Inc. have been on a recruiting tear, while start‐up hir‐ ing has also been brisk, fueled by the likes of Facebook Inc. Most of that activity is concentrated in South Bay cities such as Mountain View, Cupertino and mid‐peninsula in Palo Alto...” 15 6 City of Palo Alto 2012 6 The Bay Area is predicted to continue to outpace the state in job growth in 2012. According to a new University of the Pacific forecast, while the state job market is expected to grow by 1.1 percent in 2012, the Bay Area is ex‐ pected to show employment expansion of greater than 1.5 percent. 16 Beacon Economics predicts the South Bay will re‐gain its pre‐recession peak by the second half of 2013. The un‐ employment rate, which peaked at 11.8 percent in the 4th quarter of 2009 and reached 9.9 percent in October 2011, is predicted to fall to 8 percent by the end of 2013. 17 ECONOMIC DEVELOPMENT IN PALO ALTO Staff continues to work with Council to develop a Policy for Economic Development, to help guide the City’s efforts to attract and develop business activity in Palo Alto. In the meantime, staff is working on numerous fronts, including: • Helping shepherd current hotel projects through the City’s process • Investigating possible auto dealership, retail or hotel usages of the Municipal Services Center (MSC) site • Drafted an RFP for creating a digital billboard at the MSC • Participating in the Development Center restructuring • Creating a “Test Bed” for innovative, green, and clean tech companies. Staff has already created a Utilities‐based funding source for new companies developing energy‐efficiency‐related technologies • Engaging in extensive outreach to the business community to develop lines of communication and stay attuned to opportunities to help facilitate business growth • Setting up meetings between business leaders, Council Members, and the City Manager • Updating the business portion of the City’s web site IMPACT OF ECONOMIC OUTLOOK ASSUMPTIONS ON THE MODEL The economic developments in the Bay Area and locally translate into a more positive outlook for City revenues. Palo Alto transient occupancy and per diem rates have moved up appreciably, as they have along the entire Pen‐ insula, due to increased business activity. Sales tax revenue has been on an upward trend with strong depart‐ ment store and electronic equipment sales. While property tax revenue has been relatively flat due to commer‐ cial property tax appeals, once those appeals are resolved the City expects gradual improvements in this revenue category as well. Overall the picture is slowly improving for City revenues. ECONOMIC OUTLOOK City of Palo Alto 7 2012 7 III. UPDATED MODEL ASSUMPTIONS USED IN THE BASE MODEL The following is a detailed description of the assumptions utilized in the Base Model. Note that some of the de‐ scriptions refer to “CAGR” or Compound Annual Growth Rate.18 This is the average rate of growth over a period of time in a particular revenue source or expense category. Generally, staff looked at the CAGR over fiscal years 2006‐2011 as a guideline for future rates of increase, after removing one‐time variations. OVERALL ASSUMPTIONS FY 2013 revenues and expenditures follow the Proposed Budget working its way through the Budget Process. The FY 2013 Proposed Budget includes a number of one‐time expenditures and savings. The Base Model backs out these one‐time items starting FY 2014, for forecasting purposes, until staff has an opportunity to review the im‐ pacts of the operational changes and determine whether positions can be permanently eliminated. In the Alter‐ nate Scenario, the savings attributable to frozen positions are assumed to become permanent reductions in head‐ count. The specific one‐time items included in the FY 2013 Proposed Budget are as follows: 1. $2.65 million in salary and benefit savings due to the following frozen positions: • 6 Firefighters • 1 OES FTE • 1 Plan Check Engineer • 6 Police Officers • 1 Police Captain 2. $1.6 million in one‐time costs as follows: • $0.15 million for a Planning Organizational Study and an Animal Services Study • $0.34 million in election costs • $0.31 million loan to the Airport Fund • $0.8 million in additional technology investments for Development Center Subtotal of One‐Time Savings and Costs: $1.05 million in net savings In addition to the one‐time savings included the FY 2013 Budget, the Proposed Budget also assumes the perma‐ nent elimination of the Animal Services program, although this policy decision has been discussed but by no means finalized by Council. The assumed closure impacts a few different revenue and expense categories in the Forecast, as noted in the discussion below. UPDATED MODEL 8 City of Palo Alto 2012 8 REVENUES Overall, City revenues are improving; expense increases, discussed on pages 11‐15, continue to outpace the growth in revenues. Sales Tax FY 2012 sales tax revenue is estimated at $21.6 million, an increase of $1.4 million above the Adopted FY 2012 budget, and a $0.8 million (4.1 percent) increase over FY 2011 actuals. The increases are based on year‐to‐date receipts and projected year‐end figures from MuniServices, the City’s sales tax consultant; they also reflect in‐ creased overall business and consumer spending in the area. In FY 2013, these revenues are estimated to increase 4.4 percent to $22.5 million. This rate of increase drops to 3.6 for FY 2014, but then resumes growth in the 4 to 5 percent range through FY 2022. Property Tax FY 2012 property tax revenue is projected at $26.0 million, a 1.2 percent increase over FY 2011 actuals —which aligns with County growth expectations. The Forecast then assumes gradual growth in property tax revenues over the next 8 years from 3.9 percent in FY 2013 to 4.6 percent in FY 2022. The City’s near‐term forecast assumes a steeper growth rate than that of the Palo Alto Unified School District, which, as of January 2012, forecasted 2 per‐ cent growth for the next few years. Transient Occupancy Tax (TOT) With the opening of Hotel Keen in May 2010 and strong receipts from existing establishments, the TOT re‐ bounded in FY 2011 after two years of declines, with a 17.8 percent increase over 2010 actual receipts. FY 2012 first quarter receipts were 26.2 percent higher than first quarter FY 2011 receipts, and for FY 2012 TOT revenues are projected to exceed FY 2011 revenues by $0.6 million or 7.3 percent– reaching $8.7 million. FY 2013 revenues are expected to be $9.6 million, or 10.6 percent above projected FY 2012 revenues. Note that the Forecast does not include revenues for potential new hotels. Two hotels (Hilton Garden and Palo Alto Bowl) have submitted plans while another two are expected to do so in the next 6‐9 months. Hilton Garden plans 170 rooms, with an expected opening in 2014 and potential TOT revenues of $1.0 to $1.2 million. Utility Users Tax (UUT) The UUT is levied on electric, gas, and water consumption, as well as on telephone usage. FY 2012 UUT revenues are expected to be 1.7 percent below FY 2011 revenues, or $10.7 million. The utility‐generated portion of the FY 2012 UUT comes in 1.3 percent higher than those in FY 2011, while the telephone‐generated portion comes in 9.5 percent lower. Telephone‐generated UUT revenues are projected to decrease at an average rate of 3.4 percent per year for the length of the Forecast, due to carriers’ unbundling of services, leaving a lower taxable portion of users’ telephone bills. Note that the Utility‐generated portion of projected UUT revenues assumes the rate change assumptions shown in the table on page 10, utilizing Utility Department‐generated 5‐year revenue projections. The remaining years’ increases for Gas and Electric are based on the CAGR for the first 5 years. For the Water utility, given the steep expected increases in water rates over the next couple years, staff modified the CAGR downward for out years. UPDATED MODEL City of Palo Alto 9 2012 9 UPDATED MODEL Top 5 General Fund Tax Revenue Sources: Property Tax, Sales Tax, UUT, TOT, Doc. Transfer Tax $30 $40 $50 $60 $70 $80 $90 $100 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Fiscal Year Do l l a r s ( M i l l i o n s ) FY 2012-2017 numbers are projected. General Fund Major Revenues (in millions) Sales Tax 21.6 Property Tax 26.0 TOT8.7 Utility User's Tax 10.7 Doc. Transfer Tax4.8 $4 $8 $12 $16 $20 $24 $28 $32 $36 $40 2 0 0 3 -0 4 2 0 0 4 -0 5 2 0 0 5 -0 6 2 0 0 6 -0 7 2 0 0 7 -0 8 2 0 1 1 -1 2 2 0 1 2 -1 3 2 0 1 3 -1 4 2 0 1 4 -1 5 2 0 1 5 -1 6 2 0 1 6 -1 7 Fiscal Year 10 City of Palo Alto 2012 10 UTILITY RATE INCREASE ASSUMPTIONS IN UUT PROJECTIONS Documentary Transfer Tax FY 2012 revenues are projected at $4.8 million — 7.7 percent below FY 2011 revenues. This revenue source is challenging to forecast accurately, since it is highly dependent on sales volume and the mix of commercial and residential sales. For example, in FY 2011, 17 large transactions—just 2 percent of all transactions—accounted for two‐thirds of the $1.5 million year‐over‐year increase. The forecast for FY 2012 and beyond is based on recent revenue trends and the real estate market outlook. In FY 2013, the tax is projected at 6.5 percent above 2012 lev‐ els—at $5.1 million. From FY 2014 onwards, rates of increase are in the 5 percent range. Other Taxes & Fines Close to 76 percent of this category is comprised of Parking Violation revenue. It is assumed that continued gaps in staffing levels, due to disability and workers’ comp leave, will make it difficult to bring Parking Violation reve‐ nue back to 2008 levels. Experience over the past five fiscal years has shown this to be a volatile revenue stream with year‐to‐year changes ranging from an 8 percent increase in FY 2007 to a 17 percent decrease in FY 2010. An‐ other portion of this category is the Vehicle‐in‐Lieu Fee (VLF), which is projected to be $0.2 million lower than the Adopted Budget. As part of FY 2012 state budget adoption, Senate Bill 89 eliminated the allocation of VLF to cit‐ ies and counties. According to the League of California Cities, Cities should expect zero VLF revenue in subsequent years unless there is a change in the law. Therefore, staff is projecting no VLF receipts in this forecast. In the re‐ maining categories, a 1 percent annual increase is assumed. Charges for Services Major changes in Charges for Services are anticipated from the projected increase in activity at the Development Center in FY 2012 and 2013, as well as from the possible contracting out of Animal Services. For FY 2012 and 2013, the combined increase in Development Center revenue is projected at $1.4 million or 6.2 percent. However, this is offset in FY 2013 by an assumed decrease in Animal Services fee revenue of $0.7 million. The City is cur‐ rently undertaking a Cost of Services study which may have an impact on this revenue category starting in FY 2013. Permits and Licenses The City’s Chief Building Official anticipates a $0.6 million or 11 percent increase in revenue for FY 2012 as compared to the Adopted Budget, followed by five years of lower revenues, before resuming annual increases in FY 2018. The FY 2012 projection represents a $1.4 million or 28 percent increase over FY 2011 revenues; the longer‐term forecast re‐ flects the periodic ebbs and flows in this revenue source. The Cost of Services study may also impact this category as early as FY 2013. UPDATED MODEL FISCAL YEAR 12-13 13-14 14-15 15-16 16-17 17-18 18-19 19-20 20-21 21-22 Electric 0% 0% 4% 6% 5% 4% 4% 4% 4% 4% Water 15% 15% 9% 3% 2% 4.3% 4.3% 4.3% 4.3% 4.3% Gas -10% 4% 5% 4% 4% 0.8% 0.8% 0.8% 0.8% 0.8% City of Palo Alto 11 2012 11 Return on Investment Since the recession began in FY 2009, interest income has fallen roughly by half. In FY 2009, revenues were $2.0 million; in FY 2012 they are projected at $0.97 million. As higher yielding maturing investments continue to be re‐ invested in a historically low interest rate environment, interest income levels are expected to decline further. Starting in FY 2015, interest income is projected to increase each year by between 1.3 percent and 2.2 percent. Rental Income The largest components of rental income are the City’s Enterprise Funds and the Cubberley Community Cen‐ ter. The rent from the Enterprise Funds will decline by $2.5 million — 16.5 percent of the overall category — in FY 2013 with the closure of the landfill, the Middlefield Well Site, and the former Los Altos Treatment Plant (LATP) site. Starting in FY 2014, staff projects that rent increases in other City properties will more than make up for the loss of the LATP and Well site. For this forecast period, rental income is expected to increase at approximately the same rate as the Consumer Price Index, which drives Enterprise Fund rental fees. The City is conducting an assessment of all General Fund properties which might impact the rental income from Enterprise Funds starting in FY 2014. From Other Agencies Revenue from Other Agencies includes income from Community Services Outreach theatre programs, PAUSD pro‐ grams, State of California grants for Police, Libraries and Community Services, and donations from Friends groups. Many of these are unpredictable and are influenced by the economy. For example, State grants are reduced when the State of California experiences budget difficulties. Due to this category’s unpredictable nature, the Forecast assumes a zero growth rate from FY 2014 onwards. Charges to Other Funds Seventy‐eight percent of this category comprises General Fund administrative cost plan allocation charges. The FY 2012 projected amount is equal to the Budgeted amount of $10.5 million, rising by 3.5 percent or $0.37 million in FY 2013. From FY 2014 onward, forecasted increases range from 0.74 percent to 1.6 percent. Other Revenues In FY 2012, Other Revenues are projected to be $0.7 million higher than the Adopted Budget as a result of a $0.5 million one‐time donation from the Palo Alto Library Foundation to support library programs; $0.13 million in do‐ nations to fund Community Services Department programs; and $0.06 million in reimbursements from various agencies to public safety departments. In FY 2013 onwards, the Forecast assumes that the City will contract out its Animal Services program with a revenue loss in this category (from partner agencies only) of $0.6 million. An annual increase of under‐one‐percent is assumed from FY 2013 onwards. Operating Transfers In Operating Transfers In include the equity transfer from the Electric and Gas Funds, as well as transfers from the University Avenue Parking Permit Fund and the California Avenue Parking Permit Fund. The FY 2013‐2016 equity transfers are based on Utilities Five‐Year Projections of capital‐based returns, increasing roughly 3 percent per year. UPDATED MODEL 12 City of Palo Alto 2012 12 EXPENSES Salary and Benefits Salary • All bargaining units are assumed to have 4 years of salary freezes followed by 2 percent annual increases. While it is difficult to contemplate salary increases in years in which budget gaps are forecasted, such in‐ creases are included for forecasting purposes. • SEIU and Management (Miscellaneous) groups are assumed to receive 2 percent salary increases every year starting FY 2014. Note that the Miscellaneous group’s last cost‐of‐living increase was July 1, 2008. • Fire unit receives 0 percent increases in 2013 and 2014, and 2 percent annual increases start 2015, pend‐ ing the absence of a budget gap, as per the contract approved October 2011. • Police unit receives 0 percent increases until 2016 when it commences 2 percent annual increases. • The Library Department has estimated $0.45 million in salary and benefit savings for 2013 and 2014 while the Main and Mitchell Park libraries are under construction. Starting in 2015, though, the Library Depart‐ ment estimates $0.3 million in additional salary costs for the two newly remodeled libraries. See End‐ notes Number 19 (page 28) for breakout of new library costs and savings incorporated into the model. Benefits • Forecast includes PERS’s estimated rates for FY 2013, 2014, and 2015 (as of their October 2011 actuarial report) ‐ as revised by their March 2012 decision to lower the assumed discount rate from 7.75% to 7.5%. See PERS Rates Detail chart on page 15 outlining historic and projected PERS rates. • The rates are assumed to increase 3 percent per year after FY 2015, as per Council direction in March 2011. If a more moderate annual increase of 1.5 percent were assumed after FY 2015, $25.7 million in sav‐ ings would result for FY 2016‐2022. • For Two‐Tier savings, Forecast based estimates on Bartel & Associates analysis of September 26, 2011, but delayed savings by two years from implementation of each relevant agreement, since CalPERS bases its pension calculations on information from two years prior. • Forecast assumes 10 percent annual increases in medical costs as per previous Council direction • Forecast assumes 4 percent annual increases in Dental and Vision costs • FY 2012 medical calculation includes $86,000 in savings from partial year of cost‐sharing by the Interna‐ tional Association of Firefighters (IAFF). • FY 2013 medical calculation includes full year of cost‐sharing by IAFF, the Palo Alto Police Officers Associa‐ tion (PAPOA) and the Fire Chiefs Association (FCA). • For FCA and PAPOA concessions, model includes combined savings of $1.6 million for FY 2013 and about $17.6 million over the remaining nine years of the Forecast • Retiree Annual Required Contributions (ARC) are based on the January 1, 2011 actuarial study for FY 2012, 2013, and 2014, as amended by the Council direction of April 16, 2012. The model also assumes 3.25 per‐ cent annual increases in ARC, as assumed in the January actuarial valuation study. UPDATED MODEL City of Palo Alto 13 2012 13 The following chart illustrates the increasing salary and benefit costs that the City has experienced in the General Fund, despite reduced headcount. General Fund Salaries, Benefits, and Number of Employees (FTE) $48.5 $54.2 $58.9 $57.3 $53.9 $55.1 $55.6 $57.0 $60.4 $62.1 $58.4 $60.0 $60.4 $16.3 $21.0 $13.5 $19.0 $18.4 $24.5 $27.3 $29.9 $36.8$34.2$32.7$29.5$30.9 704 725 752 760 676 669 647 650 576 580623652653 $- $20 $40 $60 $80 $100FY 2000FY 2001FY 2002FY 2003FY 2004FY 2005FY 2006FY 2007FY 2008FY 2009FY 2010FY 2011FY 2012Mi l l i o n s - 100 200 300 400 500 600 700 800 Nu m b e r o f E m p l o y e e s ( F T E ) Salaries Benefits Full-Time Equivalent Permanent Employees (FTE) ` $0.00 $5.00 $10.00 $15.00 $20.00 $25.00 $30.00 FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 Employer Contribution Employee Portion Paid by City 12‐Year Trend ‐ Citywide Pension Expense FY 2002‐2013 Paid by City ($Millions, FY 2012 Forecasted, FY 2013 Proposed) *Don't have breakdown prior to FY 2004 31.3% 68.7%58.9% 41.1% 70.6% 29.4% 73.8% 26.2% 77.4% 22.6% 73.4% 26.6% 82.3% 17.7% 85.1% 14.9%86.3% 13.7% $3.8 $2.4 $4.7 $15.6 $18.2 $19.5 $20.8 $22.9 $20.0 $19.5 $23.9 26.6% $23.1 87% 13% 14 City of Palo Alto 2012 14 UPDATED MODEL The following two charts illustrate the trend in health care cost. $14.9$14.3$13.7$13.5$13.0$12.2$11.8 $10.9$9.7$9.0 $6.6 $0.00 $2.00 $4.00 $6.00 $8.00 $10.00 $12.00 $14.00 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 * FY 2002‐2012 overall growth 126% 10 Year Trend ‐ Citywide Health Care Expenditure ($Millions, FY 2012 Adopted) 8 Year Trend ‐ Citywide Average Monthly Medical Cost per Employee $935 $1,059 $1,019 $901 $875 $814 $768 $695 $609$600 $700 $800 $900 $1,000 $1,100 2004 2005 2006 2007 2008 2009 2010 2011 2012 * FY 2004‐2012 overall growth 74% City of Palo Alto 15 2012 15 UPDATED MODEL The following chart shows historical employer PERS rates for FY 2007 through 2012, and the projected rates used in this Forecast for FY 2013 to 2022. Non-Salary/Benefit Expense Contract Services FY 2012 Projected Contract Services include $0.3 million in one‐time contracts. The FY 2013 figure includes $0.11 million in additional costs for the Mitchell Park and Main Library remodeling projects. Additional costs of $0.23 million are assumed in FY 2014, and from 2015 onwards, an additional $0.28 million per year for the two remod‐ eled libraries. This expense shows 1.5 percent annual growth from FY 2015 onwards. The Attorney’s Office, Human Resources and Community Services have discussed the possible need to convert many outside contractors, particularly class instructors, to hourly personnel. Were this to happen, contract ser‐ vices expense would decrease and Salaries and Benefits expense would increase. Some of these converted work‐ ers would become SEIU hourly workers, requiring benefit expense in addition to salary. Supplies & Materials FY 2012 projected Supplies and Materials costs are about $0.6 million higher than the Adopted Budget, due mainly to a one‐time donation from the Palo Alto Library Foundation for collection materials for the new Mitchell Park Library. Aside from that one‐time gift, Supplies & Materials costs are expected to remain relatively constant in outer years, with a 1 percent yearly increase. The FY 2013 amount is $0.1 million lower than the FY 2012 Adopted Budget, despite $13,000 in additional needs for the Mitchell Park and Main Library projects and $20,000 increase in Community Services Department related to Project Safety Net. The net decrease is due primarily to the proposed elimination of Animal Services program. FY 2007 2008 2009 2010 2011 2012 2013 2014 2015 Miscellaneous 11.4% 17.4% 17.0% 17.1% 17.6% 21.7% 23.0% 24.1% 25.2% Safety 24.2% 23.6% 24.5% 23.9% 24.7% 30.1% 31.1% 32.8% 34.5% PERS RATES DETAIL CHART Notes: 1. FY 2013, 2014, and 2015 rates are based on PERS actuarial valuations for Miscellaneous and Safety groups received Octo‐ ber 2011. 2. For FY 2014 and 2015, base rates are revised upwards over two years by 1.5% for Miscellaneous and 2.5% for Safety due to PERS Board's change to 7.5% discount rate assumption. 16 City of Palo Alto 2012 16 General Expense The majority of General Expense comprises the lease payments to PAUSD for the Cubberley facility. For FY 2012 that payment is $7.1 million or 65 percent of the $10.9 million total for the category. The current lease contract calls for the City to make a decision on the next 5‐year option by December 2013. The Forecast assumes that the lease contract with PAUSD will continue beyond 2014. For FY 2012, actuals are projected at $31,000 above FY 2012 Adopted Budget, due to the expense of an additional ballot measure in November 2011. In FY 2013 and 2014, staff projects small (less than 1 percent) increases, and from FY 2015 onwards, annual increases of 3.3 percent are assumed. Rents and Leases FY 2012 and FY 2013 show increases of $174,000 and $106,000 above Adopted FY 2012 Budget due to Development Center space needs. After FY 2013, Rents and Leases expense growth is expected to be fairly steady at a 3.5 percent annual rate. Facilities & Equipment The FY 2012 projected amount is $162,000 higher than budgeted, due to one‐time increases in Development Center expenses. In FY 2013, an additional $30,000 is expected for library remodeling‐related expenses; from 2014 onwards that number increases to $86,000. In addition to the one‐time increases, there is an ongoing annual increase in the 4 percent range for this category. Allocated Charges Allocated charges vary significantly from year to year, since they include a variety of sources, such as City use of utili‐ ties, liability insurance, technology costs, and vehicle replacement costs. Technology costs are increasing in FY 2012 and FY 2013 due to the Development Center Blueprint Process. These include one‐time charges of $1.7 million for tech‐ nology enhancements over two years, ending in FY 2013. In addition, the remodeled Mitchell Park and Main libraries are expected to add about $0.1 million in Allocated Charges from 2014 forward. Lastly, the General Fund has been re‐ paying the Technology Fund its $4.8 million loan at about $1.2 million per year over four years. FY 2013 will be the last year of the loan repayment. Beyond 2014, the Forecast assumes a 2 percent annual growth rate. Operating Transfers Out Operating Transfers Out includes transfers to Debt Service and Capital Project (Infrastructure) Funds, which change along with any new debt issuances or changed funding levels. Debt Service Fund transfers are based on payment schedules for the 2002 B Downtown Parking Improvement Project Certificates of Participation (COP) and the 2011 Golf Course debt. The Golf Course debt will be paid down by 2018. For FY 2013‐2016, transfers to the Capital Project Fund are based on the FY 2012‐2016 Five‐Year Capital Plan. Beyond FY 2016, transfers to the Capital Project Fund are based on a fairly complex formula, described below: UPDATED MODEL City of Palo Alto 17 2012 17 UPDATED MODEL 1. The “annual base transfer” of $3.6 million and a “dedicated year‐end surplus” of $1.0 million remain constant. 2. The transfer for specific projects receiving General Fund reimbursements varies year‐by‐year with the 5‐year CIP Budgets. The FY 2012‐2016 CIP Budget’s average annual rate of increase is 2.7 percent, so this is used as the assumed increase in each of the years from FY 2017‐2022. 3. $5.9 million is increased by 7 percent per year, as a result of Council’s “$3 million challenge” begun in 2007, whereby they committed to spend an additional $3 million on infrastructure, growing by 7 percent per year. Beginning FY 2013, the base model adds an additional $2.2 million per year in infrastructure investment, as per Finance Committee direction. This is meant to fund remaining “keep‐up” needs defined by the Infrastructure Blue Ribbon Com‐ mission (IBRC) Report, but does not address either the “catch‐up” needs or new construction needs discussed in the IBRC report. FACTORS NOT INCLUDED IN THE BASE MODEL The following factors are not incorporated into the base model assumptions: • Impacts from possible conversion of selected contractors to hourly personnel • IBRC recommendations regarding $42 million in “catch‐up” needs, as well as new construction needs, such as for the MSC and public safety building • Any additional employee cost‐sharing needed to close budget gaps • Possible TOT revenues from hotels, such as the Hilton Garden and Palo Alto Bowl, that have not yet begun con‐ struction BASE MODEL The Base Model may be found on the following pages (18‐21). The first table shows General Fund revenue and expense projections for FY 2012‐2022. The second table shows year‐over‐year percentage changes in each category. The Base Model shows a balanced budget in FY 2012 after a $2.3 million draw on the BSR. In FY 2013 it shows a deficit of $1.0 million, and for the ten‐year period from FY 2013 through FY 2022, cumulative deficits are projected at $88.2 million. Combined additional costs in FY 2013 and 2014 due to the Mitchell Park and Main Library remodeling projects are projected to be 100% offset by salary and benefit savings due to library closures during construction. However, from FY 2015 onwards, about $1.0 million in additional costs is expected. 18 City of Palo Alto 2012 18 UPDATED MODEL 20 1 2 - 2 0 2 2 L R F F - B A S E M O D E L FY 2 0 1 2 Ad o p t e d FY 2 0 1 2 Pr o j e c t e d FY 2 0 1 3 F Y 2 0 1 4 F Y 2 0 1 5 F Y 2 0 1 6 F Y 2 0 1 7 F Y 2 0 1 8 F Y 2 0 1 9 F Y 2 0 2 0 F Y 2 0 2 1 F Y 2 0 2 2 Re v e n u e s Sa l e s T a x e s $ 2 0 , 2 4 6 $ 2 1 , 5 9 4 $ 2 2 , 5 4 5 $ 2 3 , 3 6 1 $ 2 4 , 2 1 8 $ 2 5 , 1 9 9 $ 2 6 , 2 4 8 $ 2 7 , 3 5 0 $ 2 8 , 5 2 9 $ 2 9 , 7 9 3 $ 3 1 , 1 4 2 $ 3 2 , 63 4 Pr o p e r t y T a x e s 2 6 , 0 5 2 2 5 , 9 8 9 2 7 , 0 0 6 2 7 , 9 4 9 2 8 , 9 3 8 3 0 , 0 0 6 3 1 , 1 6 1 3 2 , 4 3 5 3 3 , 8 2 7 3 5 , 3 2 5 3 6 , 9 3 3 3 8 , 6 2 4 Tr a n s i e n t O c c u p a n c y T a x 8 , 2 0 4 8 , 6 7 4 9 , 5 9 1 9 , 9 0 9 1 0 , 2 9 9 1 0 , 7 1 1 1 1 , 1 5 0 1 1 , 6 1 5 1 2 , 1 0 5 1 2 , 6 2 6 1 3 , 1 71 1 3 , 7 8 2 Ut i l i t y U s e r T a x 1 0 , 8 5 9 1 0 , 6 6 6 1 0 , 7 3 1 1 1 , 0 9 9 1 1 , 4 7 3 1 1 , 8 5 5 1 2 , 1 7 6 1 2 , 4 5 9 1 2 , 7 4 5 1 3 , 0 3 4 1 3 , 3 1 9 1 3 , 6 0 1 Do c u m e n t a r y T r a n s f e r T a x 4 , 2 6 9 4 , 7 6 9 5 , 0 7 8 5 , 3 3 0 5 , 6 0 0 5 , 8 8 6 6 , 1 8 8 6 , 5 0 8 6 , 8 5 0 7 , 2 1 3 7 ,5 9 9 8 , 0 1 4 Ot h e r T a x e s & F i n e s 2 , 3 3 0 2 , 1 5 6 2 , 0 3 7 2 , 0 5 7 2 , 0 7 8 2 , 0 9 9 2 , 1 2 0 2 , 1 4 1 2 , 1 6 2 2 , 1 8 4 2 ,2 0 6 2 , 2 2 8 S u b t o t a l : T a x e s 7 1 , 9 6 0 7 3 , 8 4 8 7 6 , 9 8 8 7 9 , 7 0 5 8 2 , 6 0 6 8 5 , 7 5 5 8 9 , 0 4 2 9 2 , 5 0 8 9 6 , 2 1 9 1 0 0 , 1 7 4 1 0 4 , 3 6 9 1 0 8 , 8 8 3 Ch a r g e s f o r S e r v i c e s 2 1 , 8 4 1 2 2 , 7 0 2 2 3 , 1 9 7 2 3 , 4 0 6 2 4 , 2 2 5 2 5 , 0 7 3 2 5 , 9 5 0 2 6 , 8 5 9 2 7 , 7 9 9 2 8 , 7 7 2 2 9 , 7 7 9 3 0 , 8 2 1 Pe r m i t s a n d L i c e n s e s 5 , 7 7 8 6 , 4 0 6 6 , 4 9 5 6 , 2 4 4 6 , 0 0 3 5 , 7 6 2 5 , 5 3 2 5 , 3 0 2 5 , 5 6 7 5 , 8 4 5 6 ,1 3 8 6 , 4 4 4 Re t u r n o n I n v e s t m e n t 1 , 3 1 8 9 7 4 9 5 9 9 5 7 9 6 9 9 8 6 1 , 0 0 5 1 , 0 2 8 1 , 0 4 9 1 , 0 7 0 1 , 0 9 3 1 , 1 1 7 Re n t a l I n c o m e 1 3 , 9 1 4 1 3 , 9 1 4 1 2 , 6 5 1 1 2 , 9 8 8 1 3 , 2 9 8 1 3 , 6 1 7 1 3 , 9 4 7 1 4 , 2 8 6 1 4 , 6 3 4 1 4 , 9 9 3 1 4 , 0 4 7 1 3 , 4 6 9 Fr o m o t h e r a g e n c i e s 1 5 5 1 5 5 1 5 7 1 5 7 1 5 7 1 5 7 1 5 7 1 5 7 1 5 7 1 5 7 1 5 7 1 5 7 Ch a r g e s t o O t h e r F u n d s 1 0 , 5 0 5 1 0 , 5 0 5 1 0 , 8 7 4 1 0 , 9 5 4 1 1 , 0 3 6 1 1 , 1 1 8 1 1 , 2 0 3 1 1 , 2 8 8 1 1 , 3 7 5 1 1 , 5 0 2 1 1 , 6 8 6 1 1 , 8 7 3 Ot h e r r e v e n u e s 1 , 4 2 8 2 , 0 9 3 6 6 2 6 6 5 6 6 7 6 7 0 6 7 3 6 7 5 6 7 8 6 8 1 6 8 3 6 8 6 T o t a l R e v e n u e s B e f o r e T r a n s - fe r s 1 2 6 , 8 9 9 1 3 0 , 5 9 7 1 3 1 , 9 8 3 1 3 5 , 0 7 5 1 3 8 , 9 6 0 1 4 3 , 1 3 9 1 4 7 , 5 0 9 1 5 2 , 1 0 3 1 5 7 , 4 7 8 1 6 3 , 1 9 4 1 6 7 , 9 5 2 1 7 3 , 45 1 Op e r a t i n g T r a n s f e r s - I n 1 9 , 6 0 6 1 9 , 6 0 6 1 8 , 9 9 5 1 9 , 8 1 2 1 9 , 8 6 9 2 0 , 6 2 6 2 1 , 2 1 8 2 1 , 8 2 7 2 2 , 4 5 4 2 3 , 1 0 0 2 3 , 7 6 6 2 4 , 4 5 0 T O T A L R E V E N U E S 1 4 6 , 5 0 5 1 5 0 , 2 0 3 1 5 0 , 9 7 8 1 5 4 , 8 8 7 1 5 8 , 8 3 0 1 6 3 , 7 6 5 1 6 8 , 7 2 7 1 7 3 , 9 3 0 1 7 9 , 9 3 1 1 8 6 , 2 9 4 1 9 1 , 7 1 8 1 9 7 , 9 0 1 Ex p e n d i t u r e s Sa l a r i e s 5 7 , 4 2 2 6 0 , 3 8 9 5 6 , 9 5 7 5 9 , 7 1 9 6 1 , 5 0 9 6 2 , 7 5 2 6 4 , 0 1 9 6 5 , 3 1 2 6 6 , 6 3 2 6 7 , 9 7 8 6 9 , 3 5 1 7 0 , 7 5 2 Be n e f i t s 3 4 , 6 4 8 3 6 , 1 3 8 3 6 , 0 2 2 3 9 , 2 9 7 4 1 , 8 0 8 4 5 , 2 1 1 4 8 , 8 1 5 5 2 , 5 7 3 5 6 , 5 4 3 6 0 , 7 3 8 6 5 , 1 7 8 6 9 , 8 7 8 S u b t o t a l : S a l a r i e s a n d B e n e f i t s 9 2 , 0 7 0 9 6 , 5 2 7 9 2 , 9 7 9 9 9 , 0 1 6 1 0 3 , 3 1 7 1 0 7 , 9 6 3 1 1 2 , 8 3 4 1 1 7 , 8 8 6 1 2 3 , 1 7 5 1 2 8 , 7 1 6 1 3 4 , 5 2 9 1 40 , 6 2 9 Co n t r a c t S e r v i c e s 1 1 , 2 9 7 1 1 , 6 0 7 1 1 , 6 4 1 1 1 , 7 2 6 1 1 , 9 5 2 1 2 , 1 8 2 1 2 , 3 6 5 1 2 , 5 5 1 1 2 , 7 3 9 1 2 , 9 3 0 1 3 , 1 2 4 1 3 , 3 2 1 Su p p l i e s & M a t e r i a l s 3 , 2 0 6 3 , 7 6 1 3 , 1 0 4 3 , 1 5 8 3 , 3 8 1 3 , 4 1 2 3 , 4 4 4 3 , 4 7 6 3 , 5 0 8 3 , 5 4 1 3 ,5 7 4 3 , 6 0 8 Ge n e r a l E x p e n s e 1 0 , 8 9 7 1 0 , 9 2 8 1 1 , 0 0 6 1 1 , 3 6 8 1 1 , 7 4 2 1 2 , 1 3 0 1 2 , 5 3 1 1 2 , 9 4 6 1 3 , 3 7 6 1 3 , 8 2 0 1 4 , 2 7 6 1 4 , 7 5 3 Re n t s & L e a s e s 8 3 1 1 , 0 0 5 1 , 1 1 1 1 , 1 5 0 1 , 1 9 0 1 , 2 3 2 1 , 2 7 5 1 , 3 2 0 1 , 3 6 6 1 , 4 1 4 1 ,4 6 3 1 , 5 1 4 Fa c i l i t i e s & E q u i p m e n t 4 6 0 6 2 2 5 1 7 6 0 0 6 2 5 6 5 1 6 7 8 7 0 7 7 3 7 7 6 9 8 0 2 8 3 7 Al l o c a t e d C h a r g e s 1 5 , 7 6 2 1 6 , 4 5 0 1 6 , 8 6 0 1 7 , 4 1 6 1 7 , 7 6 3 1 8 , 1 3 8 1 8 , 4 9 9 1 8 , 8 6 7 1 9 , 2 4 2 1 9 , 6 2 5 2 0 , 0 1 6 2 0 , 4 1 4 T o t a l E x p e n d i t u r e s B e f o r e T r a n s - fe r s 1 3 4 , 5 2 3 1 4 0 , 9 0 1 1 3 7 , 2 1 8 1 4 4 , 4 3 4 1 4 9 , 9 7 0 1 5 5 , 7 0 8 1 6 1 , 6 2 6 1 6 7 , 7 5 2 1 7 4 , 1 4 2 1 8 0 , 8 1 4 1 8 7 , 7 8 4 1 9 5 , 07 6 City of Palo Alto 19 2012 19 UPDATED MODEL Tr a n s f e r s t o O t h e r F u n d s Op e r a t i n g T r a n s f e r s O u t 8 5 9 2 , 1 0 9 1 , 6 0 5 6 6 0 6 6 6 6 6 4 6 6 6 6 6 6 6 6 8 2 3 5 2 3 3 - Tr a n s f e r t o I n f r a s t r u c t u r e 1 0 , 9 7 8 1 0 , 9 7 8 1 3 , 1 7 8 1 3 , 5 3 4 1 3 , 9 8 8 1 4 , 4 8 8 1 5 , 0 1 8 1 5 , 5 8 3 1 6 , 1 8 6 1 6 , 8 2 8 1 7 , 5 1 3 1 8 , 2 4 4 T O T A L E X P E N D I T U R E S 1 4 6 , 3 6 0 1 5 3 , 9 8 8 1 5 2 , 0 0 0 1 5 8 , 6 2 8 1 6 4 , 6 2 3 1 7 0 , 8 6 0 1 7 7 , 3 1 0 1 8 4 , 0 0 0 1 9 0 , 9 9 7 1 9 7 , 8 7 8 2 0 5 , 5 3 0 2 1 3 , 3 2 0 Ne t S u r p l u s / ( G a p ) 1 4 5 ( 3 , 7 8 5 ) ( 1 , 0 2 2 ) ( 3 , 7 4 1 ) ( 5 , 7 9 4 ) ( 7 ,0 9 5 ) ( 8 , 5 8 3 ) ( 1 0 , 0 7 0 ) ( 1 1 , 0 6 5 ) ( 11 , 5 8 4 ) ( 1 3 , 8 12 ) ( 1 5 , 4 1 9 ) BA O s A p p r o v e d b y C o u n c i l : A d d ' l l e g a l c o u n s e l 1 8 5 L o a n t o R e f u s e F u n d 1 , 2 5 0 De v e l o p m e n t C e n t e r B l u e P r i n t P l a n 4 Mid y e a r D e c i s i o n P o i n t s S a l a r y / F T E r e l a t e d - o n g o i n g ( 4 5 1 ) R e v e n u e / N o n - S a l a r y r e l a t e d 4 8 5 P r o p o s e d M i d y e a r B S R D r a w 2 , 3 1 2 S u b t o t a l - 3 , 7 8 5 - - - - - - - - - - G R A N D N E T S U R P L U S ( G A P ) $ 1 4 5 $ ( 0 ) $ ( 1 , 0 2 2 ) $ ( 3 , 7 4 1 ) $ ( 5 , 7 9 4 ) $ ( 7 , 0 9 5 ) $ ( 8 , 5 8 3 ) $ ( 1 0 , 0 7 0 ) $ ( 1 1 , 0 6 5 ) $ ( 1 1 , 5 8 4 ) $ ( 1 3 , 8 1 2 ) $ ( 1 5 , 4 1 9 ) 20 City of Palo Alto 2012 20 UPDATED MODEL PE R C E N T A G E C H A N G E S I N B A S E M O D E L FY 2 0 1 2 Pr o j e c t e d FY 2 0 1 3 F Y 2 0 1 4 F Y 2 0 1 5 F Y 2 0 1 6 F Y 2 0 1 7 F Y 2 0 1 8 F Y 2 0 1 9 F Y 2 0 2 0 F Y 2 0 2 1 F Y 2 0 2 2 Cu m u l a t i v e % Ch a n g e 20 1 2 - 2 0 2 2 Re v e n u e s Sa l e s T a x e s 4. 0 9 % 4 . 4 0 % 3 . 6 2 % 3 . 6 7 % 4 . 0 5 % 4 . 1 6 % 4 . 2 0 % 4 . 3 1 % 4 . 4 3 % 4 . 5 3 % 4 . 7 9 % Pr o p e r t y T a x e s 1. 1 7 % 3 . 9 1 % 3 . 4 9 % 3 . 5 4 % 3 . 6 9 % 3 . 8 5 % 4 . 0 9 % 4 . 2 9 % 4 . 4 3 % 4 . 5 5 % 4 . 5 8 % Tr a n s i e n t O c c u p a n c y T a x 7. 3 2 % 1 0 . 5 7 % 3 . 3 2 % 3 . 9 3 % 4 . 0 0 % 4 . 1 0 % 4 . 1 7 % 4 . 2 2 % 4 . 3 0 % 4 . 3 2 % 4 . 6 4 % Ut i l i t y U s e r T a x (1 . 7 0 % ) 0 . 6 1 % 3 . 4 3 % 3 . 3 7 % 3 . 3 3 % 2 . 7 1 % 2 . 3 2 % 2 . 3 0 % 2 . 2 6 % 2 . 1 9 % 2 . 1 2 % Do c u m e n t a r y T r a n s f e r T a x (7 . 7 0 % ) 6 . 4 8 % 4 . 9 6 % 5 . 0 6 % 5 . 1 1 % 5 . 1 3 % 5 . 1 8 % 5 . 2 6 % 5 . 2 9 % 5 . 3 5 % 5 . 4 6 % Oth e r T a x e s & F i n e s 1. 2 7 % - 5 . 5 2 % 1 . 0 0 % 1 . 0 0 % 1 . 0 0 % 1 . 0 0 % 1 . 0 0 % 1 . 0 0 % 1 . 0 0 % 1 . 0 0 % 1 . 0 0 % S u b t o t a l : T a x e s 1. 6 3 % 4 . 2 5 % 3 . 5 3 % 3 . 6 4 % 3 . 8 1 % 3 . 8 3 % 3 . 8 9 % 4 . 0 1 % 4 . 1 1 % 4 . 1 9 % 4 . 3 2 % 47 . 4 4 % Ch a r g e s f o r S e r v i c e s 1. 4 0 % 2 . 1 8 % 0 . 9 0 % 3 . 5 0 % 3 . 5 0 % 3 . 5 0 % 3 . 5 0 % 3 . 5 0 % 3 . 5 0 % 3 . 5 0 % 3 . 5 0 % Pe r m i t s a n d L i c e n s e s 28 . 1 9 % 1 . 4 0 % - 3 . 8 7 % - 3 . 8 6 % - 4 . 0 1 % - 3 . 9 9 % - 4 . 1 6 % 5 . 0 0 % 5 . 0 0 % 5 . 0 0 % 5 . 0 0 % Re t u r n o n I n v e s t m e n t 82 . 3 3 % - 1 . 5 0 % - 0 . 2 4 % 1 . 3 1 % 1 . 7 6 % 1 . 9 1 % 2 . 3 1 % 2 . 0 1 % 2 . 0 4 % 2 . 1 1 % 2 . 1 9 % Re n t a l I n c o m e (2 . 7 6 % ) - 9 . 0 8 % 2 . 6 6 % 2 . 3 9 % 2 . 4 0 % 2 . 4 2 % 2 . 4 3 % 2 . 4 4 % 2 . 4 5 % - 6 . 3 1 % - 4 . 1 1 % Fr o m o t h e r a g e n c i e s (4 7 . 4 6 % ) 1 . 2 9 % 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 % Ch a r g e s t o O t h e r F u n d s (6 . 8 0 % ) 3 . 5 1 % 0 . 7 4 % 0 . 7 4 % 0 . 7 5 % 0 . 7 6 % 0 . 7 6 % 0 . 7 7 % 1 . 1 2 % 1 . 6 0 % 1 . 6 0 % Oth e r r e v e n u e s 12 . 9 5 % - 6 8 . 3 7 % 0 . 4 0 % 0 . 4 0 % 0 . 4 0 % 0 . 4 0 % 0 . 4 0 % 0 . 4 0 % 0 . 4 0 % 0 . 4 0 % 0 . 4 0 % T o t a l R e v e n u e s B e f o r e T r a n s f e r s 1. 7 8 % 1 . 0 6 % 2 . 3 4 % 2 . 8 8 % 3 . 0 1 % 3 . 0 5 % 3 . 1 1 % 3 . 5 3 % 3 . 6 3 % 2 . 9 2 % 3 . 2 7 % 32 . 8 1 % Op e r a t i n g T r a n s f e r s - I n 9. 3 3 % - 3 . 1 2 % 4 . 3 0 % 0 . 2 9 % 3 . 8 1 % 2 . 8 7 % 2 . 8 7 % 2 . 8 7 % 2 . 8 8 % 2 . 8 8 % 2 . 8 8 % T O T A L R E V E N U E S 2 . 7 1 % 0. 5 2 % 2. 5 9 % 2. 5 5 % 3.1 1 % 3. 0 3 % 3. 0 8 % 3. 4 5 % 3. 5 4 % 2.9 1 % 3. 2 3 % 31 . 7 6 % Ex p e n d i t u r e s Sa l a r i e s 0. 7 3 % - 5 . 6 8 % 4 . 8 5 % 3 . 0 0 % 2 . 0 2 % 2 . 0 2 % 2 . 0 2 % 2 . 0 2 % 2 . 0 2 % 2 . 0 2 % 2 . 0 2 % 17 . 1 6 % Be n e f i t s 5. 5 4 % - 0 . 3 2 % 9 . 0 9 % 6 . 3 9 % 8 . 1 4 % 7 . 9 7 % 7 . 7 0 % 7 . 5 5 % 7 . 4 2 % 7 . 3 1 % 7 . 2 1 % S u b t o t a l : S a l a r i e s a n d B e n e f i t s 2. 4 8 % - 3 . 6 8 % 6 . 4 9 % 4 . 3 4 % 4 . 5 0 % 4 . 5 1 % 4 . 4 8 % 4 . 4 9 % 4 . 5 0 % 4 . 5 2 % 4 . 5 3 % 45 . 6 9 % Co n t r a c t S e r v i c e s 24 . 3 1 % 0 . 2 9 % 0 . 7 3 % 1 . 9 3 % 1 . 9 3 % 1 . 5 0 % 1 . 5 0 % 1 . 5 0 % 1 . 5 0 % 1 . 5 0 % 1 . 5 0 % Su p p l i e s & M a t e r i a l s 32 . 3 0 % - 1 7 . 4 8 % 1 . 7 3 % 7 . 0 6 % 0 . 9 3 % 0 . 9 3 % 0 . 9 3 % 0 . 9 3 % 0 . 9 4 % 0 . 9 4 % 0 . 9 4 % Ge n e r a l E x p e n s e 17 . 2 0 % 0 . 7 1 % 3 . 2 9 % 3 . 2 9 % 3 . 3 0 % 3 . 3 1 % 3 . 3 1 % 3 . 3 2 % 3 . 3 2 % 3 . 3 0 % 3 . 3 4 % Re n t s & L e a s e s 57 . 2 9 % 1 0 . 5 4 % 3 . 5 0 % 3 . 5 0 % 3 . 5 0 % 3 . 5 0 % 3 . 5 0 % 3 . 5 0 % 3 . 5 0 % 3 . 5 0 % 3 . 5 0 % Fa c i l i t i e s & E q u i p m e n t 11 2 . 9 2 % - 1 6 . 8 5 % 1 5 . 9 9 % 4 . 1 6 % 4 . 1 9 % 4 . 2 2 % 4 . 2 4 % 4 . 2 7 % 4 . 3 0 % 4 . 3 2 % 4 . 3 5 % All o c a t e d C h a r g e s 4. 7 0 % 2 . 4 9 % 3 . 3 0 % 1 . 9 9 % 2 . 1 1 % 1 . 9 9 % 1 . 9 9 % 1 . 9 9 % 1 . 9 9 % 1 . 9 9 % 1 . 9 9 % T o t a l E x p e n d i t u r e s B e f o r e T r a n s - fe r s 6. 4 7 % - 2 . 6 1 % 5 . 2 6 % 3 . 8 3 % 3 . 8 3 % 3 . 8 0 % 3 . 7 9 % 3 . 8 1 % 3 . 8 3 % 3 . 8 5 % 3 . 8 8 % 38 . 4 5 % City of Palo Alto 21 2012 21 UPDATED MODEL Op e r a t i n g T r a n s f e r s O u t 84 . 5 1 % - 2 3 . 9 0 % - 5 8 . 8 5 % 0 . 8 7 % - 0 . 2 7 % 0 . 2 4 % - 0 . 0 4 % 0 . 4 3 % - 6 4 . 8 0 % - 1 . 1 4 % - 1 0 0 . 0 0 % Tr a n s f e r t o I n f r a s t r u c t u r e 11 . 3 7 % 2 0 . 0 4 % 2 . 7 0 % 3 . 3 5 % 3 . 5 8 % 3 . 6 6 % 3 . 7 6 % 3 . 8 7 % 3 . 9 7 % 4 . 0 7 % 4 . 1 7 % T O T A L E X P E N D I T U R E S 7 . 4 3 % -1 . 2 9 % 4. 3 6 % 3. 7 8 % 3.7 9 % 3. 7 8 % 3. 7 7 % 3. 8 0 % 3. 6 0 % 3.8 7 % 3. 7 9 % 38 . 5 3 % Ne t S u r p l u s / ( G a p ) (2 3 0 . 2 1 % ) - 7 3 . 0 0 % 2 6 6 . 0 2 % 5 4 . 8 8 % 2 2 . 4 5 % 2 0 . 9 8 % 1 7 . 3 3 % 9 . 8 8 % 4 . 6 8 % 1 9 . 2 4 % 1 1 . 6 3 % 22 City of Palo Alto 2012 22 ALTERNATE SCENARIO IV. ALTERNATE SCENARIO The following scenario assumes that positions frozen in FY 2013 are permanently cut. This reduces the cumulative defi‐ cits from $88.2 million to $58.7 million—a reduction of $29.5 million, or 33 percent. 2012-2022 LRFF - SCENARIO "MAKE FROZEN POSITIONS PERMANENT CUTS" FY 2012 Adopted FY 2012 Projected FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 TOTAL REVENUES 146,505 150,203 150,978 154,887 158,830 163,765 168,727 173,930 179,931 186,294 191,718 197,901 Expenditures Salaries 57,422 60,389 56,957 58,039 59,789 60,997 62,229 63,486 64,768 66,077 67,411 68,773 Benefits 34,648 36,138 36,022 38,230 40,676 43,987 47,493 51,150 55,011 59,093 63,413 67,985 Subtotal: Salaries and Bene- fits 92,070 96,527 92,979 96,269 100,465 104,984 109,722 114,635 119,780 125,170 130,824 136,758 Contract Services 11,297 11,607 11,641 11,726 11,952 12,182 12,365 12,551 12,739 12,930 13,124 13,321 Supplies & Materials 3,206 3,761 3,104 3,158 3,381 3,412 3,444 3,476 3,508 3,541 3,574 3,608 General Expense 10,897 10,928 11,006 11,368 11,742 12,130 12,531 12,946 13,376 13,820 14,276 14,753 Rents & Leases 831 1,005 1,111 1,150 1,190 1,232 1,275 1,320 1,366 1,414 1,463 1,514 Facilities & Equipment 460 622 517 600 625 651 678 707 737 769 802 837 Allocated Charges 15,762 16,450 16,860 17,416 17,763 18,138 18,499 18,867 19,242 19,625 20,016 20,414 Total Expenditures Before Transfers 134,523 140,901 137,218 141,687 147,117 152,728 158,514 164,501 170,748 177,268 184,079 191,205 Transfers to Other Funds Operating Transfers Out 859 2,109 1,605 660 666 664 666 666 668 235 233 - Transfer to Infrastructure 10,978 10,978 13,178 13,534 13,988 14,488 15,018 15,583 16,186 16,828 17,513 18,244 TOTAL EXPENDITURES 146,360 153,988 152,000 155,881 161,771 167,880 174,197 180,750 187,602 194,332 201,825 209,449 Net Surplus/(Gap) 145 (3,785) (1,022) (994) (2,941) (4,115) (5,470) (6,820) (7,670) (8,038) (10,108) (11,548) Subtotal Midyear items - 3,785 - - - - - - - - - - GRAND NET SURPLUS (GAP) $ 145 $ (0) $ (1,022) $ (994) $ (2,941) $ (4,115) $ (5,470) $ (6,820) $ (7,670) $ (8,038) $ (10,108) $ (11,548) City of Palo Alto 23 2012 23 ALTERNATE SCENARIO PERCENTAGE CHANGES IN SCENARIO "MAKE FROZEN POSITIONS PERMANENT CUTS" FY 2012 Projected FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 Cumulative % Change 2012-2022 TOTAL REVENUES 2.71% 0.52% 2.59% 2.55% 3.11% 3.03% 3.08% 3.45% 3.54% 2.91% 3.23% 31.76% Expenditures Salaries 0.73% -5.68% 1.90% 3.01% 2.02% 2.02% 2.02% 2.02% 2.02% 2.02% 2.02% 13.88% Benefits 5.54% -0.32% 6.13% 6.40% 8.14% 7.97% 7.70% 7.55% 7.42% 7.31% 7.21% Subtotal: Salaries and Benefits 2.48% -3.68% 3.54% 4.36% 4.50% 4.51% 4.48% 4.49% 4.50% 4.52% 4.54% 41.68% Contract Services 24.31% 0.29% 0.73% 1.93% 1.93% 1.50% 1.50% 1.50% 1.50% 1.50% 1.50% Supplies & Materials 32.30% -17.48% 1.73% 7.06% 0.93% 0.93% 0.93% 0.93% 0.94% 0.94% 0.94% General Expense 17.20% 0.71% 3.29% 3.29% 3.30% 3.31% 3.31% 3.32% 3.32% 3.30% 3.34% Rents & Leases 57.29% 10.54% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% Facilities & Equipment 112.92% -16.85% 15.99% 4.16% 4.19% 4.22% 4.24% 4.27% 4.30% 4.32% 4.35% Allocated Charges 4.70% 2.49% 3.30% 1.99% 2.11% 1.99% 1.99% 1.99% 1.99% 1.99% 1.99% Total Expenditures Before Transfers 6.47% -2.61% 3.26% 3.83% 3.81% 3.79% 3.78% 3.80% 3.82% 3.84% 3.87% 35.70% Operating Transfers Out 84.51% -23.90% -58.85% 0.87% -0.27% 0.24% -0.04% 0.43% -64.80% -1.14% -100.00% Transfer to Infrastructure 11.37% 20.04% 2.70% 3.35% 3.58% 3.66% 3.76% 3.87% 3.97% 4.07% 4.17% TOTAL EXPENDITURES 7.43% -1.29% 2.55% 3.78% 3.78% 3.76% 3.76% 3.79% 3.59% 3.86% 3.78% 36.02% Net Surplus/(Gap) (230.21%) -73.00% -2.72% 195.83% 39.92% 32.93% 24.67% 12.47% 4.79% 25.76% 14.25% 24 City of Palo Alto 2012 24 V. CHALLENGES & CONCLUSIONS Thankfully, the City’s revenue outlook has improved with the economy. Overall projected FY 2012 revenues are approximately $3.7 million higher than the FY 2012 Adopted Budget. While these revenue increases are welcome, they bring the City’s tax revenues to where they last were in FY 2008. The City will just emerge from the trough of the Recession after four years of decline. On the flip side, a new actuarial valuation of the City’s unfunded retiree medical liability showed an increase of $30 million – or 29 percent ‐ since the 2009 valuation. After making the three assumption changes approved by the Council on April 16, 2012, this translated to an increase of $2.0 million in the amount the General Fund needs to set aside in FY 2012 to fund that liability. In addition, the FY 2012 Adopted Budget assumed that negotiations with the City’s public safety units would yield $3.4 million in savings for this fiscal year. Of that, about $1 million was realized via the agreement with IAFF, and another $0.1 million was realized via the agreements with FCA, plus about $0.2 in savings from the potential agreement with PAPOA, leaving a $2.1 million gap between budgeted and projected savings. Therefore, the unex‐ pected $3.7 million in revenues for FY 2012 are “undone” by $2.0 million in unforeseen expenses plus $2.1 million in unrealized savings—$4.1 million total in added costs and unrealized savings. This Long Range Financial Forecast projects 2.8 percent average annual increases in revenues and 3.4 percent av‐ erage annual increases in expenses. Of that, salary and benefits are expected to increase an average 3.9 percent per year. This gap reflects the City’s continued structural deficit, without taking into account the significant in‐ crease in infrastructure investment that will be critical to the City’s future. The chart at the top of page 25 (at right), “10 year Trend General Fund FTE,” shows the decreases in General Fund staffing since FY 2002. The rate of increase in staffing costs has varied among the City’s bargaining units, with public safety costs outpac‐ ing those of non‐safety groups. In FY 2006, approximately 25 percent of the City’s general fund was allocated to public safety services, with the remaining 75 percent shared roughly equally between Public Works, Community Services and Administration. Just five years later, public safety’s portion had grown to 36 percent, due to large salary increases for public safety employees and significant concessions made by the Miscellaneous group. The chart at the bottom of page 25 (at right), “Public Safety % of Total General Fund Expenditures” illustrates that trend. This discrepancy contributed to the City’s adoption of a guiding principle of fairness across all bargaining units while negotiating employee concessions. CHALLENGES & CONCLUSIONS City of Palo Alto 25 2012 25 CHALLENGES & CONCLUSIONS 10 Year Trend ‐ General Fund Full Time Equivalent (FTE) (FY 2012 Adopted) 576.4579.0 622.5 651.3644.8649.2 671.7676.4 758.2 651.5 748.2 500 550 600 650 700 750 800 FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 General Fund FTE Public Safety % of Total General Fund Expenditures 24.1% 26.1% 29.8% 30.7% 35.9% 30.1% 26.5%25.3%26.3%25.6% 23.0% 25.0% 27.0% 29.0% 31.0% 33.0% 35.0% 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Public Safety % of Total General Fund Expenditures 26 City of Palo Alto 2012 26 CHALLENGES & CONCLUSIONS The following two charts show the rates of growth of the different bargaining units’ compensation from FY 2010 to FY 2011 and from FY 2011 to FY 2012. $0 $50,000 $100,000 $150,000 $200,000 $250,000 2010 2011 2012Management/ Professional Fire Chiefs Association IAFF PAPOA Police Mgmt Group Citywide Average Salary & Benefits by Labor Group *Management/Professional includes UMPAPA % Growth of Salary & Benefits by Labor Group 0.7% 4.6% 6.9%7.2% 6.3% 1.5% 9.0% 5.0% 5.9% 1.2% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% % change FY 2010 to FY 2011 % change FY 2011 to FY 2012 Mgmt/Prof % Growth Fire Chief Assoc % Growth IAFF % Growth PAPOA % Growth Police Mgmt % Growth SEIU % Growth *Management/Professional includes UMPAPA City of Palo Alto 27 2012 27 CHALLENGES & CONCLUSIONS CONCESSIONS TO DATE With recent structural adjustments, Council and staff have eliminated more than $14 million in expenses and over 60 positions from the General Fund budget. The following concessions have been approved since fall of 2009: Current SEIU contract: • Created a second tier to our retirement structure (2 percent at 60) for new employees hired on or after July 17, 2010. • Reduced City payment of employee share of PERS for SEIU employees 3.75 percent ‐ with em‐ ployees picking up the difference. • Implemented a 90‐10 medical cost sharing plan that began April 1, 2011 • Implemented cost‐of‐living freezes in FY 2010, 2011, and 2012 • Eliminated Tuition Reimbursement program Estimated Savings: $2.7 million per year, or 4 percent of total compensation Current Management and Professional agreement: • Eliminated the Variable Management Compensation plan as of FY 2009 • Implemented a 90‐10 medical cost sharing plan that began April 1, 2011 • Implemented cost‐of‐living freezes in FY 2010, 2011, and 2012 • Created a second tier to our retirement structure (2 percent at 60) for new employees hired on or after July 17, 2010. Estimated Savings: $1.7 million per year, or 4 percent of the total compensation Current agreement with Fire personnel (approved October 2011): • Created a second tier to their retirement structure (3 percent at 55) for new employees • Ceased paying the full 9 percent of the employee portion of pension expense. Fire employees themselves will pay the 9 percent. • Eliminated final year “spike” of 9 percent for pension formula calculation • Eliminated minimum staffing requirements • Implemented a 90‐10 medical cost sharing plan • Implemented cost‐of‐living freezes from FY 2012‐2014 • Eliminated Tuition Reimbursement program Estimated Savings: $1.4 million per year, or 7.14 percent of total compensation. Taking into ac‐ count the 4 percent salary increase received in FY 2010, Fire salary and benefit concessions are in line with the 4 percent of total compensation given by SEIU and Management. 28 City of Palo Alto 2012 28 Current agreement with Fire Chiefs Association (approved March 2012): • Created a second tier to their retirement structure (3 percent at 55) for new employees • Ceased paying the full 9 percent of the employee portion of pension expense effective 3/10/12 to 3/10/13. After 3/10/13 employees will pay 5.1 percent of employee portion • Eliminated Tuition and Professional Development Reimbursement program • Implemented a 90‐10 medical cost sharing plan • Eliminated Variable Management Compensation program Estimated Savings: $0.85 million per year, or 8 percent of total compensation Potential agreement with PAPOA (not yet approved by Council): • Creates a second tier to their retirement structure (3 percent at 55) for new employees • Ceases paying the full 9 percent employee portion of PERS. Police employees to pay the 9 percent themselves. • Implements cost‐of‐living freezes from FY 2012‐2014 • Eliminates Tuition and Professional Development Reimbursement program • Implements wage reduction of 1.33 percent • Eliminates three paid holidays • Well before this agreement was negotiated, PAPOA voluntarily postponed a scheduled salary in‐ crease of 6 percent for one year from July 1, 2009 to July 1, 2010, saving the City $0.8 million in one‐time expenses. Estimated Savings: $1.3 million per year, or 7.14 percent of total compensation Prior to 2009, between 2004 and 2006, the City implemented for all bargaining units: • All new hires have a 20‐year vesting period to qualify for lifelong City‐paid health coverage • Highest cost health care plan option eliminated, saving almost $10,000 per year for each employee moved away from this option The aforementioned concessions and staffing reductions have been tough decisions that were not taken lightly. Like the City, our employees face rising household costs and diminished asset values. Furthermore, the impact of the position eliminations is that our employees are stretched thin, and our ability to take on new projects is re‐ duced. We have also experienced a significant amount of staff turnover as a result of the compensation adjust‐ ments. CHALLENGES & CONCLUSIONS City of Palo Alto 29 2012 29 CHALLENGES & CONCLUSIONS Yet the need to make additional difficult choices will remain until the structural budget gap is eliminated. Additional employee concessions will be required. The City is in the process of realigning and recalibrating its organization to match available staff and financial resources. This includes looking at alternate ways to provide services, including contracting out services, evaluating delivery of services through a regional model, and much more. Through the Cost of Services Study, the City will reach out to the community to determine the services they value most. This Forecast shows that, without further action, the City can expect more deficits in the coming years. How‐ ever, the City has received a vote of confidence in the form of a General Obligation Bond Triple‐A credit rat‐ ing from Standard and Poor’s. Staff trusts that the community, Council and staff will act, as they have in the past, to balance the budget and to maintain the assets that make Palo Alto a renowned place to live. Staff trusts that the community, Council and staff will act, as they have in the past, to balance the budget and to maintain the assets that make Palo Alto a renowned place to live. 30 City of Palo Alto 2012 30 VI. ENDNOTES 1. Paul Wiseman, “Economy ends year on surprising upswing,” San Jose Mercury News, Dec. 22, 2012 2. Martin Crutsinger, “Retail sales hit record despite slow December,” San Jose Mercury News, January 13, 2012 3. Anne D’Innocenzio, “Retailers pay the price for holiday deals,” San Jose Mercury News, January 6, 2012 4. “The Employment Situation—January 2012,” Bureau of Labor Statistics News Release, February 3, 2012 5. Motoko Rich and Stephanie Clifford, “For 2012, Signs Point to Tepid Consumer Spending,” New York Times, January 3, 2012 6. Shaila Dewan, “U.S. Economy Gains Steam as 200,000 Jobs Are Added,” New York Times, January 6, 2012 7. Beaconomics, “United States: Unemployment Rate” Forecast dated December 2011 8. Paul Wiseman and Derek Kravitz, “Steady as we go with economy,” San Jose Mercury News, December 27, 2011 9. UCLA Anderson Forecast, “The National Economy Remains Mired in a Long Slump but Double‐Dip Possi‐ bilities Abate,” Press Release, December 2011 10. “U.S. Macro Focus, The Outlook for 2012: Unfinished Business,” Citigroup Global Markets, December 14, 2011 11. Don Thompson, “State’s jobless rate drops below 11%,” San Francisco Chronicle, January 21, 2012 12. UCLA Anderson Forecast, “The National Economy is Stalled, but No Recession in the Forecast,” Septem‐ ber 2011 13. The Beacon Employment Report, Beacon Economics, January 2012 14. Chistopher Thornberg, Beaconomics, September 2011 15. Pui‐Wing Tam, “Uneven Growth as Region Revives,” Wall Street Journal, November 17, 2011 16. George Avalos, “’The worst’ may be over on job front in Bay Area,” San Jose Mercury News, November 16, 2011 17. Beacon Economics, “The Regional Outlook‐South Bay,” Quarterly Update, December 2011 18. Compound Annual Growth Rate calculations use the following equation: 19. Library Costs (Savings) Projected from Mitchell Park and Main Library Remodeling (in thousands): ENDNOTES Fiscal Year FY 2013 FY 2014 FY 2015 FY 2016—FY 2022 (annual costs) Salary & Benefit ($ 453) ($ 453) $ 300 $ 300 Contracts/Supplies & Materi‐ als/Facilities & Equip $ 200 $ 453 $ 703 $ 723 Technology $ 137 ‐ Total ($ 116) ‐ $1,003 $1,023 City of Palo Alto 31 2012 31 n the last few years, the City and its employees have made some headway in addressing the structural deficit by increasing the employees’ contributions towards the costs of their benefits. The City has pur‐ sued a guiding principle that all of its bargaining units should share equally – as measured by percent of total compensation ‐‐ in contributing to a solution to the city’s immediate and long term fiscal de‐ mands. To date, all units, with the exception of the Policy Officers Association, have agreed to contrib‐ ute an equal amount of their total compensation towards defraying their pension and health care costs. Note that due to differing past agreements, different units’ compensation costs have grown at different rates. Visit our website at: www.CityofPaloAlto.org AMERICANS WITH DISABILITIES ACT STATEMENT Contributors Nancy Nagel Rob Braulik Amber Cameron Libby Dame Tarun Narayan Sherry Nikzat Christine Paras David Ramberg Joe Saccio Tony Sandhu Dale Wong In compliance with Americans with Disabilities Act (ADA) of 1990, this document may be provided in other accessible formats. For information contact: ADA Coordinator City of Palo Alto 285 Hamilton Avenue (650) 329‐2550 Printing City of Palo Alto Scott Jensen Lalo Perez 32 City of Palo Alto 2012 32 The City of Palo Alto is located in northern Santa Clara County, approximately 35 miles south of the City of San Francisco and 12 miles north of the City of San Jose. Spanish explorers named the area for the tall, twin‐trunked redwood tree they camped beneath in 1769. Palo Alto incorporated in 1894 and the State of California granted its first charter in 1909. Phone:650‐329‐2100 Fax:650‐325‐5025 City of Palo Alto 250 Hamilton Ave Palo Alto, CA 94301 30% post‐consumer recycled Finance Meeting 2-28-12, Item #3 Excerpt 3. Long Range Financial Forecast Fiscal Years 2012 to 2022. Administrative Services Director, Lalo Perez stated that the “at place” document which was placed before the Committee was to correct a missing line item in the 2012-2022 Long Range Financial Forecast (LRFF)-Summary of Base Model table. The missing line item was in Total Revenues that reflected transferred amounts in the Report and did not change the Grand Net Surplus. He stated that on the reverse- side of the document was Scenario #3 that was added to the FY2013 Base Model to include savings resulting from Long-term Employee Concessions. Portions of the concessions still needed to be achieved. Senior Financial Analyst, Nancy Nagel gave a summary of the LRFF. She stated that City revenues were improving; however, last year’s revenues had not yet matched the FY2008 revenues. The Top 5 General Fund Tax Revenue Sources she was referring to were Property Tax, Sales Tax, Utilities User Tax (UUT), Transfer Occupancy Tax (TOT), and Documentary Transfer Tax. Certain concessions were assumed in the Base Model Assumptions (2) for FY2013 only, and not carried forward. Fire Department concessions were carried forward for the full term of the forecast. In FY2013, concessions in the amount of $2 million were assumed from the remaining Public Safety groups other than the International Association of Fire Fighters (IAFF). In 2011, the Council directed Staff to consider assumptions in the medical trend and Public Employee Retirement System (PERS) rates. A 10 percent increase in medical and a 3 percent annual increase in PERS was projected in 2015-2022 and assumed in the Base Model. A 2 percent cost-of-living adjustment (COLA) increase was assumed in FY2014 for Service Employees International Union (SEIU) and the Management Groups. Base Model Assumptions (3) noted that the full- time employees (FTEs) in the General Fund had decreased by 18 percent since FY2000, while salary and benefit costs increased by 50 percent. Pension expenses had increased by six-folds since 2002. The required medical annual contribution for retirees had grown by $2.6 million and had adjusted from $6.8 million in FY2011 to $9.4 million in FY2012. Factors not included in the Base Model were additional Mitchell Park Library expenses beyond FY2013, Infrastructure Blue Ribbon Commission (IBRC) revenues from new hotels not yet approved, additional required cost-sharing from employees beyond FY2013, and ongoing concessions from the remaining Public Safety groups. Alternate assumption scenarios included: Scenario #1: PERS rate increase of 1.5 percent per year after 2014, rather than 3 percent that would result in a $27.1 million in savings over 8 years. Scenario #2: invest an additional $6.6 million per year in infrastructure that would result in a $67 million additional deficit over 10 years. Scenario #3: continued concessions beyond 2012 that would result in $33 million in savings over a 10-year period. She referred to the visual Base Model chart in the overhead presentation that reflected combined deficits of $74.9 and said the City could anticipate improvements if concessions in 2013 were carried forward. Mr. Perez stated that the City needed to ask employees for more cost- sharing and if the organization was able to work through these challenges it would be less painful because the numbers were getting smaller. It was necessary to continue the exploration of regional service delivery and the cost-of-services study. He said the City was more complex and diversified than other agencies and had over 1,000 fees, which were more than other agencies. There were 25 percent in Community Services Division (CSD) fees, 25 percent in Police Department fees, 25 percent in Planning and Transportation Division fees, and 25 percent in the remaining City departments. Council Member Price asked why the study findings were delayed. Mr. Perez said this was a significant project for the organization to undertake. His department lacked Staff capacity and it was necessary to hire a temporary Staff member to do the work. Council Member Price asked if Staff had the ability to set the fee base for resident and non-resident fees. Mr. Perez said there was a difference in the fee structure and that non- resident fees were higher. Part of the review and analyses that was conducted was the limitations the City could face with Proposition 26. He said infrastructure needed to be addressed in the 10-year forecast. Council Member Price said she felt that the additional Mitchell Park Library and other library expenses were actuals and should be factored into the Base Model. Mr. Perez said there were preliminary numbers that would get factored into the 2013 budget. Council Member Price had raised concerns regarding overtime expenditures and recovery of cost that were incurred with public- partners events. The City had waived fees that should have been collected. She asked why this was being done. Mr. Perez stated the issue needed to be addressed to determine whether the practice should continue. Council Member Price asked why Utilities Management Professionals Association of Palo Alto (UMPAPA) was not listed in the LRFF. Mr. Perez said the group was omitted because it was fairly new but it was considered in the numbers. He stated that $600K was proposed for Mitchell Park with a breakdown of $100K for Facilities Management, $200K for technology, and $300K for operations. They were preliminary figures for only half a year since the Library Community Center would be opening in the middle of the year. Council Member Shepherd asked if the $600K was in the Model. Ms. Nagel confirmed the Mitchell Park figures were included in the Model for FY2013 only and not in FY2014 going forward. The historical chart was showing trends and Staff did not have information available on UMPAPA because it was new. City Manager, James Keene clarified that the acronym UMPAPA stood for Utilities Management Professionals Association of Palo Alto. Council Member Burt asked if the revenues projected for 2012-13 had been adopted. Mr. Perez said it was projected and included in the midyear calculations. Council Member Burt asked why there was not a larger increase in revenues from FY2012 to FY2013. Mr. Perez said the big change in 2013 was the Refuse Fund rental income change that amounted to several million dollars. Council Member Burt referred to the color handout chart and said that page 7 of the Report, under Sales Tax noted an estimate of $26.1 million for FY2012, an increase of $1.4 million. He asked if that was a FY2013 projection. Ms. Nagel clarified it was a 2012 projection based on increased sales tax assumptions. Council Member Burt asked if the bases for FY2013 projections were being addressed. Ms. Nagel said not in that category. Council Member Burt said he needed clarification of what the FY2013 projections were based on. Mr. Perez said a sales tax consultant was hired by the City to help realign sales tax projections. The School District and the County were considered to determine property tax. The TOT was doing well. There was a continued concerns regarding telephone usage in the UUT, volume or rate set in utilities, and the need for sufficient volume in the Documentary Transfer Tax, parking citations, and high levels in job- related injuries. He said increased activities in the Development Center would be a good sign in terms of permits which would create job opportunities and spending that would impact sales tax. Ms. Nagel asked what level of detail the Council wanted to see in the 2013 projections. Council Member Burt stated that the forward years were more speculative. FY2013 would be based on the recent trend patterns and that certain specific projections could be used as a baseline in going forward. Mr. Keene said a 10-year forecast would be an ideal tool for planning. The goal would be to get as close to the real numbers as possible without going over. Vice Mayor Scharff said he viewed the LRFF different from the budget. He said the deficit progressively increased but would decline as revenues increased and efforts to eliminate budget cuts in the upcoming years. He supported Council Member Price’s request to include the Mitchell Park Library expense, as well as other expenses and expressed the importance to be as accurate as possible in forecasting. Revenues needed to be correct because of unexpected expenses. He said it was common to get more revenues than what was expected which could cover unanticipated costs. Expenses were usually less than what was budgeted for except in Capital Improvement Projects (CIP). Infrastructure costs must be included in the Model. There would be more in infrastructure costs and would require a policy-decision on how to fund the costs annually. He felt to not include hotel revenues that had not been approved was appropriate because there were instances where the revenues had been approved and did not move forward. He asked what the process was for hotel revenues. Assistant Director, Joe Saccio said the current focus was to work with the existing hotels and hotels currently under construction. Hotel Keen was the latest hotel that had one-year’s worth of data. Data was obtained by measuring the trend in the occupancy and per diem rate increases as well as projecting out to the near future. Vice Mayor Scharff asked if the same TOT rate was being used. Mr. Saccio said yes, which was 12 percent. Vice Mayor Scharff said his understanding was that there would be a $2 million concession in the FY2013 budget and would be subtracted in FY2014. He felt it should remain in the FY2013. Mr. Perez said it was a matter of preference. Staff was looking for guidance on what should be included in the Base Model and scenarios. Vice Mayor Scharff referred to page 16 of the Base Model and said in FY2012 salary projection was $60 million, a decreased of $57 million in 2013, and reverted back to $60 million in 2014. Ms. Nagel said most of the $2 million was put in salaries and distorted the balance of salaries and benefits in 2013. Mr. Perez said the figures would change assuming that Staff would be directed to include the ongoing employee concession. Chair Shepherd made reference to the reorganization and staff size. She felt the delivery of City services were not sustainable. There was a need to reconsider services that were optional services and to rethink how they should be delivered. She felt delivery lacked aggressiveness. For example, there were discussions to have more public-private partnership; however, strategies were not set. She expressed the need to develop cost-neutral policies or set a 5-year plan in getting to a sustainable program with minimal subsidies. She wanted “add-on” expenses to be reflected as line items in the LRFF- Summary Base Model chart such as Infrastructure Blue Ribbon Committee Report, Library, and Infrastructure and forecasted as items that were forthcoming. The data would be known and would allow the Council to make decisions on the “add-on” items. Mr. Perez asked for clarification on how “add-ons” should be displayed. Chair Shepherd said the Base Model chart had two line items: total revenues and total expenditures and asked that the Mitchell Park Library be added as a line item. She wanted Staff to expand on the Main Library and asked if the Main Library was to going to continue operating as it did. Mr. Perez said the main focus had been on the Mitchell Park Library and had not looked into specific details for the Main Library. He said he would be able to provide a table that would specify projects that were forthcoming. Mr. Keene said he viewed the LRFF as a project where current activities were considered and projected into the future with assumptions and drivers that pushed revenues and expenditures in a particular way. Strategic policy shifts happened in each budget year that caused a ripple affect into the future in re-negotiating social contract, reinvesting in assets, restructuring benefits, and redesigning work roles. It was important to capture its progress and to summarize and predict how the City shared responsibilities with the community. Council Member Shepherd said it was important that the correct figures were used if the Mitchell Park Library and the other libraries were to be added to help determine future expenditures in the LRFF. Council Member Price spoke regarding the Scenario #1 alternative that included the lower Public Employee Retirement System (PERS) increase after 2015. She found the original document in the narrative compelling because it resulted in a $27 million difference between a 1.5 and 3 percent assumption. She asked what the impact would be on the Scenario #1 alternative. Mr. Keene said a lot was based on predictions on the City’s current situation or on the inflating or deflating of things over time and would become dynamic over the 10-year period. Council Member Burt spoke regarding revenues from hotels and reviewing hotels under construction. He said hotels often get approved and do not move forward while under construction. He said a long-term projection on the anticipated school lease was not noted in LRFF. Mr. Perez said the school lease was assumed to continue, status quo, and the assumed consumer price index (CPI) was 3 percent. Council Member Burt said when looking at the lease there was a need to differentiate between the lease for the space, which could continue or diminish over a period of time, and the covenant not to develop which was antiquated. His understanding was that benefits gained in efficiency from animation and the trend towards E-Books was unknown and would not materialize until they were in place. There were uncertainties in cost. MOTION: Council Member Burt moved, seconded by Vice Mayor Scharff that infrastructure keep-up be added to the Base Model. Council Member Burt stated there needed to be a way that keep-up was part of the Base Model. He said catchup and future needs may or may not have future revenue sources to address. He did not think it was reasonable to go to the voters and ask for new revenues to achieve the keep-up element. Vice Mayor Scharff said he agreed with Council Member Burt to include keep-up and would be going down a wrong path if it was not included. It would not make sense to talk about infrastructure and not put the base keep-up. MOTION PASSED: 4-0 MOTION: Vice Mayor Scharff moved, seconded by Council Member Burt to carry forward Option 3 in the Long-term Forecast MOTION PASSED: 4-0 Vice Mayor Scharff said a reasonable number should be specified for Mitchell Park Library. Mr. Perez said Staff would come up with a suitable figure and was committed to have the figure in place by the time the item went to the Council. Chair Shepherd announced there were no more questions and discussion on the LRFF item was concluded. Chair Shepherd wanted a clear understanding of what the Library Director’s vision for the libraries in 2012-13 in terms of staffing needs. Mr. Perez noted that the last page of the forecast contained names of those who contributed in putting the LRFF together. He said it was a significant project and required a great deal of support. The goal was to have the changes ready for the April 9th Council Meeting. The next Finance Meeting was scheduled for March 6, 2012. The agenda was full and asked the Committee to accept the tentative agenda. Council had requested that the Community Services Division (CSD) Staff come back through the Finance Committee with more information on the Golf Course impacts from the San Francisquito Creek Joint Powers Authority (JPA) work. CSD was leading the effort and have additional information for the Committee to review. Additionally, there was the Water Financial Forecast, Wastewater, and the Refuse Fund Cost-of- Service Study item that have Proposition 218 notification. Vice Mayor Scharff asked if all this was going to be discussed at the March 6 meeting at 7 p.m., with the AB1234 Ethics Training at 5 p.m. Mr. Perez said yes. The group discussed topics that needed to be included in the upcoming meetings that included the Golf Course, Community Development Block Grant (CDBG), Proposition 218 and to determine which subjects would be discussed during which meetings. Upcoming Council Member absentees were also discussed. Meeting dates for consideration were April 10th, 17th and 24th. Adjournment: 10:21 pm. City of Palo Alto (ID # 2560) City Council Staff Report Report Type: Action ItemsMeeting Date: 5/7/2012 May 07, 2012 Page 1 of 5 (ID # 2560) Summary Title: Proposed CDBG Allocations Title: Public Hearing: Adoption of a Resolution Approving the Proposed Fiscal Year 2013 Community Development Block Grant (CDBG) Funding Allocations and the 2012/1 3 Draft Annual Action Plan From:City Manager Lead Department: Planning and Community Environment Recommendation Staff and the Finance Committee recommend that the City Council: 1.Adopt the attached funding Resolution allocating CDBG funding as recommended by staff and the Human Relations Commission in the 2012-13 Action Plan; 2.Authorize staff to submit the 2012-13 Action Plan to the Department of Housing and Urban Development by the May 15, 2012 deadline; and 3.Authorize the City Manager, on behalf of the City, to execute the 2012- 13 application and Action Plan for CDBG funds and any other necessary documents concerning the application and to otherwise bind the City with respect to the application and commitment of funds. Executive Summary The City of Palo Alto receives funds annually on a formula grant basis from the Department of Housing and Urban Development (HUD) as an entitlement city under the Community Development Block Grant (CDBG) Program, authorized by Title I of the Housing and Community Development Act of 1974, as amended. The purpose of the program is to benefit low and very-low income persons, aid in the prevention or elimination of slums or blight, or meet urgent community needs. HUD requirements include preparation of a five-year strategic plan, referred to as a Consolidated Plan, to address priority housing and community development needs and to set forth goals for attaining identified objectives. On May 3, 2010, May 07, 2012 Page 2 of 5 (ID # 2560) the City Council adopted the 2010-2015 Consolidated Plan. An Action Plan is prepared annually to identify specific projects to be funded in that year that implement the strategies identified in the Consolidate Plan. These programs and projects are summarized in the resolution (Attachment A) approving the use of CDBG funds for Fiscal Year 2013. The draft 2012-2013 Action Plan (Attachment B) detailing the programs and projects has been made available for public review from March 23, 2012 through April 21, 2012. HUD requires the submittal of the Action Plan no later than 45 days prior to the start of the program year, or May 15th of every year. Staff and the Human Relations Commission’s CDBG funding recommendations were presented at a public hearing before the Finance Committee on April 17, 2012. There was one comment from the public, and the Finance Committee voted 3-1 to recommend to Council the recommendations of staff and the Human Relations Commission. Background On January 17, 2012 HUD released the CDBG entitlement grant allocation amounts for fiscal year 2013. The final allocation for Palo Alto is $429,304, representing an approximate reduction of 29 percent compared to last year’s allocation of $606,566. This reduction in funding is attributed to significant reductions in federal appropriations, from $3.302 billion to $2.948 billion,and the use of 2010 census data for allocating CDBG funds. CDBG allocations are based on complicated formulas that take into account a community's population, poverty level, overcrowding, volume of pre-1940s housing stock, and a statistic called growth-lag, which measures how slowly a city has grown relative to other cities. CDBG program statute requires the use “of the most recent data compiled by the United States Bureau of the Census” for allocating CDBG funds. As such, the CDBG allocation formula will now rely on the Census Bureau’s new annual data source, the American Community Survey (ACS), and the 2010 Census Population Counts. Moving to the ACS will have the effect of more gradual year- to-year adjustments instead of being recalculated once every 10 years. The combined effect of reductions in appropriations and technical changes to the type of data HUD uses to make funding decisions, decrease the available funding for allocation. Discussion May 07, 2012 Page 3 of 5 (ID # 2560) Palo Alto’s CDBG program continues to be directed towards expanding and maintaining existing affordable housing supply, promoting housing opportunities and choices, maintaining and improving community facilities, and providing support services for targeted low-income groups including persons who are homeless, persons with disabilities, the elderly, and other speical needs groups. Moreover, the CDBG program places a high priority to expand the goal of creating economic opportunities for low-income persons. All of the proposed projects for Fiscal Year 2013, as presented in the Draft 2012-2013 Action Plan, address these priorities identified in the adopted 2010 –2015 Consolidated Plan. Review by Human Relations Commission and Finance Committee The HRC considered funding recommendations for the CDBG budget at a public hearing on March 8, 2012. After listening to comments from the public and discussing the CDBG regulations, the HRC voted unanimously to endorse the funding recommendations. Staff and the Human Relations Commission’s CDBG funding recommendations, as outlined in CMR #2600 (Attachment C), were presented at a public hearing before the Finance Committee on April 17, 2012. There was one comment from the public and the Finance Committee voted 3-1, with Council Member Burt in opposition,to recommend to Council the recommendations of staff and the Human Relations Commission.Council Member Burt offered an amendment to support funding the Opportunity Center and other program services at their requested level ($26,400 total shortfall) through the use of General Fund or other sources, but the Committee did not approve the amendment.The Finance Committee meeting minutes are included as Attachment D. Timeline Funding recommendations made by the City Council will be incorporated into the final 2012-13 Action Plan and submitted to HUD, along with the appropriate forms and certifications, by the May 15, 2012 deadline. Resource Impact Funding of the proposed program and projects will not impact the City’s General Fund as the funds will be provided through the CDBG grant.Several measures have been taken to reduce administrative costs, including reducing CDBG staffing level to a 1.0 full time equivalent position. However, the significant reduction in allocation results in less May 07, 2012 Page 4 of 5 (ID # 2560) funding available for administrative costs and it is estimated that the CDBG grant will not entirely cover the City’s costs to administer the program. Policy Implications All of the applications recommended for funding in fiscal year 2013 are consistent with the priorities established in the City’s adopted Consolidated Plan for the period 2010 to 2015. Moreover, they are consistent with the housing programs and policies in the adopted 1998-2010 Comprehensive Plan. Environmental Review For purposes of the National Environmental Policy Act (NEPA) and the California Environmental Quality Act (CEQA), budgeting in itself is not a project. HUD environmental regulations require that entitlement jurisdictions assume the responsibility for environmental review and decision-making under NEPA. Prior to the commitment or release of funds for each of the proposed projects, staff will carry out the required environmental reviews or assessments, and certify that the review procedures under CEQA, and HUD and NEPA regulations have been satisfied for each particular project. cc: HRC Avenidas Catholic Charities Downtown Streets, Inc. InnVision The Way Home Palo Alto Housing Corporation Project Sentinel YWCA Silicon Valley –Shelter Network Attachments: ·Attachment A -CDBG FY 2013 Resolution (PDF) ·Attachment B -DRAFT 2012-13 Action Plan (PDF) ·Attachment C -April 17, 2012 Finance Committee Staff Report (PDF) ·Attachment D -Finance Committee Meeting Minutes (PDF) May 07, 2012 Page 5 of 5 (ID # 2560) Prepared By:Consuelo Hernandez, Department Head:Curtis Williams, Director City Manager Approval: ____________________________________ James Keene, City Manager ATTACHMENT A Resolution No. XXXX Resolution of the Council of the City of Palo Alto Approving The Use of Community Development Block Grant Funds for Fiscal Year 2013 WHEREAS, on May 9, 2010, the Palo Alto City Council approved and adopted a document entitled “Consolidated Plan” which identified and established the Palo Alto housing and non-housing community development needs, objectives and priorities for the period July 1, 2010 to June 30, 2015; and WHEREAS, the 2012-13 Action Plan, the annual funding update to the Consolidated Plan, was subjected to public review and commentary during the period from March 23, 2012 through April 21, 2012; and WHEREAS, the potential uses of Community Development Block Grant (CDBG) funds were evaluated in light of the needs and objectives identified in the Consolidated Plan and reflected in the recommendations and comments of the Human Relations Commission and other interested citizens; and WHEREAS, under the CDBG program, the highest priority is given the activities which will benefit persons with low and moderate incomes; and WHEREAS, the City Council and the Finance Committee of the City Council have held publicly noticed public hearings on the proposed uses of the CDBG funds for fiscal year 2013; and WHEREAS, CDBG funds allocated to the City for fiscal year 2013 are proposed to implement the programs described in this resolution. NOW, THEREFORE, the Council of the City of Palo Alto does RESOLVE as follows: SECTION 1. The uses of CDBG funds for fiscal year 2013 are hereby approved and authorized for the following programs: Name of Program Amount 1. Palo Alto Housing Corporation - Supportive Housing Counseling. Services to assist low- $20,375 income residents of single room occupancy facilities stabilize and maintain their housing. 2. Catholic Charities - Long-Term Care Ombudsman Program. Advocacy and $ 5,000 complaint investigation services for elderly residents of Palo Alto’s long-term care facilities. 3. InnVision, the Way Home - Opportunity Center. Supportive services for homeless persons including counseling, referrals, $ 37,175 food, rotating church shelter, clothing, showers, health care, and voicemail. 4. YWCA/Support Network for Battered Women. Shelter and supportive services $ 9,175 For adults and children who are victims of domestic violence. 5. Project Sentinel - Fair Housing. Provision of fair housing services including $ 23,875 complaint investigation, counseling, advocacy and community education. 6. City of Palo Alto. Department of Planning and Community Environment – CDBG $ 97,861 program administration. 7. Downtown Streets Team/Manpower - Workforce Development Program. Job training, readiness and placement $146,200 Services for motivated previously homeless individuals. 8. Palo Alto Housing Corporation – Cal Park Apartments. New roof, structural repairs, and energy efficient improvements $245,016 for a 10-unit affordable rental housing complex for low-income persons. 9. Avenidas – Avenidas HVAC Upgrade Common area energy efficient $135,000 improvements to a 57-unit affordable housing facility serving low-income seniors. TOTAL $719,677 SECTION 2. The total amount set forth under Section 1 of this resolution represents the proposed allocation of $429,304 in CDBG funds from the United States Department of Housing and Urban Development (HUD) for fiscal year 2013, $60,000 in anticipated program income for fiscal year 2013 from Palo Alto Housing Corporation, a total of $82,337 in re-allocated funds from the following projects where funds were left over: (Avenidas Senior Home Repairs Program $6,880 - FY 2011; Second Harvest Food Bank $5,457 - FY 2011; and Stevenson House Sewer Rehabilitation Project $70,000 -FY 2010), $28,759 in excess program income from previous years ($8,790 – Previous Fiscal Years Excess Program Income, $15,424 – PAHC FY 2011 Excess Program Income, $3,876 – PAHC FY 2012 Plum Tree Apartments Excess Program Income, $670 – PAHC FY 2012 Excess Program Income from loan repayment), $56,670 in loan repayment from Palo Alto Housing Corporation (Sheridan Apartments); and $62,607 in loan repayment from MidPen Housing Corporation (Palo Alto Gardens). SECTION 3. The City staff is hereby authorized to submit the 2012-13 annual Action Plan update and appropriate application forms to HUD for the fiscal year 2013 CDBG funds, and such money shall be spent as set forth in this resolution. The Mayor, City Manager and any other designated City staff or officials are hereby authorized to execute such application forms and any other necessary documents to secure these funds. SECTION 4. The funding amounts set forth in Section 1 of this resolution are based on final allocation amounts from the Federal Fiscal Year 2012 CDBG allocation; City Staff is authorized to make adjustments increasing or decreasing the funding amounts set forth herein as consistent with the adopted Citizen Participation Plan. SECTION 5. The City Council hereby finds that the fiscal year 2013 CDBG program authorized under Section 1 of this resolution is not a project under the California Environmental Quality Act (CEQA). However, the Council further authorizes and directs City staff to prepare certifications that may be required, under CEQA and the National Environmental Policy Act (NEPA), for each project under the fiscal year 2012 CDBG program prior to the release of funds for any such project. // // // // // INTRODUCED AND PASSED: MAY 7, 2012 AYES: NOES: ABSTENTIONS: ABSENT: ATTEST: APPROVED: _______________________ _______________________ City Clerk Mayor APPROVED AS TO FORM: _______________________ City Manager _______________________ _______________________ Assistant City Attorney Director of Planning and Community Environment APPROVED AS TO CONTENT: ______________________ Director of Administrative Services _______________________ CDBG Coordinator CITY OF PALO ALTO DRAFT 2012/2013 ONE-YEAR ACTION PLAN Annual Update of the City’s Consolidated Plan for the Period July 1, 2012 to June 30, 2013 Public Review Period March 23, 2012 – April 21, 2012 Prepared by Department of Planning & Community Environment 250 Hamilton Avenue Palo Alto, California 94301 Curtis Williams, Director For Information, please contact Consuelo Hernandez, Planner – CDBG Advanced Planning Division, City of Palo Alto (650) 329-2428 2012/2013 ACTION PLAN TABLE OF CONTENTS Executive Summary…………………………………………………………………………...1 Objectives……………………………………………………………………………………...1 Outcomes………………………………………………………………………………………1 Report Outline…………………………………………………………………………………2 Introduction……………………………………………………………………………………..3 Leveraging and matching……………………………………………………………………..3 Goals and Objectives………………………………………………………………………….3 Public Participation........................................................................................................4 Public Comment Period……………………………………………………………………….4 Public Hearings………………………………………………………………………………...4 Resources.......................................................................................................................5 Maximum Spending Caps…………………………………………………………………….5 Annual Objectives……………………………………………………………………………..6 Geographic Distributions…………………………………………………………………….7 Allocation Priorities........................................................................................................7 Annual Affordable Housing Goals………………………………………………………….8 Homeless and Special Needs Populations…………………………………………………8 CDBG Funded Activities……………………………………………………………………...9 HSRAP Funded Activities…………………………………………………………………….9 Barriers to Affordable Housing...................................................................................11 Affirmatively Furthering Fair Housing……………………………………………………...11 Activities to Affirmatively Further Fair Housing…………………………………………...11 Other Housing and Community Development Efforts..............................................12 Appendix A: Application for Federal Assistance Form SF-424 Appendix B: Certifications Appendix C: Public and Private Resources Appendix D: Proposed Projects Appendix E: Public Hearing Advertisement Appendix F: Map Appendix G: Public Comments 2012 – 2013 Action Plan City of Palo Alto DUNS No. 050520782 1 May 2012 EXECUTIVE SUMMARY The 2012/2013 Action Plan is a one-year plan describing the eligible activities the City of Palo Alto intends to undertake to address the needs and implement the strategies identified in the adopted 2010-2015 Consolidated Plan. It is the third Action Plan in the implementation of the five-year plan and serves as the City’s application for federal funds under the U.S. Department of Housing and Urban Development (HUD) formula grant programs. Both the Consolidated Plan and the Action Plan are implemented by the City’s Planning and Community Environment Department. A total of $719,677 is available for funding project and programs during the 2012 Program Year. The City anticipates receiving $429,304 from the federal Community Development Block Grant (CDBG) program. In addition, the City will also reprogram $82,337 in prior-year CDBG funds, $60,000 in anticipated program income, $28,759 in excess program income, $56,670 from Sheridan loan interest payment, and $62,607 from Palo Alto Gardens loan repayment. Palo Alto has access to a variety of federal, state, and local resources to achieve its housing and community development priorities. Specific funding resources will be utilized based on the opportunities and constraints of each particular project or program. Table 1, Fiscal Year 2013 CDBG Budget, summarizes the uses of the funds proposed during the 2012 Program Year. Palo Alto encourages citizen participation through the Action Plan process. This includes consulting local organizations, holding public meetings, and encouraging public comment during the public review period. A total of three public hearings were held in order to allow for public input. Moreover, the Draft Action Plan was made available for 30 days from March 23, 2012 through April 21, 2012. Objectives The City intends to provide funding for various activities which are consistent with the adopted Consolidated Plan. Key objectives for Fiscal Year 2013 include the following: • Support the rehabilitation of older affordable housing projects. • Support efforts to help homeless or Palo Alto residents at risk of homelessness receive necessary supportive services. • Complete improvements to public facilities serving priority need populations. • Improve employment opportunities for low-income persons. Outcomes The City’s outcomes for this planning period are directed at public services, expanding economic opportunities for low-income persons, improving the quality of existing affordable housing units, and rehabilitating public facilities. Specifically, the City anticipates the following outcomes from its 2012-13 activities: • 130 persons will have improved accessibility to a suitable living environment. • 200 persons residing in long term care facilities will have improved access to a suitable living environment. • 800 homeless persons will be provided with supportive services and have improved accessibility to a suitable living environment. 2012 – 2013 Action Plan City of Palo Alto DUNS No. 050520782 2 May 2012 • 45 unduplicated adults and children will be provided emergency safety net supportive services and emergency shelter as needed. • 25 households will have improved accessibility to decent affordable housing. • 10 individuals will be placed in jobs through job training/employment readiness classes • Approximately 43 homes will have their windows replaced • 1 public facility will have their HVAC system upgraded Table 1: FISCAL YEAR 2013 CDBG BUDGET Applicant Agency Budget Public Services Palo Alto Housing Corporation - SRO Hotels Supportive Services $20,375 Catholic Charities - Long Term Care Ombudsman $ 5,000 InnVision - Opportunity Center - Drop-In Center $37,175 YWCA/Support Network - Domestic Violence Services $ 9,175 Project Sentinel- Fair Housing Services $23,875 Sub-total $95,600 Planning and Administration City of Palo Alto Administration $ 97,861 Sub-total $ 97,861 Economic Development Downtown Streets – Workforce Development Program $146,200 Sub-total $146,200 Housing Palo Alto Housing Corporation - Cal Park Apartments Rehab $245,016 Sub-total $245,016 Public Facilities Avenidas- HVAC Upgrade $135,000 Sub-total $135,000 Grand Total $719,677 Report Outline The Action Plan includes the SF-424 application for federal funding and required narrative responses. Divided into eight primary sections, the Action Plan outlines the actions that will be undertaken during Program Year 2012, evaluates the past performance of the City’s CDBG program, summarizes Citizen Participation, and descriptions of the annual objectives. 2012 – 2013 Action Plan City of Palo Alto DUNS No. 050520782 3 May 2012 INTRODUCTION HUD requires all government entities receiving federal CDBG funds to prepare an annual Action Plan. The one-year action plan is submitted to HUD 45 days prior to the start of the City’s fiscal year along with an application for federal assistance (Appendix A) and required certifications (Appendix B). In general, the Action Plan outlines funding priorities and discusses how activities will meet the community needs identified in the Consolidated Plan. The activities described in this Action Plan are proposed to be undertaken during the period between July 1, 2012 and June 30, 2013. The overall goal of the CDBG program is to serve low-income persons by developing viable urban communities through the following actions: • Provide decent housing • Provide a suitable living environment; and • Expand economic opportunities. Palo Alto has identified a range of goals in the 2010-15 Consolidated Plan including the creation and preservation of affordable rental housing, expanding economic opportunities, and improving existing public facilities. All of the projects and activities to be undertaken in Fiscal Year 2013 will address the priority public services, economic development, housing, and public facilities needs identified in the Consolidated Plan. Leveraging and Matching The City of Palo Alto will leverage federal and private housing funds to the greatest extent feasible and consistent with the goals identified in the Consolidated Plan. Moreover, the City will continue to encourage housing projects sponsors to seek private financing and private grants, and to fully utilize other state and federal housing development subsidies such as the low-income housing tax credit program. The City will also utilize its local Affordable Housing fund, as appropriate, to leverage federal and private housing funds and to provide any required matching funds. Where eligible, CDBG housing funds could be used as a portion of the matching requirements for federal housing programs. A full listing of potential funding sources is appended to this Action Plan as Appendix C – Public and Private Resources Available for Housing and Community Development. Goals and Objectives Details of the proposed projects providing a description of each project and program, the CDBG funds allocated, the expected project beneficiaries and the HUD national objective and outcome measure is provided as Appendix D, Proposed Projects. HUD requires a performance measurement system to better capture data on a national level for the activities that are undertaken with CDBG funds at the local level. This system helps quantify and measure program outcomes in order to determine how well programs and activities are meeting established needs and objectives. 2012 – 2013 Action Plan City of Palo Alto DUNS No. 050520782 4 May 2012 PUBLIC PARTICIPATION On October 18, 2010, the Palo Alto City Council adopted an amended Citizen Participation Plan that utilizes the Human Relations Commission (HRC), rather than a separate Citizen Advisory Committee, to promote and encourage citizen participation in the planning, implementation and assessment of the CDBG program. The HRC is uniquely positioned to understand and consider the needs of low and very low income persons, members of minority groups, the elderly, persons with disabilities, and residents of neighborhoods where CDBG activities may be undertaken. Thus far the revisions to the Citizen Participation Plan have promoted a more coordinated and effective response by the City to the human service needs in the community. Public Comment Period Palo Alto provided the draft 2012/13 Action Plan for public review from March 23, 2012 through April 21, 2012. Notice of the document’s availability was advertized in the Palo Alto weekly on March 2nd, 2012 (Appendix F, Public Hearing Notice) and published on the City’s website on February 29, 2012. Copies of the Action Plan were made available at the City Hall 5th floor Department of Planning and Community Environment located at 250 Hamilton Avenue and the City’s Development Center located at 285 Hamilton Avenue. Public Hearings A subcommittee of City staff and two members of the HRC met during February 2012 to review the applications and make recommendations to the full HRC. The subcommittee’s recommendations were considered and unanimously approved at a public hearing held on March 8, 2012. The draft Action Plan was also open for public comment at two additional public hearings. The City’s Finance Committee conducted a public hearing on April 17, 2012 and the City Council conducted a public hearing on May 7, 2012. 2012 – 2013 Action Plan City of Palo Alto DUNS No. 050520782 5 May 2012 RESOURCES In Fiscal Year 2013, Palo Alto will allocate approximately $719,677 to eligible activities that address the needs identified in the Consolidated Plan. On January 17, 2012 HUD released final entitlement grant amounts for Federal Fiscal Year 2012. This correlates with the City’s Fiscal Year 2013 CDBG Program. The funding available for allocation includes $429,304 in CDBG entitlement funds, $82,337 of unspent CDBG funds from previous years, $60,000 in estimated program income, $28,759 in excess program income, $56,670 from Sheridan loan interest payment, and $62,607 from Palo Alto Gardens loan repayments as summarized in Table 2, Funding Available for Allocation. Program income is income directly generated from the use of CDBG funds that is returned to the CDBG program for allocation to new activities. The program income anticipated below is from the Palo Alto Housing Corporation and Mid-peninsula Housing Coalition properties previously purchased or rehabilitated with CDBG funds where revenue exceeded expenses. Table 2: Funding Available for Allocation $429,304 Fiscal Year 2013 Entitlement Grant $ 82,337 Reallocated funds: $ 6,880 - Avenidas (FY 2011) $ 5,457 - Second Harvest (FY 2011) $70,000 -Stevenson House Sewer Rehabilitation Project (FY 2010) $ 60,000 Estimated Program Income from Palo Alto Housing Corporation (PAHC) that is generated from rental income in excess of expenses on specific properties acquired or rehabilitated with CDBG funds. $28,759 Excess Program Income: $ 8,790 – Previous Fiscal Years Excess Program Income $15,424 – PAHC FY 2011 Excess Program Income $ 3,876 – PAHC FY 2012 Plum Tree Apartments Excess Program Income $ 670 – PAHC FY 2012 Excess Program Income $56,670 Interest Payment for Sheridan Loan (PAHC) $ 62,607 Loan Repayment for Palo Alto Gardens from MidPen Housing Coalition $719,677 ESTIMATED TOTAL AVAILABLE FOR ALLOCATION Maximum Spending Caps Maximum Available for Public Services FY 2013 CDBG Entitlement Grant $429,304 FY 2012 Actual Program Income Received $208,036 Public Service Cap (15% of $637,340) $ 95,601 Maximum Available for Planning/Administration FY 2013 CDBG Entitlement Grant $429,304 Estimated 2013 Program Income $ 60,000 Planning/Admin Cap (20% of $489,304) $ 97,861 In order to comprehensively address community needs and the goals identified in the Consolidated Plan, the City will augment CDBG funds utilizing a variety of additional funding sources. These funding sources include other federal funds, state, and local funds. A full listing of potential funding sources is appended to this Action Plan as Appendix C – Public and Private Resources. 2012 – 2013 Action Plan City of Palo Alto DUNS No. 050520782 6 May 2012 ANNUAL OBJECTIVES Table 3 provides a list of the activities the City will fund with CDBG funds during Fiscal Year 2013. A more detailed description for each of the activities is listed in Appendix D – Proposed Projects (HUD table 3Cs). Planning and Administration Activities Table 3: Summary of Specific Annual Objectives (HUD table 3A) Specific Objective Source of Funds Performance Measure Goal Achieved Outcome/ Objective* Public Service SRO Tenant Support Program $20,375 CDBG People 130 TBD** SL-1 Long-Term Care Ombudsman Program $5,000 CDBG People 200 TBD SL-1 Opportunity Center $37,175 CDBG People 800 TBD SL-1 Domestic Violence Services $9,175 CDBG People 45 TBD SL-1 Fair Housing Services $23,875 CDBG Households 25 TBD Economic Development Workforce Development Program $146,200 CDBG Jobs 24 TBD E0-1 Rental Housing Rental Housing Rehab Cal Park Apartments $245,016 CDBG Housing Units 43 TBD DH-1 Public Facilities Objective Public Facilities Improvements Avenidas HVAC Upgrade $135,000 CDBG People 6,000 TBD * HUD’s National Outcome/Objectives Codes Availability/ Accessibility Affordability Sustainability Decent Housing DH-1 DH-2 DH-3 Suitable Living Environment SL-1 SL-2 SL-3 Economic Opportunity EO-1 EO-2 EO-3 ** TBD: To be determined at the end of the Program Year 2012 – 2013 Action Plan City of Palo Alto DUNS No. 050520782 7 May 2012 GEOGRAPHIC DISTRIBUTION The City considers the provisions of all types of housing assistance on a citywide basis consistent with the policies of the Comprehensive Plan. Palo Alto does not have specific target areas for housing activities, instead the City attempts to provide housing affordable to lower- income persons throughout the City. There are only a few areas that are considered to have a concentration of minority populations or low-income residents in Palo Alto. ALLOCATION PRIORITIES Fiscal Year 2013 is the third year of the City’s five year Consolidated Plan for the period 2010- 2015. Table 4, Summary of Specific Housing/Community Development Objectives, below sets forth five year goals of the Plan and the one-year goals of the Action Plan for Fiscal Year 2013. Table 4: Summary of Specific Housing/Community Development Objectives Goal # Specific Objectives Performance Measure 5 Year Goal FY 2013 Goal Rental Housing Objectives 1A.1 &1C.1 Increase the Supply of Rental Housing Units 125 0 1A.2 &1C.1 Preserve Existing Affordable Rental Housing Units 72 0 1A.2 &1C.1 Conserve the Condition of Existing Rental Housing Units 150 43 Owner Housing Objectives 1B.1 Continue Below market Rate Program Units 34 10 1B.3 Rehabilitation Loans to L/M Income Owners Units Emergency Only As Needed 1B.3 Minor Home Repairs and Accessibility Upgrades Units 150 0 Public Service Objectives 3A.1 Assist Seniors in Long-Term Care Individuals 400 200 2A.1 - 5 Services to Prevent Homelessness Individuals 2,000 531 3A.1 Food and Meal Programs Individuals 2,000 400 Public Facilities Objectives 3B.1 & 3B.2 Promote Community-Based Services through Public Facilities Facilities 2 1 2012 – 2013 Action Plan City of Palo Alto DUNS No. 050520782 8 May 2012 ANNUAL AFFORDABLE HOUSING GOALS Palo Alto has identified affordable housing as the primary objective for the expenditure of CDBG funds in the Consolidated Plan. It will continue to allocate the maximum funding available to activities and projects that meet this objective. Table 5, Fiscal Year 2013 Annual Affordable Housing Goals, outlines the 5-Year Consolidated Plan goals and the proposed Fiscal Year 2013 goal. Table 5: Fiscal Year 2013 Affordable Housing Goals Grantee Name: City of Palo Alto Program Year: 2012 5-Year Goal Fiscal Year 2013 Goal Resources Used BENEFICIARY GOALS (Sec. 215 Only) Homeless households 2,067 CDBG Non-homeless households 825 CDBG Special needs households CDBG Total Sec. 215 Beneficiaries RENTAL GOALS (Sec. 215 Only) Production of new units 125 0 CDBG Rehabilitation of existing units 150 43 CDBG Total Sec. 215 Affordable Rental HOME OWNER GOALS (Sec. 215 Only) Below Market Rate Program 34 Housing Rehabilitation of existing units 150 0 CDBG Total Sec. 215 Affordable Owner Total Overall Housing Goal Homeless and Special Needs Populations The City of Palo Alto plans to use its CDBG funds to promote the local provision of services for low-income Palo Alto residents. A number of the City’s proposed Fiscal Year 2013 programs will directly benefit special needs groups. Moreover, through the City’s Human Services Resource Allocation Process (HSRAP), funding is provided to support services and resources targeted to Homeless and Special Needs populations. CDBG Funded Palo Alto Housing Corporation – SRO Tenant Counseling: Provides counseling and case-management services for the low-income residents and prospective residents of single room occupancy hotels in Palo Alto. Many SRO residents have a history of homelessness and special needs. The program plays a vital role in helping residents maintain their stability and housing. 2012 – 2013 Action Plan City of Palo Alto DUNS No. 050520782 9 May 2012 Catholic Charities – Ombudsman Program: The long-term care ombudsman program provides complaint investigation and advocacy services for the frail elderly or persons with disabilities in long term care facilities in Palo Alto InnVision - Opportunity Center: The Opportunity Center facility in Palo Alto provides a clean, safe environment and resources for very-low income or homeless persons including bagged groceries, hot meals, a rotating church shelter program, information and referral, shower and laundry facilities, case- management, and money management (payee) programs, clothing and health services. A daily hot meal is provided at a different location each day and bagged groceries are distributed daily at the Downtown Food Closet. The Hotel de Zink rotating church shelter program is housed at a different location each month. Downtown Streets Team/Manpower – Workforce Development Program: A new economic development pilot program to help motivated graduates of the Downtown Streets Team programs move on to stable employment. The program will include mentoring, counseling, job readiness, job training, and assistance. HSRAP Funded Abilities United – Disability Services: This organization provides services and activities for adults and children with mental and physical disabilities. Avenidas – Senior Services: Agency is the main provider of senior services in the Mid-Peninsula area. Community Technology Alliance – Shared Technical Infrastracture: Provides shelter hotline and voicemail services for homeless individuals and families. The voicemail service helps case-managed clients attain individual goals such as securing health care, housing or employment. A countywide housing information and referral website and tracking system is maintained to assist service providers and those seeking shelter. Downtown Streets Team – Downtown Streets: Identifies motivated homeless individuals and provides them with jobs cleaning and beautifying the downtown area in exchange for housing and food vouchers. The program includes counseling, coaching and training to help program participants build self-esteem, confidence and connections in the community. La Comida de California – Hot Meals for The Elderly: Daily meal program for the elderly. May View Health Center – Health Care for Low Income & Homeless Palo Alto residents: Basic primary health care services and health education and referral services for uninsured low- income and homeless individuals from the Palo Alto area. Momentum for Mental Health – Homeless Outreach Program: Mental health outreach program that provides emergency on-call services to assist local mentally ill homeless persons. The agency provides services to City departments, libraries, community centers and local homeless service providers. 2012 – 2013 Action Plan City of Palo Alto DUNS No. 050520782 10 May 2012 Peninsula HealthCare Connection – Project Downtown Connect: Provider of health care services at the Opportunity Center of Palo Alto. Project Downtown Connect provides Section 8 vouchers to eligible homeless individuals and families. SALA – Legal Assistance to Elders: Senior Adults Legal Assistance (SALA) provides affordable legal assistance to elders. 2012 – 2013 Action Plan City of Palo Alto DUNS No. 050520782 11 May 2012 BARRIERS TO AFFORDABLE HOUSING A barrier of affordable housing is defined in the Consolidated Plan as a public policy such as land use controls, property taxes, zoning ordinances, building codes, fees, growth limits, and other similar policies. Affirmatively Furthering Fair Housing Fair Housing is crucial to ensuring persons of like income levels have equal access to housing. HUD requires that jurisdictions receiving federal funds commit to affirmatively further fair housing. A fair housing impediment, according to HUD, is considered to be “any actions, omissions, or decisions which have the effect of restricting housing choices or the availability of housing choices because of race, color, religion, sex, disability, familial status, or national origin.” A key part of affirmatively furthering fair housing includes the preparation of an Analysis of Impediments to Fair Housing Choice (AI). The City of Palo Alto is currently reviewing and updating its AI. Activities to Affirmatively Further Fair Housing Palo Alto is committed to fair housing practices and places a priority on promoting and ensuring an atmosphere of non-discrimination in housing choice. In Fiscal Year 2013 the City of Palo Alto will provide $23,875 in CDBG funds to Project Sentinel for the provision of fair housing complaint investigations, public education and information, and referral services. The following actions to foster and maintain affordable housing to address housing: • Provide tenant/landlord counseling and mediation services for Palo Alto residents through the Palo Alto Mediation Program (Project Sentinel). • Support the Human Relations Commission in their documentation and investigation of hate crimes, and in their support of diversity, disability and affordable housing issues. • Continue to monitor the provision of fair housing services to ensure that adequate services are being provided and are cost effective. • Continue to participate in the Santa Clara County Fair Housing Task Force. • Provide funding to Project sentinel to reduce discrimination in housing by: 1. Investigating cases of housing discrimination in Palo Alto 2. Conducting consultation with persons who believe they have been discriminated against 3. Maintaining a pool of trained testers for investigations and conducting trainings 4. Maintaining a panel of participating attorneys for referral 5. Running fair housing ads in the Palo Alto Weekly, San Jose Mercury News and other media outlets 6. Distributing fair housing brochures 7. Running public service announcements for local radio/TV broadcasters 8. Making educational presentations to the community 9. Monitoring and testing rental housing sites for fair housing compliance 10. Organizing an event for National Fair Housing Month 2012 – 2013 Action Plan City of Palo Alto DUNS No. 050520782 12 May 2012 OTHER HOUSING AND COMMUNITY DEVELOPMENT EFFORTS EVALUATION OF PAST PERFORMANCE The City has historically allocated CDBG funds to activities that benefit low and moderate income persons, with a top priority to increase affordable housing opportunities within the City. Palo Alto has one of the most expensive housing markets in the country due in part to the lack of available land. Not withstanding, 91 new affordable rental housing units have been created during the 2010-2015 Consolidated Planning Period. In addition, Eden Housing’s proposed project at 801-841 Alma Street is expected to create 50 additional new rental units within the next few years. MONITORING OF ACTIVITIES Palo Alto follows the monitoring requirements for the use of Federal funds as directed by HUD. The City’s Department of Planning and Community Environment monitors its housing production goals and all the activities carried out to further the goals of the Consolidated Plan. An annual performance report is required for activities funded by CDBG and HOME programs and completed in compliance with HUD regulations and in accordance with HUD standards. The Consolidated Annual Performance and Evaluation Report (CAPER) is available to the general public for comments during a 15-day review period. This report identifies the actual dollars expended, the beneficiaries served, and the program goals achieved. The City has also developed a subrecipient monitoring plan that includes the submittal of semi- annual and annual performance reports. Both reports outline the extent to which program goals have been achieved and the number of beneficiaries who have been served. Program performance is measured against the specific program objectives outlined in the contract scope of services. Additionally, City staff conducts on-site monitoring visits, as necessary, to ensure compliance with all regulations governing their administrative, financial and programmatic operations, and to make sure the identified performance objectives have been achieved. INSTITUTIONAL STRUCTURE AND COORIDNATION Implementation of CDBG funds is overseen by the Department of Planning and Community Environment. Human Services and social service delivery in Palo Alto by non-profit agencies is coordinated through the City’s HSRAP. The City Council approves projects and programs that meet the City’s goals. 2012 – 2013 Action Plan City of Palo Alto DUNS No. 050520782 May 2012 APPENDIX A APPLICATION FOR FEDERAL ASSISTANCE FORM SF-424 APPLICATION FOR Version 7/03 FEDERAL ASSISTANCE 2. DATE SUBMITTED Applicant Identifier 1. TYPE OF SUBMISSION: Application Pre-application 3. DATE RECEIVED BY STATE State Application Identifier Construction Construction Non-Construction Non-Construction 4. DATE RECEIVED BY FEDERAL AGENCY Federal Identifier 5. APPLICANT INFORMATION Organizational Unit: Legal Name: Department: Organizational DUNS: Division: Address: Street: Name and telephone number of person to be contacted on matters involving this application (give area code) Prefix:First Name: City: Middle Name County: Last Name State:Zip Code Suffix: Country: Email: 6. EMPLOYER IDENTIFICATION NUMBER (EIN): - Phone Number (give area code) Fax Number (give area code) 8. TYPE OF APPLICATION: New Continuation Revision 7. TYPE OF APPLICANT: (See back of form for Application Types) If Revision, enter appropriate letter(s) in box(es) (See back of form for description of letters.) Other (specify) Other (specify) 9. NAME OF FEDERAL AGENCY: 10. CATALOG OF FEDERAL DOMESTIC ASSISTANCE NUMBER: - TITLE (Name of Program): 12. AREAS AFFECTED BY PROJECT (Cities, Counties, States, etc.): 11. DESCRIPTIVE TITLE OF APPLICANT’S PROJECT: 13. PROPOSED PROJECT 14. CONGRESSIONAL DISTRICTS OF: Start Date:Ending Date: a. Applicant b. Project 15. ESTIMATED FUNDING: 16. IS APPLICATION SUBJECT TO REVIEW BY STATE EXECUTIVE ORDER 12372 PROCESS? a. Federal $.00 b. Applicant $.00 a. Yes. THIS PREAPPLICATION/APPLICATION WAS MADE AVAILABLE TO THE STATE EXECUTIVE ORDER 12372 PROCESS FOR REVIEW ON c. State $.00 DATE: d. Local $.00 b. No.PROGRAM IS NOT COVERED BY E. O. 12372 e. Other $.00 OR PROGRAM HAS NOT BEEN SELECTED BY STATE FOR REVIEW f. Program Income $.00 17. IS THE APPLICANT DELINQUENT ON ANY FEDERAL DEBT? g. TOTAL $.00 Yes If “Yes” attach an explanation. No 18. TO THE BEST OF MY KNOWLEDGE AND BELIEF, ALL DATA IN THIS APPLICATION/PREAPPLICATION ARE TRUE AND CORRECT. THE DOCUMENT HAS BEEN DULY AUTHORIZED BY THE GOVERNING BODY OF THE APPLICANT AND THE APPLICANT WILL COMPLY WITH THE ATTACHED ASSURANCES IF THE ASSISTANCE IS AWARDED. a. Authorized Representative Prefix First Name Middle Name Last Name Suffix b. Title c. Telephone Number (give area code) d. Signature of Authorized Representative e. Date Signed Previous Edition Usable Authorized for Local Reproduction Standard Form 424 (Rev.9-2003) Prescribed by OMB Circular A-102 B-12-MC-06-0020 B-12-MC-06-0020 City of Palo Alto Planning and Community Environment 050520782 Planning P.O. BOX 10250 Miss Consuelo Palo Alto Santa Clara Hernandez CA 94303 9 (650) 329-2428 consuelo.hernandez@cityofpaloalto.org (650) 329-2154 D. Township Government U.S. Department of Housing and Urban Development The City of Palo Alto's Community Development Block Grant (CDBG) Program for Fiscal Year 2012/13. Community Development Block Grant (CDBG) City of Palo Alto, County of Santa Clara, State of California 07/01/2012 06/30/2013 14th Congressional District 14th Congressional District 429,304 82,336 208,037 719,677 Mr.James Keene City Manager (650) 329-2563 ✔ ✔ 4 6 983000 1 8124 OMB Approved No. 3076-0006 2012 – 2013 Action Plan City of Palo Alto DUNS No. 050520782 May 2012 APPENDIX B CERTIFICATIONS CPMP Non-State Grantee Certifications 1 Version 2.0 CPMP Non-State Grantee Certifications Many elements of this document may be completed electronically, however a signature must be manually applied and the document must be submitted in paper form to the Field Office. This certification does not apply. This certification is applicable. NON-STATE GOVERNMENT CERTIFICATIONS In accordance with the applicable statutes and the regulations governing the consolidated plan regulations, the jurisdiction certifies that: Affirmatively Further Fair Housing -- The jurisdiction will affirmatively further fair housing, which means it will conduct an analysis of impediments to fair housing choice within the jurisdiction, take appropriate actions to overcome the effects of any impediments identified through that analysis, and maintain records reflecting that analysis and actions in this regard. Anti-displacement and Relocation Plan -- It will comply with the acquisition and relocation requirements of the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970, as amended, and implementing regulations at 49 CFR 24; and it has in effect and is following a residential antidisplacement and relocation assistance plan required under section 104(d) of the Housing and Community Development Act of 1974, as amended, in connection with any activity assisted with funding under the CDBG or HOME programs. Drug Free Workplace -- It will or will continue to provide a drug-free workplace by: 1. Publishing a statement notifying employees that the unlawful manufacture, distribution, dispensing, possession, or use of a controlled substance is prohibited in the grantee's workplace and specifying the actions that will be taken against employees for violation of such prohibition; 2. Establishing an ongoing drug-free awareness program to inform employees about – a. The dangers of drug abuse in the workplace; b. The grantee's policy of maintaining a drug-free workplace; c. Any available drug counseling, rehabilitation, and employee assistance programs; and d. The penalties that may be imposed upon employees for drug abuse violations occurring in the workplace; 3. Making it a requirement that each employee to be engaged in the performance of the grant be given a copy of the statement required by paragraph 1; 4. Notifying the employee in the statement required by paragraph 1 that, as a condition of employment under the grant, the employee will – a. Abide by the terms of the statement; and b. Notify the employer in writing of his or her conviction for a violation of a criminal drug statute occurring in the workplace no later than five calendar days after such conviction; 5. Notifying the agency in writing, within ten calendar days after receiving notice under subparagraph 4(b) from an employee or otherwise receiving actual notice of such conviction. Employers of convicted employees must provide notice, including position title, to every grant officer or other designee on whose grant activity the convicted employee was working, unless the Federal agency has designated a central point for the receipt of such notices. Notice shall include the identification number(s) of each affected grant; 6. Taking one of the following actions, within 30 calendar days of receiving notice under subparagraph 4(b), with respect to any employee who is so convicted – a. Taking appropriate personnel action against such an employee, up to and including termination, consistent with the requirements of the Rehabilitation Act of 1973, as amended; or b. Requiring such employee to participate satisfactorily in a drug abuse assistance or rehabilitation program approved for such purposes by a Federal, State, or local health, law enforcement, or other appropriate agency; 7. Making a good faith effort to continue to maintain a drug-free workplace through implementation of paragraphs 1, 2, 3, 4, 5 and 6. Palo Alto CPMP Non-State Grantee Certifications 2 Version 2.0 Anti-Lobbying -- To the best of the jurisdiction's knowledge and belief: 8. No Federal appropriated funds have been paid or will be paid, by or on behalf of it, to any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with the awarding of any Federal contract, the making of any Federal grant, the making of any Federal loan, the entering into of any cooperative agreement, and the extension, continuation, renewal, amendment, or modification of any Federal contract, grant, loan, or cooperative agreement; 9. If any funds other than Federal appropriated funds have been paid or will be paid to any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with this Federal contract, grant, loan, or cooperative agreement, it will complete and submit Standard Form-LLL, "Disclosure Form to Report Lobbying," in accordance with its instructions; and 10. It will require that the language of paragraph 1 and 2 of this anti-lobbying certification be included in the award documents for all subawards at all tiers (including subcontracts, subgrants, and contracts under grants, loans, and cooperative agreements) and that all subrecipients shall certify and disclose accordingly. Authority of Jurisdiction -- The consolidated plan is authorized under State and local law (as applicable) and the jurisdiction possesses the legal authority to carry out the programs for which it is seeking funding, in accordance with applicable HUD regulations. Consistency with plan -- The housing activities to be undertaken with CDBG, HOME, ESG, and HOPWA funds are consistent with the strategic plan. Section 3 -- It will comply with section 3 of the Housing and Urban Development Act of 1968, and implementing regulations at 24 CFR Part 135. Signature/Authorized Official Date Name Title Address City/State/Zip Telephone Number James Keene City Manager 250 Hamilton Avenue Palo Alto, CA 94301 650-329-2563 Palo Alto CPMP Non-State Grantee Certifications 3 Version 2.0 This certification does not apply. This certification is applicable. Specific CDBG Certifications The Entitlement Community certifies that: Citizen Participation -- It is in full compliance and following a detailed citizen participation plan that satisfies the requirements of 24 CFR 91.105. Community Development Plan -- Its consolidated housing and community development plan identifies community development and housing needs and specifies both short-term and long-term community development objectives that provide decent housing, expand economic opportunities primarily for persons of low and moderate income. (See CFR 24 570.2 and CFR 24 part 570) Following a Plan -- It is following a current consolidated plan (or Comprehensive Housing Affordability Strategy) that has been approved by HUD. Use of Funds -- It has complied with the following criteria: 11. Maximum Feasible Priority - With respect to activities expected to be assisted with CDBG funds, it certifies that it has developed its Action Plan so as to give maximum feasible priority to activities which benefit low and moderate income families or aid in the prevention or elimination of slums or blight. The Action Plan may also include activities which the grantee certifies are designed to meet other community development needs having a particular urgency because existing conditions pose a serious and immediate threat to the health or welfare of the community, and other financial resources are not available); 12. Overall Benefit - The aggregate use of CDBG funds including section 108 guaranteed loans during program year(s) 2011, 2012, 2013, (a period specified by the grantee consisting of one, two, or three specific consecutive program years), shall principally benefit persons of low and moderate income in a manner that ensures that at least 70 percent of the amount is expended for activities that benefit such persons during the designated period; 13. Special Assessments - It will not attempt to recover any capital costs of public improvements assisted with CDBG funds including Section 108 loan guaranteed funds by assessing any amount against properties owned and occupied by persons of low and moderate income, including any fee charged or assessment made as a condition of obtaining access to such public improvements. However, if CDBG funds are used to pay the proportion of a fee or assessment that relates to the capital costs of public improvements (assisted in part with CDBG funds) financed from other revenue sources, an assessment or charge may be made against the property with respect to the public improvements financed by a source other than CDBG funds. The jurisdiction will not attempt to recover any capital costs of public improvements assisted with CDBG funds, including Section 108, unless CDBG funds are used to pay the proportion of fee or assessment attributable to the capital costs of public improvements financed from other revenue sources. In this case, an assessment or charge may be made against the property with respect to the public improvements financed by a source other than CDBG funds. Also, in the case of properties owned and occupied by moderate-income (not low-income) families, an assessment or charge may be made against the property for public improvements financed by a source other than CDBG funds if the jurisdiction certifies that it lacks CDBG funds to cover the assessment. Excessive Force -- It has adopted and is enforcing: 14. A policy prohibiting the use of excessive force by law enforcement agencies within its jurisdiction against any individuals engaged in non-violent civil rights demonstrations; and 15. A policy of enforcing applicable State and local laws against physically barring entrance to or exit from a facility or location which is the subject of such non-violent civil rights demonstrations within its jurisdiction; Palo Alto CPMP Non-State Grantee Certifications 4 Version 2.0 Compliance With Anti-discrimination laws -- The grant will be conducted and administered in conformity with title VI of the Civil Rights Act of 1964 (42 USC 2000d), the Fair Housing Act (42 USC 3601-3619), and implementing regulations. Lead-Based Paint -- Its activities concerning lead-based paint will comply with the requirements of part 35, subparts A, B, J, K and R, of title 24; Compliance with Laws -- It will comply with applicable laws. Signature/Authorized Official Date Name Title Address City/State/Zip Telephone Number James Keene City Manager 250 Hamilton Avenue Palo Alto, CA 94301 650-329-2563 Palo Alto CPMP Non-State Grantee Certifications 10 Version 2.0 This certification does not apply. This certification is applicable. APPENDIX TO CERTIFICATIONS Instructions Concerning Lobbying and Drug-Free Workplace Requirements Lobbying Certification This certification is a material representation of fact upon which reliance was placed when this transaction was made or entered into. Submission of this certification is a prerequisite for making or entering into this transaction imposed by section 1352, title 31, U.S. Code. Any person who fails to file the required certification shall be subject to a civil penalty of not less than $10,000 and not more than $100,000 for each such failure. Drug-Free Workplace Certification 1. By signing and/or submitting this application or grant agreement, the grantee is providing the certification. 2. The certification is a material representation of fact upon which reliance is placed when the agency awards the grant. If it is later determined that the grantee knowingly rendered a false certification, or otherwise violates the requirements of the Drug-Free Workplace Act, HUD, in addition to any other remedies available to the Federal Government, may take action authorized under the Drug-Free Workplace Act. 3. Workplaces under grants, for grantees other than individuals, need not be identified on the certification. If known, they may be identified in the grant application. If the grantee does not identify the workplaces at the time of application, or upon award, if there is no application, the grantee must keep the identity of the workplace(s) on file in its office and make the information available for Federal inspection. Failure to identify all known workplaces constitutes a violation of the grantee's drug-free workplace requirements. 4. Workplace identifications must include the actual address of buildings (or parts of buildings) or other sites where work under the grant takes place. Categorical descriptions may be used (e.g., all vehicles of a mass transit authority or State highway department while in operation, State employees in each local unemployment office, performers in concert halls or radio stations). 5. If the workplace identified to the agency changes during the performance of the grant, the grantee shall inform the agency of the change(s), if it previously identified the workplaces in question (see paragraph three). 6. The grantee may insert in the space provided below the site(s) for the performance of work done in connection with the specific grant: Place of Performance (Street address, city, county, state, zip code) Check if there are workplaces on file that are not identified here. The certification with regard to the drug-free workplace is required by 24 CFR part 21. Place Name Street City County State Zip Palo Alto City Hall 250 Hamilton Ave. Palo Alto Santa Clara CA 94301 7. Definitions of terms in the Nonprocurement Suspension and Debarment common rule and Drug-Free Workplace common rule apply to this certification. Grantees' attention is called, in particular, to the following definitions from these rules: "Controlled substance" means a controlled substance in Schedules I through V of the Controlled Substances Act (21 U.S.C. 812) and as further defined by regulation (21 CFR 1308.11 through 1308.15); "Conviction" means a finding of guilt (including a plea of nolo contendere) or imposition of sentence, or both, by any judicial body charged with the responsibility to determine violations of the Federal or State criminal drug statutes; "Criminal drug statute" means a Federal or non-Federal criminal statute involving the manufacture, distribution, dispensing, use, or possession of any Palo Alto CPMP Non-State Grantee Certifications 11 Version 2.0 controlled substance; "Employee" means the employee of a grantee directly engaged in the performance of work under a grant, including: a. All "direct charge" employees; b. all "indirect charge" employees unless their impact or involvement is insignificant to the performance of the grant; and c. temporary personnel and consultants who are directly engaged in the performance of work under the grant and who are on the grantee's payroll. This definition does not include workers not on the payroll of the grantee (e.g., volunteers, even if used to meet a matching requirement; consultants or independent contractors not on the grantee's payroll; or employees of subrecipients or subcontractors in covered workplaces). Note that by signing these certifications, certain documents must completed, in use, and on file for verification. These documents include: 1. Analysis of Impediments to Fair Housing 2. Citizen Participation Plan 3. Anti-displacement and Relocation Plan Signature/Authorized Official Date Name Title Address City/State/Zip Telephone Number James Keene City Manager 250 Hamilton Avenue Palo Alto, CA 94301 650-329-2563 2012 – 2013 Action Plan City of Palo Alto DUNS No. 050520782 May 2012 APPENDIX C PUBLIC AND PRIVATE RESOURCES AVAILABLE FOR HOUSING AND COMMUNITY DEVELOPMENT 2012 – 2013 Action Plan City of Palo Alto DUNS No. 050520782 May 2012 FEDERAL, STATE AND LOCAL RESOURCES Palo Alto has access to a variety of federal, state, and local resources to achieve its housing and community development priorities. The table below identifies potential sources of funding available to carry out housing and community development activities in Palo Alto. To the extent possible, the City will seek to leverage funding from other public and private entities to strengthen programs and activities established in the Consolidated Plan and this Action Plan. PROGRAM NAME DESCRIPTION ELIGIBLE ACTIVITIES FEDERAL PROGRAMS Community Development Block Grant (CDBG) Grants awarded to the City on a formula basis for Housing and Community Development Activities. The City’s CDBG Budget for Fiscal Year 2013 is $719,675.62. • Acquisition • Rehabilitation • Home buyer assistance • Economic Development • Homeless assistance • Public services HOME Program The City of Palo Alto is not an entitlement grantee under the federal HOME program and thus does not receive a direct grant of HOME Program funds from HUD. HOME funds are available on an annual competitive basis through the State of California HOME program. • Acquisition • Rehabilitation • Home buyer assistance • Rental Assistance Section 8 Housing Vouchers The Housing Authority of the County of Santa Clara administers the federal Section 8 program countywide. The City anticipates that Section 8 vouchers will continue to be available to Palo Alto residents in fiscal year 2012/13 through the Moderate Rehabilitation Program, Housing Choice Voucher Program, and the Shelter Plus Care Program. • Rental Assistance • Homeless Assistance • Support Services McKinney – Vento Homeless Assistance Funds Santa Clara County distributes federal McKinney Homeless Assistance funds to organizations in the County that provide services to homeless persons and persons at-risk of homelessness. None of the funding is currently targeted directly to shelter or supportive services in Palo Alto. • Supportive Housing • Shelter Plus Care • Section 8 SRO STATE PROGRAMS State of California’s Multifamily Housing Program (MHP) MHP has been a major source of funding for affordable housing since 2002. The purpose of this program is to provide low-interest loans to developers of affordable rental housing. The Fabian Way Senior Housing received an award of $5.25 million in permanent MHP funding in 2008. • New construction • Rehabilitation • Preservation of low-income permanent and transitional rental housing 2012 – 2013 Action Plan City of Palo Alto DUNS No. 050520782 May 2012 PROGRAM NAME DESCRIPTION ELIGIBLE ACTIVITIES State of California’s Local Housing Trust Fund Grant Program Another component of Proposition 46 was funding for new and existing local housing trust funds. A local housing trust fund is a public or private partnership created to receive on-going revenues for affordable housing production such as Palo Alto’s Commercial and Residential Housing Funds. • Rental Housing Projects (deed restricted) • Down payment assistance Low-Income Housing Tax Credits The California Tax Credit Allocation Committee (CTCAC) holds two application cycles each year. Typically, the first cycle is held in March and the second is held in July. Local non-profits apply directly to the CTCAC for these funds when they have identified a project. • New Construction • Acquisition and rehabilitation of eligible projects LOCAL PROGRAMS Human Service Resource Allocation Process (HSRAP) In addition to the CDBG public service funds, the City will provide $1,099,347 million dollars from the General Fund in support of human services through HSRAP. The HSRAP funds, in conjunction with the CDBG public service funds, are distributed to local non-profit agencies. • Public service activities serving the needs of seniors, children, youth and families, persons with disabilities, and those who are homeless or at risk of homelessness Palo Alto Commercial Housing Fund The Commercial Housing fund is used primarily to increase the number of new affordable housing units for Palo Alto’s work force. It is funded with mitigation fees required from developers of commercial and industrial projects. As of March 21, 2012 the Commercial Fund had an available balance of approximately $99,000. • New construction Palo Alto Residential Housing Fund The Residential Housing Fund is funded with mitigation fees provided under Palo Alto’s Below Market Rate (BMR) housing program from residential developers and money from other miscellaneous sources, such as proceeds from the sale or lease of City property. As of March 21, 2012 the Residential Fund had a balance of approximately $108,000. • Acquisition • Rehabilitation • New construction • Pre-development costs Below Market Rate Emergency Fund This fund was authorized by council in September 2002 in order to provide funding on an ongoing basis for loans to BMR owners for special assessment loans and for rehabilitation and preservation of the City’s stock of BMR ownership units. As of March 21, 2012 the BMR Emergency Fund had a balance of approximately $392,000. • Special Assessment Loans • Rehabilitation 2012 – 2013 Action Plan City of Palo Alto DUNS No. 050520782 May 2012 PROGRAM NAME DESCRIPTION ELIGIBLE ACTIVITIES The Housing Trust Fund of Santa Clara County (HTSCC) HTSCC is a non-profit organization that combines private and public funds to support affordable housing activities in the County, including assistance to developers and homebuyers. The HTSCC is a public/private initiative, dedicated to creating more affordable housing in Santa Clara County, using a revolving loan fund and grant- making program to complement and leverage other housing resources. • New Construction • First time homebuyers program • Developer Loans • Homelessness Prevention Programs Santa Clara County Affordable Housing Fund (AHF) The Santa Clara County Board of Supervisors established the Affordable Housing Fund with initial funding of $18.6 million in 2002. The main purpose of the AHF was to assist in the development of affordable housing especially for extremely low income and special needs people throughout Santa Clara County. $960,000 was awarded to the Tree House project developed by the Palo Alto Housing Corporation. The County has awarded over $10 million from the AHF to date. • Construction • Permanent Financing 2012 – 2013 Action Plan City of Palo Alto DUNS No. 050520782 May 2012 APPENDIX D PROPOSED PROJECTS U.S. Department of Housing OMB Approval No. 2506-0117 and Urban Development Exp. 8/31/2014) Table 3C Consolidated Plan Listing of Projects Jurisdiction’s Name City of Palo Alto Priority Need Public Services Project Title SRO Resident Support Services Description Palo Alto Housing Corporation will provide counseling and supportive case management services for low- income residents of single room occupancy facilities in order to help them maintain housing stability. Activities include financial counseling, health maintenance, information and referral, problem solving, employment assistance, crisis intervention and case management. Objective category: Suitable Living Environment Decent Housing Economic Opportunity Outcome category: Availability/Accessibility Affordability Sustainability Location/Target Area Street Address: 439 Emerson Street and 753 Alma Street City, State, Zipcode: Palo Alto, CA 94301 Objective Number SL-1 Project ID 1 HUD Matrix Code 05 Public Services CDBG Citation 570.201 (e) Type of Recipient LMC CDBG National Objective 570.208(a)(2) Start Date (mm/dd/yyyy) 07/01/2012 Completion Date (mm/dd/yyyy) 06/30/2013 Performance Indicator People Annual Units 130 Local ID SR-01048-999 Units Upon Completion 130 Funding Sources: CDBG $20,375 ESG HOME HOPWA Total Formula Prior Year Funds Assisted Housing PHA Other Funding Total $20,375 The primary purpose of the project is to help: the Homeless Persons with HIV/AIDS Persons with Disabilities Public Housing Needs U.S. Department of Housing OMB Approval No. 2506-0117 and Urban Development Exp. 8/31/2014) Table 3C Consolidated Plan Listing of Projects Jurisdiction’s Name City of Palo Alto Priority Need Public Services Project Title Long Term Care Ombudsman Program Description Catholic Charities assists in problem resolution and advocates for the rights of residents of long term care facilities in Palo Alto. The majority of the clients assisted are low-income, frail, elderly, and chronically ill. This program assists these vulnerable, dependent and socially isolated residents receive the care and placement to which they are entitled. Objective category: Suitable Living Environment Decent Housing Economic Opportunity Outcome category: Availability/Accessibility Affordability Sustainability Location/Target Area Community - wide Street Address: City, State, Zipcode: Objective Number SL-1 Project ID 2 HUD Matrix Code 05A Senior Services CDBG Citation 570.201 (e) Type of Recipient LMC CDBG National Objective 570.208(a)(2) Start Date (mm/dd/yyyy) 07/01/2012 Completion Date (mm/dd/yyyy) 06/30/2013 Performance Indicator People Annual Units 200 Local ID SR-01025-999 Units Upon Completion 200 Funding Sources: CDBG 5,000 ESG HOME HOPWA Total Formula Prior Year Funds Assisted Housing PHA Other Funding Total 5,000 The primary purpose of the project is to help: the Homeless Persons with HIV/AIDS Persons with Disabilities Public Housing Needs . U.S. Department of Housing OMB Approval No. 2506-0117 and Urban Development Exp. 8/31/2014) Table 3C Consolidated Plan Listing of Projects Jurisdiction’s Name City of Palo Alto Priority Need Public Services Project Title Opportunity Center Description InnVision provides basic necessities for persons who are homeless or at-risk of becoming homeless. The facility provides showers, laundry, clothing, snacks, case management, and shelter/housing referral services. Objective category: Suitable Living Environment Decent Housing Economic Opportunity Outcome category: Availability/Accessibility Affordability Sustainability Location/Target Area Street Address: 33 Encina Way City, State, Zipcode: Palo Alto, CA 94301 Objective Number SL-1 Project ID 3 HUD Matrix Code 05 Public Services CDBG Citation 570.201 (e) Type of Recipient LMC CDBG National Objective 570.208(a)(2) Start Date (mm/dd/yyyy) 07/01/2012 Completion Date (mm/dd/yyyy) 06/30/2013 Performance Indicator People Annual Units 800 Local ID SR-01082-999 Units Upon Completion 800 Funding Sources: CDBG $37,175 ESG HOME HOPWA Total Formula Prior Year Funds Assisted Housing PHA Other Funding Total $37,175 The primary purpose of the project is to help: the Homeless Persons with HIV/AIDS Persons with Disabilities Public Housing Needs . U.S. Department of Housing OMB Approval No. 2506-0117 and Urban Development Exp. 8/31/2014) Table 3C Consolidated Plan Listing of Projects Jurisdiction’s Name City of Palo Alto Priority Need Public Services Project Title Domestic Violence Services Description Support Network for Battered Women, a Division of YWCA will provide individuals and families experiencing domestic violence, the program provides a bilingual domestic violence hotline, an emergency shelter, crisis counseling, legal assistance, court accompaniment, individual and group therapy, support groups, children’s therapy groups, preventative education, safety planning and community referrals. Objective category: Suitable Living Environment Decent Housing Economic Opportunity Outcome category: Availability/Accessibility Affordability Sustainability Location/Target Area Community-wide Street Address: City, State, Zipcode: Objective Number SL-1 Project ID 4 HUD Matrix Code 05G CDBG Citation 570.201(e) Type of Recipient LMC CDBG National Objective 570.208(a)(2) Start Date (mm/dd/yyyy) 07/01/2012 Completion Date (mm/dd/yyyy) 06/30/2013 Performance Indicator People Annual Units 45 Local ID SR-01105-999 Units Upon Completion 45 Funding Sources: CDBG 9,175 ESG HOME HOPWA Total Formula Prior Year Funds Assisted Housing PHA Other Funding Total 9,175 The primary purpose of the project is to help: the Homeless Persons with HIV/AIDS Persons with Disabilities Public Housing Needs . U.S. Department of Housing OMB Approval No. 2506-0117 and Urban Development Exp. 8/31/2014) Table 3C Consolidated Plan Listing of Projects Jurisdiction’s Name City of Palo Alto Priority Need Public Services Project Title Fair Housing Services Description Project Sentinel will provide community education and outreach regarding fair housing law and practices, investigation, counseling and legal referral for victims of housing discrimination, and analyses for City staff and officials regarding fair housing practices. California and federal fair housing laws assure specific protected classes the right to be treated in terms of their individual merits and qualifications in seeking housing. Unfortunately, some people are not aware of the law or their rights. Objective category: Suitable Living Environment Decent Housing Economic Opportunity Outcome category: Availability/Accessibility Affordability Sustainability Location/Target Area Community-wide Street Address: City, State, Zipcode: Objective Number DH-1 Project ID 5 HUD Matrix Code 05J CDBG Citation 570.206 Type of Recipient LMC CDBG National Objective 570.208(a)(2) Start Date (mm/dd/yyyy) 07/01/2012 Completion Date (mm/dd/yyyy) 06/30/2013 Performance Indicator People Annual Units 25 Local ID SR-01087-999 Units Upon Completion 25 Funding Sources: CDBG $23,875 ESG HOME HOPWA Total Formula Prior Year Funds Assisted Housing PHA Other Funding Total $23,875 The primary purpose of the project is to help: the Homeless Persons with HIV/AIDS Persons with Disabilities Public Housing Needs . U.S. Department of Housing OMB Approval No. 2506-0117 and Urban Development Exp. 8/31/2014) Table 3C Consolidated Plan Listing of Projects Jurisdiction’s Name City of Palo Alto Priority Need Job creation and replacement Project Title Workforce Development Program Description The Workforce Development Program will provide a transition from unemployment and homelessness to regular employment and housing through case management, job training, mentoring, housing, and transportation assistance. Downtown Streets Team will screen and prepare applicants while Manpower will use their community connections to provide training and job opportunities. Objective category: Suitable Living Environment Decent Housing Economic Opportunity Outcome category: Availability/Accessibility Affordability Sustainability Location/Target Area Community-wide Street Address: City, State, Zipcode: Objective Number E0-1 Project ID 6 HUD Matrix Code 05H CDBG Citation 570.204(a)(2) Type of Recipient LMC CDBG National Objective 570.208(a)(2)(A) Start Date (mm/dd/yyyy) 07/01/2012 Completion Date (mm/dd/yyyy) 06/30/2013 Performance Indicator Annual Units 24 Local ID SR-01121-999 Units Upon Completion 24 Funding Sources: CDBG $146,200 ESG HOME HOPWA Total Formula Prior Year Funds Assisted Housing PHA Other Funding Total $146,200 The primary purpose of the project is to help: the Homeless Persons with HIV/AIDS Persons with Disabilities Public Housing Needs . U.S. Department of Housing OMB Approval No. 2506-0117 and Urban Development Exp. 8/31/2014) Table 3C Consolidated Plan Listing of Projects Jurisdiction’s Name City of Palo Alto Priority Need Multi-family Housing Rehabilitation Project Title California Park – Window Replacement Description California Park is an affordable housing community located at 2301 Park Blvd. in Palo Alto consisting of 45 one, two, and three bedroom flats and town houses for households with very low and low incomes. Current aluminum frame windows are suffering from seal defects causing moisture retention and fogging resulting in minimal barrier from noise at all hours of the day and night. The project proposes the interior window replacements in 43 units for a total of 198 windows with new vinyl frame, double pane, low-E windows. Upon completion, the new windows and insulation will reduce the noise level inside the units by over 95% and will reduce residents’ utility bills by over $5,385 per year and avoid 7,245 lbs of CO2 in the environment per year. Objective category: Suitable Living Environment Decent Housing Economic Opportunity Outcome category: Availability/Accessibility Affordability Sustainability Location/Target Area California Park Street Address: 2301 Park Blvd. City, State, Zipcode: Palo Alto, CA 94306 Objective Number DH-3 Project ID 7 HUD Matrix Code 14B CDBG Citation 570.202(b)(4) Type of Recipient LMH CDBG National Objective 570.208(a)(3) Start Date (mm/dd/yyyy) 07/01/2012 Completion Date (mm/dd/yyyy) 06/30/2012 Performance Indicator Units Annual Units 43 Local ID TBD Units Upon Completion 43 Funding Sources: CDBG $245,016 ESG HOME HOPWA Total Formula Prior Year Funds Assisted Housing PHA Other Funding Total $245,016 The primary purpose of the project is to help: the Homeless Persons with HIV/AIDS Persons with Disabilities Public Housing Needs . U.S. Department of Housing OMB Approval No. 2506-0117 and Urban Development Exp. 8/31/2014) Table 3C Consolidated Plan Listing of Projects Jurisdiction’s Name City of Palo Alto Priority Need Public Facilities Project Title Avenidas HVAC Upgrade Description Avenidas serves the Mid-Peninsula senior community by providing a warm and welcoming atmosphere for social contact to combat loneliness and isolation that is so prevalent among today’s aging seniors. The HVAC Upgrade project will make substantial improvements to Avenidas’ current HVAC system, which was partially upgraded in 2003. Today, many of the system components are obsolete. The upgrade program will minimize or prevent large fluctuations in temperature throughout the building and reduce energy waste. Moreover, it will allow Avenidas to more effectively control the interior environment and provide greater comfort for participants. Objective category: Suitable Living Environment Decent Housing Economic Opportunity Outcome category: Availability/Accessibility Affordability Sustainability Location/Target Area Street Address: 450 Bryant Street City, State, Zipcode: Palo Alto, CA 94301 Objective Number Project ID 8 HUD Matrix Code 03A CDBG Citation 570.201(c) Type of Recipient LMC CDBG National Objective 570.208(a)(2) Start Date (mm/dd/yyyy) 07/01/2012 Completion Date (mm/dd/yyyy) 06/30/2013 Performance Indicator People Annual Units 6,000 Local ID TBD Units Upon Completion 6,000 Funding Sources: CDBG $135,000 ESG HOME HOPWA Total Formula Prior Year Funds Assisted Housing PHA Other Funding Total $135,000 The primary purpose of the project is to help: the Homeless Persons with HIV/AIDS Persons with Disabilities Public Housing Needs . U.S. Department of Housing OMB Approval No. 2506-0117 and Urban Development Exp. 8/31/2014) Table 3C Consolidated Plan Listing of Projects Jurisdiction’s Name City of Palo Alto Priority Need Planning and Administration Project Title City of Palo Alto Description Administer the Administrative costs for the overall management, coordination, and evaluation of the CDBG program, and the project delivery costs associated with bringing projects to completion. Objective category: Suitable Living Environment Decent Housing Economic Opportunity Outcome category: Availability/Accessibility Affordability Sustainability Location/Target Area City of Palo Alto Street Address: 250 Hamilton Avenue City, State, Zipcode: Palo Alto, CA 94301 Objective Number Project ID 9 HUD Matrix Code 21 CDBG Citation 570.206 Type of Recipient N/A CDBG National Objective N/A Start Date (mm/dd/yyyy) 07/01/2012 Completion Date (mm/dd/yyyy) 06/30/2013 Performance Indicator N/A Annual Units N/A Local ID SR-01003-999 Units Upon Completion N/A Funding Sources: CDBG $97,861 ESG HOME HOPWA Total Formula Prior Year Funds Assisted Housing PHA Other Funding Total $97,861 The primary purpose of the project is to help: the Homeless Persons with HIV/AIDS Persons with Disabilities Public Housing Needs . 2012 – 2013 Action Plan City of Palo Alto DUNS No. 050520782 May 2012 APPENDIX E PUBLIC HEARING ADVERTISEMENT NOTICE OF PUBLIC REVIEW PERIOD AND PUBLIC HEARINGS ON PALO ALTO’S COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG) PROGRAM This is to notify the general public and other interested parties that a 30-day public review period of the Draft Annual Action Plan for the allocation of Fiscal Year 2013 Community Development Block Grant (CDBG) funds, will begin on March 23, 2012 and end on April 21, 2012. The Draft Annual Action Plan describes the activities the City may fund under the 2012/13 CDBG Program. Collectively these activities are intended to meet Palo Alto’s affordable housing and community development objectives described in the 2010-2015 Consolidated Plan. Copies of the Draft Annual Action Plan will be available on March 23, 2012 at the Department of Planning and Community Environment, 250 Hamilton Avenue, 5th Floor, Palo Alto, CA 94301, on the City’s website http://www.cityofpaloalto.org/depts/pln/advance_planning/cdbg.asp or by calling Consuelo Hernandez, Planner – CDBG, at (650) 329-2428. Interested parties are encouraged to submit written comments on the proposed Draft Annual Action Plan during the public review period, or to comment at the public hearings and meetings described below. PUBLIC HEARINGS AND MEETINGS The City of Palo Alto Human Relations Commission will hold a Public Hearing on March 8, 2012 to review the Fiscal Year 2013 CDBG funding allocations recommended by the CDBG advisory committee. The Public Hearing will be held at 7:00 p.m., or as soon as possible thereafter, in City Hall Council Conference Room, 250 Hamilton Avenue, Palo Alto. The City of Palo Alto Finance Committee will hold a Public Hearing on April 3, 2012 to review the proposed Fiscal Year 2013 CDBG funding allocations identified in the Draft Annual Action Plan. The Public Hearing will be held at 7:00 p.m., or as soon as possible thereafter, in City Hall Council Chambers, 250 Hamilton Avenue, Palo Alto. The Palo Alto City Council will hold a Public Hearing on May 7, 2012 to adopt the Annual Action Plan and the associated Fiscal Year 2013 CDBG allocations. The Public Hearing will be held at 7:00p.m., or as soon as possible thereafter, in City Hall Council Chambers, 250 Hamilton Avenue, Palo Alto. Persons with disabilities who require auxiliary aids or services in using City facilities, services or programs, or who would like information on the City’s compliance with the Americans with Disabilities Act (ADA) of 1990, may contact: ADA Coordinator, City of Palo Alto, 650-329-2550 (Voice) ada@cityofpaloalto.org 2012 – 2013 Action Plan City of Palo Alto DUNS No. 050520782 May 2012 APPENDIX F MAP ElCaminoRealElCaminoReal AlmaStreet AlmaStreetAlmaSt UniversityAvenue UniversityAve JuniperoSerraBlvdJuniperoSerraBlvd WestPortolaAvenue MarichWay S.RengstorffAvenue CaliforniaStreet LathamStreet DelMedioAvenue ShowersDrive LosAltosAvenue IndependenceAvenue GarciaAvenue ontRoadWestridgeDrive DuranzoWay EricaWay SharonParkDrive RosaDrive AltschulAvenue ElenaAvenue TuscaloosaAvenue ColemanRoad LaurelStreet SantaMonicaAvenue GilbertAvenue MenaltoAvenue WoodlandAvenue BellStreet Cooley Avenue O'ConnerStreet RunnymedeStr eet ClarkAvenue WoodlandAvenue PulgasAvenue O'ConnerStreet Beach Street JasmineWay BrannerDrive CampbellLane ShoronRoad LemonStreet OliveAvenue SantaCruzAvenue BayLaurelDrive MiddleAvenue BayLaurelDrive WindsorDrive PeterCouttsCircle LasuenStreet PanamaDr GovernorsAve ElectioneerAve N.LemonAvenue CottonStreet ValparaisoAvenue FremontStreet UniversityDrive CambridgeAvenue MiddleAvenue ArborRoad CreekDrive WillowRoad OakGroveAvenue SantaCruzAvenue IsabellaAvenue BrittonAlejandraAvenue EscondidoRoad OlmsteadRoad RingwoodAvenue MiddlefieldRoadMiddlefieldRoadMiddlefieldRd BayshoreFwyBayshoreFwy EmbarcaderoRoad CharlestonRd SantaCruzAvenue SandHillRoad GlenwoodAvenue LomaVerdeAve LyttonAve HomerAve ChanningAve CowperSt EmersonSt AddisonAve EMeadowDr WMeadowDr MaybellAve StanfordAve CaliforniaAve ChimalusDr HeatherLn NewellRd ChurchillAve ParkBlvd RaimundoWay BryantSt CollegeAve LouisRd GreerRdColoradoAve RossRd ArastraderoRd ArastraderoRd LosRoblesAve GeorgiaAve LaDonnaSt LagunaAve AmarantaAve BarronAve MataderoAve SealeAve SouthCt ParkBlvd LaParaAve BirchSt LincolnAve PageMillRd ElVeranoAve ElDoradoAve EmersonSt AmarilloAve NCaliforniaAve HawthorneAve AshSt OliveAve VenturaAve AlmaSt WilkieWay FerneAve AlvaradoAvenue LinariaWay LaCuestaDrive CloudAvenue AlmaStreet ClarkAvenue AthertonAvenue AthertonAvenue WatkinsAvenue SanMateoDrive SanAntonioAve JuniperoSerraBlvd tsaE otlAolaP drofnatS ytisrevinU A notreht olneM kraP doowdeR ytiC MountainView otlAolaP Road e las P ulga s d H i l l R o a d Junip e r o S e rr a Boule v a r d P a ge Mi l l Road A r a s t r a d e r o R o a d E l a m i n o R e a l San Antonio Avenue C h ra l e s t o n R o a d rO e og n E x p er s s w a y M i d d l e fi e ld R o a d ersity Ave B a y s h o r e F r e e w a y 1 0 1 A l m S r e e t ElCa mino Real Middlefield Road p i n e R o a d Foothill Expr e s s w a y R o a d University Ave. H ill v ie w E a st B y a s o h r e W e s t B a y s h r o e Fabian CentralExpressw S a n d H ill R o a d E m ba r c a d er o R o a d MarshRoad Bay Expressway Willow ehtfotcudorpasipamsihT SIGotlAolaPfoytiC .secruoselbaliavatsebfoylnonoitatneserpercihpargasitnemucodsihT dnegeL yradnuoBytiCotlAolaP stcejorPgnisuoH '0054'0 FY 2 0 1 2 - 2 0 1 3 CD B G P r o j e c t s Lo c a t i o n m a p CITY O F PALO A LTO IN C O R P O R AT E D C ALIFOR N I A otlAolaP foytiCehT A P RIL 16 1 8 94 otlAolaPfoytiC7002ot9891©.srorreynarofytilibisnopseronsemussaotlAolaPfoytiCehT 23:71:415 0-50-1002,arevirr )bdm.arevirr\lanosreP\nimda\sig\$sig\spam-cc\\(pamnoitacolgbdc ORS ecalP amlA )4 ORS letoH rekraB )3 retneC ytinutroppO )2 Cal Park Apartments )5 U ivn 0UBLIC 3ERVICE !CTIVITIES )1 $OWNTOWN 3TREETS 4EAM t C Public Facilities: Avenidas)6 a 2012 – 2013 Action Plan City of Palo Alto DUNS No. 050520782 May 2012 APPENDIX G PUBLIC COMMENT City of Palo Alto (ID # 2600) Finance Committee Staff Report Report Type:Meeting Date: 4/17/2012 April 17, 2012 Page 1 of 7 (ID # 2600) Summary Title: Fiscal Year 2013 CDBG Allocations Title: Public Hearing: Recommendations on Proposed Fiscal Year 2013 Community Development Block Grant Funding Allocations and the Draft 2012/1 3 Annual Action Plan From:City Manager Lead Department: Planning and Community Environment Recommendation Staff and the Human Relations Commission recommend that the Finance Committee recommend that the City Council take the following actions: 1.Allocate CDBG funding as recommended in the draft 2012-2013 Action Plan and as described in this report; 2.Authorize the City Manager to execute the 2012-2013 CDBG application and 2012-2013 Action Plan for CDBG funds, any other necessary documents concerning the application, and to otherwise bind the City with respect to the applications and commitment of funds; and 3.Authorize staff to submit the 2012-2013 Action Plan to HUD by the May 15, 2012 deadline. Executive Summary The City of Palo Alto receives funds annually from the U.S. Department of Housing and Urban Development (HUD) as an entitlement city under the Community Development Block Grant (CDBG) Program. It is the principal Federal program providing localities with grants to devise innovative and constructive neighborhood approaches to improve the physical, economic, and social conditions in their communities through “the development of viable urban communities, by providing decent housing and a suitable living environment and expanding economic opportunities, principally for persons of low and moderate income.” HUD requirements include preparation of a five-year strategic plan of action, referred to as a Consolidated Plan, to address priority housing and community development needs and to set goals for attaining identified objectives. On May 3, 2010, the City Council adopted the City’s 2010-2015 Consolidated Plan. An Action Plan is prepared annually to identify specific projects to be funded in that year that implement the strategies identified in the Consolidated Plan. The CDBG applications April 17, 2012 Page 2 of 7 (ID # 2600) considered for funding for Fiscal Year 2013 are identified on the attached chart (Attachment A). The draft 2012-2013 Action Plan (Attachment B) has been made available for Public review from March 23, 2012 through April 21, 2012. The Finance Committee is being asked to review the funding recommendations and the draft 2012-2013 Action Plan. Upon review, it is requested the Finance Committee make recommendations to City Council. The City Council will review the recommendations of the Finance Committee at a public hearing scheduled for May 7, 2012. Staff will then submit the Action Plan to HUD in order to meet the May 15, 2012 deadline. Background The CDBG program is authorized under Title I of the Housing and Community Development Act of 1974, as amended. As an entitlement city under the CDBG program, the City of Palo Alto receives funds annually on a formula grant basis. Palo Alto has historically expended all of its CDBG funds on projects benefiting low-and very-low-income persons. HUD regulations require all CDBG funded activities meet one of the three national objectives: ·Benefit low-and very-low-income persons; ·Aid in the prevention or elimination of slums or blight; or ·Meet other community development needs having a particular urgency, or posing a serious and immediate threat to the health or welfare of the community. Palo Alto has five primary CDBG program activity areas in which to allocate funds: Public Services, Planning and Administration, Economic Development, Housing, and Public Facilities. Federal regulations limit the amount that can be spent on Administration and Public Services. No more than 20 percent of the City’s entitlement grant and estimated program income for the following year can be spent on Planning and Administration. It is estimated that $97,861 will be available for this category for Fiscal Year 2013. Similarly, Federal law places a maximum spending cap of 15 percent of the grant allocation and 15 percent of any program income received during the previous fiscal year on public services. It is estimated that $95,601 will be available for public service activities for Fiscal Year 2013. On January 17, 2012 HUD released the CDBG entitlement grant allocation amounts for fiscal year 2013. The final allocation for Palo Alto is $429,304 representing an approximate reduction of 29 percent compared to last year’s allocation of $606,566. This drastic reduction in funding is attributed to significant reductions in federal appropriations and the use of 2010 Census data for allocating CDBG funds. Federal Fiscal Year 2012 budget for the CDBG formula allocation that was included in the appropriation bill adopted by Congress correlating with the City’s Fiscal Year 2013 budget represents a reduction of approximately 11 percent in total available funding; from $3.302 billion to $2.948 billion. The CDBG program statute requires the use of “the most recent data compiled by the United States Bureau of the Census” for allocating CDBG funds. Pursuant to 42 U.S.C. 5302(b), Federal Fiscal Year 2012 marks the first year the CDBG allocation formula will rely on the Census Bureau’s new annual data source, the American Community April 17, 2012 Page 3 of 7 (ID # 2600) Survey (ACS), and the 2010 Census Population Counts. Moving to the ACS will have the effect of more gradual year-to-year adjustments instead of being recalculated only once every 10 years. To that end, the combined effect reductions in appropriations and of the new Census data decrease the available funding for allocation. Action Plan HUD requires submittal of an Annual Action Plan no later than 45 days prior to the start of the program year, or May 15th of every year, that identifies the specific projects to be funded to implement strategies identified in the Consolidated Plan. On May 3, 2010, the City Council adopted the 2010-2015 Consolidated Plan, a five-year strategic plan of action that addresses priority housing and community development needs. CDBG Applications Currently, the CDBG program is operating under a two-year funding request cycle. Applications for Fiscal Years 2012 and 2013 were mailed to area housing and social service providers on November 4, 2010 and posted on the City’s website. A notice of CDBG funding availability was published in the Palo Alto Weekly on November 5, 2010 with completed applications due December 16, 2010. A mandatory proposal-writing workshop was conducted on November 15, 2010 to assist applicants with program regulations and project eligibility questions. The CDBG applications considered for funding for Fiscal Year 2013 are identified on the attached chart (Attachment A). Citizen Participation A Citizen Participation Plan is a required component of the CDBG Program. HUD regulations require CDBG recipient agencies prepare and implement a plan that provides adequate opportunity for citizens to participate in an advisory role in the planning, implementation, and assessment of the CDBG program. On October 18, 2010 the City adopted an amended Citizen Participation Plan and shifted the CDBG advisory role from a separate Citizens Advisory Committee to the established Human Relations Commission (HRC). In summary, the intention of the new plan was to provide a collaborative link between the CDBG funding process and the Human Service Resource Allocation Process (HSRAP). The HRC is now charged with reviewing funding recommendations for the City’s two human service funding sources. A sub-committee comprised of staff and two members of the HRC was established to review both the CDBG and HSRAP funding applications and to provide recommendations to the full commission. While both CDBG and HSRAP are operating on a two-year funding cycle, final CDBG funding recommendations need to be reviewed annually since the budget is contingent upon funding allocations received from HUD. The sub-committee met on February 13, 2012 at City Hall to discuss the Fiscal Year 2013 CDBG budget, review existing Public Service, Planning and Administration, and Economic Development Activities, and recommend funding amounts based on the estimated funds available. In addition, there were four projects recommended for funding in Fiscal Year 2013. These projects were reviewed, re-evaluated, and prioritized for funding. April 17, 2012 Page 4 of 7 (ID # 2600) The HRC considered the funding recommendations of the subcommittee at a public hearing on March 8, 2012. After listening to comments from the public and discussing the CDBG regulations, the HRC voted unanimously to endorse the subcommittee’s funding recommendations. Following the meeting the City received some unexpected program income increasing the total available funding for allocation by $85,430. Staff adjusted the funding recommendations using the merits used by the sub-committee to make allocation recommendations. Commitment of Funds HUD regulations require that CDBG funds be expended in a timely manner. Specifically, the regulatory requirement is that no more than 1.5 times a jurisdiction’s annual entitlement grant amount remain in the City’s Letter of Credit 60 days prior to the end of the program year. In an effort to reduce the backlog of unspent CDBG funds, HUD employs monetary sanctions against jurisdictions that exceed this timeliness requirement. For this reason, all funding applications are scrutinized to insure the readiness of the program or project to move forward and expend funds in a timely manner. Discussion Palo Alto’s CDBG program continues to be directed towards expanding and maintaining existing affordable housing supply, promoting housing opportunities and choices, maintaining and improving community facilities, and providing supportive services for targeted low-income groups including persons who are homeless, persons with disabilities, the elderly, and other special needs groups. Moreover, the CDBG program places a high priority to expand the goal of creating economic opportunities for low-income persons. All of the proposed projects for CDBG funding for Fiscal Year 2013, as presented in the draft 2012-2013 Action Plan, address the priority housing and supportive service needs identified in the Consolidated Plan. Fiscal Year 2013 Funds Available for Allocation The total amount available for allocation in Fiscal Year 2013 is estimated to be $719,677 and summarized as follows: $429,304 Fiscal Year 2013 Entitlement Grant $ 82,337 Reallocated funds from previous fiscal year $ 60,000 Estimated Program Income from Palo Alto Housing Corporation that is generated from rental income in excess of expenses on specific properties acquired or rehabilitated with CDBG funds. $ 28,759 Excess Program Income $ 56,670 Loan Repayment from Palo Alto Housing Corporation (Sheridan Apartments) $ 62,607 Loan Repayment from MidPen Housing Corporation (Palo Alto Gardens) $719,677 ESTIMATED TOTAL AVAILABLE FOR ALLOCATION April 17, 2012 Page 5 of 7 (ID # 2600) Funding limitations are placed on Planning and Administration and Public Service activities. The following summarizes maximum available funding for each: Maximum Available for Public Services 2013 CDBG Entitlement Grant $429,304 2012 Actual Program Income Received1 $208,036 Public Service Cap $637,340 x 15%= $ 95,601 Maximum Available for Planning/Administration 2013 CDBG Entitlement Grant $429,304 Estimated 2013 Program Income $ 60,000 Planning/Admin Cap $489,304 x 20%=$ 97,861 Available for Economic Development, Housing, and Public Facilities $719,677 (Total Available) -$95,601 (Public Service) -$97,861 (Admin) = $526,215 The difference between the funding caps and estimated total available, or $526,215, yields the amount that can be used to fund projects within the other three funding categories; Economic Development, Housing, and Public Facilities. Additional funding can be made available for these activities if less is provided for administration or public services. Fiscal Year 2013 –Funding Requests and Recommendations Palo Alto’s CDBG program is operating under a two-year funding cycle. Table 1, Fiscal Year 2013 Funding Recommendations, identifies the applications recommended for funding. Table 1: Funding Recommendations for Fiscal Year 2013 Applicant Agency 2013 Funding Request 2013 Staff and HRC Recommendations Public Services Palo Alto Housing Corporation -SRO Hotels Supportive Services $ 26,000 $20,375 Catholic Charities -Long Term Care Ombudsman $ 5,000 $ 5,000 InnVision -Opportunity Center Drop-In Center $ 50,000 $37,175 YWCA/Support Network -Domestic Violence Services $ 10,000 $ 9,175 Project Sentinel-Fair Housing Services $ 31,000 $23,875 Sub-total $122,000 $95,600 Admin/Fair Housing Services City of Palo Alto Admin $133,311 $ 97,861 Sub-total $133,311 $ 97,861 Economic Development Downtown Streets –Workforce Development $146,200 $146,200 Sub-total $146,200 $146,200 1 Actual program income received in Fiscal Year 2012 consists of $60,000 from Palo Alto Housing Corporation, $28,759 of excess program income from previous fiscal years, $56,670 from Palo Alto Housing Corporation, and $62,607 from MidPen Housing Corporation. April 17, 2012 Page 6 of 7 (ID # 2600) Housing Palo Alto Housing Corporation -Cal Park Apartments Rehab $248,835 $245,016 Sub-total $248,835 $245,016 Public Facilities Avenidas-Avenidas HVAC Upgrade $135,000 $135,000 Sub-total $135,000 $135,000 Grand Total $719,677 Preliminary funding recommendations for Fiscal Year 2013 were considered along with the Fiscal Year 2012 CDBG Budget. Specifically, programs within the Public Service, Planning and Administration, and Economic Development activities were recommended for funding for another year subject to availability of funding. Final funding amounts were recommended to be increase or decreased an amount equal to the percent change in funding with the exception of Catholic Charities. The City’s established minimum grant amount is $5,000. Four projects were recommended to be reviewed, re-evaluated, and reconsidered for funding for Fiscal Year 2013. Applications submitted and considered for Fiscal Year 2013, as well as the funding recommendations, are listed in Attachment A. Timeline Funding recommendations made by the Finance Committee will be forwarded to the City Council for review and approval at a public hearing scheduled for May 7, 2012. Subsequently, the adopted Action Plan will be submitted to HUD by May 15, 2012. Policy Implications All of the applications recommended for funding in Fiscal Year 2013 are consistent with the priorities established in the City’s adopted 2010-2015 Consolidated Plan. Moreover, they are consistent with the housing programs and policies in the adopted 1998-2010 Comprehensive Plan. Fiscal Implications Several measures have been taken to ensure there is no General Fund subsidy for the administration of the CDBG program. This includes reducing CDBG staffing level to a 1.0 full time equivalent position, a revised Citizen Participation Plan, the two-year funding and contract processes, and revised monitoring guidelines to improve efficiency of the program. Environmental Review For purposes of the National Environmental Policy Act (NEPA) and the California Environmental Quality Act (CEQA), budgeting in itself is not a project. Prior to commitment or release of funds for each of the proposed projects, staff will carry out the required environmental reviews or assessments and certify that the review procedures under CEQA, HUD and NEPA regulations have been satisfied for each particular project. April 17, 2012 Page 7 of 7 (ID # 2600) Attachments: ·Attachment A -FY 2013 Recommendations (PDF) ·DRAFT 2012-13 Action PLan (PDF) Prepared By:Consuelo Hernandez, Department Head:Curtis Williams, Director City Manager Approval: ____________________________________ James Keene, City Manager Attachment A: FY2013 Recommendations CITY OF PALO ALTO CDBG APPLICATIONS FISCAL YEAR 2013 Estimated Funding Available $ 719,677 Available For Public Service (15% Cap) $ 95,601 Available For Planning/Admin (20% Cap) $ 97,861 Available for "Other" Projects $ 526,215 Agency Program Name Final 2012 Requested FY 2013 Recommendation Public Services PAHC SRO Resident Support $ 26,000 $ 26,000 $ 20,375 Catholic Charities Ombudsman $ 5,000 $ 5,000 $ 5,000 Inn Vision Opportunity Center $ 50,000 $ 50,000 $ 37,175 YWCA/Support Network Domestic Violence Services $ 10,000 $ 10,000 $ 9,175 Project Sentinel Fair Housing Services $ 31,000 $ 31,000 $ 23,875 Public Service Total $ 122,000 $ 122,000 $ 95,600 Planning & Administration City of Palo Alto CDBG Admin $ 133,311 $ 133,311 $ 97,861 Planning & Administration Total $ 133,311 $ 133,311 $ 97,861 Economic Development Downtown Streets Workforce Development $ 146,200 $ 146,200 $ 146,200 Economic Development Total $ 146,200 $ 146,200 $ 146,200 Housing Community Working Group Alma Garden Apts. Rehab $ 301,210 $ - $ - Palo Alto Housing Corp. Sheridan Apts. Rehab $ 58,800 $ - $ - Palo Alto Housing Corp. Ventura Apts. Rehab $ 128,835 $ - $ - Palo Alto Housing Corp. Cal Park Apts. Rehab $ - $ 248,835 $ 245,016 MidPen Housing Corporation Palo Alto Gardens Rehab $ - $ 145,464 $ - Housing Total $ 488,845 $ 394,299 $ 245,016 Public Facilities Avenidas Avenidas HVAC Upgrade $ - $ 135,000 $ 135,000 Achieve kids Cool roof $ - $ 120,000 $ - Public Facilities Total $ - $ 255,000 $ 135,000 GRAND TOTAL $ 890,356 $ 1,050,810 $ 719,677 CITY OF PALO ALTO DRAFT 2012/2013 ONE-YEAR ACTION PLAN Annual Update of the City’s Consolidated Plan for the Period July 1, 2012 to June 30, 2013 Public Review Period March 23, 2012 – April 21, 2012 Prepared by Department of Planning & Community Environment 250 Hamilton Avenue Palo Alto, California 94301 Curtis Williams, Director For Information, please contact Consuelo Hernandez, Planner – CDBG Advanced Planning Division, City of Palo Alto (650) 329-2428 2012/2013 ACTION PLAN TABLE OF CONTENTS Executive Summary…………………………………………………………………………...1 Objectives……………………………………………………………………………………...1 Outcomes………………………………………………………………………………………1 Report Outline…………………………………………………………………………………2 Introduction……………………………………………………………………………………..3 Leveraging and matching……………………………………………………………………..3 Goals and Objectives………………………………………………………………………….3 Public Participation........................................................................................................4 Public Comment Period……………………………………………………………………….4 Public Hearings………………………………………………………………………………...4 Resources.......................................................................................................................5 Maximum Spending Caps…………………………………………………………………….5 Annual Objectives……………………………………………………………………………..6 Geographic Distributions…………………………………………………………………….7 Allocation Priorities........................................................................................................7 Annual Affordable Housing Goals………………………………………………………….8 Homeless and Special Needs Populations…………………………………………………8 CDBG Funded Activities……………………………………………………………………...9 HSRAP Funded Activities…………………………………………………………………….9 Barriers to Affordable Housing...................................................................................11 Affirmatively Furthering Fair Housing……………………………………………………...11 Activities to Affirmatively Further Fair Housing…………………………………………...11 Other Housing and Community Development Efforts..............................................12 Appendix A: Application for Federal Assistance Form SF-424 Appendix B: Certifications Appendix C: Public and Private Resources Appendix D: Proposed Projects Appendix E: Public Hearing Advertisement Appendix F: Map Appendix G: Public Comments 2012 – 2013 Action Plan City of Palo Alto DUNS No. 050520782 1 May 2012 EXECUTIVE SUMMARY The 2012/2013 Action Plan is a one-year plan describing the eligible activities the City of Palo Alto intends to undertake to address the needs and implement the strategies identified in the adopted 2010-2015 Consolidated Plan. It is the third Action Plan in the implementation of the five-year plan and serves as the City’s application for federal funds under the U.S. Department of Housing and Urban Development (HUD) formula grant programs. Both the Consolidated Plan and the Action Plan are implemented by the City’s Planning and Community Environment Department. A total of $719,677 is available for funding project and programs during the 2012 Program Year. The City anticipates receiving $429,304 from the federal Community Development Block Grant (CDBG) program. In addition, the City will also reprogram $82,337 in prior-year CDBG funds, $60,000 in anticipated program income, $28,759 in excess program income, $56,670 from Sheridan loan interest payment, and $62,607 from Palo Alto Gardens loan repayment. Palo Alto has access to a variety of federal, state, and local resources to achieve its housing and community development priorities. Specific funding resources will be utilized based on the opportunities and constraints of each particular project or program. Table 1, Fiscal Year 2013 CDBG Budget, summarizes the uses of the funds proposed during the 2012 Program Year. Palo Alto encourages citizen participation through the Action Plan process. This includes consulting local organizations, holding public meetings, and encouraging public comment during the public review period. A total of three public hearings were held in order to allow for public input. Moreover, the Draft Action Plan was made available for 30 days from March 23, 2012 through April 21, 2012. Objectives The City intends to provide funding for various activities which are consistent with the adopted Consolidated Plan. Key objectives for Fiscal Year 2013 include the following: • Support the rehabilitation of older affordable housing projects. • Support efforts to help homeless or Palo Alto residents at risk of homelessness receive necessary supportive services. • Complete improvements to public facilities serving priority need populations. • Improve employment opportunities for low-income persons. Outcomes The City’s outcomes for this planning period are directed at public services, expanding economic opportunities for low-income persons, improving the quality of existing affordable housing units, and rehabilitating public facilities. Specifically, the City anticipates the following outcomes from its 2012-13 activities: • 130 persons will have improved accessibility to a suitable living environment. • 200 persons residing in long term care facilities will have improved access to a suitable living environment. • 800 homeless persons will be provided with supportive services and have improved accessibility to a suitable living environment. 2012 – 2013 Action Plan City of Palo Alto DUNS No. 050520782 2 May 2012 • 45 unduplicated adults and children will be provided emergency safety net supportive services and emergency shelter as needed. • 25 households will have improved accessibility to decent affordable housing. • 10 individuals will be placed in jobs through job training/employment readiness classes • Approximately 43 homes will have their windows replaced • 1 public facility will have their HVAC system upgraded Table 1: FISCAL YEAR 2013 CDBG BUDGET Applicant Agency Budget Public Services Palo Alto Housing Corporation - SRO Hotels Supportive Services $20,375 Catholic Charities - Long Term Care Ombudsman $ 5,000 InnVision - Opportunity Center - Drop-In Center $37,175 YWCA/Support Network - Domestic Violence Services $ 9,175 Project Sentinel- Fair Housing Services $23,875 Sub-total $95,600 Planning and Administration City of Palo Alto Administration $ 97,861 Sub-total $ 97,861 Economic Development Downtown Streets – Workforce Development Program $146,200 Sub-total $146,200 Housing Palo Alto Housing Corporation - Cal Park Apartments Rehab $245,016 Sub-total $245,016 Public Facilities Avenidas- HVAC Upgrade $135,000 Sub-total $135,000 Grand Total $719,677 Report Outline The Action Plan includes the SF-424 application for federal funding and required narrative responses. Divided into eight primary sections, the Action Plan outlines the actions that will be undertaken during Program Year 2012, evaluates the past performance of the City’s CDBG program, summarizes Citizen Participation, and descriptions of the annual objectives. 2012 – 2013 Action Plan City of Palo Alto DUNS No. 050520782 3 May 2012 INTRODUCTION HUD requires all government entities receiving federal CDBG funds to prepare an annual Action Plan. The one-year action plan is submitted to HUD 45 days prior to the start of the City’s fiscal year along with an application for federal assistance (Appendix A) and required certifications (Appendix B). In general, the Action Plan outlines funding priorities and discusses how activities will meet the community needs identified in the Consolidated Plan. The activities described in this Action Plan are proposed to be undertaken during the period between July 1, 2012 and June 30, 2013. The overall goal of the CDBG program is to serve low-income persons by developing viable urban communities through the following actions: • Provide decent housing • Provide a suitable living environment; and • Expand economic opportunities. Palo Alto has identified a range of goals in the 2010-15 Consolidated Plan including the creation and preservation of affordable rental housing, expanding economic opportunities, and improving existing public facilities. All of the projects and activities to be undertaken in Fiscal Year 2013 will address the priority public services, economic development, housing, and public facilities needs identified in the Consolidated Plan. Leveraging and Matching The City of Palo Alto will leverage federal and private housing funds to the greatest extent feasible and consistent with the goals identified in the Consolidated Plan. Moreover, the City will continue to encourage housing projects sponsors to seek private financing and private grants, and to fully utilize other state and federal housing development subsidies such as the low-income housing tax credit program. The City will also utilize its local Affordable Housing fund, as appropriate, to leverage federal and private housing funds and to provide any required matching funds. Where eligible, CDBG housing funds could be used as a portion of the matching requirements for federal housing programs. A full listing of potential funding sources is appended to this Action Plan as Appendix C – Public and Private Resources Available for Housing and Community Development. Goals and Objectives Details of the proposed projects providing a description of each project and program, the CDBG funds allocated, the expected project beneficiaries and the HUD national objective and outcome measure is provided as Appendix D, Proposed Projects. HUD requires a performance measurement system to better capture data on a national level for the activities that are undertaken with CDBG funds at the local level. This system helps quantify and measure program outcomes in order to determine how well programs and activities are meeting established needs and objectives. 2012 – 2013 Action Plan City of Palo Alto DUNS No. 050520782 4 May 2012 PUBLIC PARTICIPATION On October 18, 2010, the Palo Alto City Council adopted an amended Citizen Participation Plan that utilizes the Human Relations Commission (HRC), rather than a separate Citizen Advisory Committee, to promote and encourage citizen participation in the planning, implementation and assessment of the CDBG program. The HRC is uniquely positioned to understand and consider the needs of low and very low income persons, members of minority groups, the elderly, persons with disabilities, and residents of neighborhoods where CDBG activities may be undertaken. Thus far the revisions to the Citizen Participation Plan have promoted a more coordinated and effective response by the City to the human service needs in the community. Public Comment Period Palo Alto provided the draft 2012/13 Action Plan for public review from March 23, 2012 through April 21, 2012. Notice of the document’s availability was advertized in the Palo Alto weekly on March 2nd, 2012 (Appendix F, Public Hearing Notice) and published on the City’s website on February 29, 2012. Copies of the Action Plan were made available at the City Hall 5th floor Department of Planning and Community Environment located at 250 Hamilton Avenue and the City’s Development Center located at 285 Hamilton Avenue. Public Hearings A subcommittee of City staff and two members of the HRC met during February 2012 to review the applications and make recommendations to the full HRC. The subcommittee’s recommendations were considered and unanimously approved at a public hearing held on March 8, 2012. The draft Action Plan was also open for public comment at two additional public hearings. The City’s Finance Committee conducted a public hearing on April 17, 2012 and the City Council conducted a public hearing on May 7, 2012. 2012 – 2013 Action Plan City of Palo Alto DUNS No. 050520782 5 May 2012 RESOURCES In Fiscal Year 2013, Palo Alto will allocate approximately $719,677 to eligible activities that address the needs identified in the Consolidated Plan. On January 17, 2012 HUD released final entitlement grant amounts for Federal Fiscal Year 2012. This correlates with the City’s Fiscal Year 2013 CDBG Program. The funding available for allocation includes $429,304 in CDBG entitlement funds, $82,337 of unspent CDBG funds from previous years, $60,000 in estimated program income, $28,759 in excess program income, $56,670 from Sheridan loan interest payment, and $62,607 from Palo Alto Gardens loan repayments as summarized in Table 2, Funding Available for Allocation. Program income is income directly generated from the use of CDBG funds that is returned to the CDBG program for allocation to new activities. The program income anticipated below is from the Palo Alto Housing Corporation and Mid-peninsula Housing Coalition properties previously purchased or rehabilitated with CDBG funds where revenue exceeded expenses. Table 2: Funding Available for Allocation $429,304 Fiscal Year 2013 Entitlement Grant $ 82,337 Reallocated funds: $ 6,880 - Avenidas (FY 2011) $ 5,457 - Second Harvest (FY 2011) $70,000 -Stevenson House Sewer Rehabilitation Project (FY 2010) $ 60,000 Estimated Program Income from Palo Alto Housing Corporation (PAHC) that is generated from rental income in excess of expenses on specific properties acquired or rehabilitated with CDBG funds. $28,759 Excess Program Income: $ 8,790 – Previous Fiscal Years Excess Program Income $15,424 – PAHC FY 2011 Excess Program Income $ 3,876 – PAHC FY 2012 Plum Tree Apartments Excess Program Income $ 670 – PAHC FY 2012 Excess Program Income $56,670 Interest Payment for Sheridan Loan (PAHC) $ 62,607 Loan Repayment for Palo Alto Gardens from MidPen Housing Coalition $719,677 ESTIMATED TOTAL AVAILABLE FOR ALLOCATION Maximum Spending Caps Maximum Available for Public Services FY 2013 CDBG Entitlement Grant $429,304 FY 2012 Actual Program Income Received $208,036 Public Service Cap (15% of $637,340) $ 95,601 Maximum Available for Planning/Administration FY 2013 CDBG Entitlement Grant $429,304 Estimated 2013 Program Income $ 60,000 Planning/Admin Cap (20% of $489,304) $ 97,861 In order to comprehensively address community needs and the goals identified in the Consolidated Plan, the City will augment CDBG funds utilizing a variety of additional funding sources. These funding sources include other federal funds, state, and local funds. A full listing of potential funding sources is appended to this Action Plan as Appendix C – Public and Private Resources. 2012 – 2013 Action Plan City of Palo Alto DUNS No. 050520782 6 May 2012 ANNUAL OBJECTIVES Table 3 provides a list of the activities the City will fund with CDBG funds during Fiscal Year 2013. A more detailed description for each of the activities is listed in Appendix D – Proposed Projects (HUD table 3Cs). Planning and Administration Activities Table 3: Summary of Specific Annual Objectives (HUD table 3A) Specific Objective Source of Funds Performance Measure Goal Achieved Outcome/ Objective* Public Service SRO Tenant Support Program $20,375 CDBG People 130 TBD** SL-1 Long-Term Care Ombudsman Program $5,000 CDBG People 200 TBD SL-1 Opportunity Center $37,175 CDBG People 800 TBD SL-1 Domestic Violence Services $9,175 CDBG People 45 TBD SL-1 Fair Housing Services $23,875 CDBG Households 25 TBD Economic Development Workforce Development Program $146,200 CDBG Jobs 24 TBD E0-1 Rental Housing Rental Housing Rehab Cal Park Apartments $245,016 CDBG Housing Units 43 TBD DH-1 Public Facilities Objective Public Facilities Improvements Avenidas HVAC Upgrade $135,000 CDBG People 6,000 TBD * HUD’s National Outcome/Objectives Codes Availability/ Accessibility Affordability Sustainability Decent Housing DH-1 DH-2 DH-3 Suitable Living Environment SL-1 SL-2 SL-3 Economic Opportunity EO-1 EO-2 EO-3 ** TBD: To be determined at the end of the Program Year 2012 – 2013 Action Plan City of Palo Alto DUNS No. 050520782 7 May 2012 GEOGRAPHIC DISTRIBUTION The City considers the provisions of all types of housing assistance on a citywide basis consistent with the policies of the Comprehensive Plan. Palo Alto does not have specific target areas for housing activities, instead the City attempts to provide housing affordable to lower- income persons throughout the City. There are only a few areas that are considered to have a concentration of minority populations or low-income residents in Palo Alto. ALLOCATION PRIORITIES Fiscal Year 2013 is the third year of the City’s five year Consolidated Plan for the period 2010- 2015. Table 4, Summary of Specific Housing/Community Development Objectives, below sets forth five year goals of the Plan and the one-year goals of the Action Plan for Fiscal Year 2013. Table 4: Summary of Specific Housing/Community Development Objectives Goal # Specific Objectives Performance Measure 5 Year Goal FY 2013 Goal Rental Housing Objectives 1A.1 &1C.1 Increase the Supply of Rental Housing Units 125 0 1A.2 &1C.1 Preserve Existing Affordable Rental Housing Units 72 0 1A.2 &1C.1 Conserve the Condition of Existing Rental Housing Units 150 43 Owner Housing Objectives 1B.1 Continue Below market Rate Program Units 34 10 1B.3 Rehabilitation Loans to L/M Income Owners Units Emergency Only As Needed 1B.3 Minor Home Repairs and Accessibility Upgrades Units 150 0 Public Service Objectives 3A.1 Assist Seniors in Long-Term Care Individuals 400 200 2A.1 - 5 Services to Prevent Homelessness Individuals 2,000 531 3A.1 Food and Meal Programs Individuals 2,000 400 Public Facilities Objectives 3B.1 & 3B.2 Promote Community-Based Services through Public Facilities Facilities 2 1 2012 – 2013 Action Plan City of Palo Alto DUNS No. 050520782 8 May 2012 ANNUAL AFFORDABLE HOUSING GOALS Palo Alto has identified affordable housing as the primary objective for the expenditure of CDBG funds in the Consolidated Plan. It will continue to allocate the maximum funding available to activities and projects that meet this objective. Table 5, Fiscal Year 2013 Annual Affordable Housing Goals, outlines the 5-Year Consolidated Plan goals and the proposed Fiscal Year 2013 goal. Table 5: Fiscal Year 2013 Affordable Housing Goals Grantee Name: City of Palo Alto Program Year: 2012 5-Year Goal Fiscal Year 2013 Goal Resources Used BENEFICIARY GOALS (Sec. 215 Only) Homeless households 2,067 CDBG Non-homeless households 825 CDBG Special needs households CDBG Total Sec. 215 Beneficiaries RENTAL GOALS (Sec. 215 Only) Production of new units 125 0 CDBG Rehabilitation of existing units 150 43 CDBG Total Sec. 215 Affordable Rental HOME OWNER GOALS (Sec. 215 Only) Below Market Rate Program 34 Housing Rehabilitation of existing units 150 0 CDBG Total Sec. 215 Affordable Owner Total Overall Housing Goal Homeless and Special Needs Populations The City of Palo Alto plans to use its CDBG funds to promote the local provision of services for low-income Palo Alto residents. A number of the City’s proposed Fiscal Year 2013 programs will directly benefit special needs groups. Moreover, through the City’s Human Services Resource Allocation Process (HSRAP), funding is provided to support services and resources targeted to Homeless and Special Needs populations. CDBG Funded Palo Alto Housing Corporation – SRO Tenant Counseling: Provides counseling and case-management services for the low-income residents and prospective residents of single room occupancy hotels in Palo Alto. Many SRO residents have a history of homelessness and special needs. The program plays a vital role in helping residents maintain their stability and housing. 2012 – 2013 Action Plan City of Palo Alto DUNS No. 050520782 9 May 2012 Catholic Charities – Ombudsman Program: The long-term care ombudsman program provides complaint investigation and advocacy services for the frail elderly or persons with disabilities in long term care facilities in Palo Alto InnVision - Opportunity Center: The Opportunity Center facility in Palo Alto provides a clean, safe environment and resources for very-low income or homeless persons including bagged groceries, hot meals, a rotating church shelter program, information and referral, shower and laundry facilities, case- management, and money management (payee) programs, clothing and health services. A daily hot meal is provided at a different location each day and bagged groceries are distributed daily at the Downtown Food Closet. The Hotel de Zink rotating church shelter program is housed at a different location each month. Downtown Streets Team/Manpower – Workforce Development Program: A new economic development pilot program to help motivated graduates of the Downtown Streets Team programs move on to stable employment. The program will include mentoring, counseling, job readiness, job training, and assistance. HSRAP Funded Abilities United – Disability Services: This organization provides services and activities for adults and children with mental and physical disabilities. Avenidas – Senior Services: Agency is the main provider of senior services in the Mid-Peninsula area. Community Technology Alliance – Shared Technical Infrastracture: Provides shelter hotline and voicemail services for homeless individuals and families. The voicemail service helps case-managed clients attain individual goals such as securing health care, housing or employment. A countywide housing information and referral website and tracking system is maintained to assist service providers and those seeking shelter. Downtown Streets Team – Downtown Streets: Identifies motivated homeless individuals and provides them with jobs cleaning and beautifying the downtown area in exchange for housing and food vouchers. The program includes counseling, coaching and training to help program participants build self-esteem, confidence and connections in the community. La Comida de California – Hot Meals for The Elderly: Daily meal program for the elderly. May View Health Center – Health Care for Low Income & Homeless Palo Alto residents: Basic primary health care services and health education and referral services for uninsured low- income and homeless individuals from the Palo Alto area. Momentum for Mental Health – Homeless Outreach Program: Mental health outreach program that provides emergency on-call services to assist local mentally ill homeless persons. The agency provides services to City departments, libraries, community centers and local homeless service providers. 2012 – 2013 Action Plan City of Palo Alto DUNS No. 050520782 10 May 2012 Peninsula HealthCare Connection – Project Downtown Connect: Provider of health care services at the Opportunity Center of Palo Alto. Project Downtown Connect provides Section 8 vouchers to eligible homeless individuals and families. SALA – Legal Assistance to Elders: Senior Adults Legal Assistance (SALA) provides affordable legal assistance to elders. 2012 – 2013 Action Plan City of Palo Alto DUNS No. 050520782 11 May 2012 BARRIERS TO AFFORDABLE HOUSING A barrier of affordable housing is defined in the Consolidated Plan as a public policy such as land use controls, property taxes, zoning ordinances, building codes, fees, growth limits, and other similar policies. Affirmatively Furthering Fair Housing Fair Housing is crucial to ensuring persons of like income levels have equal access to housing. HUD requires that jurisdictions receiving federal funds commit to affirmatively further fair housing. A fair housing impediment, according to HUD, is considered to be “any actions, omissions, or decisions which have the effect of restricting housing choices or the availability of housing choices because of race, color, religion, sex, disability, familial status, or national origin.” A key part of affirmatively furthering fair housing includes the preparation of an Analysis of Impediments to Fair Housing Choice (AI). The City of Palo Alto is currently reviewing and updating its AI. Activities to Affirmatively Further Fair Housing Palo Alto is committed to fair housing practices and places a priority on promoting and ensuring an atmosphere of non-discrimination in housing choice. In Fiscal Year 2013 the City of Palo Alto will provide $23,875 in CDBG funds to Project Sentinel for the provision of fair housing complaint investigations, public education and information, and referral services. The following actions to foster and maintain affordable housing to address housing: • Provide tenant/landlord counseling and mediation services for Palo Alto residents through the Palo Alto Mediation Program (Project Sentinel). • Support the Human Relations Commission in their documentation and investigation of hate crimes, and in their support of diversity, disability and affordable housing issues. • Continue to monitor the provision of fair housing services to ensure that adequate services are being provided and are cost effective. • Continue to participate in the Santa Clara County Fair Housing Task Force. • Provide funding to Project sentinel to reduce discrimination in housing by: 1. Investigating cases of housing discrimination in Palo Alto 2. Conducting consultation with persons who believe they have been discriminated against 3. Maintaining a pool of trained testers for investigations and conducting trainings 4. Maintaining a panel of participating attorneys for referral 5. Running fair housing ads in the Palo Alto Weekly, San Jose Mercury News and other media outlets 6. Distributing fair housing brochures 7. Running public service announcements for local radio/TV broadcasters 8. Making educational presentations to the community 9. Monitoring and testing rental housing sites for fair housing compliance 10. Organizing an event for National Fair Housing Month 2012 – 2013 Action Plan City of Palo Alto DUNS No. 050520782 12 May 2012 OTHER HOUSING AND COMMUNITY DEVELOPMENT EFFORTS EVALUATION OF PAST PERFORMANCE The City has historically allocated CDBG funds to activities that benefit low and moderate income persons, with a top priority to increase affordable housing opportunities within the City. Palo Alto has one of the most expensive housing markets in the country due in part to the lack of available land. Not withstanding, 91 new affordable rental housing units have been created during the 2010-2015 Consolidated Planning Period. In addition, Eden Housing’s proposed project at 801-841 Alma Street is expected to create 50 additional new rental units within the next few years. MONITORING OF ACTIVITIES Palo Alto follows the monitoring requirements for the use of Federal funds as directed by HUD. The City’s Department of Planning and Community Environment monitors its housing production goals and all the activities carried out to further the goals of the Consolidated Plan. An annual performance report is required for activities funded by CDBG and HOME programs and completed in compliance with HUD regulations and in accordance with HUD standards. The Consolidated Annual Performance and Evaluation Report (CAPER) is available to the general public for comments during a 15-day review period. This report identifies the actual dollars expended, the beneficiaries served, and the program goals achieved. The City has also developed a subrecipient monitoring plan that includes the submittal of semi- annual and annual performance reports. Both reports outline the extent to which program goals have been achieved and the number of beneficiaries who have been served. Program performance is measured against the specific program objectives outlined in the contract scope of services. Additionally, City staff conducts on-site monitoring visits, as necessary, to ensure compliance with all regulations governing their administrative, financial and programmatic operations, and to make sure the identified performance objectives have been achieved. INSTITUTIONAL STRUCTURE AND COORIDNATION Implementation of CDBG funds is overseen by the Department of Planning and Community Environment. Human Services and social service delivery in Palo Alto by non-profit agencies is coordinated through the City’s HSRAP. The City Council approves projects and programs that meet the City’s goals. 2012 – 2013 Action Plan City of Palo Alto DUNS No. 050520782 May 2012 APPENDIX A APPLICATION FOR FEDERAL ASSISTANCE FORM SF-424 APPLICATION FOR Version 7/03 FEDERAL ASSISTANCE 2. DATE SUBMITTED Applicant Identifier 1. TYPE OF SUBMISSION: Application Pre-application 3. DATE RECEIVED BY STATE State Application Identifier Construction Construction Non-Construction Non-Construction 4. DATE RECEIVED BY FEDERAL AGENCY Federal Identifier 5. APPLICANT INFORMATION Organizational Unit: Legal Name: Department: Organizational DUNS: Division: Address: Street: Name and telephone number of person to be contacted on matters involving this application (give area code) Prefix:First Name: City: Middle Name County: Last Name State:Zip Code Suffix: Country: Email: 6. EMPLOYER IDENTIFICATION NUMBER (EIN): - Phone Number (give area code) Fax Number (give area code) 8. TYPE OF APPLICATION: New Continuation Revision 7. TYPE OF APPLICANT: (See back of form for Application Types) If Revision, enter appropriate letter(s) in box(es) (See back of form for description of letters.) Other (specify) Other (specify) 9. NAME OF FEDERAL AGENCY: 10. CATALOG OF FEDERAL DOMESTIC ASSISTANCE NUMBER: - TITLE (Name of Program): 12. AREAS AFFECTED BY PROJECT (Cities, Counties, States, etc.): 11. DESCRIPTIVE TITLE OF APPLICANT’S PROJECT: 13. PROPOSED PROJECT 14. CONGRESSIONAL DISTRICTS OF: Start Date:Ending Date: a. Applicant b. Project 15. ESTIMATED FUNDING: 16. IS APPLICATION SUBJECT TO REVIEW BY STATE EXECUTIVE ORDER 12372 PROCESS? a. Federal $.00 b. Applicant $.00 a. Yes. THIS PREAPPLICATION/APPLICATION WAS MADE AVAILABLE TO THE STATE EXECUTIVE ORDER 12372 PROCESS FOR REVIEW ON c. State $.00 DATE: d. Local $.00 b. No.PROGRAM IS NOT COVERED BY E. O. 12372 e. Other $.00 OR PROGRAM HAS NOT BEEN SELECTED BY STATE FOR REVIEW f. Program Income $.00 17. IS THE APPLICANT DELINQUENT ON ANY FEDERAL DEBT? g. TOTAL $.00 Yes If “Yes” attach an explanation. No 18. TO THE BEST OF MY KNOWLEDGE AND BELIEF, ALL DATA IN THIS APPLICATION/PREAPPLICATION ARE TRUE AND CORRECT. THE DOCUMENT HAS BEEN DULY AUTHORIZED BY THE GOVERNING BODY OF THE APPLICANT AND THE APPLICANT WILL COMPLY WITH THE ATTACHED ASSURANCES IF THE ASSISTANCE IS AWARDED. a. Authorized Representative Prefix First Name Middle Name Last Name Suffix b. Title c. Telephone Number (give area code) d. Signature of Authorized Representative e. Date Signed Previous Edition Usable Authorized for Local Reproduction Standard Form 424 (Rev.9-2003) Prescribed by OMB Circular A-102 B-12-MC-06-0020 B-12-MC-06-0020 City of Palo Alto Planning and Community Environment 050520782 Planning P.O. BOX 10250 Miss Consuelo Palo Alto Santa Clara Hernandez CA 94303 9 (650) 329-2428 consuelo.hernandez@cityofpaloalto.org (650) 329-2154 D. Township Government U.S. Department of Housing and Urban Development The City of Palo Alto's Community Development Block Grant (CDBG) Program for Fiscal Year 2012/13. Community Development Block Grant (CDBG) City of Palo Alto, County of Santa Clara, State of California 07/01/2012 06/30/2013 14th Congressional District 14th Congressional District 429,304 82,336 208,037 719,677 Mr.James Keene City Manager (650) 329-2563 ✔ ✔ 4 6 983000 1 8124 OMB Approved No. 3076-0006 2012 – 2013 Action Plan City of Palo Alto DUNS No. 050520782 May 2012 APPENDIX B CERTIFICATIONS CPMP Non-State Grantee Certifications 1 Version 2.0 CPMP Non-State Grantee Certifications Many elements of this document may be completed electronically, however a signature must be manually applied and the document must be submitted in paper form to the Field Office. This certification does not apply. This certification is applicable. NON-STATE GOVERNMENT CERTIFICATIONS In accordance with the applicable statutes and the regulations governing the consolidated plan regulations, the jurisdiction certifies that: Affirmatively Further Fair Housing -- The jurisdiction will affirmatively further fair housing, which means it will conduct an analysis of impediments to fair housing choice within the jurisdiction, take appropriate actions to overcome the effects of any impediments identified through that analysis, and maintain records reflecting that analysis and actions in this regard. Anti-displacement and Relocation Plan -- It will comply with the acquisition and relocation requirements of the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970, as amended, and implementing regulations at 49 CFR 24; and it has in effect and is following a residential antidisplacement and relocation assistance plan required under section 104(d) of the Housing and Community Development Act of 1974, as amended, in connection with any activity assisted with funding under the CDBG or HOME programs. Drug Free Workplace -- It will or will continue to provide a drug-free workplace by: 1. Publishing a statement notifying employees that the unlawful manufacture, distribution, dispensing, possession, or use of a controlled substance is prohibited in the grantee's workplace and specifying the actions that will be taken against employees for violation of such prohibition; 2. Establishing an ongoing drug-free awareness program to inform employees about – a. The dangers of drug abuse in the workplace; b. The grantee's policy of maintaining a drug-free workplace; c. Any available drug counseling, rehabilitation, and employee assistance programs; and d. The penalties that may be imposed upon employees for drug abuse violations occurring in the workplace; 3. Making it a requirement that each employee to be engaged in the performance of the grant be given a copy of the statement required by paragraph 1; 4. Notifying the employee in the statement required by paragraph 1 that, as a condition of employment under the grant, the employee will – a. Abide by the terms of the statement; and b. Notify the employer in writing of his or her conviction for a violation of a criminal drug statute occurring in the workplace no later than five calendar days after such conviction; 5. Notifying the agency in writing, within ten calendar days after receiving notice under subparagraph 4(b) from an employee or otherwise receiving actual notice of such conviction. Employers of convicted employees must provide notice, including position title, to every grant officer or other designee on whose grant activity the convicted employee was working, unless the Federal agency has designated a central point for the receipt of such notices. Notice shall include the identification number(s) of each affected grant; 6. Taking one of the following actions, within 30 calendar days of receiving notice under subparagraph 4(b), with respect to any employee who is so convicted – a. Taking appropriate personnel action against such an employee, up to and including termination, consistent with the requirements of the Rehabilitation Act of 1973, as amended; or b. Requiring such employee to participate satisfactorily in a drug abuse assistance or rehabilitation program approved for such purposes by a Federal, State, or local health, law enforcement, or other appropriate agency; 7. Making a good faith effort to continue to maintain a drug-free workplace through implementation of paragraphs 1, 2, 3, 4, 5 and 6. Palo Alto CPMP Non-State Grantee Certifications 2 Version 2.0 Anti-Lobbying -- To the best of the jurisdiction's knowledge and belief: 8. No Federal appropriated funds have been paid or will be paid, by or on behalf of it, to any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with the awarding of any Federal contract, the making of any Federal grant, the making of any Federal loan, the entering into of any cooperative agreement, and the extension, continuation, renewal, amendment, or modification of any Federal contract, grant, loan, or cooperative agreement; 9. If any funds other than Federal appropriated funds have been paid or will be paid to any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with this Federal contract, grant, loan, or cooperative agreement, it will complete and submit Standard Form-LLL, "Disclosure Form to Report Lobbying," in accordance with its instructions; and 10. It will require that the language of paragraph 1 and 2 of this anti-lobbying certification be included in the award documents for all subawards at all tiers (including subcontracts, subgrants, and contracts under grants, loans, and cooperative agreements) and that all subrecipients shall certify and disclose accordingly. Authority of Jurisdiction -- The consolidated plan is authorized under State and local law (as applicable) and the jurisdiction possesses the legal authority to carry out the programs for which it is seeking funding, in accordance with applicable HUD regulations. Consistency with plan -- The housing activities to be undertaken with CDBG, HOME, ESG, and HOPWA funds are consistent with the strategic plan. Section 3 -- It will comply with section 3 of the Housing and Urban Development Act of 1968, and implementing regulations at 24 CFR Part 135. Signature/Authorized Official Date Name Title Address City/State/Zip Telephone Number James Keene City Manager 250 Hamilton Avenue Palo Alto, CA 94301 650-329-2563 Palo Alto CPMP Non-State Grantee Certifications 3 Version 2.0 This certification does not apply. This certification is applicable. Specific CDBG Certifications The Entitlement Community certifies that: Citizen Participation -- It is in full compliance and following a detailed citizen participation plan that satisfies the requirements of 24 CFR 91.105. Community Development Plan -- Its consolidated housing and community development plan identifies community development and housing needs and specifies both short-term and long-term community development objectives that provide decent housing, expand economic opportunities primarily for persons of low and moderate income. (See CFR 24 570.2 and CFR 24 part 570) Following a Plan -- It is following a current consolidated plan (or Comprehensive Housing Affordability Strategy) that has been approved by HUD. Use of Funds -- It has complied with the following criteria: 11. Maximum Feasible Priority - With respect to activities expected to be assisted with CDBG funds, it certifies that it has developed its Action Plan so as to give maximum feasible priority to activities which benefit low and moderate income families or aid in the prevention or elimination of slums or blight. The Action Plan may also include activities which the grantee certifies are designed to meet other community development needs having a particular urgency because existing conditions pose a serious and immediate threat to the health or welfare of the community, and other financial resources are not available); 12. Overall Benefit - The aggregate use of CDBG funds including section 108 guaranteed loans during program year(s) 2011, 2012, 2013, (a period specified by the grantee consisting of one, two, or three specific consecutive program years), shall principally benefit persons of low and moderate income in a manner that ensures that at least 70 percent of the amount is expended for activities that benefit such persons during the designated period; 13. Special Assessments - It will not attempt to recover any capital costs of public improvements assisted with CDBG funds including Section 108 loan guaranteed funds by assessing any amount against properties owned and occupied by persons of low and moderate income, including any fee charged or assessment made as a condition of obtaining access to such public improvements. However, if CDBG funds are used to pay the proportion of a fee or assessment that relates to the capital costs of public improvements (assisted in part with CDBG funds) financed from other revenue sources, an assessment or charge may be made against the property with respect to the public improvements financed by a source other than CDBG funds. The jurisdiction will not attempt to recover any capital costs of public improvements assisted with CDBG funds, including Section 108, unless CDBG funds are used to pay the proportion of fee or assessment attributable to the capital costs of public improvements financed from other revenue sources. In this case, an assessment or charge may be made against the property with respect to the public improvements financed by a source other than CDBG funds. Also, in the case of properties owned and occupied by moderate-income (not low-income) families, an assessment or charge may be made against the property for public improvements financed by a source other than CDBG funds if the jurisdiction certifies that it lacks CDBG funds to cover the assessment. Excessive Force -- It has adopted and is enforcing: 14. A policy prohibiting the use of excessive force by law enforcement agencies within its jurisdiction against any individuals engaged in non-violent civil rights demonstrations; and 15. A policy of enforcing applicable State and local laws against physically barring entrance to or exit from a facility or location which is the subject of such non-violent civil rights demonstrations within its jurisdiction; Palo Alto CPMP Non-State Grantee Certifications 4 Version 2.0 Compliance With Anti-discrimination laws -- The grant will be conducted and administered in conformity with title VI of the Civil Rights Act of 1964 (42 USC 2000d), the Fair Housing Act (42 USC 3601-3619), and implementing regulations. Lead-Based Paint -- Its activities concerning lead-based paint will comply with the requirements of part 35, subparts A, B, J, K and R, of title 24; Compliance with Laws -- It will comply with applicable laws. Signature/Authorized Official Date Name Title Address City/State/Zip Telephone Number James Keene City Manager 250 Hamilton Avenue Palo Alto, CA 94301 650-329-2563 Palo Alto CPMP Non-State Grantee Certifications 10 Version 2.0 This certification does not apply. This certification is applicable. APPENDIX TO CERTIFICATIONS Instructions Concerning Lobbying and Drug-Free Workplace Requirements Lobbying Certification This certification is a material representation of fact upon which reliance was placed when this transaction was made or entered into. Submission of this certification is a prerequisite for making or entering into this transaction imposed by section 1352, title 31, U.S. Code. Any person who fails to file the required certification shall be subject to a civil penalty of not less than $10,000 and not more than $100,000 for each such failure. Drug-Free Workplace Certification 1. By signing and/or submitting this application or grant agreement, the grantee is providing the certification. 2. The certification is a material representation of fact upon which reliance is placed when the agency awards the grant. If it is later determined that the grantee knowingly rendered a false certification, or otherwise violates the requirements of the Drug-Free Workplace Act, HUD, in addition to any other remedies available to the Federal Government, may take action authorized under the Drug-Free Workplace Act. 3. Workplaces under grants, for grantees other than individuals, need not be identified on the certification. If known, they may be identified in the grant application. If the grantee does not identify the workplaces at the time of application, or upon award, if there is no application, the grantee must keep the identity of the workplace(s) on file in its office and make the information available for Federal inspection. Failure to identify all known workplaces constitutes a violation of the grantee's drug-free workplace requirements. 4. Workplace identifications must include the actual address of buildings (or parts of buildings) or other sites where work under the grant takes place. Categorical descriptions may be used (e.g., all vehicles of a mass transit authority or State highway department while in operation, State employees in each local unemployment office, performers in concert halls or radio stations). 5. If the workplace identified to the agency changes during the performance of the grant, the grantee shall inform the agency of the change(s), if it previously identified the workplaces in question (see paragraph three). 6. The grantee may insert in the space provided below the site(s) for the performance of work done in connection with the specific grant: Place of Performance (Street address, city, county, state, zip code) Check if there are workplaces on file that are not identified here. The certification with regard to the drug-free workplace is required by 24 CFR part 21. Place Name Street City County State Zip Palo Alto City Hall 250 Hamilton Ave. Palo Alto Santa Clara CA 94301 7. Definitions of terms in the Nonprocurement Suspension and Debarment common rule and Drug-Free Workplace common rule apply to this certification. Grantees' attention is called, in particular, to the following definitions from these rules: "Controlled substance" means a controlled substance in Schedules I through V of the Controlled Substances Act (21 U.S.C. 812) and as further defined by regulation (21 CFR 1308.11 through 1308.15); "Conviction" means a finding of guilt (including a plea of nolo contendere) or imposition of sentence, or both, by any judicial body charged with the responsibility to determine violations of the Federal or State criminal drug statutes; "Criminal drug statute" means a Federal or non-Federal criminal statute involving the manufacture, distribution, dispensing, use, or possession of any Palo Alto CPMP Non-State Grantee Certifications 11 Version 2.0 controlled substance; "Employee" means the employee of a grantee directly engaged in the performance of work under a grant, including: a. All "direct charge" employees; b. all "indirect charge" employees unless their impact or involvement is insignificant to the performance of the grant; and c. temporary personnel and consultants who are directly engaged in the performance of work under the grant and who are on the grantee's payroll. This definition does not include workers not on the payroll of the grantee (e.g., volunteers, even if used to meet a matching requirement; consultants or independent contractors not on the grantee's payroll; or employees of subrecipients or subcontractors in covered workplaces). Note that by signing these certifications, certain documents must completed, in use, and on file for verification. These documents include: 1. Analysis of Impediments to Fair Housing 2. Citizen Participation Plan 3. Anti-displacement and Relocation Plan Signature/Authorized Official Date Name Title Address City/State/Zip Telephone Number James Keene City Manager 250 Hamilton Avenue Palo Alto, CA 94301 650-329-2563 2012 – 2013 Action Plan City of Palo Alto DUNS No. 050520782 May 2012 APPENDIX C PUBLIC AND PRIVATE RESOURCES AVAILABLE FOR HOUSING AND COMMUNITY DEVELOPMENT 2012 – 2013 Action Plan City of Palo Alto DUNS No. 050520782 May 2012 FEDERAL, STATE AND LOCAL RESOURCES Palo Alto has access to a variety of federal, state, and local resources to achieve its housing and community development priorities. The table below identifies potential sources of funding available to carry out housing and community development activities in Palo Alto. To the extent possible, the City will seek to leverage funding from other public and private entities to strengthen programs and activities established in the Consolidated Plan and this Action Plan. PROGRAM NAME DESCRIPTION ELIGIBLE ACTIVITIES FEDERAL PROGRAMS Community Development Block Grant (CDBG) Grants awarded to the City on a formula basis for Housing and Community Development Activities. The City’s CDBG Budget for Fiscal Year 2013 is $719,675.62. • Acquisition • Rehabilitation • Home buyer assistance • Economic Development • Homeless assistance • Public services HOME Program The City of Palo Alto is not an entitlement grantee under the federal HOME program and thus does not receive a direct grant of HOME Program funds from HUD. HOME funds are available on an annual competitive basis through the State of California HOME program. • Acquisition • Rehabilitation • Home buyer assistance • Rental Assistance Section 8 Housing Vouchers The Housing Authority of the County of Santa Clara administers the federal Section 8 program countywide. The City anticipates that Section 8 vouchers will continue to be available to Palo Alto residents in fiscal year 2012/13 through the Moderate Rehabilitation Program, Housing Choice Voucher Program, and the Shelter Plus Care Program. • Rental Assistance • Homeless Assistance • Support Services McKinney – Vento Homeless Assistance Funds Santa Clara County distributes federal McKinney Homeless Assistance funds to organizations in the County that provide services to homeless persons and persons at-risk of homelessness. None of the funding is currently targeted directly to shelter or supportive services in Palo Alto. • Supportive Housing • Shelter Plus Care • Section 8 SRO STATE PROGRAMS State of California’s Multifamily Housing Program (MHP) MHP has been a major source of funding for affordable housing since 2002. The purpose of this program is to provide low-interest loans to developers of affordable rental housing. The Fabian Way Senior Housing received an award of $5.25 million in permanent MHP funding in 2008. • New construction • Rehabilitation • Preservation of low-income permanent and transitional rental housing 2012 – 2013 Action Plan City of Palo Alto DUNS No. 050520782 May 2012 PROGRAM NAME DESCRIPTION ELIGIBLE ACTIVITIES State of California’s Local Housing Trust Fund Grant Program Another component of Proposition 46 was funding for new and existing local housing trust funds. A local housing trust fund is a public or private partnership created to receive on-going revenues for affordable housing production such as Palo Alto’s Commercial and Residential Housing Funds. • Rental Housing Projects (deed restricted) • Down payment assistance Low-Income Housing Tax Credits The California Tax Credit Allocation Committee (CTCAC) holds two application cycles each year. Typically, the first cycle is held in March and the second is held in July. Local non-profits apply directly to the CTCAC for these funds when they have identified a project. • New Construction • Acquisition and rehabilitation of eligible projects LOCAL PROGRAMS Human Service Resource Allocation Process (HSRAP) In addition to the CDBG public service funds, the City will provide $1,099,347 million dollars from the General Fund in support of human services through HSRAP. The HSRAP funds, in conjunction with the CDBG public service funds, are distributed to local non-profit agencies. • Public service activities serving the needs of seniors, children, youth and families, persons with disabilities, and those who are homeless or at risk of homelessness Palo Alto Commercial Housing Fund The Commercial Housing fund is used primarily to increase the number of new affordable housing units for Palo Alto’s work force. It is funded with mitigation fees required from developers of commercial and industrial projects. As of March 21, 2012 the Commercial Fund had an available balance of approximately $99,000. • New construction Palo Alto Residential Housing Fund The Residential Housing Fund is funded with mitigation fees provided under Palo Alto’s Below Market Rate (BMR) housing program from residential developers and money from other miscellaneous sources, such as proceeds from the sale or lease of City property. As of March 21, 2012 the Residential Fund had a balance of approximately $108,000. • Acquisition • Rehabilitation • New construction • Pre-development costs Below Market Rate Emergency Fund This fund was authorized by council in September 2002 in order to provide funding on an ongoing basis for loans to BMR owners for special assessment loans and for rehabilitation and preservation of the City’s stock of BMR ownership units. As of March 21, 2012 the BMR Emergency Fund had a balance of approximately $392,000. • Special Assessment Loans • Rehabilitation 2012 – 2013 Action Plan City of Palo Alto DUNS No. 050520782 May 2012 PROGRAM NAME DESCRIPTION ELIGIBLE ACTIVITIES The Housing Trust Fund of Santa Clara County (HTSCC) HTSCC is a non-profit organization that combines private and public funds to support affordable housing activities in the County, including assistance to developers and homebuyers. The HTSCC is a public/private initiative, dedicated to creating more affordable housing in Santa Clara County, using a revolving loan fund and grant- making program to complement and leverage other housing resources. • New Construction • First time homebuyers program • Developer Loans • Homelessness Prevention Programs Santa Clara County Affordable Housing Fund (AHF) The Santa Clara County Board of Supervisors established the Affordable Housing Fund with initial funding of $18.6 million in 2002. The main purpose of the AHF was to assist in the development of affordable housing especially for extremely low income and special needs people throughout Santa Clara County. $960,000 was awarded to the Tree House project developed by the Palo Alto Housing Corporation. The County has awarded over $10 million from the AHF to date. • Construction • Permanent Financing 2012 – 2013 Action Plan City of Palo Alto DUNS No. 050520782 May 2012 APPENDIX D PROPOSED PROJECTS U.S. Department of Housing OMB Approval No. 2506-0117 and Urban Development Exp. 8/31/2014) Table 3C Consolidated Plan Listing of Projects Jurisdiction’s Name City of Palo Alto Priority Need Public Services Project Title SRO Resident Support Services Description Palo Alto Housing Corporation will provide counseling and supportive case management services for low- income residents of single room occupancy facilities in order to help them maintain housing stability. Activities include financial counseling, health maintenance, information and referral, problem solving, employment assistance, crisis intervention and case management. Objective category: Suitable Living Environment Decent Housing Economic Opportunity Outcome category: Availability/Accessibility Affordability Sustainability Location/Target Area Street Address: 439 Emerson Street and 753 Alma Street City, State, Zipcode: Palo Alto, CA 94301 Objective Number SL-1 Project ID 1 HUD Matrix Code 05 Public Services CDBG Citation 570.201 (e) Type of Recipient LMC CDBG National Objective 570.208(a)(2) Start Date (mm/dd/yyyy) 07/01/2012 Completion Date (mm/dd/yyyy) 06/30/2013 Performance Indicator People Annual Units 130 Local ID SR-01048-999 Units Upon Completion 130 Funding Sources: CDBG $20,375 ESG HOME HOPWA Total Formula Prior Year Funds Assisted Housing PHA Other Funding Total $20,375 The primary purpose of the project is to help: the Homeless Persons with HIV/AIDS Persons with Disabilities Public Housing Needs U.S. Department of Housing OMB Approval No. 2506-0117 and Urban Development Exp. 8/31/2014) Table 3C Consolidated Plan Listing of Projects Jurisdiction’s Name City of Palo Alto Priority Need Public Services Project Title Long Term Care Ombudsman Program Description Catholic Charities assists in problem resolution and advocates for the rights of residents of long term care facilities in Palo Alto. The majority of the clients assisted are low-income, frail, elderly, and chronically ill. This program assists these vulnerable, dependent and socially isolated residents receive the care and placement to which they are entitled. Objective category: Suitable Living Environment Decent Housing Economic Opportunity Outcome category: Availability/Accessibility Affordability Sustainability Location/Target Area Community - wide Street Address: City, State, Zipcode: Objective Number SL-1 Project ID 2 HUD Matrix Code 05A Senior Services CDBG Citation 570.201 (e) Type of Recipient LMC CDBG National Objective 570.208(a)(2) Start Date (mm/dd/yyyy) 07/01/2012 Completion Date (mm/dd/yyyy) 06/30/2013 Performance Indicator People Annual Units 200 Local ID SR-01025-999 Units Upon Completion 200 Funding Sources: CDBG 5,000 ESG HOME HOPWA Total Formula Prior Year Funds Assisted Housing PHA Other Funding Total 5,000 The primary purpose of the project is to help: the Homeless Persons with HIV/AIDS Persons with Disabilities Public Housing Needs . U.S. Department of Housing OMB Approval No. 2506-0117 and Urban Development Exp. 8/31/2014) Table 3C Consolidated Plan Listing of Projects Jurisdiction’s Name City of Palo Alto Priority Need Public Services Project Title Opportunity Center Description InnVision provides basic necessities for persons who are homeless or at-risk of becoming homeless. The facility provides showers, laundry, clothing, snacks, case management, and shelter/housing referral services. Objective category: Suitable Living Environment Decent Housing Economic Opportunity Outcome category: Availability/Accessibility Affordability Sustainability Location/Target Area Street Address: 33 Encina Way City, State, Zipcode: Palo Alto, CA 94301 Objective Number SL-1 Project ID 3 HUD Matrix Code 05 Public Services CDBG Citation 570.201 (e) Type of Recipient LMC CDBG National Objective 570.208(a)(2) Start Date (mm/dd/yyyy) 07/01/2012 Completion Date (mm/dd/yyyy) 06/30/2013 Performance Indicator People Annual Units 800 Local ID SR-01082-999 Units Upon Completion 800 Funding Sources: CDBG $37,175 ESG HOME HOPWA Total Formula Prior Year Funds Assisted Housing PHA Other Funding Total $37,175 The primary purpose of the project is to help: the Homeless Persons with HIV/AIDS Persons with Disabilities Public Housing Needs . U.S. Department of Housing OMB Approval No. 2506-0117 and Urban Development Exp. 8/31/2014) Table 3C Consolidated Plan Listing of Projects Jurisdiction’s Name City of Palo Alto Priority Need Public Services Project Title Domestic Violence Services Description Support Network for Battered Women, a Division of YWCA will provide individuals and families experiencing domestic violence, the program provides a bilingual domestic violence hotline, an emergency shelter, crisis counseling, legal assistance, court accompaniment, individual and group therapy, support groups, children’s therapy groups, preventative education, safety planning and community referrals. Objective category: Suitable Living Environment Decent Housing Economic Opportunity Outcome category: Availability/Accessibility Affordability Sustainability Location/Target Area Community-wide Street Address: City, State, Zipcode: Objective Number SL-1 Project ID 4 HUD Matrix Code 05G CDBG Citation 570.201(e) Type of Recipient LMC CDBG National Objective 570.208(a)(2) Start Date (mm/dd/yyyy) 07/01/2012 Completion Date (mm/dd/yyyy) 06/30/2013 Performance Indicator People Annual Units 45 Local ID SR-01105-999 Units Upon Completion 45 Funding Sources: CDBG 9,175 ESG HOME HOPWA Total Formula Prior Year Funds Assisted Housing PHA Other Funding Total 9,175 The primary purpose of the project is to help: the Homeless Persons with HIV/AIDS Persons with Disabilities Public Housing Needs . U.S. Department of Housing OMB Approval No. 2506-0117 and Urban Development Exp. 8/31/2014) Table 3C Consolidated Plan Listing of Projects Jurisdiction’s Name City of Palo Alto Priority Need Public Services Project Title Fair Housing Services Description Project Sentinel will provide community education and outreach regarding fair housing law and practices, investigation, counseling and legal referral for victims of housing discrimination, and analyses for City staff and officials regarding fair housing practices. California and federal fair housing laws assure specific protected classes the right to be treated in terms of their individual merits and qualifications in seeking housing. Unfortunately, some people are not aware of the law or their rights. Objective category: Suitable Living Environment Decent Housing Economic Opportunity Outcome category: Availability/Accessibility Affordability Sustainability Location/Target Area Community-wide Street Address: City, State, Zipcode: Objective Number DH-1 Project ID 5 HUD Matrix Code 05J CDBG Citation 570.206 Type of Recipient LMC CDBG National Objective 570.208(a)(2) Start Date (mm/dd/yyyy) 07/01/2012 Completion Date (mm/dd/yyyy) 06/30/2013 Performance Indicator People Annual Units 25 Local ID SR-01087-999 Units Upon Completion 25 Funding Sources: CDBG $23,875 ESG HOME HOPWA Total Formula Prior Year Funds Assisted Housing PHA Other Funding Total $23,875 The primary purpose of the project is to help: the Homeless Persons with HIV/AIDS Persons with Disabilities Public Housing Needs . U.S. Department of Housing OMB Approval No. 2506-0117 and Urban Development Exp. 8/31/2014) Table 3C Consolidated Plan Listing of Projects Jurisdiction’s Name City of Palo Alto Priority Need Job creation and replacement Project Title Workforce Development Program Description The Workforce Development Program will provide a transition from unemployment and homelessness to regular employment and housing through case management, job training, mentoring, housing, and transportation assistance. Downtown Streets Team will screen and prepare applicants while Manpower will use their community connections to provide training and job opportunities. Objective category: Suitable Living Environment Decent Housing Economic Opportunity Outcome category: Availability/Accessibility Affordability Sustainability Location/Target Area Community-wide Street Address: City, State, Zipcode: Objective Number E0-1 Project ID 6 HUD Matrix Code 05H CDBG Citation 570.204(a)(2) Type of Recipient LMC CDBG National Objective 570.208(a)(2)(A) Start Date (mm/dd/yyyy) 07/01/2012 Completion Date (mm/dd/yyyy) 06/30/2013 Performance Indicator Annual Units 24 Local ID SR-01121-999 Units Upon Completion 24 Funding Sources: CDBG $146,200 ESG HOME HOPWA Total Formula Prior Year Funds Assisted Housing PHA Other Funding Total $146,200 The primary purpose of the project is to help: the Homeless Persons with HIV/AIDS Persons with Disabilities Public Housing Needs . U.S. Department of Housing OMB Approval No. 2506-0117 and Urban Development Exp. 8/31/2014) Table 3C Consolidated Plan Listing of Projects Jurisdiction’s Name City of Palo Alto Priority Need Multi-family Housing Rehabilitation Project Title California Park – Window Replacement Description California Park is an affordable housing community located at 2301 Park Blvd. in Palo Alto consisting of 45 one, two, and three bedroom flats and town houses for households with very low and low incomes. Current aluminum frame windows are suffering from seal defects causing moisture retention and fogging resulting in minimal barrier from noise at all hours of the day and night. The project proposes the interior window replacements in 43 units for a total of 198 windows with new vinyl frame, double pane, low-E windows. Upon completion, the new windows and insulation will reduce the noise level inside the units by over 95% and will reduce residents’ utility bills by over $5,385 per year and avoid 7,245 lbs of CO2 in the environment per year. Objective category: Suitable Living Environment Decent Housing Economic Opportunity Outcome category: Availability/Accessibility Affordability Sustainability Location/Target Area California Park Street Address: 2301 Park Blvd. City, State, Zipcode: Palo Alto, CA 94306 Objective Number DH-3 Project ID 7 HUD Matrix Code 14B CDBG Citation 570.202(b)(4) Type of Recipient LMH CDBG National Objective 570.208(a)(3) Start Date (mm/dd/yyyy) 07/01/2012 Completion Date (mm/dd/yyyy) 06/30/2012 Performance Indicator Units Annual Units 43 Local ID TBD Units Upon Completion 43 Funding Sources: CDBG $245,016 ESG HOME HOPWA Total Formula Prior Year Funds Assisted Housing PHA Other Funding Total $245,016 The primary purpose of the project is to help: the Homeless Persons with HIV/AIDS Persons with Disabilities Public Housing Needs . U.S. Department of Housing OMB Approval No. 2506-0117 and Urban Development Exp. 8/31/2014) Table 3C Consolidated Plan Listing of Projects Jurisdiction’s Name City of Palo Alto Priority Need Public Facilities Project Title Avenidas HVAC Upgrade Description Avenidas serves the Mid-Peninsula senior community by providing a warm and welcoming atmosphere for social contact to combat loneliness and isolation that is so prevalent among today’s aging seniors. The HVAC Upgrade project will make substantial improvements to Avenidas’ current HVAC system, which was partially upgraded in 2003. Today, many of the system components are obsolete. The upgrade program will minimize or prevent large fluctuations in temperature throughout the building and reduce energy waste. Moreover, it will allow Avenidas to more effectively control the interior environment and provide greater comfort for participants. Objective category: Suitable Living Environment Decent Housing Economic Opportunity Outcome category: Availability/Accessibility Affordability Sustainability Location/Target Area Street Address: 450 Bryant Street City, State, Zipcode: Palo Alto, CA 94301 Objective Number Project ID 8 HUD Matrix Code 03A CDBG Citation 570.201(c) Type of Recipient LMC CDBG National Objective 570.208(a)(2) Start Date (mm/dd/yyyy) 07/01/2012 Completion Date (mm/dd/yyyy) 06/30/2013 Performance Indicator People Annual Units 6,000 Local ID TBD Units Upon Completion 6,000 Funding Sources: CDBG $135,000 ESG HOME HOPWA Total Formula Prior Year Funds Assisted Housing PHA Other Funding Total $135,000 The primary purpose of the project is to help: the Homeless Persons with HIV/AIDS Persons with Disabilities Public Housing Needs . U.S. Department of Housing OMB Approval No. 2506-0117 and Urban Development Exp. 8/31/2014) Table 3C Consolidated Plan Listing of Projects Jurisdiction’s Name City of Palo Alto Priority Need Planning and Administration Project Title City of Palo Alto Description Administer the Administrative costs for the overall management, coordination, and evaluation of the CDBG program, and the project delivery costs associated with bringing projects to completion. Objective category: Suitable Living Environment Decent Housing Economic Opportunity Outcome category: Availability/Accessibility Affordability Sustainability Location/Target Area City of Palo Alto Street Address: 250 Hamilton Avenue City, State, Zipcode: Palo Alto, CA 94301 Objective Number Project ID 9 HUD Matrix Code 21 CDBG Citation 570.206 Type of Recipient N/A CDBG National Objective N/A Start Date (mm/dd/yyyy) 07/01/2012 Completion Date (mm/dd/yyyy) 06/30/2013 Performance Indicator N/A Annual Units N/A Local ID SR-01003-999 Units Upon Completion N/A Funding Sources: CDBG $97,861 ESG HOME HOPWA Total Formula Prior Year Funds Assisted Housing PHA Other Funding Total $97,861 The primary purpose of the project is to help: the Homeless Persons with HIV/AIDS Persons with Disabilities Public Housing Needs . 2012 – 2013 Action Plan City of Palo Alto DUNS No. 050520782 May 2012 APPENDIX E PUBLIC HEARING ADVERTISEMENT NOTICE OF PUBLIC REVIEW PERIOD AND PUBLIC HEARINGS ON PALO ALTO’S COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG) PROGRAM This is to notify the general public and other interested parties that a 30-day public review period of the Draft Annual Action Plan for the allocation of Fiscal Year 2013 Community Development Block Grant (CDBG) funds, will begin on March 23, 2012 and end on April 21, 2012. The Draft Annual Action Plan describes the activities the City may fund under the 2012/13 CDBG Program. Collectively these activities are intended to meet Palo Alto’s affordable housing and community development objectives described in the 2010-2015 Consolidated Plan. Copies of the Draft Annual Action Plan will be available on March 23, 2012 at the Department of Planning and Community Environment, 250 Hamilton Avenue, 5th Floor, Palo Alto, CA 94301, on the City’s website http://www.cityofpaloalto.org/depts/pln/advance_planning/cdbg.asp or by calling Consuelo Hernandez, Planner – CDBG, at (650) 329-2428. Interested parties are encouraged to submit written comments on the proposed Draft Annual Action Plan during the public review period, or to comment at the public hearings and meetings described below. PUBLIC HEARINGS AND MEETINGS The City of Palo Alto Human Relations Commission will hold a Public Hearing on March 8, 2012 to review the Fiscal Year 2013 CDBG funding allocations recommended by the CDBG advisory committee. The Public Hearing will be held at 7:00 p.m., or as soon as possible thereafter, in City Hall Council Conference Room, 250 Hamilton Avenue, Palo Alto. The City of Palo Alto Finance Committee will hold a Public Hearing on April 3, 2012 to review the proposed Fiscal Year 2013 CDBG funding allocations identified in the Draft Annual Action Plan. The Public Hearing will be held at 7:00 p.m., or as soon as possible thereafter, in City Hall Council Chambers, 250 Hamilton Avenue, Palo Alto. The Palo Alto City Council will hold a Public Hearing on May 7, 2012 to adopt the Annual Action Plan and the associated Fiscal Year 2013 CDBG allocations. The Public Hearing will be held at 7:00p.m., or as soon as possible thereafter, in City Hall Council Chambers, 250 Hamilton Avenue, Palo Alto. Persons with disabilities who require auxiliary aids or services in using City facilities, services or programs, or who would like information on the City’s compliance with the Americans with Disabilities Act (ADA) of 1990, may contact: ADA Coordinator, City of Palo Alto, 650-329-2550 (Voice) ada@cityofpaloalto.org 2012 – 2013 Action Plan City of Palo Alto DUNS No. 050520782 May 2012 APPENDIX F MAP ElCaminoRealElCaminoReal AlmaStreet AlmaStreetAlmaSt UniversityAvenue UniversityAve JuniperoSerraBlvdJuniperoSerraBlvd WestPortolaAvenue MarichWay S.RengstorffAvenue CaliforniaStreet LathamStreet DelMedioAvenue ShowersDrive LosAltosAvenue IndependenceAvenue GarciaAvenue ontRoadWestridgeDrive DuranzoWay EricaWay SharonParkDrive RosaDrive AltschulAvenue ElenaAvenue TuscaloosaAvenue ColemanRoad LaurelStreet SantaMonicaAvenue GilbertAvenue MenaltoAvenue WoodlandAvenue BellStreet Cooley Avenue O'ConnerStreet RunnymedeStr eet ClarkAvenue WoodlandAvenue PulgasAvenue O'ConnerStreet Beach Street JasmineWay BrannerDrive CampbellLane ShoronRoad LemonStreet OliveAvenue SantaCruzAvenue BayLaurelDrive MiddleAvenue BayLaurelDrive WindsorDrive PeterCouttsCircle LasuenStreet PanamaDr GovernorsAve ElectioneerAve N.LemonAvenue CottonStreet ValparaisoAvenue FremontStreet UniversityDrive CambridgeAvenue MiddleAvenue ArborRoad CreekDrive WillowRoad OakGroveAvenue SantaCruzAvenue IsabellaAvenue BrittonAlejandraAvenue EscondidoRoad OlmsteadRoad RingwoodAvenue MiddlefieldRoadMiddlefieldRoadMiddlefieldRd BayshoreFwyBayshoreFwy EmbarcaderoRoad CharlestonRd SantaCruzAvenue SandHillRoad GlenwoodAvenue LomaVerdeAve LyttonAve HomerAve ChanningAve CowperSt EmersonSt AddisonAve EMeadowDr WMeadowDr MaybellAve StanfordAve CaliforniaAve ChimalusDr HeatherLn NewellRd ChurchillAve ParkBlvd RaimundoWay BryantSt CollegeAve LouisRd GreerRdColoradoAve RossRd ArastraderoRd ArastraderoRd LosRoblesAve GeorgiaAve LaDonnaSt LagunaAve AmarantaAve BarronAve MataderoAve SealeAve SouthCt ParkBlvd LaParaAve BirchSt LincolnAve PageMillRd ElVeranoAve ElDoradoAve EmersonSt AmarilloAve NCaliforniaAve HawthorneAve AshSt OliveAve VenturaAve AlmaSt WilkieWay FerneAve AlvaradoAvenue LinariaWay LaCuestaDrive CloudAvenue AlmaStreet ClarkAvenue AthertonAvenue AthertonAvenue WatkinsAvenue SanMateoDrive SanAntonioAve JuniperoSerraBlvd tsaE otlAolaP drofnatS ytisrevinU A notreht olneM kraP doowdeR ytiC MountainView otlAolaP Road e las P ulga s d H i l l R o a d Junip e r o S e rr a Boule v a r d P a ge Mi l l Road A r a s t r a d e r o R o a d E l a m i n o R e a l San Antonio Avenue C h ra l e s t o n R o a d rO e og n E x p er s s w a y M i d d l e fi e ld R o a d ersity Ave B a y s h o r e F r e e w a y 1 0 1 A l m S r e e t ElCa mino Real Middlefield Road p i n e R o a d Foothill Expr e s s w a y R o a d University Ave. H ill v ie w E a st B y a s o h r e W e s t B a y s h r o e Fabian CentralExpressw S a n d H ill R o a d E m ba r c a d er o R o a d MarshRoad Bay Expressway Willow ehtfotcudorpasipamsihT SIGotlAolaPfoytiC .secruoselbaliavatsebfoylnonoitatneserpercihpargasitnemucodsihT dnegeL yradnuoBytiCotlAolaP stcejorPgnisuoH '0054'0 FY 2 0 1 2 - 2 0 1 3 CD B G P r o j e c t s Lo c a t i o n m a p CITY O F PALO A LTO IN C O R P O R AT E D C ALIFOR N I A otlAolaP foytiCehT A P RIL 16 1 8 94 otlAolaPfoytiC7002ot9891©.srorreynarofytilibisnopseronsemussaotlAolaPfoytiCehT 23:71:415 0-50-1002,arevirr )bdm.arevirr\lanosreP\nimda\sig\$sig\spam-cc\\(pamnoitacolgbdc ORS ecalP amlA )4 ORS letoH rekraB )3 retneC ytinutroppO )2 Cal Park Apartments )5 U ivn 0UBLIC 3ERVICE !CTIVITIES )1 $OWNTOWN 3TREETS 4EAM t C Public Facilities: Avenidas)6 a 2012 – 2013 Action Plan City of Palo Alto DUNS No. 050520782 May 2012 APPENDIX G PUBLIC COMMENT Attachment D City of Palo Alto April 11, 2012 Page 1 of 11 Finance Committee 1 Tuesday, April 17, 2012 Special Meeting 2 6:00 PM, Council Conference Room 3 1st Floor, Civic Center 4 250 Hamilton Avenue 5 Palo Alto, California 94301 6 7 ROLL CALL: 8 9 ORAL COMMUNICATIONS. 10 11 AGENDA ITEMS 12 13 1. Public Hearing: Recommendations on Proposed Fiscal Year 2013 Community 14 Development Block Grant Funding Allocations and the Draft 2012/13 Annual Action 15 Plan 16 17 (Note: Tape starts with her already speaking) Consuelo Hernandez, Planner: …And three, to 18 meet other community needs that are particularly urgent for the low income community. All of 19 the projects in Palo Alto meet the first objective. On January 17th the City received the final 20 entitlement grant allocation amounts for Federal fiscal year 2012 which translates into the City’s 21 fiscal year 2013, and Palo Alto will receive $429,304.00, which represents an approximate 29% 22 reduction over the last year’s allocation. And, this is associated with a significant reduction in 23 the appropriation in the bill and the use of the 2010 Census data and the American Community 24 Survey. The estimated total funds available for the fiscal year is $719,677.00, which includes 25 the entitlement grant, the reallocated funds from previous projects that had an unspent balance, 26 $60,000.00 in program income from Palo Alto Housing Corporation, and some excess program 27 income from last year, and two loan repayments, one from Palo Alto Housing Corporation and 28 the second from MidPen Housing Corporation. Palo Alto has five funding categories in which to 29 allocate these funds, Public Services, which is similar to the agencies that we fund through the 30 HSRAP Process, Planning and Administration, Economic Development, Housing and Public 31 Facilities. Public Service activities have a maximum spending cap of 15%. For fiscal year 2013 32 we approximate an amount of $95,601.00 available for allocation. And, the recommendations 33 show that we would like to maximize that allowed amount under the cap to the five nonprofit 34 agencies that submitted an application. They provide a number of crucial public service 35 activities for low income persons. Similarly a 20% cap is placed on Planning and Administrative 36 activities, which includes the administrative cost that’s associated with managing the Community 37 Development Block Grant (CDBG) Program and similarly we’d like to maximize that maximum 38 spending cap of $97,861.00. The difference is $526,000.00 which is allocated to amongst the 39 three other funding categories and no cap is placed on these activities. We are recommending 40 funding the Pilot Workforce Development project administered by Downtown Streets at the 41 maximum amount requested which is $146,000.00. It’s a new project and so far it’s proved to be 42 very successful. As of March 31, 2012, 19 previously unemployed and homeless individuals 43 have been placed in jobs. The goal was for five. So we feel that that’s a very good project and 44 we want to continue funding it. And, Staff is actively working with Downtown Streets Team on 45 identifying supplemental funding sources and also thinking about new, innovative, and creative 46 ways on how to ensure that the project is successful the next year. The other recommendations 47 City of Palo Alto April 11, 2012 Page 2 of 11 include funds for the replacement of windows for Cal Park Apartments, operated by Palo Alto 1 Housing Corporation and an HVAC upgrade for Avenidas. And collectively these activities help 2 address the priority housing and community development needs included in the adopted 2010-3 2015 consolidated plan. That’s the in a nutshell of the summary of the Staff Report and we can 4 answer any questions you may have. 5 6 Chair Shepherd: Ok, I’ll turn it to the Committee if anybody has any questions about this. Yes. 7 8 Council Member Price: Thank you for your presentation, very clear. I had a question about the 9 Workforce Development program. Just in terms of the other resources in the region, so for 10 example, do you know, and you may or may not, if the Downtown Streets Team has had contact 11 with NOVA and the employment development resources that are in Sunnyvale they do a lot of 12 work in this area, so I just was just curious if there is a link there. 13 14 Ms. Hernandez: Maybe about two months ago we actually met with Downtown Streets to 15 connect them with NOVA. There are, they, WIA funding is distributed across Santa Clara 16 County and because Palo Alto doesn’t qualify to receive those funds directly, NOVA is the 17 agency that we have to go through and so we made that connection with Downtown Streets. 18 19 Council Member Price: Great, because they are award-winning and excellent, been in place for 20 20-30 years probably. So that’s really great. I’m delighted to hear that, I wasn’t sure because it 21 wasn’t mentioned, you know, and that really helps. Thank you very much. 22 23 Chair Shepherd: Council Member Burt. 24 25 Council Member Burt: Is there any sense of what to expect in the coming budget cycle for 26 funding? 27 28 Ms. Hernandez: There’s very early and preliminary talk for Federal fiscal year 2013. The US 29 Department of Housing and Urban Development (HUD) is proposing to request the same 30 appropriation level amount, so I believe its $2.98 billion, and Palo Alto’s allocation is based on 31 several variables so it just depends on what the ACS report shows at the end of the calendar year 32 I believe. 33 34 Council Member Burt: So that figure is the same as the 2012 you mean? So we had a reduction 35 from the 2011 to 2012. 36 37 Ms. Hernandez: For the cities, yes. 38 39 Council Member Burt: And so based on that, if that Federal allocation went forward would we 40 expect approximately something in the neighborhood of the 429 is that what you’re saying? 41 42 Ms. Hernandez: Yes. 43 44 Council Member Burt: So then when I look at Table One, we have a combination of services 45 and some significant maintenance needs for Palo Alto Housing Corp. and Avenidas. And, I see 46 that the drop-in center at InnVision and the Project Sentinel, which I don’t know much about, are 47 City of Palo Alto April 11, 2012 Page 3 of 11 the areas that, well and the Housing Corp. SRO hotel support services are the things that took 1 fairly sizeable hits from a percentage basis. Maybe not so much in absolute dollars but perhaps 2 to them it’s a lot of dollars. So can you comment more on what is the impact of the loss of those 3 funds to those agencies and why we made the decisions that we did? 4 5 Ms. Hernandez: Sure. So I’ll address the funding amounts first. The way that the CDBG 6 program works is public service activities, which include these nonprofit agencies, are limited to 7 a 15% cap of our entitlement grant plus any program income received. Which for this years’ 8 budget or for the 2013 budget represents the $95,600.00. That’s the maximum that we can 9 allocate between those five agencies. As far as the impact that each will have based on this 10 reduction, our funding represents a small portion of their entire budget and the amount that we 11 give them doesn’t represent all the work that they do and what we’re trying more actively, Staff 12 is becoming more active, in trying to find additional funding for them and helping them. I think 13 for Project Sentinel maybe on a yearly basis we submit maybe five or ten letters of support for 14 supplemental funding and so we are trying to take more of an active role in them. 15 16 Council Member Burt: And are they moderately successful at obtaining some of those 17 supplemental funds? 18 19 Ms. Hernandez: They actually are, they’ve been in Santa Clara County for so many years and 20 the impact that they have in our communities is so high that they don’t have problems with the 21 funding. 22 23 Council Member Burt: Great, thank you. 24 25 Mr. Perez: Council Member Burt, just to add the HSRAP, as you know is the Human Services 26 Resource Allocation Process also has $8,920.00 in the proposed budget for InnVision. 27 28 Council Member Burt: Great, thank you. 29 30 Chair Shepherd: Vice Mayor Scharff, nothing? Ok. First off, thank you for the work on this 31 and I’m really proud that Palo Alto gets to keep this operational. Quite frankly I think that this is 32 a privilege and I think that much of the work that’s gone before us really has embedded answers 33 in the community about the very low and low income people and people that are most at risk 34 during this particular financial crisis as well. I have to say I’m so sad to see that we have to redo 35 the windows over there at Cal Park. I think that that’s, because that’s, I remember that getting 36 built. It just seems that something, you know, wasn’t right when they purchased it basically and 37 so they have to come out and do this. So I’m glad to see that’s happening, I’m also glad to see 38 that Avenidas is getting their HVAC and I know that they really need to grow as well. So, I 39 don’t know what we’re doing to address that or do we work with Avenidas? What are the other 40 facets or is this our main contribution to them? 41 42 Ms. Hernandez: We, I know that the City does provide them some funding through a public 43 benefit for the Hamilton project. That’s before my time, so I don’t know too much in detail 44 about it, but I know that they do receive funding that supplements improvement projects for 45 seniors and I don’t know, I’m sorry that I can’t speak to it. 46 47 City of Palo Alto April 11, 2012 Page 4 of 11 Chair Shepherd: That’s ok, because many people like to, well we do have a close connectivity 1 with Avenidas and I just want to make sure that we’re being attentive to their particular interest. 2 I know right now [unintelligible] to expand based on just the population of the aging in our 3 community which apparently I’m part of now. I’ve these chunks, of age chunks. So, if there is 4 no more questions or comments I’m going to go to the public before we make a motion. We 5 have one public comment and that is Phillip Dah. Thank you Phillip. You have three minutes. 6 7 Phillip Dah: Good evening. Thanks for the opportunity. My name is Phillip Dah and I’m the 8 Director for InnVision on the Peninsula. My office is located out of the Opportunity Center. I 9 just want to comment on the drastic reduction in the very little funding that we get. It’s been a 10 very big concern of ours for all these years and I have come here and taken my three minutes 11 every single day to advocate on behalf of the clients that we serve. It’s becoming more and more 12 evident that the services that we provide are really not seen or it really it’s not considered 13 essential but we are the safety net in the community for a lot of the folks who are out on the 14 street. We are the only organization in Palo Alto to provide meals to people on the street. 120 15 on average every single day. We provide clothing, we provide housing, we provide counseling. 16 Every single organization specializes in one thing that they do, but we are the ones who hold 17 everything together. Without us a lot of our clients would be out on the street, but we provide all 18 of these services and opportunities and elsewhere in the community to support this group of 19 people and yet we tend to be the guys who always get the brunt of the cuts. Unfortunately we do 20 not get, the economy has become very difficult as we all understand and so all the grants we are 21 writing come back being denied. All those funds are also slashed in half and so providing 22 services has really become difficult while the need has grown a lot. And so I would really speak 23 to this all the time and ask that you reconsider this. When we closed the shelter at Clara-Mateo, 24 our funding was completely taken away even though we begged the Committee to move some of 25 the funding to what we currently had to increase it a little bit it was not and yet this year we’ve 26 taken about $12,000 or $15,000 slash. And like she said, it’s a little bit, just a small portion of 27 what we get, but without that we would not be able to save the people in Palo Alto. So please 28 consider this request again and give us enough to support what we can already do. Thank you. 29 30 Chair Shepherd: Thank you. Vice Mayor Scharff. 31 32 Vice Mayor Scharff: I just wanted to confirm that even if we wanted to we couldn’t raise 33 InnVision’s right? They are getting the maximum amount underneath this, right? That’s what 34 he said right? There’s a limit? 35 36 Ms. Hernandez: Collectively the agencies are getting the maximum, yeah. The 95. 37 38 Vice Mayor Scharff: Right, so I mean so basically you’d have to, well ok, so what you’re saying 39 is you’d have to then take away money from one of these other worthwhile causes where we 40 can’t put money from one of these other categories the $95,000 is. 41 42 Ms. Hernandez: That’s correct. 43 44 MOTION 45 46 City of Palo Alto April 11, 2012 Page 5 of 11 Vice Mayor Scharff: That was my understanding. I’ll make a motion that we go ahead and 1 approve Staff recommendation of the Human Relations Commission (HRC) recommendation to 2 fund these according to the schedule here. 3 4 Council Member Price: Second. 5 6 Chair Shepherd: Would you like to speak to your motion? 7 8 Vice Mayor Scharff: Yeah, I’d like to thank the HRC for their hard work on this and Staff on 9 this. I think the choices are hard and I recognize that, I appreciate you coming and talking for 10 InnVision, I really do, but it’s a difficult choice. We’d have to cut one of these other ones and 11 that’s something that the HRC and Staff has put a lot of time into it. I’m not sure I see a basis of 12 cutting any of these others frankly to fund something else even though they are all worthwhile 13 causes. 14 15 Chair Shepherd: Council Member Price. 16 17 Council Member Price: Yes, thank you. I agree with all the comments made by my colleague 18 and I just want to acknowledge the important services provided by nonprofits in our area and I 19 think that the Staff does a very good job of assessing the needs and working in a very 20 collaborative way with the Human Relations Commission. And, I appreciate people’s comments 21 made tonight. I do feel that the HRC has had a chance to go through this very, very carefully. 22 They are very deliberate in their work and I would defer to their opinion in conjunction with the 23 Staff analysis. 24 25 Chair Shepherd: Council Member Burt. 26 27 Council Member Burt: So I was looking at, we have Attachment A, which shows the 2012 final 28 funding and it’s basically the same as the requested 2013 funding that we have here. So, the 29 reason for the reduction is clearly that the Federal funds have been reduced by 29% and then that 30 leaves two questions. What’s the correct proportionate reduction for each of these services and 31 the second question is are there any ways to make up some of that difference? Not through this 32 funding source per se, but through any other funding sources. This is $27,000 which is in the 33 City’s budget, not a great deal of money, but for some of these services, significant with real 34 direct impacts. So the first question for me is, I still want to understand a little better what the 35 rationale was for why some, two of these services basically didn’t see reductions for the most 36 part, and three of them saw a fairly significant percentage reductions. What was the reasoning 37 there? 38 39 Ms. Hernandez: Initially our approach was to reduce each of the agencies by the 29% that was 40 reduced. That was, our allocation was reduced by and we debated whether we should take that 41 approach or look at the services that each of the agencies provides and we found that because we 42 are operating on a two year funding cycle and the agencies were already recommended based on 43 those services and at a certain percentage that we should just look at it based on numbers. After 44 we looked at that we received an additional about $89,000 that we were not expecting of funding 45 that we have to distribute. And again we had to take into consideration that cap. Again we just 46 City of Palo Alto April 11, 2012 Page 6 of 11 looked at the numbers and not the services and we divided that amount by four and distributed 1 accordingly. 2 3 Council Member Burt: So I don’t get it. After all that explanation why wouldn’t each of… that 4 all sounded like something by which the different five services would see proportionate 5 reductions, but that’s not what occurred. So I’m still not following something. 6 7 Ms. Hernandez: And I think it’s again because if we look at… if we, I’m sorry I’m not 8 explaining myself properly. Looking at the, I’m sorry. I’m sorry. 9 10 Council Member Burt: You’re doing well. Thanks. 11 12 Ms. Hernandez: I’m sorry. My first meeting, I still get nervous. 13 14 Chair Shepherd: We want you to make money for us. 15 16 Ms. Hernandez: I’ve been trying. So the additional funding that we received increased our 17 original budget by that $85,000, and we have to be cognizant of that maximum cap and so we 18 debated whether that additional funding that could go towards public service should be 19 distributed proportionately or percentage. And, because everything else had been done by the 20 dollar amounts that’s how we proceeded. We took the initial percentage reduction at the 29% 21 and then whatever was left over we divided it by four. The fifth agency, which is Catholic 22 Charities, did not get an increase because they were funded at the full amount, that’s why they 23 don’t see a reduction and our minimum grant amount for CDBG is $5,000.00. So none of them 24 are, they are not represented equally by percentages or dollars amount. I understand what… 25 (interrupted) 26 27 Council Member Burt: It sounds like we deducted based on percentage, and then we added back 28 based upon equal proportions of that $89,000.000. And I don’t know… (interrupted) 29 30 Ms. Hernandez: Correct. 31 32 Council Member Burt: I don’t think the dollars on that, how that additional $89,000.00 got 33 allocated are terribly impactful in the end, but I still don’t follow that reasoning and how we did 34 it. So, unless there’s some additional clarity, I’ll just leave that for the moment. This next 35 question is maybe a little more for Lalo. If we were to try to make up some of this difference 36 through other funding sources, what do you see as available sources that we might be able to do? 37 Are there possibilities within our budget? 38 39 Lalo Perez, Administrative Services Director: So, off the top of my head I was thinking as you 40 were asking the question, so one obvious one would be using the Budget Stabilization Reserve, 41 but that as you know doesn’t solve the ongoing issue. If you wanted to make it a one time that 42 would be a fine solution. A reduction in the operating budgets somewhere in our Operating 43 Budget in the General Fund, a redistribution of what’s in HSRAP (interrupted) over to the 44 CDBG could be another option. And then seeking donations I guess would be the other one that 45 comes to mind. 46 47 City of Palo Alto April 11, 2012 Page 7 of 11 PROPOSED FRIENDLY AMENDMENT 1 2 Council Member Burt: So when I look at this in a broader picture, as I mentioned earlier this 3 $27,000, or say half of that $27,000 if we were to try to make up half of the shortfall, is not a 4 large amount in the City Budget. But, these services represent a lot of our safety net and as was 5 stated that $27,000 is only a fraction of their budget, so it’s not like they don’t have other 6 funding sources, but it is a big portion of our City’s contribution to these services. So, I would 7 propose an amendment that we ask Staff to come back with alternatives to make up some or all 8 of that lost revenue support for these vital services from other funding sources in the budget. Not 9 an obligation that we will be able to do it, but just to be able to look at alternatives. 10 11 Mr. Perez: But I think you’re coming back to Council on May 7th, is that correct? 12 13 Ms. Hernandez: Correct. 14 15 Mr. Perez: Because we have to get the application in by May 15th. 16 17 Council Member Burt: So it wouldn’t affect this decision tonight. 18 19 Mr. Perez: No. I think what I’m trying to add, I apologize for being long winded, but that 20 you’re asking Staff to return at the Council meeting with possible alternatives. And you 21 recommended…(interrupted) 22 23 Council Member Burt: It actually can be in the balance of the budget cycle, because it would 24 be… 25 26 Mr. Perez: A supplemental to the HUD. Yeah, that makes sense. 27 28 Vice Mayor Scharff: Don’t we already have HSRAP which is basically a million dollars which 29 comes out of the General Fund? So aren’t we already funding a million dollars? 30 31 Ms. Hernandez: Yeah. 32 33 Council Member Burt: The question…(interrupted) 34 35 Vice Mayor Scharff: What you’re really suggesting is that we add more money to HSRAP and 36 then put this here. That’s really the equivalent of what you’re suggesting and we already have a 37 policy of using a million dollars to do it. So you’re suggesting we increase it then. 38 39 Council Member Burt: Do I get to….? 40 41 Vice Mayor Scharff: Sure that’s ok, when I finish. 42 43 Chair Shepherd: Let me control the meeting Mister. We are not talking globally right now. I 44 think that that is a big point that we do have other sources of funds. We also, I was gonna ask 45 also about Council discretionary dollars. We have our own contingency which also could be 46 looked at and I think that it would be… I actually wanted to bring up this topic before. You said 47 City of Palo Alto April 11, 2012 Page 8 of 11 it’s a two year funding cycle. So, this is the second year of this funding cycle, is that correct? So 1 what does that mean for next year, because, will there be a shuffle of these agencies or we be 2 basically looking at the same five? Yeah, we’ve got five agencies here with similar dollar 3 amounts and more constraints because of less funding coming from the Feds I’m imagining, and 4 so is there any, you know, resetting of this process so that it get looks at? I mean has there been 5 conversations to this? 6 7 Ms. Hernandez: So we will actually be issuing the notice of funding availability later this year 8 and some of the things that we’ve been discussing internally is increasing the minimum grant 9 amount to maybe $10,000. Which you would fund less agencies but at a higher dollar amount. 10 And some… (interrupted) 11 12 Chair Shepherd: That would fall out the Catholic Charities then? 13 14 Ms. Hernandez: Not necessarily, it just means that they could apply for $10,000 instead of 15 $5,000. 16 17 Chair Shepherd: That means that somebody would fall out here, clearly. 18 19 Council Member Burt: Chair? 20 21 Chair Shepherd: Yes, I’m sorry. 22 23 Council Member Burt: I had made a motion amendment offer. The maker of the motion asked 24 me a question; I think it’s in order for me to be able to answer. 25 26 Chair Shepherd: That’s fine. 27 28 Council Member Burt: Ok. So in essence, that is probably the case that we are looking at 29 increasing the HSRAP funding by, say we tried to make up half of this shortfall, by another 30 $12,000-$13,0000, something like that, but I didn’t want to be prescriptive in the motion. But, 31 that’s the likelihood, yes. 32 33 Vice Mayor Scharff: That was my understanding. Can I respond? 34 35 Council Member Burt: Well, you responded. First say that the real response is whether you 36 accept that as a friendly amendment. 37 38 Vice Mayor Scharff: Well, before we get to that, because actually go through the thought 39 process. The question I have is, we’re going to deal with HSRAP in the budget, right? At which 40 point we can say to ourselves in the overall context of the budget let’s add $13,000 to these 41 groups, or let’s do that. I’m not sure what the amendment gains since we have that opportunity 42 when we do the budget. Frankly, to say let’s fund this at a higher level, well, let’s take it out of 43 the General Fund because it is General Fund. 44 45 Council Member Burt: My response would be that this would be asking Staff to identify doing 46 that as opposed to if we didn’t do that it’s lost in the weeds. 47 City of Palo Alto April 11, 2012 Page 9 of 11 1 Vice Mayor Scharff: I’m not going to accept the amendment. 2 3 AMENDMENT 4 5 Council Member Burt: Ok. Then I will move that as an amendment. 6 7 Council Member Price: Seconded. 8 9 Chair Shepherd: Would you like to speak to your amendment? 10 11 Council Member Burt: No. I think, well yes. The clarification is really that this is, when we go 12 through the funding including for HSRAP we’re going to look for whether we can make up some 13 or all of the shortfall and it’s really a placeholder to do so, is the purpose of this. 14 15 Chair Shepherd: Have you changed the amendment then to ask that it be included in HSRAP? 16 17 Council Member Burt: No. The amendment was to look at it through other (interrupted) 18 19 Chair Shepherd: Right, to make up all or some of these funds. 20 21 Council Member Burt: Right, and the likely, speaking to the motion is that the likely vehicle for 22 doing that would be in the HSRAP. 23 24 Chair Shepherd: Ok. But, ok. Council Member Price would you like to speak? 25 26 Council Member Price: Yes, I will be supporting this. I think it’s reasonable. My only concern 27 is we’re not necessarily setting a precedent that you know we go through the cycle and that we 28 need to be deliberate in the decisions that we make, but I will be supporting this. 29 30 Chair Shepherd: Any other comments? 31 32 Vice Mayor Scharff: I have a brief comment. I obviously will not be supporting it. Not that I 33 don’t think it’s a good idea that we take a look at this. I just think it’s superfluous and I think it 34 singles this out and it’s bad public policy to single this out when we actually look at the HSRAP 35 and we look at the funding and we make a decision on how much we want to spend on HSRAP. 36 You know we could lower the HSRAP, we could raise it, and there’s a whole host of issues when 37 you do the budgeting process and I don’t see why this should be separated out frankly from that 38 when we do concentrate exactly on the HSRAP. It’s one of the items that comes to us and it 39 comes to us in a big number. It comes to us as a million dollars and we may very well say, you 40 know, what’s an extra $13,000.00 on that looking at the budget and where that comes from. 41 That’s part of our jobs. I don’t see this as any different than that, so I don’t think it’s necessary 42 to do this. 43 44 Chair Shepherd: Ok and I guess I’m going to have to ask a couple more questions. Last year 45 when we talked about HSRAP we were supposed to get some feedback as to how this item gets 46 measured for… it hasn’t grown in a couple of years, as a matter of fact it was reduced by 5% a 47 City of Palo Alto April 11, 2012 Page 10 of 11 few years ago. And, I guess my question would be whether or not we can ask Staff to really look 1 rigorously at reestablishing a percentage of our budget as HSRAP, if it’s 1%, which I think it 2 might have been about 1%, but it’s been reduced now to less than 1% and so if you, do you know 3 off the top of your head? 4 5 Mr. Perez: That’s my recollection. 1% of the budget. I did… (interrupted) 6 7 Chair Shepherd: But no longer. 8 9 Mr. Perez: No longer, it’s right now its $1,110,452 and our budget is 146 adopted, $146 million. 10 I did get a chance to talk to Community Services Department (CSD) Staff and what you’re 11 referring to then coming back they tell me that they can’t do it in time in correlation with the 12 Commission’s discussions until after the budget. They would like to come back in June but 13 they’re prepared to bring you the second year of the HSRAP through in the CSD night in May. 14 And so that’s what they intend to do, bring you the second year recommendations at that time. 15 16 Chair Shepherd: And at that time will we then understand better how we can maybe incorporate 17 or restore the 1%, which I know would be exceeding the $27,000 right now that it would, but 18 we’ve also asked to take out funds to pay for Staff in that which we have been using from 19 Council discretionary dollars, $27,000 I think from last year. So we went ahead and funded the 20 $27,000 instead of sequestering part of it in order to pay for I believe Minka. And, so it’s 21 something that we did do last year and the next question, for me, is if it’s possible to start to have 22 a year or two incremental increase back up to 1% above budget? 23 24 Mr. Perez: You know I think it’s a developing discussion because you’re going to have multiple 25 decisions points and you’re going to want to have the big picture, so in my mind in the past 26 we’ve recommended to you the Finance Committee that maybe you pin some items so you go 27 through the process and make your final determination. I can tell you given that you have asked 28 me, or the Finance Committee has directed Staff to incorporate $2.2 million into the fiscal year 29 13 budget that’s going to be a challenge. So, you know, we’ll definitely do as you direct us, but I 30 guess what I’m asking you to consider all the decisions points you’re going to have and how you 31 are going to want to handle that as a Committee as the process evolves. 32 33 VOTE 34 35 Chair Shepherd: Ok. In that case I think I will not be voting in support of this motion 36 particularly because I’d like to have this conversation when we do get that, when we get the 37 Community Services here to talk about HSRAP, so let’s go ahead and vote. All those in favor? 38 All those opposed? Motion doesn’t carry. Anything more with CDBG? 39 40 MOTION FAILED 41 42 Council Member Burt: Well, we have to vote on the primary motion. 43 44 Chair Shepherd: Oh, thank you. 45 46 Council Member Burt: And I would like to speak to it. 47 City of Palo Alto April 11, 2012 Page 11 of 11 1 Chair Shepherd: Ok. 2 3 Council Member Burt: So, I plan on voting no on the primary motion. And if we have two votes 4 no on a primary motion then this discussion essentially remains open. 5 6 Chair Shepherd: Right. 7 8 Vice Mayor Scharff: No, we just don’t pass the CDBG. We go to Council without a 9 recommendation. 10 11 Chair Shepherd: Yeah. 12 13 Mr. Perez: It’s an action item, it’s actually a public hearing. 14 15 VOTE 16 17 Chair Shepherd: We need a timeframe on this for them to actually make the applications. So, 18 any more comments? Thank you. All those in favor say aye? All those opposed? Motion 19 carries three to one with Burt in opposition. So, thank you. 20 21 MOTION PASSED 22 23 2. Adoption of a Resolution Amending Utility Rate Schedule D-1 (Storm and Surface 24 Water Drainage) Reflecting a 2.9% CPI Rate Increase to $11.73 Per Month Per 25 Equivalent Residential Unit for Fiscal Year 2013 26 27 3. Recommended Refuse Residential Rate Increase Effective Fiscal Year 2013 28 29 FUTURE MEETINGS AND AGENDAS 30 31 ADJOURNMENT: 32 City of Palo Alto (ID # 2765) City Council Staff Report Report Type: Action ItemsMeeting Date: 5/7/2012 May 07, 2012 Page 1 of 9 (ID # 2765) Summary Title: Lytton Gateway Planned Community at 355 Alma Title: PUBLIC HEARING: Adoption Of A PC Ordinance For The Proposed Lytton Gateway Project to Amend The Zoning Map of the City Of Palo Alto to Change the Zone Designations From CDC-P And CDN-P to a Planned Community (PC) District To Allow A Mixed Office And Retail, Four-Story,50 Foot Tall Building (And A 70 Foot Tall Corner Tower Feature) on the Former Shell Station Site, Located At 355 And 335 Alma Street. The Project Includes Exceptions to the Daylight Plane And 35-Foot Height Limit Within 150 Feet of Residential Property. *Quasi- Judicial From:City Manager Lead Department: Planning and Community Environment Recommendation Staff recommends that Council approve a Planned Community Zone District ordinance (Attachment A) rezoning the subject property from CD-N(P) and CD- C(P) to allow a mixed office and retail, four-story, 50-foot tall building (and 70 foot tall corner tower feature) on the former Shell Station site located at 355 and 335 Alma Street. The PC Ordinance would grant exceptions to the daylight plane and 35-foot height limit within 150 feet of residential property. Executive Summary The “Lytton Gateway” project is designed as a mixed office and retail building in a gateway location (on the former Shell gas station site, closed in August 2010) across from the City’s most active transit hub. On March 12, 2012, the Council moved to continue the item to a future Council meeting and requested that staff meet with the applicant to: 1) discuss the elimination of onsite affordable housing and potentially redirecting public benefit dollars toward the Housing Fund, the Downtown Parking In-Lieu Fund, and/or toward other efforts to reduce parking impacts upon adjacent downtown neighborhoods, 2) reduce the May 07, 2012 Page 2 of 9 (ID # 2765) size of the building by one floor, and 3) explore shifting the former subsidized retail area to be designated as subsidized downtown-serving non-profit office space on the ground floor. Additionally, the Council approved the Initial Study and Mitigated Negative Declaration for the development and adopted a Resolution amending the Comprehensive Plan designation for a portion of the site (335 Alma) from Neighborhood Commercial to Regional/Community Commercial. The applicant has submitted a revised project to address Council’s direction. The project no longer includes a residential component. The public benefits and on- site parking were also amended as discussed later in this report. The applicant represents that the value of the project public benefits now totals over $6 million. Further Architectural Review would be required to finalize the design changes. Background The Council reviewed the original five-story mixed use project on March 12, 2012. The Council continued the item to another Council meeting and requested that staff meet with the applicant to: 1) discuss the elimination of onsite affordable housing and potentially redirecting public benefit dollars toward the Housing Fund, the Downtown Parking In-Lieu Fund, and/or toward other efforts to reduce parking impacts upon adjacent downtown neighborhoods, 2) reduce the size of the building by one floor, and 3) explore shifting the former subsidized retail area to be designated as subsidized downtown-serving non-profit office space on the ground floor. Additionally, the Council approved the Initial Study and Mitigated Negative Declaration for the development and adopted a Resolution amending the Comprehensive Plan designation for a portion of the site (335 Alma) from Neighborhood Commercial to Regional/Community Commercial. Project site conditions and other background information are described in the March 12, 2012 City Manager’s Report (ID# 2433), which is appended to this report (Attachment F), without attachments. The full report and attachments are available online at: http://www.cityofpaloalto.org/civica/filebank/blobdload.asp?BlobID=30512. The minutes of the March 12 Council meeting are included as Attachment G. Board and Commission Review May 07, 2012 Page 3 of 9 (ID # 2765) A complete summary of all previous Planning and Transportation Commission and Architectural Review Board staff reports and minutes were provided with the March 12 staff report and are available online at the same link. No further review by the Planning and Transportation Commission has been required. Additional Architectural Review Board review would be required following Council action. The approval conditions (Planning Division condition of approval # 9) include a condition for the applicant to return to the ARB with design details for the revised four-story building,including final resolution of the 70-foot tower design, landscape screening at the northeast corner, signage, lighting details, and bike rack selection. Discussion The applicant has submitted a revised project to address Council’s direction. The project no longer includes a residential component. The public benefits and on- site parking were also amended as discussed below. Findings for approval of the project are contained in the proposed Planned Community ordinance (Attachment A) and the approved Comprehensive Plan Amendment Resolution (Attachment B). The focus of this report and the key issues discussed below include: 1) Proposed Public Benefits, 2) On-Site Parking, and 3) Exceptions to Height and Daylight Plane. 1.Proposed Public Benefits The applicant has modified the public benefits offered to include: 1) a substantial contribution to affordable housing ($1.25 million, over and above the $850,000 commercial housing impact fee, for a total of $2.1 million) in lieu of the original proposal for seven below-market rate (BMR) units and 2) a significant contribution to in-lieu parking (almost $1.5 million) plus funding for a downtown garage study and for residential parking mitigation for downtown north and downtown south areas. Also, the prior commitment to “below market” retail space has been supplanted by a similar offer for Palo Alto-based nonprofit office space. Most of the other benefits remain as originally proposed, though some decrease is reflected for the engineering streetscape improvements on Alma. The following project components are now proposed as public benefits: May 07, 2012 Page 4 of 9 (ID # 2765) a)Financial contribution of $1,250,000 to the City of Palo Alto’s Affordable Housing Program (in addition to required $850,000 commercial in-lieu fee). b)Financial contribution of $1,476,200 to cover the cost of 22 in-lieu fee parking spaces (at $67,100 per space). c)Inclusion of 3,807 square feet of ground floor retail, personal service or financial service area as proximate to the train station. d)Inclusion of 1,640 square feet of subsidized non-profit office space at rates not to exceed 25% of market rent, for a 10 year term. The space would be provided to a Palo Alto-based non-profit organization. e)Provision of two (2) electric vehicle (EV) charging stations at off-site parking spaces directly adjacent to the site along Alma Street (one level 3 and one level 2 charging station) where the applicant will incur all costs of installing the EV stations. f)Provision of two additional level 2 EV charging stations in the below-grade parking garage. g)Provision of one Zip Car rental unit to be located in a designated space within the surface parking lot behind the building that is open to the public. h)Contribution of $250,000 to the City for Neighborhood Parking Preservation Projects or Programs. i)Contribution of $60,000 in funding to support City efforts to initiate a parking analysis for Downtown parking improvements. j)Provision of 8 surface parking spaces as available to the public at all hours daily (retail spaces), and 16 underground spaces available to the public on nights and weekends. k)Development of an extensive Alma Street tree canopy with the addition of 13 new street trees on the west side (Cal Train parking lot side) of Alma Street between Lytton and Everett. l)Installation of pedestrian and urban design features, including widened sidewalks and crosswalks, to enhance pedestrian safety and connectivity. m)Installation of street and vehicular improvements including: 1.upgraded traffic signals at the intersection of Lytton and Alma, and high visibility crosswalk striping; 2.southbound left turn lane and associated striping and improvements at the Alma and University ramp (north ramp) to facilitate southbound left turns from Alma to westbound University; May 07, 2012 Page 5 of 9 (ID # 2765) 3.striped median and improvements on Alma between University and Lytton; 4.upgraded bike lanes and markings: northbound bike lane on Alma between University and Lytton; westbound bike lane and “bike box” on Lytton at the Alma intersection, and southbound bike lane on Alma approaching Lytton; 5.pedestrian bulb-out along project frontage at the Lytton and Alma corner, to shorten pedestrian crossing distances and walk times while improving safety; 6.new left turn lane from southbound Alma onto eastbound Everett (with no change to hours of permitted turns proposed); 7.expanded sidewalk and curb (four feet wider) along Lytton project frontage to enhance pedestrian environment; 8.relocated street trees along Alma from existing sidewalk planting strips to new planters (with new trees) located within parking lane, to increase the usable sidewalk width from 8’3” to approximately 10’3”; 9.ten new post-top streetlights along Alma and Lytton at approximately 28 foot spacing, to provide safe and attractive lighting (replacing two existing streetlights); 10.street furnishings including a bench for pedestrian seating on Alma and trash and recycling receptacles along entire project frontage. n)Provision of CalTrain Go-Passes or the equivalent, as part of the TDM program, for all employees of the commercial spaces for the life of the project. The applicant represents that the value of the public benefits amounts to more than $6 million. Staff notes, however, that: a) the parking in-lieu contribution could be viewed as providing parking needed to satisfy the project demands, rather than a public benefit, b) the 8 public spaces are retail spaces already available to the public for that purpose, and c) the Go-Passes are part of the TDM solution that allows for a parking reduction. Staff believes, however, that those contributions are valuable and meaningful and that the overall package of benefits is substantial and appears to respond well to Council’s direction. 2.On-Site Parking The initial project provided 130 parking spaces, which included 14 parking spaces for the residential component, and an exemption per the code for the first floor May 07, 2012 Page 6 of 9 (ID # 2765) space (FAR) within the Parking Assessment District (approximately 58 spaces). The project also assumed the availability of another 34 spaces with “attendant” parking. With the removal of the residential component, the project is now required (per zoning code requirements) to provide 208 parking spaces for the entire 52,163 square foot building (1 space per 250 sq. ft. of floor area). With the use of a 20% parking reduction (TDM program and proximity to transit), the project would require 166 parking spaces. There are a total of 144 parking spaces being provided in the garage and surface parking areas (including credit for 25% of 40 “attendant” spaces). The applicant is now proposing to pay the parking in- lieu fee for the 22 parking spaces not being provided, which amounts to $1,476,200 (at $67,100 per space).. This approach avoids the issue of whether the first floor parking exemption should apply. In addition, the applicant is offering as public benefits contributions to studies of parking garage and other parking options by the City ($60,000) and funds ($250,00) to be used to mitigate parking impacts on nearby residential neighborhoods. Some parking spaces (24) are also to be made available to the public at nights and on weekends as a further benefit. Professorville Residential Permit Parking Program: Staff notes that a trial residential permit parking program has been presented to the Downtown Parking Study Group and staff expects that a program will be in place by approximately July 1. Staff will report on the trial and other parking measures to Council on July 16. If the Gateway Project is approved, some of the funding to be provided by the applicant would be used to cover initial costs of the permit parking program. Staff expects to then initiate discussions with the Downtown North residents about potential parking solutions in that neighborhood. 3.Height and Daylight Plane Exceptions The original five-story mixed use proposal included 14 rental housing units. Three of the 14 units were proposed as affordable units in order to qualify for two concessions under Government Code Section 65915. The two concessions were: 1) allowance for additional building height (exceeding the 35 foot height limitation, due to its proximity within 150 feet of residential zoning, where a 50 foot height is otherwise allowed within a PC zone), and 2) relief from the more restrictive PC zone daylight plane requirement (again specific to the project site’s adjacency to residential lots). May 07, 2012 Page 7 of 9 (ID # 2765) The loss of the fifth story allows the building to comply with the 50-foot maximum height limit for Planned Community projects (with the exception of the “tower” architectural feature), but a portion of the structure still exceeds the 35-foot height limit and the daylight plane requirements for a Planned Community Development within 150 feet of and abutting residentially zoned property. However, the “concessions” previously requested are no longer available, as concessions are eligible only for affordable housing units provided on-site. The height exceptions are due to the location of the project site within 150 feet of residentially zoned parcels (the abutting residential parcels). The daylight plane exception is required since the site abuts these residentially zoned parcels; the owner of these parcels is supportive of the project and the exceptions. Staff has reviewed with the City Attorney whether these exceptions may be granted by the Council in the PC Ordinance, rather than requiring a variance, and believes that such action is within the authority of the Council. This is because a Council adopted ordinance (including a PC ordinance) may amend any provision of the zoning ordinance, including provisions within the PC zone section. The issue is more of a policy one for Council, regarding precedence and extent of the exceptions. Staff notes again that the exceptions are for minor compatibility purposes and do not adversely impact the adjacent properties, and findings to that extent are noted in the proposed PC ordinance. Staff believes that, if the request were for a height in excess of 50 feet for building areas comprising floor area, an undesirable precedent could be set through a PC process, though again the Council may have discretion to make such a determination. Design Considerations The project design has been modified by being reduced (from 5 stories) to 4 stories, with the corner tower reduced proportionately (from 84 feet to 70 feet) as well. Staff believes that the Architectural Review Board (ARB) should review the final designs of the building and tower to assure consistency and compatibility under its initial approval. Planning condition of approval #9 requires ARB review prior to final building permit issuance for the above ground structure (permits for the garage and foundation construction could be issued in advance of ARB review and final design approval). Conclusion May 07, 2012 Page 8 of 9 (ID # 2765) Staff believes that the project changes and the revised public benefits respond in a meaningful way to Council’s direction, and that the scale and design of the project are appropriate at a key transit-oriented, gateway location. Staff therefore recommends approval of the revised project. Timeline Initiation by P&TC March 16, 2011 Preliminary ARB Hearing June 2, 2011 P&TC Study Session June 29, 2011 First ARB Hearing October 20, 2011 Second ARB Hearing November 3, 2011 Formal P&TC Hearing January 25, 2012 Formal P&TC Hearing February 22, 2012 First Council Hearing Date March 12, 2012 Second Council Hearing Date May 7, 2012 Resource Impact The project’s creation of 46,636 square feet of office space and 3,807 square feet of retail space would yield the City additional annual revenues in the form of property taxes, sales taxes, and utility user taxes, estimated in the range of $50,000 to $70,000 per year.One-time revenues would include impact fees of approximately $1,288,700 (mostly housing). The project is not expected to create additional demand for City services, beyond those accounted for in the proposed impact fees. The elimination of the residential component reduces the potential for impacts on City services. Environmental Review The Initial Study and Mitigated Negative Declaration, which reviewed the environmental issues related to the project, as required by the California Environmental Quality Act (CEQA), were circulated for a 20-day public comment period between October 17, 2011 and November 6, 2011. No comments were received on the Mitigated Negative Declaration during the comment period. The City Council approved the Mitigated Negative Declaration on March 12, 2012. Attachments: ·Attachment A: Draft Planned Community Ordinance (w/ exhibits)(PDF) May 07, 2012 Page 9 of 9 (ID # 2765) ·Attachment B: Comp. Plan Resolution (includes Exhibit)(PDF) ·Attachment C: Initial Study Mitigated Negative Declaration (PDF) ·Attachment D: Mitigation Monitoring Program (PDF) ·Attachment E: Location Map (PDF) ·Attachment F: March 7,2012 CMR (without attachments)(PDF) ·Attachment G: Draft Excerpt Minutes of the March 12, 2012 City Council Meeting (PDF) ·Attachment H: Project description Letter, April 18, 2012 (PDF) Prepared By:Jason Nortz, Planner Department Head:Curtis Williams, Director City Manager Approval: ____________________________________ James Keene, City Manager * NOT YET APPROVED * 120502 dm 1200537 1 Ordinance No. 5150 Ordinance of the Council of the City of Palo Alto Amending Section 18.08.040 of the Palo Alto Municipal Code (The Zoning Map) to Change the Classification of Property Located at 335 Alma Street from CD-N(P) Downtown Neighborhood Commercial and 355 Alma Street from CD-C(P) Downtown Community Commercial to PC Planned Community Zone No. XXXX for a Four Story, 50 Foot Tall (and an 70 Foot Tall Corner Tower Feature) Mixed Office and Retail Project Containing 52,163 Square Feet of Floor Area The Council of the City of Palo Alto does ORDAIN as follows: SECTION 1. (a) Lytton Gateway LLC, ("the Applicant") applied on January 21, 2011 to the City for approval of a rezoning application (the "Project") for a new Planned Community (PC) district for a property located at 335 and 355 Alma Street (the "Subject Property") to accommodate the uses set forth below. (b) The Planning and Transportation Commission, at its meeting of March 16, 2011, advanced the Project with an initiation to consider a Planned Community Zone process for the establishment of Planned Community Zone District (c) The Architectural Review Board, at its meeting of November 3, 2011, reviewed the Project design and recommended the City Council approve the project with associated draft conditions of approval `Exhibit B.' (d) The Planning and Transportation Commission, after a duly noticed public hearing held February 22, 2012, reviewed, considered, and recommended approval of the draft Mitigated Negative Declaration and an earlier draft ordinance, and recommended that Section 18.08.040 (the Zoning Map) of the Palo Alto Municipal Code be amended to rezone the Subject Property to a new Planned Community zone to permit construction of a five-story, mixed use project, consistent with conditions included in the Planned Community zone related to allowable land uses and required development standards, and subject to provision of the public benefits outlined in the draft ordinance to be considered by Council on March 12, 2012. The Commission also recommended approval of a Comprehensive Plan resolution to designate a portion of the site to Regional Commercial. (e) The Palo Alto City Council, after a duly noticed public hearing held on March 12, 2012, adopted the Mitigated Negative Declaration and approved the resolution revising the Comprehensive Plan land use designation. The Council * NOT YET APPROVED * 120502 dm 1200537 2 continued its review of the project to allow for revisions by the applicant pursuant to Council direction. (f) The Palo Alto City Council, after due consideration of the revised project, depicted on `Exhibit A' (the Project), the analysis of the City Staff, and the conditions recommended by the Planning and Transportation Commission and the Architectural Review Board, finds that the proposed Ordinance is in the public interest and will promote the public, health, safety and welfare, as hereinafter set forth. (g) The Council finds that (1) the Subject Property is so situated, and the use or uses proposed for the site are of such characteristics that the application of general districts or combining districts will not provide sufficient flexibility to allow for the Project; (2) development of the Subject Property under the provisions of the PC Planned Community District will result in public benefits not otherwise attainable by application of the regulations of general districts or combining districts, as set forth in Section (4)(c) hereof; and (3) the use or uses permitted, and the site development regulations applicable within the proposed district are consistent with the Palo Alto Comprehensive Plan (Goals, Policies, and proposed designation of Mixed Use for the Subject Property) and are compatible with existing and potential uses on adjoining sites or within the general vicinity. (h) The Council further approves exceptions to Section 18.38.150 allowing height in excess of 35 feet within 150 feet of a residential zone and allowing encroachment into the daylight plane. The Council finds that these exceptions do not result in incompatibility with the adjacent residential uses and do not allow for floor area increases above 50 feet. These determinations are made consistent with the findings of (g) above. SECTION 2. Section 18.08.040 of the Palo Alto Municipal Code, the "Zoning Map," is hereby amended by changing the zoning of Subject Property from CD-N(P) and CDC(P) to "PC Planned Community XXXX". SECTION 3. The City Council hereby finds with respect to the Subject Property that the Project comprises the following uses included in this ordinance for a mixed office and retail development, depicted on the Development Plans dated April 18, 2012, incorporated by reference, including the following components: (a) A four-story Mixed Office and Retail Building at a height of 50 feet for the enclosed floor area and 70 feet for the unenclosed corner tower feature, with a total of approximately 52,163 total square feet of floor area. * NOT YET APPROVED * 120502 dm 1200537 3 (b) Floors 2-4 of approximately 43,341 square feet consisting of three floors of office use. Floor 2 will be approximately 13,511 square feet and floors 3 and 4 will be approximately14,915 each. The height to the top of the fourth floor will be 50'. (c) A Ground Floor of approximately 8,822 square feet consisting of 3,807 square feet of retail use and 3,375 square feet of lobby area and elevator and stairwells to upper floors. The Lytton Avenue side commercial use includes approximately 1,640 square feet of space for lease to a Palo Alto based non-profit organization at below market rent. The Alma Street fronting commercial use includes retail services, personal services, eating and drinking services and customer-serving financial services. (d) Common Open Space area on the roof of the Building of approximately 4,500 square feet for the exclusive use of the office tenants of the building. (e) A two and-one-half level underground garage with a minimum of 126 parking stalls, with an entrance from the surface parking area of the Subject Property. SECTION 4. Development Plan for the Subject Property dated December 8, 2011, and any approved supplemental materials for the Subject Property, as submitted by the applicant pursuant to Palo Alto Municipal Code Section (PAMC) 18.38.090, shall be subject to the following permitted and conditional land uses and special limitations on land uses, development standards, parking and loading requirements, modifications to the development plans and provisions of public benefits outlined below, and conditions of project approval attached and incorporated as "Exhibit B". (a) Permitted, Conditionally Permitted land uses shall be allowed and limited as follows: Permitted Uses (subject to the limitations below under Section 4(b)): (1) Professional and General Business Offices (excluding medical offices and administrative office uses) (2) Retail Services (excluding liquor stores) (3) Eating and Drinking Services (excluding drive-in and take-out services) (4) Personal Services (5) Financial Services (excluding drive-up services) Conditionally Permitted Uses: (1) Private Educational Facility (2) Commercial Recreation (3) Convalescent Facilities (4) Private Clubs, Lodges, and Fraternal Organizations. * NOT YET APPROVED * 120502 dm 1200537 4 (b) Special limitations on land uses include the following: (1) The office uses within the project on floors 2-4 shall not exceed a total floor area of 43,341 square feet; (2) Approximately 1,640 square feet of floor area on the ground floor shall be leased to a Palo Alto-based non-profit for rents not to exceed 25% of market rates for a minimum 10-year term. (3) No medical office use shall be permitted within the development; (4) No administrative office use shall be permitted within the development; (5) The "Retail" space along Alma Street as identified on the Development Plan shall be occupied by retail uses, personal service uses, eating and drinking services or customer-serving ("walk-in") financial services only. (c) Development Standards: Development Standards for the site shall comply with the standards prescribed for the Planned Community (PC) zone district (PAMC Chapter 18.38) and as described in Section Three and Section Four herein and in the Approved Development Plans. The Council further approves exceptions to Section 18.38.150 allowing height in excess of 35 feet within 150 feet of a residential zone and allowing encroachment into the daylight plane. These determinations are made consistent with the findings of Section (1)(g) above. (d) Parking and Loading Requirements: In addition to the parking and loading requirements specified in PAMC 18.52 and 18.54, a Transportation Demand Management Plan (TDM) Program shall be developed for the Project in accordance with PAMC 18.52.050(d) for employees of the Project. The TDM plan shall, at a minimum, include bicycle, pedestrian and public transportation functions and an attendant parking program. The TDM plan shall be approved by the Director of Planning and Community Environment prior to issuance of building permits for the site and shall include, at a minimum, transit passes or subsidies for all employees and tenants of the building, car sharing, bike facilities, transportation information kiosks, and the designation of a transportation demand coordinator for the building. The TDM program shall include monitoring reports, which shall be submitted to the Director not later than two years after building occupancy and again not later than five years after building occupancy, noting the effectiveness of the proposed measures as compared to the initial performance targets, and suggestions for modifications if necessary to enhance parking and/or trip reductions. Where the monitoring reports indicate that performance measures are not met, the director may require further program modifications. (e) Modifications to the Development Plan and Site Development Regulations: Subsequent to construction of the Project consistent with the approved Development Plan, any modifications to the exterior design of the Development Plan * NOT YET APPROVED * 120502 dm 1200537 5 or any new construction not specifically permitted by the Development Plan or the site development regulations contained in Section 4 (a) (c) above shall require an amendment to this Planned Community zone, unless the modification is a minor change as described in PAMC 18.76.050 (b) (3) (e), in which case the modification may be approved through the Minor Architectural Review process. Any use not specifically permitted by this ordinance shall require an amendment to the PC ordinance. (f) Public Benefits: Development of the site under the provisions of the PC Planned Community District will result in public benefits not otherwise attainable by application of the regulations of general districts or combining districts. The Project includes the following public benefits that are proposed for the Project and in excess of those required by City zoning districts. (1) Financial contribution of $1,250,000 to the City of Palo Alto’s Affordable Housing Program (in additional to the required $850,000 commercial in- lieu housing fee). (2) Financial contribution of $1,476,200 to cover the cost of 22 in-lieu fee parking spaces. (3) Inclusion of 3,807 square feet of ground floor retail, personal service or customer-serving ("walk-in") financial service area proximate to the train station. (4) Inclusion of 1,640 square feet of subsidized non-profit office space to be leased to a Palo Alto-based non-profit at rent not to exceed 25% of market rates, for a 10 year term. (5) Provision of two (2) electric vehicle (EV) charging stations at off-site parking spaces directly adjacent to the site along Alma Street (one level 3 and one level 2 charging station), with the applicant responsible for all costs of installing the EV stations. (6) Provision of two additional level 2 EV charging stations in the below-grade parking garage. (7) Provision of one Zip Car rental unit to be located in a designated space within the surface parking lot behind the building that is open to the public (8) Contribution of $250,000 to the City for Neighborhood Parking Preservation Projects or Programs. (9) Contribution of $60,000 in funding to support City efforts to initiate a parking analysis for Downtown parking improvements. (10) Provision of 8 surface parking spaces as available to the public at all hours daily (retail spaces), and 16 underground spaces available to the public on nights and weekends. (11) Development of an extensive Alma Street tree canopy with the addition of 13 new street trees on the west side (Cal Train parking lot side) of Alma Street between Lytton and Everett. * NOT YET APPROVED * 120502 dm 1200537 6 (12) Installation of pedestrian and urban design features, including widened sidewalks and crosswalks, to enhance pedestrian safety and connectivity. (13) Installation of street and vehicular improvements, including: a. upgraded traffic signals at the intersection of Lytton and Alma, and high visibility crosswalk striping; b. southbound left turn lane and associated striping and improvements at the Alma and University ramp (north ramp) to facilitate southbound left turns from Alma to westbound University; c. striped median and improvements on Alma between University and Lytton; d. upgraded bike lanes and markings: northbound bike lane on Alma between University and Lytton; westbound bike lane and "bike box" on Lytton at the Alma intersection, and southbound bike lane on Alma approaching Lytton; e. pedestrian bulb-out along project frontage at the Lytton and Alma corner, to shorten pedestrian crossing distances and walk times while improving safety; f. new left turn lane from southbound Alma onto eastbound Everett (no change to hours of permitted turns proposed); g. expanded sidewalk and curb (four feet wider) along Lytton project frontage to enhance pedestrian environment; h. relocated street trees along Alma from existing sidewalk planting strips to new planters (with new trees) located within parking lane, to increase the usable sidewalk width from 8'3" to approximately 10'3"; i. ten new post-top streetlights along Alma and Lytton at approximately 28-foot spacing, to provide safe and attractive lighting (replacing two existing streetlights); j. street furnishings, including a bench for pedestrian seating on Alma and trash and recycling receptacles along entire project frontage. (14) Provision of CalTrain Go-Passes or the equivalent, as part of the Transportation Demand Management program, for all employees of the commercial spaces for the life of the project. (g) Development Schedule: The project is required to include a Development Schedule pursuant to PAMC 18.38.100. The approved Development Schedule is set forth below: Construction of the Project shall commence on or before January 2013, unless a change in the development schedule is approved by the Director of * NOT YET APPROVED * 120502 dm 1200537 7 Planning and Community Environment, not to exceed a one year extension in time, with only one such extension permitted without a hearing, pursuant to PAMC Section 18.38.130. The total time for the project construction and occupancy of tenant spaces is expected to be 16 months, or by April 2014, unless extended by the Director for up to one additional year. SECTION 5. Indemnification. 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 this ordinance or any permit or approval authorized hereby for the project, including (without limitation) reimbursing the City its actual attorneys fees and costs incurred in defense of the litigation. The City may, in its sole discretion, elect to defend any such action with attorneys of its choice. SECTION 6. Monitoring of Conditions and Public Benefits. Not later than three (3) years following the approval of building occupancy by the City and every three (3) years thereafter (except where a shorter timeframe is required in the conditions of approval), the applicant or successor owner shall request that the City review the project to assure that conditions of approval and public benefits remain in effect as provided in the original approval. The applicant shall provide adequate funding to reimburse the City for these costs. If conditions or benefits are found deficient by staff, the applicant shall correct such conditions in not more than 90 days from notice by the City. If correction is not made within the prescribed timeframe, the Director of Planning and Community Environment will schedule review of the project before the Planning and Transportation Commission and Council to determine appropriate remedies, fines or other actions. SECTION 7. A mitigated negative declaration (MND) for this project was prepared in accordance with the California Environmental Quality Act and circulated for public review for a 20-day period beginning October 17, 2011. The City Council approved the MND and Mitigation Monitoring Program at its meeting of March 12, 2012. // // // * NOT YET APPROVED * 120502 dm 1200537 8 SECTION 8. This ordinance shall be effective on the thirty-first day after the date of its adoption (second reading). INTRODUCED: PASSED: AYES: NOES: ABSTENTIONS: ABSENT: ATTEST: APPROVED: __________________________ City Clerk APPROVED AS TO FORM: __________________________ Assistant City Attorney __________________________ Director of Planning and Community Environment _________________________ Mayor _________________________ City Manager 1 EXHIBIT B DRAFT CONDITIONS OF APPROVAL 355 Alma St. 11PLN-00000-00045 ________________________________________________________________________ PLANNING DIVISION 1. The plans submitted for Building Permit shall be in substantial conformance with plans received and date stamped March 12, 2012, except as modified to incorporate these conditions of approval. 2. The ARB approval letter including all Department conditions of approval for the project shall be printed on the plans submitted for building permit. 3. Any exterior changes to the building such as size, location and exterior materials are subject to ARB review. 4. Any new signs associated with the project shall be required to receive architectural review board approval prior to installation. 5. All mitigation measures identified in the Mitigated Negative Declaration shall be incorporated into the project implementation. 6. The project is subject to meeting all the requirements of Palo Alto Municipal Code Chapter 18.44, the City’s Green Building Ordinance. 7. The financial contribution of $1,250,000 to the City of Palo Alto’s Affordable Housing Program (in addition to the $850,000 commercial in-lieu housing fee) shall be made paid prior to building permit issuance. 8. The financial contribution of $1,476,200 to cover the in-lieu parking fee for 22 parking spaces shall be paid prior to building permit issuance. 9. Prior to Building Permit issuance the applicant shall return to ARB with final design details for the revised four-story building including final resolution of the 70-foot tower design, landscape screening at the northeast corner, signage, lighting details, and bike rack selection. 10. Prior to building occupancy, the lease agreement or a letter summarizing the terms of the lease agreement for the 1,640 square foot subsidized non-profit office space shall be provided to Director of Planning and Community Environment. 11. The planting of 13 new street trees along the western side of Alma Street shall be installed to the satisfaction of the Directors of Public Works and Planning and 2 Community Environment. Approval of the installation shall be required prior to building occupancy. 12. The installation of all street and vehicular improvements provided as Public Benefit #13 in the approved PC Ordinance (Ordinance # xxxx) shall be installed to the satisfaction of the Directors of Public Works and Planning and Community Environment. Approval of the installation shall be required prior to building occupancy. 13. Development Impact fees with an estimated total of $1,288,700 must be paid prior to building permit issuance. This is an estimate and the final total may change based on date of building permit submittal PLANNING ARBORIST PRIOR TO DEMOLITION, BUILDING OR GRADING PERMIT ISSUANCE 1. SITE PLAN REQUIREMENTS. The Site Plans must show Type I or Type II fencing around the Street Trees a bold dashed line enclosing the Tree Protection Zone as shown on Detail #605, Sheet T-1, and the City Tree Technical Manual, Section 6.35-Site Plans. (Public Works may require: Extend the Type II street tree fencing to enclose the entire planter strip and from sidewalk to the outer branch dripline.) 2. SHEET T-1. The building permit plan set must include the city-provided, Sheet T-1 (Tree Protection-it's Part of the Plan!) Applicant shall complete and sign the sheet Tree Disclosure Statement. Inspection #1 applies to this project. DURING CONSTRUCTION 3. TREE PROTECTION VERIFICATION. Prior to demolition, grading or building permit issuance, a written verification from the contractor that the required protective fencing is in place shall be submitted to the Building Inspections Division. The fencing shall contain required warning sign and remain in place until final inspection of the project. Tree fencing shall be adjusted after demolition if necessary to increase the tree protection zone as required by the project arborist. 4. TREE DAMAGE. The applicant shall be responsible for the repair or replacement of any publicly owned or protected trees that are damaged during the course of construction, pursuant to Title 8 of the Palo Alto Municipal Code, and city Tree Technical Manual, Section 2.25. GENERAL. The following general tree preservation measures apply to all trees to be retained: No storage of material, topsoil, vehicles or equipment shall be permitted within the tree enclosure area. The ground under and around the tree 3 canopy area shall not be altered. Trees to be retained shall be irrigated, aerated and maintained as necessary to ensure survival TRANSPORTATION DIVISION 1. Bike Parking: a) If placed on public right of way, short term bike parking shall be city standard (or to be determined decorative) inverted-U type racks, powder coated black i. One inverted rack = 2 short term spaces. Consider placing parallel or 45 degrees to curb. ii. If placed on public R.O.W., bike racks should be city standard. To be discussed further. b) Long Term bike parking lockers should be located a maximum of one level down from street level. i. Relocate lower level bike parking to street levels or one level down. ii. Consider a secure bike room for office use long term bike parking (12 spaces), and 14 lockers for residential 2. Include note on plans for off-street improvement of signal modification at Alma/Lytton. 3. The TDM plan shall be approved by the Director of Planning and Community Environment prior to the issuance of building permits for the site and shall include, at a minimum, transit passes or subsidies for all employees of the commercial spaces for the life of the project, car sharing, bike facilities, transportation information kiosks, and the designation of a transportation demand coordinator for the building. The TDM program shall include monitoring reports, which shall be submitted to the Director of Planning and Community Environment not later than two years after building occupancy and again not later than five years after building occupancy, noting the effectiveness of the proposed measures as compared to the initial performance targets and suggestions for modifications if necessary to enhance parking and/or trip reductions. Where the monitoring reports indicate that performance measures are not met, the Director may require further program modifications. 4. The installation of all EV charging stations shall be approved by the Director of Planning and Community Environment prior to building occupancy. 5. The financial contribution of $250,000 to the City for Neighborhood Parking Preservation Projects or Programs shall be paid prior to building permit issuance. 6. The financial contribution of $60,000 to support the City’s efforts to initiate a parking analysis for Downtown parking improvements shall be paid prior to building permit issuance. 4 7. The applicant shall work with Transportation staff to develop and install signage that clearly indicates the location for all public parking spaces that are located on the subject property. PUBLIC WORKS ENGINEERING DIVISION 1. SIDEWALK, CURB & GUTTER: The applicant must install all new sidewalk, curb, gutter, driveway approach and planter strip in the public right-of-way along the property frontage per Public Works standards and/or as instructed by the Public Works Inspector. Any unused driveway approach shall be removed and replaced with curb and gutter. The applicant shall resurface the entire frontage of each street adjacent to the property per Public Works’ direction out to the centerline of the street. 2. STREET TREES: The applicant may be required to replace existing and/or add new street trees in the public right-of-way along the property’s frontages. Call the Public Works’ arborist at 650-496-6905 to arrange a site visit so he can determine what street tree work, if any, will be required for this project. The site plan submitted with the building permit plan set must show the street tree work that the arborist has determined, including the tree species, size, location, staking and irrigation requirements, or include a note that Public Works’ arborist has determined no street tree work is required. 3. SUBDIVISION APPLICATION: The applicant needs to file a Minor Subdivision application with the Planning Department concerning the merger of existing parcels within the project site. 4. GRADING & EXCAVATION PERMIT: An application for a grading & excavation permit must be submitted to Public Works when applying for a building permit. The plans must include a table providing the cubic yardage of dirt being cut and filled. The application and guidelines are available at the Development Center and on our website. 5. EXCAVATION SHORING: Shoring for the excavation, including tiebacks, must not extend onto adjacent private property or into the City right-of-way without having first obtained written permission from the private property owners and/or an Encroachment Permit from Public Works. Public Works will not allow any of the shoring system to remain in the public right-of-way after construction is complete except tiebacks. 6. DEWATERING: Basement excavations may require dewatering during construction. Public Works only allows groundwater drawdown well dewatering. Open pit groundwater dewatering is disallowed. Dewatering is only allowed from April through October due to inadequate capacity in our storm drain system. The geotechnical report for this site must list the highest anticipated groundwater 5 level. We recommend a piezometer to be installed in the soil boring. The contractor must determine the depth to groundwater immediately prior to excavation by using the piezometer or by drilling an exploratory hole if the deepest excavation will be within 3 feet of the highest anticipated groundwater level. If groundwater is within 3 feet of the deepest excavation, a drawdown well dewatering system must be used, or alternatively, the contractor can excavate for the basement and hope not to hit groundwater, but if he does, he must immediately stop all work and install a drawdown well system before he continues to excavate. Public Works may require the water to be tested for contaminants prior to initial discharge and at intervals during dewatering. If testing is required, the contractor must retain an independent testing firm to test the discharge water for the contaminants Public Works specifies and submit the results to Public Works. 7. GRADING & DRAINAGE PLAN: The plan set must include a grading & drainage plan prepared by a licensed professional that includes existing and proposed spot elevations and drainage flow arrows to demonstrate proper drainage of the site. Adjacent grades must slope away from the buildings a minimum of 2%. Downspouts and splashblocks should be shown on this plan, as well as any site drainage features such as swales. Grading will not be allowed that increases drainage onto, or blocks existing drainage from, neighboring properties. Public Works generally does not allow rainwater to be collected and discharged into the street gutter, but encourages the developer to keep rainwater onsite as much as feasible by directing runoff to landscaped and other pervious areas of the site. 8. STORM WATER TREATMENT: This project shall comply with the storm water regulations contained in provision C.3 of the NPDES municipal storm water discharge permit issued by the San Francisco Bay Regional Water Quality Control Board (and incorporated into Palo Alto Municipal Code Chapter 16.11). These regulations apply to land development projects that create or replace 10,000 square feet or more of impervious surface. In order to address the potential permanent impacts of the project on storm water quality, the applicant shall incorporate into the project a set of permanent site design measures, source controls, and treatment controls that serve to protect storm water quality, subject to the approval of the Public Works Department. The applicant shall identify, size, design and incorporate permanent storm water pollution prevention measures (preferably landscape-based treatment controls such as bioswales, filter strips, and permeable pavement rather than mechanical devices that require long-term maintenance) to treat the runoff from a “water quality storm” specified in PAMC Chapter 16.11 prior to discharge to the municipal storm drain system. In addition, the applicant shall designate a party to maintain the control measures for the life of the improvements and must enter into a maintenance agreement with the City. The City will inspect the treatment measures yearly and charge an inspection fee. 9. UPDATE: New regulations regarding third-party certifications of storm water treatment designs and installations went into effect 2/10/11. Prior to the issuance 6 of the building permit, the project applicant shall submit a certification by a qualified third-party reviewer that the design of the project complies with the requirements of PAMC Chapter 16.11. Prior to issuance of an occupancy permit, the project applicant shall submit a certification by a qualified third-party reviewer that the project’s permanent storm water pollution prevention measures were constructed or installed in accordance with the approved plans. A list of qualified third-party reviewers is available at: http://www.scvurppp- w2k.com/consultants.htm Also, as of December 1, 2011, additional new storm water use and treatment requirements will go into effect that may apply to this project. 10. STORMWATER POLLUTION PREVENTION: The developer shall require its contractor to incorporate best management practices (BMP's) for stormwater pollution prevention in all construction operations, in conformance with the Storm Water Pollution Prevention Plan prepared for the project. It is unlawful to discharge any construction debris (soil, asphalt, sawcut slurry, paint, chemicals, etc.) or other waste materials into gutters or storm drains. (PAMC Chapter 16.09). 11. STREET TREES: Show all existing street trees in the public right-of-way. Any removal, relocation or planting of street trees; or excavation, trenching or pavement within 10 feet of street trees must be approved by Public Works' arborist (phone: 650-496-5953). This approval shall appear on the plans. Show construction protection of the trees per City requirements. 12. WORK IN THE RIGHT-OF-WAY: The plans must clearly indicate any work that is proposed in the public right-of-way, such as sidewalk replacement, driveway approach, or utility laterals. The plans must include notes that the work must be done per City standards and that the contractor performing this work must first obtain a Permit for Construction in the Public Street (“street work permit”) from Public Works at the Development Center. If a new driveway is in a different location than the existing driveway, then the sidewalk associated with the new driveway must be replaced with a thickened (6” thick instead of the standard 4” thick) section. Additionally, curb cuts for abandoned driveways must be replaced with new curb and gutter. 13. SIDEWALK ENCROACHMENT: Add a note to the site plan that says, “The contractor using the City sidewalk to work on an adjacent private building must do so in a manner that is safe for pedestrians using the sidewalk. Pedestrian protection must be provided per the 2010 California Building Code Chapter 33 requirements. If the height of construction is 8 feet or less, the contractor must place construction railings sufficient to direct pedestrians around construction areas. If the height of construction is more than 8 feet, the contractor must obtain an Encroachment Permit from Public Works at the Development Center in order to provide a barrier and covered walkway or to close the sidewalk.” No storage of construction materials is permitted in the street or on the sidewalk. 7 14. LOGISTICS PLAN: Add a note to the site plan that says, “The contractor must submit a logistics plan to the Public Works Department prior to commencing work that addresses all impacts to the City’s right-of-way, including, but not limited to: pedestrian control, traffic control, truck routes, material deliveries, contractor’s parking, concrete pours, crane lifts, work hours, noise control, dust control, storm water pollution prevention, contractor’s contact, noticing of affected businesses, and schedule of work. The plan will be attached to a street work permit. 15. “NO DUMPING” LOGO: The applicant is required to paint the “No Dumping/Flows to San Francisquito Creek” logo in blue color on a white background, adjacent to all storm drain inlets. Stencils of the logo are available from the Public Works Environmental Compliance Division, which may be contacted at (650) 329-2598. A deposit may be required to secure the return of the stencil. Include the instruction to paint the logos on the construction grading and drainage plan. 16. IMPERVIOUS SURFACE AREA: The project will be creating or replacing 500 square feet or more of impervious surface. Accordingly, the applicant shall provide calculations of the existing and proposed impervious surface areas with the building permit application. The Impervious Area Worksheet for Land Developments form and instructions are available at the Development Center or on our website. UTILITIES-ELECTRICAL ENGINEERING GENERAL 1. The applicant shall comply with all the Electric Utility Engineering Department service requirements noted during plan review. 2. The applicant shall be responsible for identification and location of all utilities, both public and private, within the work area. Prior to any excavation work at the site, the applicant shallcontact Underground Service Alert (USA) at 1-800-227- 2600, at least 48 hours prior to beginning work. 3. The applicant shall submit a request to disconnect all existing utility services and/or meters including a signed affidavit of vacancy, on the form provided by the Building Inspection Division. Utilities will be disconnected or removed within 10 working days after receipt of request. The demolition permit will be issued after all utility services and/or meters have been disconnected and removed. THE FOLLOWING SHALL BE INCORPORATED IN SUBMITTALS FOR ELECTRIC SERVICE 8 1. A completed Electric Load Sheet and a full set of plans must be included with all applications involving electrical work. The load sheet must be included with the preliminary submittal. 2. Industrial and large commercial customers must allow sufficient lead-time for Electric Utility Engineering and Operations (typically 8-12 weeks after advance engineering fees have been paid) to design and construct the electric service requested. 3. Only one electric service lateral is permitted per parcel. Utilities Rule & Regulation #18. 4. The location of the transformers shall be shown on the site plan and approved by the Utilities Department and the Architectural Review Board. Utilities Rule & Regulations #3 & #16 (see detail comments below). See sketch at the end of this document of location of transformer. 5. The developer/owner shall provide space for installing padmount equipment (i.e. transformers,switches, and interrupters) and associated substructure as required by the City. 6. The customer shall install all electrical substructures (conduits, boxes and pads) required from the service point to the customer’s switchgear. The design and installation shall be according to the City standards and shown on plans. Utilities Rule & Regulations #16 & #18. 7. Location of the electric panel/switchboard shall be shown on the site plan and approved by the Architectural Review Board and Utilities Department. 8. All utility meters, lines, transformers, backflow preventers, and any other required equipment shall be shown on the landscape and irrigation plans and shall show that no conflict will occur between the utilities and landscape materials. In addition, all aboveground equipment shall be screened in a manner that is consistent with the building design and setback requirements. 9. For services larger than 1600 amps, the customer will be required to provide a transition cabinet as the interconnection point between the utility’s padmount transformer and the customer’s main switchgear. The cabinet design drawings must be submitted to the Electric Utility Engineering Department for review and approval. 10. For underground services, no more than four (4) 750 MCM conductors per phase can be connected to the transformer secondary terminals; otherwise, bus duct must be used for 9 connections to padmount transformers. If customer installs a bus duct directly between the transformer secondary terminals and the main switchgear, the installation of a transition cabinet will not be required. 11. The customer is responsible for sizing the service conductors and other required equipment according to the National Electric Code requirements and the City standards. Utilities Rule & Regulation #18. 12. If the customer’s total load exceeds 2500 kVA, service shall be provided at the primary voltage of 12,470 volts and the customer shall provide the high voltage switchgear and transformers. 13. Any additional facilities and services requested by the Applicant that are beyond what the utility deems standard facilities will be subject to Special Facilities charges. The Special Facilities charges include the cost of installing the additional facilities as well as the cost of ownership. Utilities Rule & Regulation #20. DURING CONSTRUCTION 1. Contractors and developers shall obtain permit from the Department of Public Works before digging in the street right-of-way. This includes sidewalks, driveways and planter strips. 2. At least 48 hours prior to starting any excavation, the customer must call Underground Service Alert (USA) at 1-800-227-2600 to have existing underground utilities located and marked. The areas to be check by USA shall be delineated with white paint. All USA markings shall be removed by the customer or contractor when construction is complete. 3. The customer is responsible for installing all on-site substructures (conduits, boxes and pads) required for the electric service. No more than 270 degrees of bends are allowed in a secondary conduit run. All conduits must be sized according to National Electric Code requirements and no 1/2 – inch size conduits are permitted. All off-site substructure work will be constructed by the City at the customer’s expense. Where mutually agreed upon by the City and the Applicant, all or part of the off- site substructure work may be constructed by the Applicant. 4. All primary electric conduits shall be concrete encased with the top of the encasement at the depth of 30 inches. No more than 180 degrees of bends are allowed in a primary conduit run. Conduit runs over 500 feet in length require additional pull boxes. 10 5. All new underground conduits and substructures shall be installed per City standards and shall be inspected by the Electrical Underground Inspector before backfilling. 6. The customer is responsible for installing all underground electric service conductors, bus duct, transition cabinets, and other required equipment. The installation shall meet the National Electric Code and the City Standards. 7. Meter and switchboard requirements shall be in accordance with Electric Utility Service Equipment Requirements Committee (EUSERC) drawings accepted by Utility and CPA standards for meter installations. 8. Shop/factory drawings for switchboards (400A and greater) and associated hardware must be submitted for review and approval prior to installing the switchgear to: Gopal Jagannath, P.E. Supervising Electric Project Engineer Utilities Engineering (Electrical) 1007 Elwell Court Palo Alto, CA 94303 9. Catalog cut sheets may not be substituted for factory drawing submittal. 10. All new underground electric services shall be inspected and approved by both the Building Inspection Division and the Electrical Underground Inspector before energizing. AFTER CONSTRUCTION & PRIOR TO FINALIZATION 1. The customer shall provide as-built drawings showing the location of all switchboards, conduits (number and size), conductors (number and size), splice boxes, vaults and switch/transformer pads. PRIOR TO ISSUANCE OF BUILDING OCCUPANCY PERMIT 1. The applicant shall secure a Public Utilities Easement for facilities installed on private property for City use. 2. All required inspections have been completed and approved by both the Building Inspection Division and the Electrical Underground Inspector. 3. All fees must be paid. 4. All Special Facilities contracts or other agreements need to be signed by the City and applicant. ADDITIONAL COMMENTS 11 • Roland.Ekstrand (Utilities Water Gas wastewater) has confirmed that the front left corner is the only logical location for the water RPA. Therefore we are approving the far left corner for the transformer and primary/secondary trench location. • The customer will sign an agreement stating that they will be financially and schedule-wise responsible for hiring a contractor to fork lift the transformer to its location in the back corner of the property (for the initial installation as well as emergency situation). The customer is responsible for any damage to the transformer/vaults caused by the customer/contractor during the installation process. The customer will also be responsible for fixing the conduit duct bank should it be damaged for any reason (ie, earth quake). Should the conduit duck bank be beyond repairable, the customer will be financially responsible to provide an alternate path. • With the new transformer location, CPAU suggests that the conduit duct bank will be installed near the property line between 355 Alma and 127 Lytton to save money on the 2 extra vaults that otherwise would have required with the original suggestion (trenching along Alma). • The red concrete covering the primary conduits shall be separated from the foundation concrete with a structural barrier material • At this time the customer is not sure of what size of panel, load or voltage will be used for this building. CPAU preferred option would be 277/480. However, we are open to other voltage request. • Attached are two sketches for the two different duct bank locations. Option 1 is for trenching along Alma then Lytton. Option 2 is for trenching across Lytton. UTILITILES-WATER,GAS,WASTEWATER PRIOR TO ISSUANCE OF DEMOLITION PERMIT 1. Prior to demolition, the applicant shall submit the existing water/wastewater fixture unit loads (and building as-built plans to verify the existing loads) to determine the capacity fee credit for the existing load. If the applicant does not submit loads and plans they may not receive credit for the existing water/wastewater fixtures. 2. The applicant shall submit a request to disconnect all utility services and/or meters including a signed affidavit of vacancy. Utilities will be disconnected or removed within 10 working days after receipt of request. The demolition permit will be issued by the building inspection division after all utility services and/or 12 meters have been disconnected and removed. FOR BUILDING PERMIT 3. The applicant shall submit completed water-gas-wastewater service connection application - load sheets for each residential unit or business unit for City of Palo Alto Utilities. The applicant must provide all the information requested for utility service demands (water in fixture units/g.p.m., gas in b.t.u.p.h, and sewer in fixture units/g.p.d.). The applicant shall provide the existing (prior) loads, the new loads, and the combined/total loads (the new loads plus any existing loads to remain). 4. The applicant shall submit improvement plans for utility construction. The plans must show the size and location of all underground utilities within the development and the public right of way including meters, backflow preventers, fire service requirements, sewer mains, sewer cleanouts, sewer lift stations and any other required utilities. Trees can not be planted within 10 feet of existing water, gas or sewer lines or meters. Utility vaults, transformers, utility cabinets, concrete bases, or other structures can not be placed over existing water, gas or wastewater mains/services. Maintain 1’ horizontal clear separation from the vault/cabinet/concrete base to existing utilities as found in the field. If there is a conflict with existing utilities, Cabinets/vaults/bases shall be relocated from the plan location as needed to meet field conditions. 5. The applicant must show on the site plan the existence of any auxiliary water supply, (i.e. water well, gray water, recycled water, rain catchment, water storage tank, etc). 6. The applicant shall be responsible for installing and upgrading the existing utility mains and/or services as necessary to handle anticipated peak loads. This responsibility includes all costs associated with the design and construction for the installation/upgrade of the utility mains and/or services. 7. Sewer drainage piping serving fixtures located less than one foot above the next upstream sewer main manhole cover shall be protected by an approved backwater valve per California Plumbing Code 710.0. The upstream sewer main manhole rim elevation shall be shown on the plans. 8. Flushing of the fire system to sanitary sewer shall not exceed 30 GPM. Higher flushing rates shall be diverted to a detention tank to achieve the 30 GPM flow to sewer. 9. Sewage ejector pumps shall meet the following conditions: 1. The pump(s) be limited to a total 100 GPM capacity or less. 13 2. The sewage line changes to a 4” gravity flow line at least 20’ from the City clean out. 3. The tank and float is set up such that the pump run time not exceed 20 seconds each cycle PRIOR TO ISSUANCE OF BUILDING PERMIT 10. The applicant's engineer shall submit flow calculations and system capacity study showing that the on-site and off-site water and sanitary sewer mains and services will provide the domestic, irrigation, fire flows, and wastewater capacity needed to service the development and adjacent properties during anticipated peak flow demands. Field testing may be required to determined current flows and water pressures on existing water main. Calculations must be signed and stamped by a registered civil engineer. The applicant is required to perform, at his/her expense, a flow monitoring study of the existing sewer main to determine the remaining capacity. The report must include existing peak flows or depth of flow based on a minimum monitoring period of seven continuous days or as determined by the senior wastewater engineer. The study shall meet the requirements and the approval of the WGW engineering section. No downstream overloading of existing sewer main will be permitted. 11. For contractor installed water and wastewater mains or services, the applicant shall submit to the WGW engineering section of the Utilities Department four copies of the installation of water and wastewater utilities off-site improvement plans in accordance with the utilities department design criteria. All utility work within the public right-of-way shall be clearly shown on the plans that are prepared, signed and stamped by a registered civil engineer. The contractor shall also submit a complete schedule of work, method of construction and the manufacture's literature on the materials to be used for approval by the utilities engineering section. The applicant's contractor will not be allowed to begin work until the improvement plan and other submittals have been approved by the water, gas and wastewater engineering section. After the work is complete but prior to sign off, the applicant shall provide record drawings (as-builts) of the contractor installed water and wastewater mains and services per City of Palo Alto Utilities record drawing procedures. 12. Existing wastewater laterals that are not plastic (ABS, PVC, or PE) can not be re- used. 13. The applicant shall pay the capacity fees and connection fees associated with increased loads or the installation of the new utility service/s by the City of Palo Alto Utilities. The approved relocation of services, meters, hydrants, or other facilities will be performed at the cost of the person/entity requesting the relocation. 14. Each unit or place of business shall have its own water and gas meter shown on the plans. 14 15. A separate water meter and backflow preventer is required to irrigate the approved landscape plan. Show the location of the irrigation meter on the plans. This meter shall be designated as an irrigation account an no other water service will be billed on the account. The irrigation and landscape plans submitted with the application for a grading or building permit shall conform to the City of Palo Alto water efficiency standards. 16. An approved reduce pressure principle assembly (RPPA backflow preventer device) is required for all existing and new water connections from Palo Alto Utilities to comply with requirements of California administrative code, title 17, sections 7583 through 7605 inclusive. The RPPA shall be installed on the owner's property and directly behind the water meter, within 5’ of the property line. Show the location of the RPPA on the plans. Inspection by the utilities cross connection inspector is required for the supply pipe between the meter and the assembly. The applicant shall provide the City with current test certificates for all backflows. 17. An approved reduced pressure detector assembly is required for the new water connection for the fire system to comply with requirements of California administrative code, title 17, sections 7583 through 7605 inclusive. reduced pressure detector assemblies shall be installed on the owner's property adjacent to the property line, within 5’ of the property line. Show the location of the reduced pressure detector assembly on the plans. Inspection by the utilities cross connection inspector is required for the supply pipe between the City connection and the assembly. 18. A new gas service line installation is required. Show the new gas meter(s) location on the plans. The gas meter(s) location must conform with utilities standard details. The gas meters shall be ganged in one area on the outside of the building (on private property) as close to the point of connection as possible. 19. The applicant shall secure a public utilities easement for facilities installed in private property. The applicant's engineer shall obtain, prepare, record with the county of Santa Clara, and provide the utilities engineering section with copies of the public utilities easement across the adjacent parcels as is necessary to serve the development. 20. All existing water and wastewater services that will not be reused shall be abandoned at the main per WGW utilties procedures before the final acceptance for the project. 21. All utility installations shall be in accordance with the City of Palo Alto utility standards for water, gas & wastewater. 22. For contractor installed water and wastewater mains or services, the applicant shall prepare and submit to the WGW engineering section of the Utilities Department as-built drawings at the completion of construction of the installation 15 of water and wastewater utilities to be owned and maintained by the City in accordance with: 1. Two sets of as-built drawings (hard copies). 2. As-built drawings in 2008 or 2010 AutoCAD format. 3. As-built drawings in .tiff format. 4. Survey points in .csv format for all new utility features. Note: All survey data shall be collected by a California Licensed Land Surveyor. The surveyor is responsible to setup all control points needed to perform the survey work. The accuracy for all survey data shall be +/- 1cm. Survey data to be collected (what's applicable): I. Collect horizontal and vertical data for: 1. Sanitary sewer manholes (rim and invert elevations and depth) 2. Storm drain manholes and catch basins (rim and invert elevations and depth) 3. Water valves (cover and stem elevations) II. Collect horizontal data only for: 1. Service or lateral connection points at the main 2. Fire hydrants 3. Water meters 4. Sanitary sewer cleanout boxes Use CPAU WGW Engineering’s "feature codes" for naming convention available from CPAU WGW Engineering 1007 Elwell Ct, Palo Alto, CA 94303 (650) 566- 4501. All drawings and survey data shall be on the California State Plane Coordinate System - Zone 3 in units of feet. The horizontal datum shall be the North American Datum of 1983 (NAD83) and the vertical datum shall be based on Bestor 93. PUBLIC WORKS-OPERATIONS 1. All trash and recycling receptacles should be easily accessible for service with no obstacles. Applicant shall work with staff prior to building permit issuance to ensure proper size and number of receptacles. PUBLIC WORKS-TREES 1. Applicant shall work with staff to ensure all new street tree plantings are of the appropriate size and species prior to building permit issuance. PUBLIC WORKS WATER QUALITY PAMC 16.09.180(b)(9) Covered Parking 16 Drain plumbing for parking garage floor drains must be connected to an oil/water separator with a minimum capacity of 100 gallons, and to the sanitary sewer system PAMC 16.09.180(b)(10) Dumpsters for New and Remodeled Facilities New buildings and residential developments providing centralized solid waste collection, except for single-family and duplex residences, shall provide a covered area for a dumpster. The area shall be adequately sized for all waste streams and designed with grading or a berm system to prevent water runon and runoff from the area. PAMC 16.09.180(b)(14) Architectural Copper On and after January 1, 2003, copper metal roofing, copper metal gutters, copper metal down spouts, and copper granule containing asphalt shingles shall not be permitted for use on any residential, commercial or industrial building for which a building permit is required. Copper flashing for use under tiles or slates and small copper ornaments are exempt from this prohibition. Replacement roofing, gutters and downspouts on historic structures are exempt, provided that the roofing material used shall be prepatinated at the factory. For the purposes of this exemption, the definition of "historic" shall be limited to structures designated as Category 1 or Category 2 buildings in the current edition of the Palo Alto Historical and Architectural Resources Report and Inventory. PAMC 16.09.180(b)(5) Condensate from HVAC Condensate lines shall not be connected or allowed to drain to the storm drain system. PAMC 16.09.180(b)(b) Copper Piping Copper, copper alloys, lead and lead alloys, including brass, shall not be used in sewer lines, connectors, or seals coming in contact with sewage except for domestic waste sink traps and short lengths of associated connecting pipes where alternate materials are not practical. The plans must specify that copper piping will not be used for wastewater plumbing. 16.09.180(12) Mercury Switches Mercury switches shall not be installed in sewer or storm drain sumps. PAMC 16.09.165(h) Storm Drain Labeling Storm drain inlets shall be clearly marked with the words "No dumping - Flows to Bay," or equivalent. Undesignated Retail Space: PAMC 16.09 Newly constructed or improved buildings with all or a portion of the space with undesignated tenants or future use will need to meet all requirements that would have been applicable during design and construction. If such undesignated retail space becomes a food service facility the following requirements must be met: Designated Food Service Establishment (FSE) Project: A. Grease Control Device (GCD) Requirements, PAMC Section 16.09.075 & cited Bldg/Plumbing Codes 17 a. The plans shall specify the manufacturer details and installation details of all proposed GCDs. (CBC 1009.2) b. GCD(s) shall be sized in accordance with the 2007 California Plumbing Code. c. GCD(s) shall be installed with a minimum capacity of 500 gallons. d. GCD sizing calculations shall be included on the plans. See a sizing calculation example below. e. The size of all GCDs installed shall be equal to or larger than what is specified on the plans. f. GCDs larger than 50 gallons (100 pounds) shall not be installed in food preparation and storage areas. Santa Clara County Department of Environmental Health prefers GCDs to be installed outside. GCDs shall be installed such that all access points or manholes are readily accessible for inspection, cleaning and removal of all contents. GCDs located outdoors shall be installed in such a manner so as to exclude the entrance of surface and stormwater. (CPC 1009.5) g. All large, in-ground interceptors shall have a minimum of three manholes to allow visibility of each inlet piping, baffle (divider) wall, baffle piping and outlet piping. The plans shall clearly indicate the number of proposed manholes on the GCD. The Environmental Compliance Division of Public Works Department may authorize variances which allow GCDs with less than three manholes due to manufacture available options or adequate visibility. h. Sample boxes shall be installed downstream of all GCDs. i. All GCDs shall be fitted with relief vent(s). (CPC 1002.2 & 1004) j. GCD(s) installed in vehicle traffic areas shall be rated and indicated on plans. B. Drainage Fixture Requirements, PAMC Section 16.09.075 & cited Bldg/Plumbing Codes k. To ensure all FSE drainage fixtures are connected to the correct drain lines, each drainage fixture shall be clearly labeled on the plans. A list of all fixtures and their discharge connection, i.e. sanitary sewer or grease waste line, shall be included on the plans. l. A list indicating all connections to each proposed GCD shall be included on the plans. This can be incorporated into the sizing calculation. m. All grease generating drainage fixtures shall connect to a GCD. These include but are not limited to: a. Pre-rinse (scullery) sinks b. Three compartment sinks (pot sinks) c. Drainage fixtures in dishwashing room except for dishwashers shall connect to a GCD d. Examples: trough drains (small drains prior to entering a dishwasher), small drains on busing counters adjacent to pre-rinse sinks or silverware soaking sinks e. Floor drains in dishwashing area and kitchens f. Prep sinks g. Mop (janitor) sinks h. Outside areas designated for equipment washing shall be covered and any drains contained therein shall connect to a GCD. i. Drains in trash/recycling enclosures j. Wok stoves, rotisserie ovens/broilers or other grease generating cooking equipment with drip lines 18 k. Kettles and tilt/braising pans and associated floor drains/sinks n. The connection of any high temperature discharge lines and non-grease generating drainage fixtures to a GCD is prohibited. The following shall not be connected to a GCD: a. Dishwashers b. Steamers c. Pasta cookers d. Hot lines from buffet counters and kitchens e. Hand sinks f. Ice machine drip lines g. Soda machine drip lines h. Drainage lines in bar areas o. No garbage disposers (grinders) shall be installed in a FSE. (PAMC 16.09.075(d)). p. Plumbing lines shall not be installed above any cooking, food preparation and storage areas. q. Each drainage fixture discharging into a GCD shall be individually trapped and vented. (CPC 1014.5) C. Covered Dumpsters, Recycling and Tallow Bin Areas PAMC, 16.09.075(q)(2) r. New buildings constructed to house FSEs shall include a covered area for all dumpsters, bins, carts or container used for the collection of trash, recycling, food scraps and waste cooking fats, oils and grease (FOG) or tallow. s. The area shall be designed and shown on plans to prevent water run-on to the area and runoff from the area. t. Drains that are installed within the enclosure for recycle and waste bins, dumpsters and tallow bins serving FSEs are optional. Any such drain installed shall be connected to a GCD. u. If tallow is to be stored outside then an adequately sized, segregated space for a tallow bin shall be included in the covered area. D. Large Item Cleaning Sink, PAMC 16.09.075(m)(2)(B) v. FSEs shall have a sink or other area drain which is connected to a GCD and large enough for cleaning the largest kitchen equipment such as floor mats, containers, carts, etc. Recommendation: Generally, sinks or cleaning areas larger than a typical mop/janitor sink are more useful. E. GCD sizing criteria and an example of a GCD sizing calculation (2007 CPC) Sizing Criteria: GCD Sizing: Drain Fixtures DFUs Total DFUs GCD Volume (gallons) Pre-rinse sink 4 8 500 3 compartment sink 3 21 750 2 compartment sink 3 35 1,000 Prep sink 3 90 1,250 Mop/Janitorial sink 3 172 1,500 Floor drain 2 216 2,000 Floor sink 2 19 Example GCD Sizing Calculation: Note: w. All resubmitted plans to Building Department which include FSE projects shall be resubmitted to Water Quality. x. It is frequently to the FSE’s advantage to install the next size larger GCD to allow for more efficient grease discharge prevention and may allow for longer times between cleaning. There are many manufacturers of GCDs which are available in different shapes, sizes and materials (plastic, reinforced fiberglass, reinforced concrete and metal) y. The requirements will assist FSEs with FOG discharge prevention to the sanitary sewer and storm drain pollution prevention. The FSE at all times shall comply with the Sewer Use Ordinance of the Palo Alto Municipal Code. The ordinances include requirements for GCDs, GCD maintenance, drainage fixtures, record keeping and construction projects. BUILDING DIVISION 1. Since this building is more than two stories above grade, provide Mixed Use area calculations using Equation 5-1 in CBC Section 506.1 so that we can verify the area of each floor is less than the allowable area for the Occupancy Use and Type of Construction. In addition, provide the allowable area calculations of the entire building based on CBC Section 506.5 Quantity Drainage Fixture & Item Number DFUs Total 1 Pre-rinse sink, Item 1 4 4 1 3 compartment sink, Item 2 3 3 2 Prep sinks, Item 3 & Floor sink, Item 4 3 6 1 Mop sink, Item 5 3 3 1 Floor trough, Item 6 & tilt skillet, Item 7 2 2 1 Floor trough, Item 6 & steam kettle, Item 8 2 2 1 Floor sink, Item 4 & wok stove, Item 9 2 2 4 Floor drains 2 8 1,000 gallon GCD minimum sized Total: 30 20 2. Where the aggregate sum of the ratios of the actual story divided by the allowable for each floor does not exceed 3. Note that occupied roofs are considered an additional story. CBC 503, 504, 506, 508 and 509. 2. The S-1 Garage Occupancy or other S occupancy cannot have more than 29 occupants where only one exit is provided. CBC Table 1004.1.1 and CBC Table 1015.1. Provide an exiting plan for each story so that we may verify the proposed means of egress. CBC 1003. 3. Relocate the accessible parking spaces so that persons with disabilities are not compelled to walk or wheel behind parked cars other than their own. CBC 1129B.4.3, CBC 1129B.1 4. In addition to the required accessible parking spaces on Parking Level 1, redistribute accessible parking spaces so that there are spaces on the other parking levels P-2, P25 and First Floor. 5. All dwelling units on the 5th floor shall be adaptable and accessible. The story of the unit that is served by the building elevator is considered a ground floor and compliance is required with the requirements of CBC 1102A.3.2. 6. Exterior walls and openings located less than 5 ft from the property line are required to be rated and exterior wall openings located less than 3 ft from the property lines are not permitted. The maximum allowable area of protected openings permitted in an exterior wall located less than 5 ft is 15%. Provide wall area and window opening percentage calculations to verify the allowable area of openings in the exterior wall. Construction of exterior walls shall comply with CBC Section 601, 602 and 705. 7. Provide an exit diagram to verify the exit doors are arranged on each floor level to be separated in accordance with the minimum dimensions in CBC 1015.2.1. 8. Due to the construction type of this building, 3rd party outside plan check review will be required. FIRE 1. Any redevelopment shall be conducted with safeguarding of any monitoring wells on site. 2. Redevelopment shall not be conducted in such a way that future investigation or cleanup activities are impinged. 3. Install a monitored NFPA 13 fire sprinkler system 4. A valid Use & Occupancy Permit is required. ENVIRONMENTAL CHECKLIST FORM City of Palo Alto Department of Planning and Community Environment PROJECT DESCRIPTION: Request by Lund Smith on behalf of Lytton Gateway LLC for Planning and Transportation Commission review of a new Planned Community (PC) zone district and Comprehensive Plan land use designation amendment to allow a mixed use, five story building at a height of 64 feet for the enclosed floor area and 84 feet for the unenclosed corner tower feature, on the 21,713 square foot former Shell station site (335 and 355 Alma) zoned CD-C (P) and CD-N(P). The proposed project includes seven Below Market Rate housing units among the 14 rental housing units. Concessions for building encroachment into the maximum height and daylight plane standards are requested pursuant to California Government Code 65915. 1. PROJECT TITLE 355 Alma St. Palo Alto, California 94306 2. LEAD AGENCY NAME AND ADDRESS City of Palo Alto Department of Planning and Community Environment 250 Hamilton Ave. Palo Alto, CA 94303 3. CONTACT PERSON AND PHONE NUMBER Jason Nortz Planner, City of Palo Alto 650-617-3137 4. PROJECT SPONSOR’S NAME AND ADDRESS Lund Smith 3130 Alpine Rd., Suite 190 Portola Valley, CA 94028 5. APPLICATION NUMBER 11-PLN-00045 6. PROJECT LOCATION 355 Alma St. Palo Alto, CA 94303 Parcel Numbers: 120-25-111 & 120-25-112 355 Alma St. 11PLN-00045 Page 1 Mitigated Negative Declaration The project site is located in the northern section of the City of Palo Alto, in the northern part of Santa Clara County, west of U.S. Highway 101 and east of Interstate 280. 7. GENERAL PLAN DESIGNATION: The parcels have Comprehensive Plan land use designations of Neighborhood Commercial and Regional/Community Commercial based on the 1998-2010 Comprehensive Plan. Neighborhood Commercial includes shopping centers with off street parking or a cluster of streetfront stores that serve the immediate neighborhood. In some locations, residential and mixed use projects may also locate in this category. Non-residential floor area ratios will range up to 0.4. Regional/Community Commercial includes a wider variety of goods and services than the neighborhood shopping areas. This could include restaurants and non-retail services such as offices and banks. Non-residential floor area ratios will range from 0.35-2.0. 8. ZONING The site consists of two zoning designations: Downtown Community Commercial (CD-C) (P) for the 355 Alma parcel (120-25-111) and Downtown Neighborhood Commercial (CD-N) (P) for the 335 Alma parcel (120-25-112). The site area of the 355 Alma parcel is 14,400 square feet, accounting for 66% percent of the project site. The 335 Alma parcel area is 7,313 square feet, making up the remaining 34% of the project site. The 355 Alma Street parcel is located within the Downtown University Avenue Parking Assessment District, while the 335 Alma Street parcel is not in the district. The CD downtown commercial district is intended to be a comprehensive zoning district for the downtown business area, accommodating a wide range of commercial uses serving citywide and regional business and service needs, as well as providing for residential uses and neighborhood service needs. The CD commercial downtown district is specifically created to promote the following objectives in the downtown area of Palo Alto: (1) control the rate and size of commercial development; (2) preserve and promote ground-floor retail uses; (3) enhance pedestrian activity; (4) create harmonious transitions from the commercial areas to adjacent residential areas; and (5) where applied in conjunction with Chapter 16.49 of the Palo Alto Municipal Code, preserve historic buildings. 9. PROJECT DESCRIPTION The project is a request for a new Planned Community zone district and Comprehensive Plan land use designation amendment to allow a mixed use, five-story building to be known as the “101 Lytton Avenue project” on the former Shell Station site. The parcels have zoning designations of Downtown Neighborhood Commercial (CD-N (P)) and Downtown Community Commercial (CD-C (P)). The pedestrian shopping combining district (P) is also applicable to both zoning districts. The associated 355 Alma St. 11PLN-00045 Page 2 Mitigated Negative Declaration Comprehensive Plan Land Use designations are Neighborhood Commercial and Regional/Community Commercial. The requested amendment would result in a Regional/Community Commercial designation for the entire site. The proposed new building and use would replace the existing automobile service station, so that the two adjacent commercially zoned parcels would form a single Planned Community (PC) zoned site. The PC district is intended to accommodate developments for residential, commercial, professional, research, administrative, industrial, or other activities, including combinations of uses appropriately requiring flexibility under controlled conditions not otherwise attainable under other districts. The project at 335 and 355 Alma Street is the demolition of an existing 2,300 square foot automobile service station and construction of 65,070 square feet of new floor area within a five-story, 64 foot tall mixed use building on the 21,713 square foot site (a floor area ratio of 2.9:1).The building will feature a predominant tower element that is situated along the southwest corner of the building. The tower element will extend beyond the top of the fifth floor to a height of 84 feet. The mixed use building is intended to serve as a promenade entry to downtown beginning with the crosswalk from the University Avenue Transit Station. The project would include two levels of below grade parking, two ground floor retail locations totaling approximately 4,155 square feet, ground floor office space plus three floors of additional office space, and a fifth floor consisting of 14 residential units including 8 one bedroom units and 6 studio units. Five of the 14 residential units would be provided as below market rate (affordable) units. All units will be for rent only. The main volume of the building would be primarily located along Alma Street, extending around the corner to Lytton Avenue. The ground floor along Alma St. would include a 2,591 square foot retail space and a portion of the office lobby area. The lobby area continues around the corner along Lytton Ave. transitioning to a smaller 1,564 square foot retail component (a café or similar) for a total of 8,303 square feet of floor area on the first floor. Three levels of office space would be provided on floors 2, 3 and 4 with each floor consisting of approximately 15,000 square feet of floor area. The fifth floor would consist of 14 residential units, including 8 one bedroom units and 6 studio units. Seven of the 14 residential units would be oriented directly along the Alma Street elevation Two studio units would be oriented along Lytton Ave. and the remaining five residential units would be situated within the interior of the site, along the northeast elevation. The residential units would range in size from 405 square feet for the studio units to 607 square feet for the one bedroom units. Open space for the development would be provided as two roof top decks. The residential roof deck would be at the fifth level directly above the fourth floor of the retail component along Lytton Ave. It would have an area of approximately 4,335 square feet. The roof top deck for the office space would be located directly on top of the residential units above the fifth floor. The office roof top deck would have an area of approximately 11,000 square feet. . The total floor area breakdown for the project site is as follows: Office Retail Residential First Floor: 3,277 sf 4,155 sf 871 sf Second Floor: 14,666 sf 83 sf Third Floor: 15,536 sf 83 sf Fourth Floor: 15,536 sf 83 sf Fifth Floor 10,780 sf 355 Alma St. 11PLN-00045 Page 3 Mitigated Negative Declaration Total: 49,015 sf 4,155 sf 11,900 sf Building Total: 65,070 sf By discontinuing the automobile service station use, the project would eliminate three of the four existing entryways (two on Lytton Avenue and one on Alma Street). The closure of these curb cuts would allow for additional on-street parking as well as helping to create a more walk-able, pedestrian friendly environment. Vehicular access to the site would be provided using one main entry along Alma St. near the northern edge of the property. The concealed entryway would cut through a section of the first floor between the edge of the office space and the stairwell. Beyond the concealed entryway would be surface parking spaces and the entry ramp leading to two levels of below grade parking. The below grade parking would provide 110 spaces and the surface parking would provide an additional 13 spaces. An as yet undetermined number of the surface parking spaces and underground spaces would be electric vehicle (EV) charging spaces. The project would incorporate a variety of sustainable design and transportation friendly concepts that would help the development achieve both Cal Green Tier II requirements for the commercial portion of the project and meet Build it Green, Green Point Rated requirements for the residential portion of the project. In addition to these requirements the project would also be subject to review under the standards for the Leadership in Energy and Environmental Design for Neighborhood Development (LEED-ND) pilot program. 10. SURROUNDING LAND USES AND SETTING The existing site is located on the northeast corner of Alma Street and Lytton Avenue (as shown on Attachment A to this report, site location map). The site was previously occupied by a Shell automobile service station but has been unoccupied since the closure of the site in August 2010. The University Avenue CalTrain station is located immediately west of the site across Alma Street. South of the site across Lytton Avenue is a four-story office building occupied by the technology company A9. Directly east of the site along Lytton Avenue is a one-story multi- tenant commercial and retail building occupied by OnLive and Darbar Restaurant. North of the site is one story commercial building occupied by a technology start-up company. Northeast of the site on High Street are two single family residential lots that are zoned for medium density multi-family use. At the north end of the block at the corner of Alma Street and Everett Avenue is Palo Alto Fire Station #1. The site is comprised of two parcels for a total of nearly 0.50 acre (21,713 square feet or 0.498 acre), currently addressed as 335 and 355 Alma Street. The site consists of an abandoned service station, service garage and a covered fueling station with four pumps totaling approximately 2,300 square feet. The remainder of the site consists of paved area for parking/circulation and minimal landscaping. Access to the site can be gained from either Lytton Avenue or Alma Street with four existing entry lanes (two each on Alma Street and Lytton Avenue.) Existing 355 Alma St. 11PLN-00045 Page 4 Mitigated Negative Declaration landscaping on the site includes three pine trees and eight street trees. The site is currently enclosed by a six foot high chain link fence for safety reasons. 11. OTHER PUBLIC AGENCIES Office of the County Clerk-Recorder, Santa Clara Valley Transportation Authority. ENVIRONMENTAL CHECKLIST AND DISCUSSION OF IMPACTS EVALUATION OF ENVIRONMENTAL IMPACTS 1) A brief explanation is required for all answers except "No Impact" answers that are adequately supported by the information sources a lead agency cites in the parentheses following each question. [A "No Impact" answer is adequately supported if the referenced information sources show that the impact simply does not apply to projects like the one involved (e. g. the project falls outside a fault rupture zone). A "No Impact" answer should be explained where it is based on project-specific factors as well as general standards (e. g. the project will not expose sensitive receptors to pollutants, based on a project-specific screening analysis).] 2) All answers must take account of the whole action involved, including off-site as well as on-site, cumulative as well as project-level, indirect as well as direct, and construction as well as operational impacts. 3) Once the lead agency has determined that a particular physical impact may occur, then the checklist answers must indicate whether the impact is potentially significant, less than significant with mitigation, or less than significant. Potentially Significant Impact” is appropriate if there is substantial evidence that an effect may be significant. If there are one or more “Potentially Significant Impact” entries when the determination is made, an EIR is required. 4) “(Mitigated) Negative Declaration: Less Than Significant With Mitigation Incorporated” applies where the incorporation of mitigation measures has reduced an effect from “Potentially Significant Impact” to a “Less than Significant Impact.” The lead agency must describe the mitigation measures, and briefly explain how they reduce the effect to a less than significant level (mitigation measures from Section 17, “Earlier Analysis,” may be cross-referenced). 5) Earlier analysis may be used where, pursuant to the tiering, program EIR, or other CEQA process, an effect has been adequately analyzed in an earlier EIR or negative declaration. Section 15063 (C)(3) (D). In this case, a brief discussion should identify the following: a) Earlier Analysis Used. Identify and state where they are available for review. b) Impacts Adequately Addressed. Identify which effects from the above checklist were within the scope of and adequately analyzed in an earlier document pursuant to applicable legal standards, and state whether such effects were addressed by mitigation measures based on the earlier analysis. 355 Alma St. 11PLN-00045 Page 5 Mitigated Negative Declaration c) Mitigation Measures. For effects that are “Less than Significant with Mitigation Measures Incorporated,” describe the mitigation measures which were incorporated or refined from the earlier document and the extent to which they address site-specific conditions for the project. 6) Lead agencies are encouraged to incorporate into the checklist references to information sources for potential impacts (e.g. general plans, zoning ordinances). Reference to a previously prepared or outside document should, where appropriate, include a reference to the page or pages where the statement is substantiated. 7) Supporting Information Sources: A source list should be attached, and other sources used or individuals contacted should be cited in the discussion. 8) The explanation of each issue should identify: a) the significance criteria or threshold, if any, used to evaluate each question; and b) the mitigation measure identified, if any, to reduce the impact to less than significance. DISCUSSION OF IMPACTS The following Environmental Checklist was used to identify environmental impacts, which could occur if the proposed project is implemented. The left-hand column in the checklist lists the source(s) for the answer to each question. The sources cited are identified at the end of the checklist. Discussions of the basis for each answer and a discussion of mitigation measures that are proposed to reduce potential significant impacts are included. A. AESTHETICS Issues and Supporting Information Resources Would the project: Sources Potentially Significant Issues Potentially Significant Unless Mitigation Incorporated Less Than Significant Impact No Impact a) Substantially degrade the existing visual character or quality of the site and its surroundings? 1,2,5,6 x b) Have a substantial adverse effect on a public view or view corridor? 1,2,3,5,6, x c) Substantially damage scenic resources, including, but not limited to, trees, rock outcroppings, and historic buildings within a state scenic highway? 1,2- Map L4,5,6 x d) Violate existing Comprehensive Plan policies regarding visual resources? 1,2,5,6 x e) Create a new source of substantial light or glare which would adversely affect day or nighttime views in the area? 1,5,6, x f) Substantially shadow public open space (other than public streets and adjacent sidewalks) between 9:00 a.m. and 3:00 p.m. from September 21 to March 21? 1,5,6, x 355 Alma St. 11PLN-00045 Page 6 Mitigated Negative Declaration DISCUSSION: The project at 335 and 355 Alma Street is the construction of 65,070 square feet of new floor area within a five-story, 64 foot tall mixed use building on the 21,713 square foot site. The intention is to create a “gateway” building for Downtown Palo Alto as seen from the western edge of the downtown. The building will feature a predominant tower element that is situated along the southwest corner of the building. The tower element will extend beyond the top of the fifth floor to a height of 84 feet. The mixed use building is intended to serve as a promenade entry to downtown beginning with the crosswalk from the University Avenue Transit Station. The project would include two levels of below grade parking, ground floor retail of approximately 4,155 square feet, ground floor office space plus three floors of additional office space, and a fifth floor consisting of 14 residential units. The areas which are most sensitive to the visual impacts are those that are seen by the most people and nearby residential areas. Palo Alto Comprehensive Plan Policy L-49 instructs, “Design buildings to revitalize streets and public spaces and to enhance a sense of community and personal safety. Provide an ordered variety of entries, porches, windows, bays and balconies along public ways where it is consistent with neighborhood character; avoid blank or solid walls at street level; and include human- scale details and massing.” The project calls for widening the sidewalks on both Alma St. and Lytton Ave., decreasing the crosswalk distance to increase pedestrian safety along both Alma St. and Lytton Ave. and provide pedestrian scale awnings that span the entire project frontage. Policy L-71instructs, “Strengthen the identity of important community gateways, including entrances to the City at Highway 101, El Camino Real and Middlefield Road; the Caltrain stations; entries to commercial districts; and Embarcadero Road at El Camino Real”. The project is located directly across the street from the University Avenue Caltrain station. The project is intended to be developed as a “gateway” to downtown by using such design features as tower element that draws attention to the corner and more specifically to train riders. Pedestrian amenities and connectivity are elements of the project that are highly emphasized. Examples of this include the planting of many new street trees on both sides of Alma St. to help create an entrance canopy into downtown, providing retail components along both Lytton Ave. and Alma St. and increasing the walkable area directly in front of the site to make the site more pedestrian friendly. The architectural review process will address the common design aspects that relate to the project, in terms of scale, massing, and neighborhood context, as well as the smaller design details that are integral to the success of the project. It is through this process that the visual character of the project will be defined and as a result, will mitigate the potentially significant impacts to the site and the surrounding areas. The project will also be subject to show consistency with the Downtown Urban Design Guidelines and the Context Based Design Criteria that the ARB will also use as part of the review process. At a height of 64 feet, plus additional height for a tower element that extends to 84 feet, the proposed building will bring a considerably taller structure to the site than what currently exists. The building massing, fenestration, rooftop mechanical systems, and architectural details should be designed within the context of the immediate commercial neighborhood while respecting the neighborhoods that adjoin this district. Again, the architectural review process in put in place to help the proposed project be designed in such a manner that is in line with and consistent with the immediate neighborhood. 355 Alma St. 11PLN-00045 Page 7 Mitigated Negative Declaration Potential impacts from light and glare sources from the building, as well as nighttime automobile traffic entering or exiting the facility on Alma St., cannot be assessed until detailed design and photometric information has been submitted. A photometric plan has been provided as part of the project plan set but only limited information is provided. Based the plans it appears that that there is minimal impact to the abutting residential properties located along the northeastern property edge. According to the plans the lighting does not exceed the required 0.5 foot candles as measured at the abutting residential property line. All additional lighting including the lighting used for the roof top open space areas will be subject to the architectural review process to ensure all lighting impacts will be as minimal as possible and will not add spillover beyond the perimeter of the property line of the development. Mitigation Measure: None B. AGRICULTURAL RESOURCES Issues and Supporting Information Resources Would the project: Sources Potentially Significant Issues Potentially Significant Unless Mitigation Incorporated Less Than Significant Impact No Impact a) Convert Prime Farmland, Unique Farmland, or Farmland of Statewide Importance (Farmland), as shown on the maps prepared pursuant to the Farmland Mapping and Monitoring Program of the California Resources Agency, to non-agricultural use? 1,2,3,5,6 X b) Conflict with existing zoning for agricultural use, or a Williamson Act contract? 1,2-Map L- 9,3,5 X c) Involve other changes in the existing environment which, due to their location or nature, could result in conversion of Farmland, to non-agricultural use? 1,2-MapL- 9,3,6 X DISCUSSION: The site is not located in a “Prime Farmland”, “Unique Farmland”, or “Farmland of Statewide Importance” area, as shown on the maps prepared for the Farmland Mapping and Monitoring Program of the California Resources Agency. The site is not zoned for agricultural use, and is not regulated by the Williamson Act. Mitigation Measures: None C. AIR QUALITY 355 Alma St. 11PLN-00045 Page 8 Mitigated Negative Declaration Issues and Supporting Information Resources Would the project: Sources Potentially Significant Issues Potentially Significant Unless Mitigation Incorporated Less Than Significant Impact No Impact a) Conflict with or obstruct with implementation of the applicable air quality plan (1982 Bay Area Air Quality Plan & 2000 Clean Air Plan)? 1,2,9 X b) Violate any air quality standard or contribute substantially to an existing or projected air quality violation indicated by the following: 1,2 9 X i. Direct and/or indirect operational emissions that exceed the Bay Area Air Quality Management District (BAAQMD) criteria air pollutants of 80 pounds per day and/or 15 tons per year for nitrogen oxides (NO), reactive organic gases (ROG), and fine particulate matter of less than 10 microns in diameter (PM10); 1,2,9 X ii. Contribute to carbon monoxide (CO) concentrations exceeding the State Ambient Air Quality Standard of nine parts per million (ppm) averaged over eight hours or 20 ppm for one hour (as demonstrated by CALINE4 modeling, which would be performed when a) project CO emissions exceed 550 pounds per day or 100 tons per year; or b) project traffic would impact intersections or roadway links operating at Level of Service (LOS) D, E or F or would cause LOS to decline to D, E or F; or c) project would increase traffic volumes on nearby roadways by 10% or more)? 1,2,9 X c) Result in a cumulatively considerable net increase of any criteria pollutant for which the project region is non-attainment under an applicable federal or state ambient air quality standard (including releasing emissions which exceed quantitative thresholds for ozone precursors)? 1,2,9 X d) Expose sensitive receptors to substantial levels of toxic air contaminants? 1,9 X i. Probability of contracting cancer for the Maximally Exposed Individual (MEI) exceeds 10 in one million 1,9 X ii. Ground-level concentrations of non- carcinogenic TACs would result in a hazard index greater than one (1) for the MEI 1,9 e) Create objectionable odors affecting a substantial number of people? 1,9 X g) Not implement all applicable construction emission control measures recommended in the Bay Area Air Quality Management District 1 X 355 Alma St. 11PLN-00045 Page 9 Mitigated Negative Declaration 355 Alma St. 11PLN-00045 Page 10 Mitigated Negative Declaration Issues and Supporting Information Resources Would the project: Sources Potentially Significant Issues Potentially Significant Unless Mitigation Incorporated Less Than Significant Impact No Impact CEQA Guidelines? DISCUSSION: The project is not expected to result in a significant impact on air quality. The project may result in temporary dust emissions due to construction activity. The project would have emissions well below the Bay Area Air Quality Management District’s (BAAQMD) thresholds. Development of the project site would be considered urban infill and the project is too small to incorporate project specific transportation control measures listed in the latest Clean Air Plan (i.e., Bay Area 2010 Clean Air Plan). Due to the size of the project, construction period emissions would be less than significant. The BAAQMD identified the size of land use projects that could result in significant air pollutant emissions. For construction impacts, the single family project size was indentified as 114 dwelling units. For operations impacts, the project size was indentified as 325 dwelling units. Since the project proposes 14 dwelling units, it is concluded that emissions would be below the BAAQMD significance thresholds for both construction exhaust and operational emissions. The project would not violate any air quality standard. Carbon monoxide emissions from traffic generated by the project would be the pollutant of greatest concern at the local level. The project would generate a small amount of traffic, so the contribution of project generated traffic would be minimal and the project would not cause or contribute to a violation of an ambient air quality standard. The project’s impact to sensitive receptors would be less than significant as long as construction period mitigation measures are put in place and ventilation systems that filter fine particulate matter are also put in place (as described in Mitigation C-1 and C-2 below). Sensitive receptors are defined as children, elderly, or ill people who can be more adversely affected by air quality problems. The proposed project will be located in an area consisting of commercial, residential and public facility uses. Construction activity is anticipated to involve the demolition of the existing buildings as well as building construction. During construction related activities dust would be the primary pollutant generated. The nearby land uses most affected by the construction generated dust would be those residences located directly south of the site due to the typical winds generated during late spring through early fall. The BAAQMD considers these impacts to less than significant if best management practices are employed to reduce the emissions. The other potential pollutant generated would be diesel exhaust from heavy construction equipment and heavy duty truck traffic. Diesel exhaust poses both a health and nuisance impact to nearby receptors. The construction activities that will generate the diesel exhaust are anticipated to occur during a relatively short time and therefore the impacts are considered to be less than significant if reasonable control measures put in place. Although sensitive receptors are in the immediate vicinity of the project, the construction impacts would be addressed as conditions of the architectural review approval, resulting in a less than significant impact to sensitive receptors. The residential portion of the project would be about 250 feet from the the Caltrain Palo Alto Station and the rail lines that run parallel to Alma Street. Based on the current Caltrain schedule, 74 trains run along this line during the weekdays and 34 trains during the weekend. In addition to the Caltrain trains, there are about four freight trains that also use this rail line on a daily basis. By 2025 it is anticipated that Caltrian will modernize its system to include the electrification of the railroad. If the electrification happens emissions would be reduced by 90 percent , essentially eliminating the air quality impacts of the Caltrain in the project site. However, prior to any electrification of Caltrain occurring, future residences of the project would be exposed to high levels of diesel particulate matter emissions from rail traffic (i.e., primarily Caltrain) that would be considered a significant impact. Use of ventilation systems that provide some level of filtration of fine particulates would reduce this impact to a less than significant level. Mitigation Measures C-1: Implementation of the measures recommended by BAAQMD and listed below would reduce the air quality impacts associated with grading and new construction to a less than significant. The contractor shall implement the following Best Management Practices that are required for all projects: 1. All exposed surface (e.g., parking areas, staging areas, soil piles, grading areas, and unpaved access roads) shall be watered two times per day. 2. All haul trucks transporting soil, sand, or other loose material off site shall be covered. 3. All visible mud or dirt track-out onto adjacent public roads shall be removed using wet power vacuum street sweepers at least once per day. The use of dry power sweeping is prohibited. 4. All vehicle speeds on unpaved roads shall be limited to 15 mph 5. All roadways, driveways, and sidewalks, to be paved shall be completed as soon as possible. Building pads shall be laid as soon as possible after grading unless seeding or soil binders are used. 6. Idling times shall be minimized either by shutting equipment off when not in use or reducing the maximum idling time to 5 minutes. Clear signage shall be provided for construction workers at all access points. 7. All construction equipment shall be maintained and properly tuned in accordance with manufacturers specifications. All equipment shall be checked by a certified mechanic and determined to be running in proper condition prior to operation. 8. Avoid staging construction equipment adjacent to existing residences or sensitive receptors. 9. Post a publicly visible sign with the telephone number and a person to contact at the Lead Agency regarding dust complaints. This person shall respond and take corrective action within 48 hours. The Air District’s phone number shall also be visible to ensure compliance with applicable regulations. Mitigation Measure C-2: Provide ventilation systems that filter fine particulate matter. The BAAQMD CEQA Air Quality Guidelines recommend as mitigation that projects install and maintain air filtration systems of fresh air supply. These systems should be installed on either an individual unit-by-unit basis, with individual air intake and exhaust ducts ventilating each unit separately, or through a centralized building ventilation system. The ventilation system should be certified to achieve certain effectiveness. It is anticipated that these units could achieve reductions of 80% of ambient PM2.5 concentrations (including DPM) from indoor areas. The filtrations systems would have to be maintained (including filter replacements) through 2020 or earlier if Caltrain is electrified. 355 Alma St. 11PLN-00045 Page 11 Mitigated Negative Declaration D. BIOLOGICAL RESOURCES Issues and Supporting Information Resources Would the project: Sources Potentially Significant Issues Potentially Significant Unless Mitigation Incorporated Less Than Significant Impact No Impact a) Have a substantial adverse effect, either directly or through habitat modifications, on any species identified as a candidate, sensitive, or special status species in local or regional plans, policies, or regulations, or by the California Department of Fish and Game or U.S. Fish and Wildlife Service? 1, 2- MapN1, 5,6 x b) Have a substantial adverse effect on any riparian habitat or other sensitive natural community identified in local or regional plans, policies, regulations, including federally protected wetlands as defined by Section 404 of the Clean Water Act (including, but not limited to, marsh, vernal pool, coastal, etc.) through direct removal, filling, hydrological interruption, or other means? 1,2- MapN1, 5,6 x c) Interfere substantially with the movement of any native resident or migratory fish or wildlife species or with established native resident or migratory wildlife corridors, or impede the use of native wildlife nursery sites? 1, 2- MapN1, 5,6 x d) Conflict with any local policies or ordinances protecting biological resources, such as a tree preservation policy or as defined by the City of Palo Alto’s Tree Preservation Ordinance (Municipal Code Section 8.10)? 1, 2, 3, 5,6,7,8,17 x e) Conflict with any applicable Habitat Conservation Plan, Natural Community Conservation Plan, or other approved local, regional, or state habitat conservation plan? 1, 2, 3, 5, 6, 7,8,17 x DISCUSSION: The project site is located in an established urban area with no riparian or tree habitat for the candidate, sensitive, or special status species in the area. No endangered, threatened, or rare animals, insects and plant species have been identified at this site. The project site is located in an established residential urban setting. The project site is located approximately ¼ mile from San Francisquito Creek, which, at its closest point to the project site, is the last riparian free-flowing urban creek on the southern Peninsula of San Francisco Bay. The mixed use project would not impact the creek, in that the project site is in an established commercial and residential area and on a site consists of an abandoned service station, service garage and a covered fueling station with four pumps. The remainder of the site consists of paved area for parking/circulation and minimal landscaping. However, due to the fact this site is located approximately ¼ mile from the nearest creek, there are no anticipated changes to the creek banks or habitat along the creek. These factors 355 Alma St. 11PLN-00045 Page 12 Mitigated Negative Declaration would result in a less than significant impact to any possible riparian habitat at San Francisquito Creek. The Comprehensive Plan includes policies, programs and implementing actions to ensure the preservation of biological tree resources. The following policies and programs are relevant to the proposed Project: Policy N-14: Protect, revitalize, and expand Palo Alto’s urban forest. Policy N-15: Require new commercial, multi-unit, and single family housing projects to provide street trees and related irrigation systems. Policy N-17: Preserve and protect heritage trees, including native oaks and other significant trees, on public and private property. Program N-16: Require replacement of trees, including street trees lost to new development. Program N-17: Develop and implement a plan for maintenance, irrigation, and replacement of trees. Program N-19: Achieve a 50 percent tree canopy for streets, parks, and parking lots. Palo Alto’s Regulated Trees The City of Palo Alto Municipal Code regulates specific types of trees on public and private property for the purpose of avoiding their removal or disfigurement without first being reviewed and permitted by the City’s Planning or Public Works Departments. Three categories within the status of regulated trees include protected trees (PAMC 8.10), public trees (PAMC 8.04.020) and designated trees (PAMC 18.76, when so provisioned to be saved and protected by a discretionary approval.) Palo Alto Municipal Code Tree Preservation Ordinance Chapter 8.10 of the Municipal Code (the Tree Preservation Ordinance) protects a category of Regulated Trees, on public or private property from removal or disfigurement. The Regulated Tree category includes: Protected Trees. Includes all coast live oak (Quercus agrifolia) and valley oak trees 11.5 inches or greater in diameter, coast redwood trees 18 inches or greater in diameter, and heritage trees designated by the City Council according to any of the following provisions: it is an outstanding specimen of a desirable species; it is one of the largest or oldest trees in Palo Alto; or it possesses distinctive form, size, age, location, and/or historical significance. Street Trees. Also protected are City-owned street trees (all trees growing within the street right- of-way, outside of private property) Designated Trees. Designated trees are established by the City when a project is subject to discretionary design review process by the Architecture Review Board that under Municipal Code Chapter 18.76.020(d)(11) includes as part of the findings of review, “whether natural features are appropriately preserved and integrated with the project.” Outstanding tree specimens 355 Alma St. 11PLN-00045 Page 13 Mitigated Negative Declaration 355 Alma St. 11PLN-00045 Page 14 Mitigated Negative Declaration contributing to the existing site, neighborhood or community, and that have a rating of “High” Suitability for Preservation as reflected in Table 3.6-1 would constitute a typical designated tree. Palo Alto Tree Preservation Guidelines For all development projects within the City of Palo Alto, discretionary or ministerial, a Tree Disclosure Statement (TDS) is part of the submittal checklist to establish and verify trees that exist on the site, trees that overhang the site originating on an adjacent property, and trees that are growing in a City easement, parkway, or publicly owned land. The TDS stipulates that a Tree Survey is required (for multiple trees), when a Tree Preservation Report is required (development within the dripline of a Regulated Tree), and who may prepare these documents. The City of Palo Alto Tree Technical Manual1 (Tree Technical Manual) describes acceptable procedures and standards to preserve Regulated Trees, including: The protection of trees during construction; If allowed to be removed, the acceptable replacement strategy; Maintenance of protected trees (such as pruning guidelines); Format and procedures for tree reports; and Criteria for determining whether a tree is a hazard. Site Tree Resources Impact Assessment The proposed mixed use project includes demolition of all existing buildings, pavement and other structures and redevelopment of the entire site. Existing trees are located within areas proposed for demolition, grading and construction. As such, significant impacts to both tree roots and crowns would be unavoidable. The applicant’s submittal, Tree Report and Protection Plan prepared by Arbor Resources, identifies 21 trees of five various species. Nine of 21 trees are situated within the public right of way and are regarded as street trees (a regulated tree as noted above). None of the inventoried trees are defined as protected trees. Due in large part to the design of the project, including below ground and surface parking areas, the project is proposing to remove all but one of the 21 trees. All eight existing street trees will be removed and replaced with nine new street trees. Six additional street trees will be added directly across the street from the project site (on the Alma side of the street) to help provide visual appeal and create a tree canopy that will help provide a gateway type of appearance to the intersection.. The City Tree Technical Manual (TTM) development guidelines require the appraised value for each tree to be presented with the development application for the purpose of identifying asset value, security bond incentive for protection and care and/or damage or replacement value in the event of a destroyed tree. Trees classified as street trees have a combined value of $24,410. 1 City of Palo Alto, City of Palo Alto Tree Technical Manual, June 2001. Provided on line at http://www.cityofpaloalto.org/environment/urban_canopy.asp The Arborist Report prepared by Arbor Resources identifies design recommendations to be incorporated into the project that help preserve the health of the new trees as well as limiting the impacts the new trees could have on the project site. Summary As previously mentioned, this application is for a new Planned Community (PC) zone district and Comprehensive Plan land use designation amendment to allow a mixed use project.. The applicant shall work with staff during the ARB review process, to ensure all City standards regarding tree removal and replacement are met. The applicant shall also work with staff to ensure all proposed landscape materials proposed in specific development project plans are drought tolerant, non-invasive plants that meet all City Standards. Mitigation Measure D-1: Provide optimum tree replacement for loss of eight street trees as identified above. The applicant shall work with the City Arborist to identify adequate replacement trees (size, species, location, etc…) prior to development project approval. Significance after Mitigation: Less than significant E. CULTURAL RESOURCES Issues and Supporting Information Resources Would the project: Sources Potentially Significant Issues Potentially Significant Unless Mitigation Incorporated Less Than Significant Impact No Impact a) Directly or indirectly destroy a local cultural resource that is recognized by City Council resolution? 1,2- MapL-7 x b) Cause a substantial adverse change in the significance of an archaeological resource pursuant to 15064.5? 1,2- MapL8 x c) Directly or indirectly destroy a unique paleontological resource or site or unique geologic feature? 1,2- MapL8 x d) Disturb any human remains, including those interred outside of formal cemeteries? 1,2- MapL8 x e) Adversely affect a historic resource listed or eligible for listing on the National and/or California Register, or listed on the City’s Historic Inventory? 1,2- MapL7 x f) Eliminate important examples of major periods of California history or prehistory? 1 x 355 Alma St. 11PLN-00045 Page 15 Mitigated Negative Declaration DISCUSSION: The Comprehensive Plan indicates that the site is in a moderate archaeological resource sensitivity zone. Most of the City area east of Interstate 280 is designated in this zone. Although existing and historic development has altered the native landscape, the potential exists that now-buried Native American sites could be uncovered in future planning area construction. If archaeological materials are discovered the applicant would be required to perform additional testing and produce an Archaeological Monitoring and Data recovery Plan (AMDRP) to be approved prior to the start of construction. The City’s standard condition of approval will address this potentiality. Mitigation Measures: None F. GEOLOGY, SOILS AND SEISMICITY Issues and Supporting Information Resources Would the project: Sources Potentially Significant Issues Potentially Significant Unless Mitigation Incorporated Less Than Significant Impact No Impact a) Expose people or structures to potential substantial adverse effects, including the risk of loss, injury, or death involving: See below i) Rupture of a known earthquake fault, as delineated on the most recent Alquist- Priolo Earthquake Fault Zoning Map issued by the State Geologist for the area or based on other substantial evidence of a known fault? Refer to Division of Mines and Geology Special Publication 42. 2-MapN- 5, 5 x ii) Strong seismic ground shaking? 2-MapN- 10, 5,10 x iii) Seismic-related ground failure, including liquefaction? 2-MapN- 5, 6,11 x iv) Landslides? 2-MapN- 5, 5,10 x b) Result in substantial soil erosion or the loss of topsoil? 1, 2, 5,10 x c) Result in substantial siltation? 1,2,5,10 x d) Be located on a geologic unit or soil that is unstable, or that would become unstable as a result of the project, and potentially result in on- or off-site landslide, lateral spreading, subsidence, liquefaction or collapse? 2-MapN- 5, 5,10 x e) Be located on expansive soil, as defined in Table 18-1-B of the Uniform Building Code (1994), creating substantial risks to life or 2-MapN- x 355 Alma St. 11PLN-00045 Page 16 Mitigated Negative Declaration property? 5, 5,10 f) Have soils incapable of adequately supporting the use of septic tanks or alternative waste water disposal systems where sewers are not available for the disposal of waste water? 1,5,10 x g) Expose people or property to major geologic hazards that cannot be mitigated through the use of standard engineering design and seismic safety techniques? 1,4,5,10 x DISCUSSION: The entire state of California is in a seismically active area. According to the Palo Alto Comprehensive Plan the project site is not in an area that is subject to very strong ground shaking in the event of an earthquake or in an area subject to surface rupture, liquefaction, or earthquake induced landslides. Based on the Geotechnincal Investigation provided by Romig Engineers, Inc. (Source reference #10) the site is suitable for the proposed five-story development provided the recommendations presented in the report are followed during design and construction. The primary geotechnical concerns for the proposed building are the need for shoring the sides of the excavation for the below grade parking and the potential for ground water to rise above the finished floor elevation of the basement floor. Based on the proposed basement elevation, the basement foundation is expected to bear in very stiff to hard clays and dense to very dense sands. Based on the recommendation of Romig (as referenced in the Geotechnical Investigation), the building may be supported on a mat foundation bearing on dense sands and ery stiff clay soils at the lower basement level. Fault Rupture – the site is not located in a State of California Earthquake Fault Zone or area where fault rupture is considered likely. Therefore, active faults are not believed to exist beneath the site and the potential for fault rupture at the site is considered low. Ground Shaking – The site is located in an active seismic area. Strong ground shaking should therefore be expected several times during the life of the building, as is typical for sites throughout the Bay Area. The building should be designed in accordance with current earthquake resistance standards. Differential Compaction – Differential compaction can occur during moderate and large earthquakes when soft or loose, natural or fill soils are densified and settle, often unevenly across a site. The soils encountered on the project site were generally stiff to hard clays and dense to very dense sands. In the opinion of Romig Engineers, the likelihood of a significant differential compaction affecting the building is low provided the recommendations presented in the Geotechnical Investigation dated July 2011 and provided as Source Reference #10 are followed during design and construction Development on the site would be required to conform to all requirements in the Uniform Building Code, which includes provisions to ensure that the design and construction of all buildings includes provisions to resist damage from earthquakes to the extent feasible and acceptable. Substantial or permanent changes to the site topography are not expected. Standard conditions of development approval would require submittal of a final grading and drainage plan for the project for approval by the Public Works Department prior to the issuance of a building permit. The application of standard grading, drainage, and erosion control measures as a part of the approved grading and drainage plan is expected to avoid any grading-related impacts. 355 Alma St. 11PLN-00045 Page 17 Mitigated Negative Declaration Mitigation Measures F-1: The design of all buildings shall be in accordance with current earthquake resistant standards, including the 2007 CBC guidelines and design recommendations regarding the potential for localized liquefaction presented in the Geotechnical Investigation provided by TRC. Mitigation Measures F-2: Prior to final approval of any development plan and prior to building permit issuance the applicant will be required to retain a geotechnical engineer to 1) perform a final geotechnical investigation once site development plans are complete, 2) review the final construction plans and specifications, and 3) observe the earthwork and foundation installation. Significance after Mitigation: Less than significant G. HAZARDS AND HAZARDOUS MATERIALS Issues and Supporting Information Resources Would the project: Sources Potentially Significant Issues Potentially Significant Unless Mitigation Incorporated Less Than Significant Impact No Impact a) Create a significant hazard to the public or the environment through the routing transport, use, or disposal of hazardous materials? 1, 5,16 x b) Create a significant hazard to the public or the environment through reasonably foreseeable upset and accident conditions involving the release of hazardous materials into the environment? 1, 5,16 X c) Emit hazardous emissions or handle hazardous or acutely hazardous materials, substances, or waste within one-quarter mile of an existing or proposed school? 1, 5,16 X d) Construct a school on a property that is subject to hazards from hazardous materials contamination, emissions or accidental release? 1,5,16 X d) Be located on a site which is included on a list of hazardous materials sites compiled pursuant to Government Code Section 65962.5 and, as a result, would it create a significant hazard to the public or the environment? 1, 2- MapN-9, 5 X e) For a project located within an airport land use plan or, where such a plan has not been adopted, within two miles of a public airport or public use airport, would the project result in a safety hazard for people residing or working in the project area? 1, 2 X f) For a project within the vicinity of a private airstrip, would the project result in a safety hazard for people residing or working the project area? 1, 2 X g) Impair implementation of or physically interfere with an adopted emergency response 1,2- X 355 Alma St. 11PLN-00045 Page 18 Mitigated Negative Declaration plan or emergency evacuation plan? MapN-7 h) Expose people or structures to a significant risk of loss, injury, or death involving wildland fires, including where wildlands are adjacent to urbanized areas or where residences are intermixed with wildlands? 2-MapN-7 X i) Create a significant hazard to the public or the environment from existing hazardous materials contamination by exposing future occupants or users of the site to contamination in excess of soil and ground water cleanup goals developed for the site? 1, 5,16 X DISCUSSION: The proposed project will not involve the handling, transportation, use, disposal, or emission of hazardous materials. The project site is not identified by either the California Environmental Protection Agency or the California State Water Resources Control Board as a hazardous materials site. The project is not expected to pose airport-related safety hazards. The proposed project will not interfere with either emergency response or evacuation. The project site is not located in a designated fire hazard area. The new construction and site design shall be required to comply with the City’s building permit approval standards and fire equipment and fire protection coverage standards as conditions of project approval prior to the issuance of a building permit. The Phase I Preliminary Site Assessment provided by Romig Engineers, Inc. indicates the subject site is not on any list of known contaminated sites, nor do there appear to be any listed sites in the immediate facility that have an obvious potential to impact soil or groundwater quality at the subject site. In a letter dated May 3, 2011 from the County of Santa Clara Department of Environmental Health, (DEH), it is made clear that the soil samples that were removed from the underground storage tanks (USTs) were not reported to have concentrations of TPHg and BTEX above the laboratory reporting limits. In addition four soil samples were collected following the removal of the UST piping and hydraulic lifts and the soil samples were not reported to have concentrations of TPHg, BTEX and Fuel Oxygenates above the laboratory reporting limits. Also, the building appears to be of sufficient age that asbestos containing materials (ACM) and Lead Paint (LBP) might have been used during construction. The previously referred to report provided by DEH confirms lead was reported in all samples at concentrations between 5.6-96 parts per million. The City of Palo Alto Fire Department requires as a condition of project approval that 1) Applicant should have a contingency plan in place to properly handle, remove and dispose of any USTs, contaminated soil and/or groundwater uncovered during excavation. Mitigation Measures H-1: CSCDEH closure stipulations shall be followed which include additional sampling, health risk management, and mitigation measures onsite in the event of a change in the property use, site grading activities, excavation, or the installation of water wells. Mitigation Measure H-2: Any future building or demolition is planned, a qualified contractor shall be retained to survey and ascertain the presence of these materials and provide for proper management and/or disposal of these materials. 355 Alma St. 11PLN-00045 Page 19 Mitigated Negative Declaration Significance after Mitigation: Less than significant H. HYDROLOGY AND WATER QUALITY Issues and Supporting Information Resources Would the project: Sources Potentially Significant Issues Potentially Significant Unless Mitigation Incorporated Less Than Significant Impact No Impact a) Violate any water quality standards or waste discharge requirements? 1,2,5,6 X b) Substantially deplete groundwater supplies or interfere substantially with groundwater recharge such that there would be a net deficit in aquifer volume or a lowering of the local groundwater table level (e.g., the production rate of pre-existing nearby wells would drop to a level which would not support existing land uses or planned uses for which permits have been granted)? 2-MapN2 X c) Substantially alter the existing drainage pattern of the site or area, including through the alteration of the course of a stream or river, in a manner which would result in substantial erosion or siltation on- or off-site? 1,2,5,6 X d) Substantially alter the existing drainage pattern of the site or area, including through the alteration of the course of a stream or river, or substantially increase the rate or amount of surface runoff in a manner which would result in flooding on- or off-site? 1,2,5,6 X e) Create or contribute runoff water which would exceed the capacity of existing or planned stormwater drainage systems or provide substantial additional sources of polluted runoff? 1,2,5,6 X f) Otherwise substantially degrade water quality? 1,2 X g) Place housing within a 100-year flood hazard area as mapped on a federal Flood Hazard Boundary or Flood Insurance Rate Map or other flood hazard delineation map? 1, 2-Map N-6,6 X h) Place within a 100-year flood hazard area structures which would impede or redirect flood flows? 2-MapN6 X i) Expose people or structures to a significant risk of loss, injury or death involve flooding, including flooding as a result of the failure of a levee or dam or being located within a 100-year flood hazard area? 2-MapN6 N8 X j) Inundation by seiche, tsunami, or mudflow? 2-MapN6, N8 X 355 Alma St. 11PLN-00045 Page 20 Mitigated Negative Declaration k) Result in stream bank instability? 1,2- MapN6,8 X DISCUSSION: The site consists of an abandoned service station, service garage and a covered fueling station with four pumps totaling approximately 2,300 square feet. The remainder of the site consists of paved area for parking/circulation and minimal landscaping. The project site is not located in an area of groundwater recharge and will not deplete the groundwater supplies. The project site is located approximately ½ mile outside of the 100-year flood hazard area and would not impede or redirect flood flows. The site is approximately a ¼ mile away from San Franciscuito Creek which is located north/northwest of the site. The project site is not in an area that is subject to seiche, tsunami or mudflow. As previously mentioned in the Geology, Soils and Seismicity section of this study, groundwater at the site has been measured to a depth as 28.5 feet. The five story building will be constructed over 2.5 levels of basement parking with the lowest level having a finished floor elevation ranging between 33.0 – 33.78 feet below existing grades. With the City’s required conditions of ARB approval the water impacts of the project would not be significant. During demolition, grading and construction, storm water pollution could result. Standard conditions of ARB approval would require the incorporation of Best Management Practices (BMPs) for storm water pollution prevention in all construction operations, in conformance with the Santa Clara Valley Non- Point Source Pollution Control Program, and submittal of a stormwater pollution prevention plan (SWPPP) in conjunction with building permit plans to address potential water quality impacts. City development standards and standard conditions of project approval would reduce potential negative impacts of the development project to less than significant. Mitigation Measure: None I. LAND USE AND PLANNING Issues and Supporting Information Resources Would the project: Sources Potentially Significant Issues Potentially Significant Unless Mitigation Incorporated Less Than Significant Impact No Impact a) Physically divide an established community? 1,2 X b) Conflict with any applicable land use plan, policy, or regulation of an agency with jurisdiction over the project (including, but not limited to the general plan, specific plan, local coastal program, or zoning ordinance) adopted for the purpose of avoiding or mitigating an environmental effect? 1,2,3,5,6, 11 X c) Conflict with any applicable habitat conservation plan or natural community conservation plan? 1,2 X d) Substantially adversely change the type or intensity of existing or planned land use in the 1,2,5,6,11 X 355 Alma St. 11PLN-00045 Page 21 Mitigated Negative Declaration 355 Alma St. 11PLN-00045 Page 22 Mitigated Negative Declaration Issues and Supporting Information Resources Would the project: Sources Potentially Significant Issues Potentially Significant Unless Mitigation Incorporated Less Than Significant Impact No Impact area? e) Be incompatible with adjacent land uses or with the general character of the surrounding area, including density and building height? 1,2,3,5,6, 11 X f) Conflict with established residential, recreational, educational, religious, or scientific uses of an area? 1,2,5,6,11 X g) Convert prime farmland, unique farmland, or farmland of statewide importance (farmland) to non-agricultural use? 1,2,6 X DISCUSSION: The project at 355 Alma is for a new Planned Community (PC) zone district and Comprehensive Plan land use designation amendment to allow a mixed use, five story (64-foot high) building on the former Shell Station site on parcels having a combined area of 21,713 square feet and zoned CD-C (P) and CD- N (P). The Comprehensive Plan designation of Neighborhood Commercial for a portion of the site (the 335 Alma Parcel) would be amended to Regional/Community Commercial for the entire site. The Comprehensive Plan land use designation of Regional/Community Commercial relies on larger trade areas and includes such uses as department stores, restaurants, theaters, and non-retail services such as offices and banks. Non-residential floor area ratios can range from 0.35-2.0. The intention is to create a “gateway” building for Downtown Palo Alto as seen from the western edge of the downtown that is immediately adjacent to the University Ave. Cal Train station. The building will feature a predominant tower element that is situated along the southwest corner of the building. The tower element will extend beyond the top of the fifth floor to a height of 84 feet. The project would include two floors of below grade parking, ground floor retail space, three floors of office space and fifth floor consisting of 14 residential rental units, including five affordable housing units. The total floor area for the project would be 65,070 square feet. (a floor area ratio of 2.9:1) The project is being proposed as a Planned Community (PC) development with a Comprehensive Plan Amendment instead of being developed under the existing zoning designations of CD-C (P) and CD-N (P) due in large part to the residential zoned properties (RM-30) that abut the project site along the northeast corner. As a result of the abutting RM-30 zoned properties development of the site is limited to a maximum height of 35 feet and floor area ratio of 2.0:1 for the CD-C zoned parcel and 0.9:1 for the CD-N zoned parcel. The maximum floor area ratio for mixed use development in the CD-C (P) is 2.0:1 and 0.9:1 for the CD-N (P) zone. There is an exception in the code section, however, that allows development up to a 3.0:1 FAR in the CD-C sub-district and up to 2.0:1 FAR in the CD-N subdistrict if the City approves an application for transfers of development rights (TDRs) and/or bonuses for seismic and historic rehabilitation upgrades If the site were eligible for TDRs and 335 Alma Street was rezoned to the CD-C sub-district, the project would comply with the 3.0:1 FAR (65,070 s.f. / 21,713 s.f. = 2.9:1 FAR). However, this project site is not an eligible receiver site for TDRs because it is closer than 150 feet to a residential zoned district (abutting RM-30 zoned properties). The applicant is requesting a concession under Government Code 65915 and SB 1818 for the increased commercial FAR that would otherwise be allowed under zoning regulations if the project were not within 150 feet of an RM-30 zoned property. If TDRs were available to use for this project the total square footage that could be constructed would be 57,826 sf. The project is proposing to construct 65,070 sf which is 7,244 square feet over what would otherwise be allowed per zoning if TDRs could be used. As part of this proposal, a Comprehensive Plan Amendment is requested to revise the land use designation of the interior parcel (335 Alma Street) from Neighborhood Commercial to Regional/Community Commercial. If both parcels of land had the Regional/Community Commercial land use designation, 43,426 square feet (2.0:1 FAR) of non-residential area could be approved for the entire project site. The non-residential floor area proposed for the project is 53,170 square feet, 9,744 square feet over the non-residential 2.0:1 FAR standard stated in the Comprehensive Plan. The Comprehensive Plan Land Use Definitions introductory paragraph (page L-10) states, “The FAR standards are consistent with those contained in the City’s Zoning Ordinance. They were initially established to estimate daytime population and employment in different parts of the City. In the definitions below, FARs represent an expectation of the overall intensity of future development. Actual FARs on individual sites will vary.” Approvals have been issued in the past for downtown developments above 2.0:1 FAR associated with Planned Communities, “receiver” sites eligible for transferred “bonus” floor area, and existing buildings expanding with seismic and historic rehabilitation bonus floor area. Those approvals did not involve adjustments to the FAR standard set forth in the land use definition paragraph of the Comprehensive Plan for Regional/Community Commercial land use to accommodate those projects. The land use designation for the 335 Alma site would need to be modified to allow up to the 2.0:1 FAR standard, and the additional area requested above 2.0:1 FAR is not achievable with bonus floor area via the transfer of Development Rights to the site as previously discussed in this report. Staff is of the opinion that the Council would not need to change to the Comprehensive Plan land use definition paragraph to increase the FAR standard based on prior Council approvals of Planned Communities with FAR greater than 2.0:1. The P&TC initiated the PC zone district and the preparation of a Comprehensive Plan land use designation amendment on March 16, 2011. The proposed development standards are also inconsistent with the PC limits for height and daylight plane adjacent to residentially zoned property. The applicant is also requesting concessions per Government Code 65915 to exceed both the height and daylight plane limitations. There are special requirements for PC zoned sites that abut any RM zoned property for height and daylight plane. Specifically, the PC zoning (PAMC 18.38) requires that the height limit shall be 35 feet and that a daylight plane is to be established along that portion of the lot that abuts the neighboring RM zoned property. The daylight plane is to be measured beginning at a height of 10 feet and increasing inward at 1:2 slope (30 degree angle); however, project plans show a daylight plane at a 45 degree angle, such that approximately a 100 foot length of building, including 4th floor office area, encroaches into the daylight plane. The proposed height for the project is 64 feet to the top of the fifth floor. . The non- residential portion of the project is proposed at 50 feet. The tower element at the corner extends to a height of approximately 84 feet. The side setback for the project from the RM zoned properties (on the eastern property line) would comply, at approximately 45 feet, and provides an adequate buffer of approximately 52 feet from the neighboring RM zoned property. In addition, the owner of the adjacent residential properties has provided a letter in support of the project 355 Alma St. 11PLN-00045 Page 23 Mitigated Negative Declaration The height requirement for the CD-C (P) zone is 50 feet whereas the height requirement for the CD-N (P) zone is 35 feet which is partially due to the project abutting two RM-30 zoned properties. Without the abutting RM zoned property the height limit would otherwise be 50 feet. The commercial portion of the project does not extend above the 50 foot height limit. The residential portion of the project, specifically the entire fifth floor, and the tower element exceed the 50 foot height limit. This height exception is consistent with recent City policy directives that have focused on limited exceptions to the City’s 50 foot height limit for developments within ¼ mile of fixed transit stations. The P&TC also advised the project applicant in previous public hearings for this project to consider exceeding the 50 foot height limit in order to accommodate more housing units. The 84 foot tall tower element will be analyzed as part of the architectural review board review. The development project would be required to comply with the City’s greenbuilding regulations and submit a checklist for Leadership in Energy and Environmental Design for Neighborhood Development (LEED-ND) as a part of the one year pilot program. The subject site is surrounded on two sides by developed land. Directly east of the site along Lytton Avenue is a one-story multi-tenant commercial and retail building occupied by OnLive and Darbar Restaurant. North of the site is one story commercial building occupied by a technology start-up company. Northeast of the site on High Street are two single family residential lots that are zoned for medium density multi-family use. The University Avenue CalTrain station is located immediately west of the site across Alma Street. South of the site across Lytton Avenue is a four-story office building occupied by the technology company A9. The site is not located in a “Prime Farmland”, “Unique Farmland”, or “Farmland of Statewide Importance” area, as shown on the maps prepared for the Farmland Mapping and Monitoring Program of the California Resources Agency. The site is not zoned for agricultural use, and is not regulated by the Williamson Act. Mitigation Measures: None. J. MINERAL RESOURCES Issues and Supporting Information Resources Would the project: Sources Potentially Significant Issues Potentially Significant Unless Mitigation Incorporated Less Than Significant Impact No Impact a) Result in the loss of availability of a known mineral resource that would be of value to the region and the residents of the state? 1,2 X b) Result in the loss of availability of a locally- important mineral resource recovery site delineated on a local general plan, specific plan or other land use plan? 1,2 X 355 Alma St. 11PLN-00045 Page 24 Mitigated Negative Declaration DISCUSSION: The City of Palo Alto has been classified by the California Department of Conservation (DOC), Division of Mines and Geology (DMG) as a Mineral Resource Zone 1 (MRZ-1). This designation signifies that there are no aggregate resources in the area. The DMG has not classified the City for other resources. There is no indication in the 2010 Comprehensive Plan that there are locally or regionally valuable mineral resources within the City of Palo Alto. Mitigation Measures: None. K. NOISE Issues and Supporting Information Resources Would the project: Sources Potentially Significant Issues Potentially Significant Unless Mitigation Incorporated Less Than Significant Impact No Impact a) Exposure of persons to or generation of noise levels in excess of standards established in the local general plan or noise ordinance, or applicable standards of other agencies? 1,2,12 X b) Exposure of persons to or generation of excessive ground borne vibrations or ground borne noise levels? 1,2,12 X c) A substantial permanent increase in ambient noise levels in the project vicinity above levels existing without the project? 1,2,12 X d) A substantial temporary or periodic increase in ambient noise levels in the project vicinity above levels existing without the project? 1,2,12 X e) For a project located within an airport land use plan or, where such a plan has not been adopted, would the project expose people residing or working in the project area to excessive noise levels? 1,2 X f) For a project within the vicinity of a private airstrip, would the project expose people residing or working in the project area to excessive noise levels? 1,2 X g) Cause the average 24 hour noise level (Ldn) to increase by 5.0 decibels (dB) or more in an existing residential area, even if the Ldn would remain below 60 dB? 1,2,12 X h) Cause the Ldn to increase by 3.0 dB or more in an existing residential area, thereby causing the Ldn in the area to exceed 60 dB? 1,2,12 X i) Cause an increase of 3.0 dB or more in an existing residential area where the Ldn currently exceeds 60 dB? 1,2,12 X j) Result in indoor noise levels for residential development to exceed an Ldn of 45 dB? 1,2,12 X 355 Alma St. 11PLN-00045 Page 25 Mitigated Negative Declaration 355 Alma St. 11PLN-00045 Page 26 Mitigated Negative Declaration Issues and Supporting Information Resources Would the project: Sources Potentially Significant Issues Potentially Significant Unless Mitigation Incorporated Less Than Significant Impact No Impact k) Result in instantaneous noise levels of greater than 50 dB in bedrooms or 55 dB in other rooms in areas with an exterior Ldn of 60 dB or greater? 1,2,12 X X l) Generate construction noise exceeding the daytime background Leq at sensitive receptors by 10 dBA or more? 1,2,12 X DISCUSSION: The project site is located in an area with an existing noise level ranging between 65-70dBA. This noise level is typical for commercial districts and residential areas located in close proximity to commercial districts. Sources of environmental noise at the site include sirens from fire trucks associated with the Alma Fire Station, vehicles on local roadways, and trains on adjacent tracks. The loudest noise levels measured a the site were due to sirens. The next loudest sources were trains and vehicles. The traffic report prepared by Hexagon Transportation Consultants (Source Reference #14) indicates the future peak hour traffic volumes 15 years from now are expected to increase by an average of 27 percent within the vicinity of the project. This corresponds to approximately a 1-decibel increase in environmental noise, which is considered less than significant. Measured vibration levels associated with both north and southbound Caltrain trains were all below the more stringent guideline of 72VdB for residences. Therefore no mitigation is needed to comply with FTA Guidelines. This also assumes that the noise levels from trains will not increase in the future. Based on the Environmental Noise Assessment provided by Charles M. Salter Associates, Inc., environmental noise levels at the proposed residences fall into the conditionally acceptable and unacceptable land use categories. In order to properly mitigate noise levels on the new residences, the windows along Lytton Ave. will need to have an STC (Sound Transmission Class) between 34-36 and 38-42 for windows along Alma St in order to reduce interior noise levels to DNL of 45 dBA as required by code. Since the residential windows will need to be closed to meet the interior DNL of 45 dBA, the design must include a ventilation or air conditioning system to provide habitable interior environment. The outdoor noise impact associated with the residential rooftop deck will not exceed the DNL of 60 dBA which is consistent with the City Comprehensive Plan. The office/retail component of the project is exposed to noise levels regularly exceeding 65 dBA. In order to mitigate the noise impacts the windows must have STC ratings of at least 30. The walls of the office/retails component shall have an STC rating of at least 50. Specific information about the location of the mechanical equipment has not been finalized but the applicant has endeavored to move a considerable amount of the mechanical equipment inside the building. Noise reduction measures will be needed to meet the noise limits for the outdoor mechanical equipment. These measures could include maintaining appropriate distance from property lines, incorporating acoustically solid parapet walls and/or equipment enclosures. Grading and construction activities will result in temporary increases in local ambient noise levels. Typical noise sources would include mechanical equipment associated with excavation, grading and construction, which will be short term in duration. Standard approval conditions would require the project to comply with the City’s Noise Ordinance (PAMC Chapter 9.10), which restricts the timing and overall noise levels associated with construction activity. Short-term construction that complies with the Noise Ordinance would result in impacts that are expected to be less than significant. Mitigation Measures N-1: In order to meet the indoor noise level criteria, sound rated exterior facades and windows shall be required. The windows and facades shall meet the STC rated recommendations as provided in the Noise Assessment by Charles M. Salter Associates, Inc. Mitigation Measures N-2: In order to mitigate noise impacts associated with outdoor mechanical equipment mitigation measures will be required. These may include a combination of selecting quiet units, maintain minimum distances to property lines, and physical barriers and/or enclosures. The applicant shall work with staff during the design phase to determine to specific requirements. Mitigation Measures N-3: Since the residential units will be closed a ventilation or air conditioning system shall be provided to provide a habitable interior environment. L. POPULATION AND HOUSING Issues and Supporting Information Resources Would the project: Sources Potentially Significant Issues Potentially Significant Unless Mitigation Incorporated Less Than Significant Impact No Impact a) Induce substantial population growth in an area, either directly (for example, by proposing new homes and businesses) or indirectly (for example, through extension of roads or other infrastructure)? 1,2,5,6 X b) Displace substantial numbers of existing housing, necessitating the construction of replacement housing elsewhere? 1,5,6 X c) Displace substantial numbers of people, necessitating the construction of replacement housing elsewhere? 1,5,6 X d) Create a substantial imbalance between employed residents and jobs? 1,2,6 X e) Cumulatively exceed regional or local population projections? 1,2,6, X DISCUSSION: The project is for a new Planned Community (PC) zone district and Comprehensive Plan land use designation amendment to allow a mixed use, five story (64-foot high) building. Population in Palo Alto’s sphere of influence in 1996, according to Palo Alto Comprehensive Plan was 58,000 people. This is projected by the City’s Comprehensive Plan to increase to 62,880 by 2010. The project, by adding to the housing stock by 14 units, would cumulatively contribute to population in the area. The average household size in Palo Alto is 2.24 persons, which would mean the project could 355 Alma St. 11PLN-00045 Page 27 Mitigated Negative Declaration generate a total of 31 people. However, the project is being proposed as one-bedroom and studio units for rent only. The 2010 Census identifies 2.10 persons/household for renters. Based on this information the project would generate approximately 29 people. The projects cumulative impacts for the purposes of CEQA are also considered to be less than significant, as the impact from the project alone is not “considerable”, and is di minimus, as environmental conditions would essentially be the same whether or not the project is implemented (as per CEQA Guidelines §15355 and §15064). This incremental increase in population generated by the proposed project would not be considered a significant impact. City development standards, development fees (including impact fees) and standard conditions of project approval reduce potential negative impacts of the project to less than significant. The project would be subject to the policies and regulations of the Below Market Rate Housing program. Mitigation Measures: None. M. PUBLIC SERVICES Issues and Supporting Information Resources Would the project: Sources Potentially Significant Issues Potentially Significant Unless Mitigation Incorporated Less Than Significant Impact No Impact a) Would the project result in substantial adverse physical impacts associated with the provision of new or physically altered governmental facilities, need for new or physically altered governmental facilities, the construction of which could cause significant environmental impacts, in order to maintain acceptable service ratios, response times or other performance objectives for any of the public services: Fire protection? Police protection? Schools? Parks? Other public facilities? 1, 2 1, 2 1, 2,20 1, 2 1, 2 X X X X X DISCUSSION: 355 Alma St. 11PLN-00045 Page 28 Mitigated Negative Declaration Fire The site is presently served by the Palo Alto Fire Department. The proposed changes will not impact present Fire District service to the site or area. The project would, as a condition of approval, be required to comply with all Fire Department requirements for fire safety. Police The site is located within the jurisdiction of the Palo Alto Police Department. The proposed changes will not result in the need for additional police officers, equipment or facilities. Schools No significant demand for school services would result from the project, which is not expected to generate a substantial increase in Palo Alto’s residential population. Based on the Palo Alto Unified School District (PAUSD) student generation rates of 0.75 students per single family detached dwelling unit and 0.7 per Below Market Rate rental unit, the project would generate approximately 10 school-age children. However, as previously mentioned above the residential units will be a mix of one-bedroom and studio units so it is anticipated that the number of school aged children will be slightly lower. Currently, enrollment in the PAUSD is approaching capacity. School overcrowding is not considered a significant effect however, under CEQA [Goleta Union School District v. The regents of the University of California (35 Cal.App.4th 1121 (1995)]. Rather, the increase in students from a project is only significant if such an increase would create significant environmental effects, such as impacts from the construction of a new school. Due to demand, the PAUSD is examining options to increase capacity, including re-opening currently closed schools. However, the project’s cumulative impacts for the purposes of CEQA are considered to be less than significant, as the impact from the project alone is not considerable. It should be noted that the PAUSD has implemented a school impact fee that the applicant would be required to pay. Impact fees are used only for construction and reconstruction of school facilities. As of July 21, 1996, the City of Palo Alto withholds building permits until PAUSD has certified that school impact fees have been paid. Parks Impact fees to address impacts on parks were adopted by the Palo Alto City Council in March of 2002. As a condition of subdivision and prior to receiving a building permit, the project applicant will be required to pay a one-time development impact fee for parks. The City’s park-in-lieu fee and park facility fee will be used to offset impacts on park facilities as a result of this project. Therefore, the project would result in a less than significant impact. Other Public Facilities Impact fees to address impacts on community centers and libraries were adopted by the Palo Alto City Council in March of 2002. Prior to receiving a building permit, the project applicant will be required to pay a one time development impact fee for community centers and libraries. The fee will be used to offset impacts on community centers and library facilities as a result of this project. Therefore, the project would result in a less than significant impact. Mitigation Measures: None 355 Alma St. 11PLN-00045 Page 29 Mitigated Negative Declaration N. RECREATION Issues and Supporting Information Resources Would the project: Sources Potentially Significant Issues Potentially Significant Unless Mitigation Incorporated Less Than Significant Impact No Impact a) Would the project increase the use of existing neighborhood and regional parks or other recreational facilities such that substantial physical deterioration of the facility would occur or be accelerated? 1,5,6 X b) Does the project include recreational facilities or require the construction or expansion of recreational facilities which might have an adverse physical effect on the environment? 1,5,6 X DISCUSSION: The development project would be subject to payment of impact fees for parks, libraries and community facilities. The project in total would therefore not have any significant impact on existing parks, nor include or require construction of recreational facilities. No mitigation is required. There would not be a significant change to the demand of recreation services as a result of the proposed project. The development project includes a proposal for separate common areas for both the residential and the commercial portions of the project. Mitigation Measures: None O. TRANSPORTATION AND TRAFFIC Issues and Supporting Information Resources Would the project: Sources Potentially Significant Issues Potentially Significant Unless Mitigation Incorporated Less Than Significant Impact No Impact a) Cause an increase in traffic which is substantial in relation to the existing traffic load and capacity of the street system (i.e., result in a substantial increase in either the number of vehicle trips, the volume to capacity ratio on roads, or congestion at intersections)? 1,5,6,14, X b) Exceed, either individually or cumulatively, a level of service standard established by the county congestion management agency for 1,5,6,14, X 355 Alma St. 11PLN-00045 Page 30 Mitigated Negative Declaration 355 Alma St. 11PLN-00045 Page 31 Mitigated Negative Declaration Issues and Supporting Information Resources Would the project: Sources Potentially Significant Issues Potentially Significant Unless Mitigation Incorporated Less Than Significant Impact No Impact designated roads or highways? c) Result in change in air traffic patterns, including either an increase in traffic levels or a change in location that results in substantial safety risks? 1 X d) Substantially increase hazards due to a design feature (e.g., sharp curves or dangerous intersections) or incompatible uses (e.g., farm equipment)? 1,5,6,14 X e) Result in inadequate emergency access? 1,2,5 X f) Result in inadequate parking capacity? 1,2,5,6,14, X g) Conflict with adopted policies, plans, or programs supporting alternative transportation (e.g., pedestrian, transit & bicycle facilities)? 1,2,5,6,14 X h) Cause a local (City of Palo Alto) intersection to deteriorate below Level of Service (LOS) D and cause an increase in the average stopped delay for the critical movements by four seconds or more and the critical volume/capacity ratio (V/C) value to increase by 0.01 or more? 1,2,5,14 X i) Cause a local intersection already operating at LOS E or F to deteriorate in the average stopped delay for the critical movements by four seconds or more? 1,2,5,14 X j) Cause a regional intersection to deteriorate from an LOS E or better to LOS F or cause critical movement delay at such an intersection already operating at LOS F to increase by four seconds or more and the critical V/C value to increase by 0.01 or more? 1,2,5,14 X k) Cause a freeway segment to operate at LOS F or contribute traffic in excess of 1% of segment capacity to a freeway segment already operating at LOS F? 1,2,5,14 X l) Cause any change in traffic that would increase the Traffic Infusion on Residential Environment (TIRE) index by 0.1 or more? 1,2,5,14 X m) Cause queuing impacts based on a comparative analysis between the design queue length and the available queue storage capacity? Queuing impacts include, but are not limited to, spillback queues at project access locations; queues at turn lanes at intersections that block through traffic; queues at lane drops; queues at one intersection that extend back to impact other 1,2,5,14 X 355 Alma St. 11PLN-00045 Page 32 Mitigated Negative Declaration Issues and Supporting Information Resources Would the project: Sources Potentially Significant Issues Potentially Significant Unless Mitigation Incorporated Less Than Significant Impact No Impact intersections, and spillback queues on ramps. n) Impede the development or function of planned pedestrian or bicycle facilities? 1,2,5,14 X o) Impede the operation of a transit system as a result of congestion? 1,2,5,14 X p) Create an operational safety hazard? 1,5,14 X DISCUSSION: The project site is located in the University Avenue Parking Assessment District, at the corner of Alma Street and Lytton Avenue. The building is proposed to be developed with on-site parking. Through empirical research, data have been collected that correlate to common land uses their propensity for producing traffic. Thus, for the most common land uses there are standard trip generation rates that can be applied to help predict future traffic increases that would result from a new development. The magnitude of the traffic generation by the proposed project was estimated by applying to the size of the development the applicable trip generation rates. These calculations, in the table below, are calculated on the basis of the trip generation rates published in the Institute of Transportation Engineers (ITE) manual entitled Trip Generation, eighth edition, 2008. The proposed project is a mixed- use development on a lot previously occupied by a gas and service station. There would be potentially significant traffic impact at the intersection of Alma Street and the University Avenue (South) ramps resulting from traffic generated by the project. Mitigation measures are identified and would reduce the potential impact to less than significant. Traffic Generation AM Peak Hour PM Peak Hour Land Use Size1 Daily Rate2 Daily Trips Peak- Hour Rate2 Hourly Trips Peak- Hour Rate2 Hourly Trips Proposed Retail – Cafe 1.564 117.23 183 40.75 64 64.21 100 Retail – Shopping Ctr 4.591 42.94 111 3.73 10 1.00 3 Office 49.015 15.72 770 2.73 134 2.16 106 Apartments 14 d.u. 6.62 93 0.62 9 0.51 7 Reductions -124 -36 -49 Net New Project Trips 1,033 181 167 1Size expressed in 1000 sq. ft. 2Trip rates based on Institute of Transportation Engineers, Trip Generation, sixth edition, 1997. Retail - Quality Restaurant (831) The replacement of the vacant lot (former gas and service station ) with a mixed use building will include enhancements to sidewalks and connectivity to adjacent land uses as well as the downtown transit station to provide a more appealing pedestrian and street environment. Impacts to the pedestrian environment will all be positive. Access/Circulation By discontinuing the automobile service station use, the project would eliminate three of the four existing entryways (two on Lytton Avenue and one on Alma Street). The closure of these curb cuts would allow for additional on-street parking as well as helping to create a more walk-able, pedestrian friendly environment. Vehicular access to the site would be provided using one main entry along Alma Street near the northern edge of the property. The concealed entryway would cut through a section of the first floor between the edge of the office space and the stairwell. Beyond the concealed entryway would be surface parking spaces and the entry ramp leading to two levels of below grade parking. The below grade parking would provide 110 spaces and the surface parking would provide an additional 13 spaces. An as yet undetermined number of the surface parking spaces and underground spaces would be electric vehicle (EV) spaces. Parking Spaces The development project provides 123 parking spaces on site, the required number of parking spaces consistent with the City code requirements after granting standard exceptions and adjustments. 101 Lytton Parking Requirements per Palo Alto Municipal Code SF Proposed Commercial FAR (49,015 SF of Office & 4,155 SF of Retail) 53,170 exemption of 1:1 FAR for Downtown Assessment District (PAMC 18.52.060) -14,400 exemption of 200 SF for every building (PAMC 18.52.070(a)(1)(D) -200 TOTAL COMMERCIAL SQUARE FOOTAGE SUBJECT TO PARKING REQUIREMENTS 38,570 Required number of Parking Spaces for 38,570 SF of Commercial space # of Stalls 4 per 1,000 SF parking ratio in assessment district (PAMC 18.52) 155 Total Parking stalls required for commercial component of project 155 30% reduction in parking ratio due to proximity to transit,TOD, affordable housing, & TDM program (PAMC 18.52) -46 Required number of Parking Spaces for Eight (8) 1BR Residential Units & Six (6) Studio Units # of Stalls 1.0 parking spaces per 1 BR unit must be provided (per Govt Code 65915) 8 1.0 parking spaces per Studio unit must be provided (per Govt Code 65915) 6 Total Parking stalls required for residential component of project 14 TOTAL PARKING REQUIREMENT 123 Transportation Demand Management Transportation Demand Management (TDM) measures will be provided as part of this project which encourage all forms of alternative transportation modes such as carpool, vanpool, public transit, bicycling, walking and telecommuting. Transit Service Impacts 355 Alma St. 11PLN-00045 Page 33 Mitigated Negative Declaration Existing bus service is provided within one-quarter mile of the project site. Commuter rail service is provided by Caltrain at the University Avenue station which is directly across the street from the project site (approximately 570 feet). There is a network of existing bicycle facilities is close proximity to the project site. Pedestrian and Bicycle Impacts Pedestrian facilities in the project area consist primarily of sidewalks along the streets near the project site. Sidewalks and crosswalks are located directly adjacent to the site. These sidewalks and crosswalks would be adequate to facilitate pedestrian access to and from the project site and the nearby transit facilities. As part of the project the applicant is proposing to decrease the crosswalk distance for both Lytton Ave. and Alma St. to enhance the safety of the intersection and encourage more pedestrian use. The project has been reviewed by the City Fire Department and Transportation Division and does not contain design features that will substantially increase hazards or result in inadequate emergency access. The project would not result in a change to air traffic patterns. Mitigation Measures: Mitigation Measure O1: The applicant shall prepare a construction management plan prior to approval of building permit. Traffic control measures during demolition and construction, removal of demolition debris, delivery of construction materials, retention of parking spaces for construction workers and on- site staff, shall be detailed as part of the approved construction management plan. Mitigation Measure O2: The project shall install left turn median shelter lane and supporting median and striping at Alma / University (south ramp) to facilitate westbound left turns from University ramp to southbound Alma. Significance After Mitigation Measures: Less than significant. P. UTILITIES AND SERVICE SYSTEMS Issues and Supporting Information Resources Would the project: Sources Potentially Significant Issues Potentially Significant Unless Mitigation Incorporated Less Than Significant Impact No Impact a) Exceed wastewater treatment requirements of the applicable Regional Water Quality Control Board? 1,2 X b) Require or result in the construction of new water or wastewater treatment facilities or expansion of existing facilities, the construction of which could cause significant environmental effects? 1,2 X c) Require or result in the construction of new storm water drainage facilities or expansion 355 Alma St. 11PLN-00045 Page 34 Mitigated Negative Declaration 355 Alma St. 11PLN-00045 Page 35 Mitigated Negative Declaration Issues and Supporting Information Resources Would the project: Sources Potentially Significant Issues Potentially Significant Unless Mitigation Incorporated Less Than Significant Impact No Impact of existing facilities, the construction of which could cause significant environmental effects? 1,2 X d) Have sufficient water supplies available to serve the project from existing entitlements and resources, or are new or expanded entitlements needed? 1,2 X e) Result in a determination by the wastewater treatment provider which serves or may serve the project that it has inadequate capacity to serve the project’s projected demand in addition to the provider’s existing commitments? 1 X f) Be served by a landfill with sufficient permitted capacity to accommodate the project’s solid waste disposal needs? 1 X g) Comply with federal, state, and local statutes and regulations related to solid waste? 1 X h) Result in a substantial physical deterioration of a public facility due to increased use as a result of the project? 1 X DISCUSSION: Based on the information that was provided the proposed project would not significantly increase the demand on existing utilities and service systems, or use resources in a wasteful or inefficient manner. Standard conditions of ARB approval would require the applicant to submit calculations by a registered civil engineer to show that the on-site and off site water, sewer and fire systems are capable of serving the needs of the development and adjacent properties during peak flow demands. Trash and recycling facilities would be are proposed in the development project to accommodate the expected waste and recycling streams that would be generated by the expected uses within the building. The development project would be subject to all conditions of approval that would be provided by all applicable city departments. Mitigation Measures: None Q. MANDATORY FINDINGS OF SIGNIFICANCE Issues and Supporting Information Resources Would the project: Sources Potentially Significant Issues Potentially Significant Unless Mitigation Incorporated Less Than Significant Impact No Impact 355 Alma St. 11PLN-00045 Page 36 Mitigated Negative Declaration Issues and Supporting Information Resources Would the project: Sources Potentially Significant Issues Potentially Significant Unless Mitigation Incorporated Less Than Significant Impact No Impact a) Does the project have the potential to degrade the quality of the environment, substantially reduce the habitat of a fish or wildlife species, cause a fish or wildlife population to drop below self-sustaining levels, threaten to eliminate a plant or animal community, reduce the number or restrict the range of a rare or endangered plant or animal or eliminate important examples of the major periods of California history or prehistory? 1,2-Map L4,5 X b) Does the project have impacts that are individually limited, but cumulatively considerable? (“Cumulatively considerable” means that the incremental effects of a project are considerable when viewed in connection with the effects of past projects, the effects of other current projects, and the effects of probable future projects)? 1,2,5 X c) Does the project have environmental effects which will cause substantial adverse effects on human beings, either directly or indirectly? 1,5,8,9,12, X DISCUSSION: The project would not have an impact on fish or wildlife habitat, nor would it impact cultural or historic resources. The uses are appropriate for the site and the development would not result in an adverse visual impact. There is nothing in the nature of the proposed development and property improvements that would have a substantial adverse effect on human beings, or other life or environmental impacts once mitigation is implemented to reduce potential impacts to the users of the new subdivision project in the area of biological resources, noise, seismicity and air quality. Global Climate Change Impacts Global climate change is the alteration of the Earth’s weather including its temperature, precipitation, and wind patterns. Global temperatures are affected by naturally occurring atmospheric and anthropogenic gases, such as carbon dioxide, methane, and nitrous oxide. These gases allow sunlight into the Earth’s atmosphere, but prevent radiant heat from escaping from the atmosphere, which is known as the “greenhouse” effect. The world’s leading climate scientists have reached consensus that global climate change is underway and that human activity is a contributing factor. Twenty agencies at the international, national, state, and local levels are considering strategies to control emissions of gases that contribute to global warming. There is no comprehensive strategy that is being implemented on a global scale that addresses climate change; however, in California a multiagency “Climate Action Team”, has identified a range of strategies and the Air Resources Board, under Assembly Bill (AB) 32, has been designated to adopt the main plan for reducing California's greenhouse gas (GHG) emissions by January 1, 2009, and regulations and other initiatives for reducing GHG emissions by January 1, 2011. AB 32 requires achievement by 2020 of a statewide GHG emissions limit equivalent to 1990 emissions, and the adoption of rules and regulations to achieve the maximum technologically feasible and cost-effective GHG emissions reductions. By 2050, the state plans to reduce GHG emissions to 80 percent below 1990 levels. Although the State of California has established programs to reduce GHG emissions, there are no established standards for gauging the significance of GHG emissions. Neither CEQA nor the CEQA Guidelines provide any methodology for analysis of GHGs. Given the “global” scope of global climate change, the challenge under CEQA is for a Lead Agency to translate the issue down to the level of a CEQA document for a specific project in a way that is meaningful to the decision making process. Under CEQA, the essential questions are whether a project creates or contributes to an environmental impact or is subject to impacts from the environment in which it would occur, and what mitigation measures are available to avoid or reduce the impacts. The proposed project would generate GHGs primarily through electricity generation and use and the creation of vehicle trips. Efforts to reduce the project’s GHG emissions by reducing electricity demand and reducing vehicle trips and miles, therefore, should be implemented. The proposed project would conform to the City’s Comprehensive Plan and other policies to reduce vehicle trips and miles traveled, including adding EV charging stations and a Transportation Demand Management program. Given the overwhelming scope of global climate change, it is not anticipated that a single development project would have an individually discernable effect on global climate change (e.g., that any change in global temperature or sea level could be attributed to the GHG emissions resulting from one single development project). Rather, it is more appropriate to conclude that the GHG emissions generated by the proposed project would combine with emissions across the state, nation, and globe to cumulatively contribute to global climate change. The project is subject to review under the standards for Leadership in Energy and Environmental Design for Neighborhood Development (LEED-ND) pilot program. Consequently, to the best of our knowledge, the proposed project would result in less-than-significant global climate change and cumulative impacts. 355 Alma St. 11PLN-00045 Page 37 Mitigated Negative Declaration SOURCE REFERENCES 1. Project Planner’s knowledge of the site and the proposed project 2. Palo Alto Comprehensive Plan, 1998-2010 (list specific policy and map references) 3. Palo Alto Municipal Code, Title 18 – Zoning Ordinance 4. Required compliance with the Uniform Building Code (UBC) Standards for Seismic Safety and Windload 5. Project Plans,Korth, Sunseri, Hagey Architects, received September 15, 2011 6. Project Description, Lytton Gateway LLC, received September 15, 2011 7. Arborist Report, Arbor Resources, February 17, 2011 8. Palo Alto Tree Technical Manual, Municipal Code Chapter 8.10.030, June 2001 9. Air Quality and Greenhouse Gas CEQA Evaluation, Illingworth & Rodkin, Inc., August 4, 2011 10. Geotechnical Investigation, Romig Engineers, INC., July, 2011 11. Phase I Preliminary Site Assessment,Romig Engineers, September 2010 12. Environmental Noise Assessment, Charles M. Salter Associates, Inc., July 29, 2011 14. Transportation Impact Analysis, Hexagon Transportation Consultants, Inc., August 5, 2011 15. Palo Alto Fire Department, Hazardous Materials Disclosure Checklist 16. City of Palo Alto Department Review Comments, Planning/Affordable Housing, November,2010 17. City of Palo Alto Department Review Comments, Planning/City Arborist 18. City of Palo Alto, Environmental Assessment Worksheet, October 25, 2010 355 Alma St. 11PLN-00045 Page 38 Mitigated Negative Declaration 355 Alma St. 11PLN-00045 Page 39 Mitigated Negative Declaration DETERMINATION On the basis of this initial evaluation: I find that the proposed project COULD NOT have a significant effect on the environment, and a NEGATIVE DECLARATION will be prepared. I find that although the proposed project could have a significant effect on the environment, there will not be a significant effect in this case because revisions in the project have been made by or agreed to by the project proponent. A MITIGATED NEGATIVE DECLARATION will be prepared. x I find that the proposed project MAY have a significant effect on the environment, and an ENVIRONMENTAL IMPACT REPORT is required. I find that the proposed project MAY have a “potentially significant impact” or “potentially significant unless mitigated” impact on the environment, but at least one effect: 1) has been adequately analyzed in an earlier document pursuant to applicable legal standards, and 2) has been addressed by mitigation measures based on the earlier analysis as described on attached sheets. An ENVIRONMENTAL IMPACT REPORT is required, but it must analyze only the effects that remain to be addressed. I find that although the proposed project could have a significant effect on the environment, because all potentially significant effects (a) have been analyzed adequately in an earlier EIR or NEGATIVE DECLARATION pursuant to applicable standards, and (b) have been avoided or mitigated pursuant to that earlier EIR or NEGATIVE DECLARATION, including revisions or mitigation measures that are imposed upon the proposed project, nothing further is required. Project Planner Date Director of Planning and Date Community Environment attachment D.doc 1 of 3 MITIGATION MONITORING AND REPORTING PROGRAM Project Name: 355 Alma (101 Lytton) Application No.: 11PLN-00045 Approved by: Signed by Director after MND/EIR approved Date: 1/11/2012 Environmental Impacts Mitigation Measures Responsibility for Timing of Compliance Oversight of Implementation Compliance Air Quality The potential expose sens to Mitigation Measure #1: Implementation of the measures recomiti receptors to substantial lev of toxic air contaminan mended by BAAQMD and g and new e Best Management tudy). culate matter.The at projects install and d be installed on either t ducts ventilating each a centralized building ventilation system. The ventilation system should be certified to achieve certain effectiveness. It is anticipated that these units could achieve reductions of 80% of ambient PM2.5 concentrations (including DPM) from indoor areas. The filtrations systems would have to be maintained (including filter replacements) through 2020 or earlier if Caltrain is elec Applican Prior to issuance building it; annually thereafter Director of Planning and Community Environment & Fire Department ve els ts listed below would reduce the air quality impacts associated with gradin construction to a less than significant. The contractor shall implement th Practices that are required for all projects (as fully described in the Initial S Mitigation Measure #2: Provide ventilation systems that filter fine parti BAAQMD CEQA Air Quality Guidelines recommend as mitigation th maintain air filtration systems of fresh air supply. These systems shoul an individual unit-by-unit basis, with individual air intake and exhaus unit separately, or through trified. t of perm Biological resources Conflict with local policies or ordinances protecting biological resources Mitigation Measure #3: Provide optimum tree replacement for loss of eight street trees as identified above. The applicant shall work with the City Arborist to identify adequate replacement trees (size, species, location, etc…) prior to development project approval. Applicant Prior to issuance of building permit Director of Public Works- Arborist/Urban Forester ATTACHMENT D attachment D.doc 2 of 3 Geology, Soils and Seismicity Be located o geologic uni soil that is unstable or would bec unstabl resu n t tha om e as a lt of the project dance w s and design presented in the and prior to technical engineer to 1) mplete, 2) review the final construction plans and specifications, and 3) observe the earthwork and foundation installation. ica to issuance ilding permit Director of Planning and Community Environment- Building Division a or t Mitigation Measure #4: The design of all buildings shall be in accor earthquake resistant standards, including the 2007 CBC guideline recommendations regarding the potential for localized liquefaction e Geotechnical Investigation provided by TRC. Mitigation Measure #5: Prior to final approval of any development plan building permit issuance the applicant will be required to retain a geo perform a final geotechnical investigation once site development plans are co ith current Appl nt Prior of bu Hazards and Hazardous Materials Create a significa hazard t public or the environm through reasonably foreseea and accide nt o the ent ble upset nt conditions e Mitigation Measure #6: CSCDEH closure stipulations shall be followed which include site in the event of a installation of water Mitigation Measure #7: Any future building or demolition is planned, a qualified contractor shall be retained to survey and ascertain the presence of these materials and provide for proper management and/or disposal of these materials Applicant Prior to issuance of building permit Fire Division-Fire Marshall involving th release of hazardous materials additional sampling, health risk management, and mitigation measures on change in the property use, site grading activities, excavation, or the wells. Noise Result noise level residential developm exceed an 45dB. in indo s fo ent t Ld of Result in instantaneous noise levels of greater than 50dBin bedrooms or 55dB in other eria, sound rated ades shall meet the ovided in the Noise Assessment by Charles M. Salter Associates, Inc. Mitigation Measure #9: In order to mitigate noise impacts associated with outdoor mechanical equipment mitigation measures will be required. These may include a combination of selecting quiet units, maintain minimum distances to property lines, and physical barriers and/or enclosures. The applicant shall work with staff during the design phase to determine to specific requirements. Applicant Prior to issuance of building permit Director of Planning and Community Environment or r Mitigation Measure #8: In order to meet the indoor noise level crit exterior facades and windows shall be required. The windows and fac STC rated recommendations as pro n attachment D.doc 3 of 3 rooms in ar with exterior Ldn of 60dB greater. ea or ventilation or air terior environment s Mitigation Measure #10: Since the residential units will be closed a conditioning system shall be provided to provide a habitable in Transportation and Traffic Cause a local intersection already opera at LOS E or deteriorat average sto delay for the critical ting to Mitigation Measure #11: The applicant shall prepare a constructio prior to approval of building permit. Traffic control measures construction, removal of demolition debris, delivery of constru retention of parking spaces for construction workF e in pp movements by four seconds more? n manageme during demolition and ction materials, ers and on-site staff, shall be helter lane Ramp). This mitigation easure of creating a one receiving and travel lane configuration between the intersection of Alma Street/Lytton Avenue and Alma Street/University Avenue (South Ramp). lican to issuance ilding permit Director of Planning and Community Environment- Chief Transportation Official the ed or detailed as part of the approved construction management plan. Mitigation Measure #12: The project shall install a left turn median with s the intersection of Alma Street/University Avenue (South would be coordinated with a recommended improvement m nt plan App t Prior of bu University Avenue Train StationAmerican Red Cross Lytton Station FireStation # 1 werl LyttonSquare Senior Center Everett Manor EverettHouse Lytton Gardens Senior Residence Casa Olga Diddams The North Face Gym Lot R Parking Garage City of Palo Alto Private Bank of the Peninsula Comerica Bank Cornish & Carey Pizza My Heart Peninsula Creamery Mac's Smokeshop Wasson Building PALO AL HA W TH ORNE AVEN UESO N STR EET RAM ONA STREET E MERSO N STREET O R NE AVENUE HIGH STREET EVERETT AVENUE EVE RETT AVENUE HIG H STREET ALM A STR EET ALM A STREET LYTTON AVENUE E L C A MIN O R E AL AL MA STREET EM ER S ON STREET RA M O NA STREETLYTTON AVENUE U NIVERSITY AVENUE R A M O N A STR HIG H STREET EM ERSON STREET E MERS O N STREET HIG H STREET HA M BRYANT STREET FLO RENCE STRE W AVERLEY STREET EVERETT AVENUEBRYANT STREET HA W TH O RA M O NA STREET BRYANT STREET LYTTO N AVEN UE LANE 5 EAST LA LAN E 20 W EST MITC HELL LANE LANE 15 EAST BRYANT C OURT PAULSEN LANE LANE 12 W EST EL C A MIN O R PENINSULA C O R RID O R JOINT P O W ERS BOARD PC- PF CD CPC-4612 0 PF R M-30 PC-4063 PC-3872 PF CD-C (P) PF PF CD-N (P) PF P C-3111 PF PC-4262 PC-4243 PC-4238 RM-15 R M D( N P ) P C-3429 C D-N (P) CD-C (P) CD-C (P)PF PC-4611 P C-4053 R M D(N P) PF PC-2049 PC-3102 RM-30 PC-4339 RM-30 R M-30 PC-4436 CD-C(GF)(P) This map is a product of the City of Palo Alto GIS This document is a graphic representation only of best available sources. Legend Project Site Parking District 0' 232' 335-355 Alma Street CITY O F PALO A L TO I N C O R P O R ATE D C ALIFOR N IA P a l o A l t oT h e C i t y o f A P RIL 16 1894 The City of Palo Alto assumes no responsibility for any errors ©1989 to 2010 City of Palo Alto jarmer, 2011-03-09 12:39:14 (\\cc-maps\gis$\gis\admin\Personal\Planning.mdb) City of Palo Alto (ID # 2433) City Council Staff Report Report Type: Action ItemsMeeting Date: 3/12/2012 March 12, 2012 Page 1 of 9 (ID # 2433) Summary Title: Lytton Gateway Planned Community @ 355 Alma Street Title: Public Hearing: Consideration of the Proposed Lytton Gateway Planned Community (PC), including: (1) Approval of a Mitigated Negative Declaration, (2) Adoption of a PC Ordinance Amending the Zoning Map of the City Of Palo Alto to Change the Zone Designations of 355 and 335 Alma, currently CDC-P and CDN-P to Allow a Mixed Use, Five-Story, 64-foot Tall Building (and an 84’ Corner Tower Feature) on the former Shell Station Site, including Two Concessions under State Density Bonus Law (Building Height and Daylight Plane), and (3) Approval of a Resolution Amending the Comprehensive Plan Designation for a Portion of the Site (335 Alma) to Regional/Community Commercial (from Neighborhood Commercial), for the Project Located at 355 and 335 Alma Street. * Quasi-Judicial. From: City Manager Lead Department: Planning and Community Environment Recommendation Staff recommends that Council: 1) Approve the Initial Study and Mitigated Negative Declaration (Attachment C) for the proposed mixed-use development at 335 and 355 Alma Street; 2) Adopt a Resolution (Attachment B) amending the Comprehensive Plan designation for a portion of the site (335 Alma) from Neighborhood Commercial to Regional/ Community Commercial; and 3) Approve a Planned Community Zone District ordinance (Attachment A) rezoning the subject property from CD-N(P) and CD-C(P) to allow for a new, five-story building with ground floor retail space (4,215 s.f.), three floors of office space (44,753 s.f.), and 14 residential rental units, including seven below market rate (BMR) residential units for which two concessions (associated with three affordable units (21% of total units under California Government Code 65915) allow for increased height and building encroachments into the required daylight plane. Executive Summary March 12, 2012 Page 2 of 9 (ID # 2433) The “Lytton Gateway” project is designed as a gateway mixed-use building in a key location (on the former Shell gas station site, closed in August 2010) across from the City’s most important transit hub. The Planning and Transportation Commission (PTC) initiated the Planned Community (PC) Zone District application in March 2011. After conducting three additional public meetings and concurring on the innovative public benefits offered, the PTC recommended approval of the project and associated legal documents on February 22, 2012, with a 5-2 vote. The Architectural Review Board (ARB) also recommended the project on a 3-1 vote following two public hearings. The key issues for the project are the appropriate height and floor area, as well as the adequacy of “public benefits” (see the discussion below) proposed for the site. Background The site is 21,713 square feet in size, comprised of two parcels having two different zoning and land use designations. The corner parcel (14,400 square feet in area, located at 355 Alma and fronting Lytton as well) is within the Downtown Parking Assessment District and the CD-C (P) Zone District and has a Community Commercial land use designation. The second parcel (7,313 square feet in area, 335 Alma) is within the CD-N (P) Zone District but is not within the parking district, and has a Neighborhood Commercial land use designation. The project site abuts one-story commercial buildings and zone districts (CD-C(P) and CD-N(P) on Lytton and Alma, respectively) and multi-story multiple family residential buildings and zone district (RM-30 at the rear interior portion of the site). There are five non-restricted street parking spaces along the site’s Alma frontage. Additional background and neighborhood context is provided in the staff reports attached and online. Board and Commission Review Planning and Transportation Commission Review The Planning and Transportation Commission (PTC) recommended approval of the project and associated legal documents, with modifications annotated in the attachments, on a 5-2 vote on February 22, 2011. The applicant presented some changes in the parking provisions at the final hearing, including: (1) An increase in the number of spaces within the garage (seven additional spaces) for a total of 130 garage spaces, March 12, 2012 Page 3 of 9 (ID # 2433) (2) An offer of eight surface spaces on the site to be open to the public at all hours, and 14 underground spaces available nights and weekends. (3) Attendant parking to allow an additional 34 cars within the garage to increase the garage’s capacity to a total of 164 cars. The Commissioners agreed that the public benefits were innovative and substantial. One dissenting vote (Vice Chair Fineberg) was due to concerns that Council had not yet provided guidelines for concessions and PC public benefits, that the downtown parking provisions are under consideration, and that the project needs a Comprehensive Plan amendment along with the PC rezoning. The PTC noted a desire to revisit Planned Community zoning regulations and issues related to code-sanctioned parking reductions and the potential for under- parking. Six public speakers presented their views to the PTC; five of the speakers were concerned about the project, primarily due to the potential for parking spillover into adjacent neighborhoods and the trickiness of PC public benefits; one speaker noted his full support. Written comments provided by one of the speakers (Mr. Alsman) are attached to this report along with correspondence received in time for Council packet. On January 25, 2012, the PTC had continued their review to allow the applicant and staff to coordinate further efforts on the public benefits and the Transportation Demand Management (TDM) programs, but the PTC had voted 6-1 to support the project’s density, size and mass as proposed, with two concessions under GC 65915 associated with three of the affordable units of a total of seven affordable units (increased from the five proposed at that time), so that four affordable units could be deemed as Public Benefits not associated with concessions. The public benefits and TDM program provisions were updated and presented to the PTC. The PTC reports provide additional background on the project. The January 25 and February 22 PTC staff reports and minutes are attached and links to other online staff reports, meeting minutes and webcasts for the following PTC meeting dates are provided below: March 12, 2012 Page 4 of 9 (ID # 2433) 1/25/12 report: http://www.cityofpaloalto.org/civica/filebank/blobdload.asp?BlobID=30044 1/25/12 minutes: http://www.cityofpaloalto.org/civica/filebank/blobdload.asp?BlobID=30319 1/25/12 webcast: http://www.cityofpaloalto.org/civica/filebank/blobdload.asp?BlobID=30044 6/29/11 report: http://www.cityofpaloalto.org/civica/filebank/blobdload.asp?BlobID=27712 6/29/11 minutes: http://www.cityofpaloalto.org/civica/filebank/blobdload.asp?BlobID=29044 3/16/11 report: http://www.cityofpaloalto.org/civica/filebank/blobdload.asp?BlobID=26591 3/16/11 minutes: http://www.cityofpaloalto.org/civica/filebank/blobdload.asp?BlobID=27101 ARB Review The ARB conducted three reviews of the project; a preliminary review in June 2011, and two formal reviews, in October and November 2011. The ARB reports provide additional background information on the project. There were a total of three speakers for these hearings (two neighbors in support plus Mr. Bob Moss). The approval conditions include a condition for the applicant to return with design details on ARB Consent Calendar for landscape screening at the northeast corner, signage, final resolution of the 84 foot tower design, lighting details, and bike rack selection. Links to the ARB staff reports and minutes for the following ARB dates are provided below: 11/3/11 report: http://www.cityofpaloalto.org/civica/filebank/blobdload.asp?BlobID=29229 10/20/11 report: http://www.cityofpaloalto.org/civica/filebank/blobdload.asp?BlobID=29056 6/2/11 report: http://www.cityofpaloalto.org/civica/filebank/blobdload.asp?BlobID=27439 Discussion and Policy Implications Findings for approval of the Mitigated Negative Declaration, Comprehensive Plan land use re-designation and Planned Community rezoning are contained in the proposed ordinance (Attachment A) and resolution (Attachment B). Three key March 12, 2012 Page 5 of 9 (ID # 2433) issues discussed below are: (1) Downtown: Comprehensive Plan Vision, including Density Near Transit, Floor Area “cap” and Parking, (2) Density Bonus Law Concessions, and (3) Planned Community Public Benefits. 1. Downtown Development Policies Comprehensive Plan The City’s Comprehensive Plan includes the land use category “Transit Oriented Residential” which is envisioned for development of increased residential densities up to 50 units per acre within 2,000 feet of the City’s two multi-modal transit stations. “Pedestrian Transit Oriented Development” Standards have been developed in the City’s Zoning Code (Chapter 18.34) and applied to developments within walking distance of the California Avenue transit station as referenced in Chapter 18.34. The downtown transit station area has also been identified as suitable for increased residential density and transit oriented development. More recently in the regional discussions about sustainable communities, transit oriented development is also viewed as including office space near transit. Council Guidelines for Density and Height The proposed project is consistent with the ongoing effort the City is making to update the Comprehensive Plan by defining the type an amount of housing that can best be accommodated. The City of Palo Alto Planning and Transportation Commission staff report dated August 11, 2010, provided the following specific guidelines to which this project adheres: •Focus on sites within a ½ mile of transit stations if well served by transit or likely to be well served; •Evaluate limited exceptions to the City’s 50 foot height limit for mixed use projects within a ¼ mile of fixed rail transit stations; and •Explore potential housing inventory sites using LEED-ND, particularly near transit and services. Downtown Cap The Downtown Study incorporated a growth limit of 350,000 square feet of additional non-residential floor area above the total floor area existing in 1986, and provided for a re-evaluation of the CD regulations when net new development reaches 235,000 square feet. Since 1986, a total of 159,857 square feet of non-residential uses have been added in the Downtown area. Based on this recent monitoring, an additional 75,143 square feet of new non- residential development remains for development before the re-evaluation limit of 235,000 square feet growth limit is reached. The proposed mixed use project at 355 Alma would add nearly 50,000 square feet of non-residential floor area which would leave only 25,000 square feet before the re-evaluation of the area needs to occur. March 12, 2012 Page 6 of 9 (ID # 2433) Downtown Parking Study The City continues to analyze parking strategies for downtown, and has been conducting meetings of a Downtown Parking Study Group to evaluate and explore ways to minimize the impacts of parking for downtown uses upon residential neighborhoods, particularly the Professorville neighborhood. The proposed public benefits for the Lytton Gateway project include contribution to a study which will look at potential locations and costs for parking structures on existing City surface parking lots. In addition, the project includes a valet parking program which could serve as a pilot or case example of such a program for potential future consideration for wider use in the downtown. 2. Density Bonus Law Concessions The City may not require BMR housing units for rental housing according to a recent appellate court decision (Palmer v. City of Los Angeles) . The applicant’s proposal is for seven affordable, rental housing units and is responsive to the PTC’s direction to increase the number of affordable housing units from five to seven so that four affordable units are public benefits not associated with concessions under Government Code Section (GC) 65915. Three of the 14 residential units (21%) would be provided as low-income affordable units, in order to qualify for two concessions under GC 65915. A binding agreement to maintain the units associated with the concessions as BMR units for 30 years would be required and is referenced in the attached PC Ordinance (Attachment A). The term and affordability level requirements contained in GC 65915 do not necessarily apply to the units that are serving as a public benefit but are not associated with the requested concessions. The City’s housing planner is working on an agreement with the applicant to ascertain the level and term of affordability for these four units. The two concessions are for: 1) allowance for additional building height (exceeding the 35 foot height limitation, due to its proximity within 150 feet of residential zoning, where a 50 foot height is otherwise allowed within a PC zone), and 2) relief from the more restrictive PC zone daylight plane requirement. The PTC is tentatively scheduled to consider the Housing Element update on April 11, 2012, and may also discuss proposed City policy regarding GC 65915 concessions at that time. March 12, 2012 Page 7 of 9 (ID # 2433) 3. Public Benefits The provision of 14 rental housing units near a major public transit hub is one of the primary public benefits of the project. Seven of these housing units are to be rented at Below Market Rates (BMR). In addition to the provision of housing units as an intrinsic benefit, the following project components are proposed as public benefits: a) Provision of seven affordable housing units, four of which are not associated with Density Bonus Law concessions. b) Inclusion of 4,215 square feet of ground floor retail, personal service or financial service area as proximate to the train station. No office will be allowed on the ground floor for the entire 4,215 square feet of commercial space. c) Inclusion of 1,550 square feet of subsidized (BMR) ground floor retail space use. d) Provision of two (2) electric vehicle (EV) charging stations at off-site parking spaces directly adjacent to the site along Alma Street (one level 3 and one level 2 charging station) where the applicant will incur all costs of installing the EV stations. e) Provision of three additional level 2 EV charging stations in the below-grade parking garage. f) Provision of one Zip Car rental unit to be located in a designated space within the surface parking lot behind the building that is open to the public. g) Contribution of no less than $60,000 in funding to help City efforts to initiate a parking analysis for Downtown parking improvements. h) Provision of 8 surface parking spaces as available to the public at all hours daily, and 14 underground spaces nights and weekends. i) Development of an extensive Alma Street tree canopy with the addition of 13 new street trees on the west side (Cal Train parking lot side) of Alma Street between Lytton and Everett. j) Installation of pedestrian and urban design features, including widened sidewalks and crosswalks, to enhance pedestrian safety and connectivity. k) Installation of street and vehicular improvements including: 1. upgraded traffic signal at the intersection of Lytton and Alma, and high visibility crosswalk striping; 2. southbound left turn lane and associated median and striping at the Alma and University ramp (north ramp) to facilitate southbound left turns from Alma to westbound University; 3. center median on Alma between University and Lytton; 4. upgraded bike lanes and markings: northbound bike lane on Alma between University and Lytton; westbound bike lane and “bike box” on Lytton at the Alma intersection, and southbound bike lane on Alma approaching Lytton; 5. pedestrian bulb-out along project frontage at the Lytton and Alma corner, to shorten pedestrian crossing distances and walk times while improving safety; 6. new left turn lane from southbound Alma onto eastbound Everett (but no 7. change to hours of permitted turns proposed); 8. expanded sidewalk and curb (four feet wider) along Lytton project frontage to enhance pedestrian environment; March 12, 2012 Page 8 of 9 (ID # 2433) 9. relocated street trees along Alma from existing sidewalk planting strips to new planters (with new trees) located within parking lane, to increase the usable sidewalk width from 8’3” to approximately 10’3”; 10. ten new post-top streetlights along Alma and Lytton at approximately 28 foot spacing, to provide safe and attractive lighting (replacing two existing streetlights); 11. street furnishings including a bench for pedestrian seating on Alma and trash and recycling receptacles along entire project frontage. l) Contribution of a perpetual easement to the City for placement of signage on the upper most roof/mechanical screen. The intent is for the City to be able to provide “gateway” signage identifying arrival into the City. m) Provision of CalTrain Go-Passes or the equivalent, as part of the TDM program, for all residents and employees of the commercial spaces for the life of the project. Timeline Initiation by P&TC March 16, 2011 Preliminary ARB Hearing June 2, 2011 P&TC Study Session June 29, 2011 First ARB Hearing October 20, 2011 Second ARB Hearing November 3, 2011 Formal P&TC Hearing January 25, 2012 Formal P&TC Hearing February 22, 2012 Council Hearing Date March 12, 2012 Resource Impact The project’s addition of 14 residential units, along with its creation of 49,024 square feet of office space and 4,215 square feet of retail space would yield the City additional annual revenues in the form of property taxes, sales taxes, and utility user taxes, estimated in the range of $70,000 to $90,000 per year. One-time revenues would include impact fees of approximately $1.4 million. On the expenditure side, the project’s residential portion will create additional demand for City services, but these should be offset by the developer impact fees and other revenues mentioned above. Environmental Review The Initial Study and Mitigated Negative Declaration, which reviewed the environmental issues related to the project, as required by the California Environmental Quality Act (CEQA), was circulated for a 20-day public comment period between October 17, 2011 and November 6, 2011. No comments were March 12, 2012 Page 9 of 9 (ID # 2433) received on the Mitigated Negative Declaration during the comment period. A copy of the environmental document is provided as Attachment C. Implementation of required Mitigation measures related to air quality, biological resources, geology and soils, hazards and hazardous materials, noise, and transportation and traffic, are included in the conditions of approval. Attachments: •:Attachment A: Draft PC Ordinance for 355 Alma (PDF) •: Attachment B: Comp Plan Resolution includes exhibit (PDF) •: Attachment C: Initial Study-Mitigated Negative Declaration(PDF) •: Attachment D: Mitigation Monitoring Program (DOC) •: Attachment E: Location Map (PDF) •: Attachment F: January 25, 2012 P&TC Staff Report & Minutes (PDF) •: Attachment G: February 22, 2012 P&TC Staff Report & Minutes (PDF) •: Attachment H: 101 Lytton public benefits list February 8, 2012 (DOCX) •: Attachment I: February 14, 2012 355 Alma Gateway Memo(PDF) •: Attachment J: Improvements to Public Right-of-Ways (PDF) •: Attachment K: Alma and Lytton Public Improvements (PDF) •: Attachment L: Parking table (XLS) •: Attachment M: Public Correspondence (PDF) •: Attachment N: Transportation Demand Management Plan(PDF) Prepared By: Amy French, Current Planning Manager Department Head: Curtis Williams, Director City Manager Approval: ____________________________________ James Keene, City Manager DRAFT EXCERPT CITY COUNCIL MEETINTG Special Meeting March 12, 2012 11.Public Hearing: Consideration of the Proposed Lytton Gateway Planned Community (PC), including: (1) Approval of a Mitigated Negative Declaration, (2) Adoption of a PC Ordinance Amending the Zoning Map of the City Of Palo Alto to Change the Zone Designations of 355 and 335 Alma, currently CDC-P and CDN-P to Allow a Mixed Use, Five-Story, 64- foot Tall Building (and an 84’ Corner Tower Feature) on the former Shell Station Site, including Two Concessions under State Density Bonus Law (Building Height and Daylight Plane), and (3) Approval of a Resolution Amending the Comprehensive Plan Designation for a Portion of the Site (335 Alma) to Regional/Community Commercial (from Neighborhood Commercial), for the Project Located at 355 and 335 Alma Street. * Quasi-Judicial. Mayor Yeh said Council would begin item 11 with a Staff presentation, followed by Commissioner Fineberg of the Planning and Transportation Commission, and Commissioner Wasserman of the Architectural Review Board. He said that the Applicant would have 10 minutes for a presentation. City Council would then have a preliminary round of questions before the public hearing was opened. Each member of the public would have two minutes for comments. After the public hearing, the Applicant would have a rebuttal of three minutes. City Council would then have time for questions, comments or motions. Curtis Williams, Director of Planning and Community Environment, introduced the people with him as Amy French, the Planning Manager and Acting Assistant Director, Jason Nortz, the Project Planner, Susan Fineberg from the Planning and Transportation Commission, and Judith Wasserman from the Architectural Review Board. He said that the background and context for this project was that in late 2012 the Applicants met with Staff and presented a proposal for a two story 17,000 square foot office building that would have required architectural review, but would not have had to go through Planning and Transportation Commission or the City Council. Staff felt that the site was under zoned and had been missing opportunities in a transit oriented location for mixed use and/or higher intensity. The project site was also constrained by the fact that transfer development rights were not permitted because of the proximity to a residential zone. The Applicant returned with the Planned Community (PC) zone and went through multiple reviews with the 1 March 12, 2012 Architectural Review Board and the Planning and Transportation Commission. At one point the Applicant reduced the project to a four story proposal, but he did not recall if that had lost the residential floor. He said that the Planning and Transportation Commission had felt five stories were more appropriate. He stated that this is a Planned Community zone district and as such Council had a lot of discretion. He said that Council had discretion to determine the appropriate land use, intensity, development standards, and public benefits related to the project. He said that the project was a five story mixed use building immediately adjacent to the University Avenue Caltrain station with proposed ground floor retail or personal services, three floors of office space, and 14 rental units on the fifth floor. Of the 14 rental units 7 would be below market rate units (BMR). There would be 130 parking stalls, 8 at the surface and the rest below grade. He said there was also a proposal to expand the capacity through attendant parking. There was a request for State Density Bonus Law for height and daylight plane encroachments. The public benefits that were identified for the project included providing for rental housing with relatively small units averaging about 750 square feet. He said that four of the seven below market rate units were above and beyond the Applicant’s request for housing law concessions. There would be 1,500 square feet of subsidized ground floor retail or nonprofit use. He stated that he believed the Applicant would explain that point in more detail but that it would provide for a certain number of years that rates would be at 50% of the market rate for ground floor retail. The proposal included three electric vehicle (EV) charging stations and Zip Car rental availability. Additionally, he said that the Applicants had offered $60,000 for a downtown parking garage study. The Applicant had also proposed a series of improvements to the street tree canopy along both sides of Alma Street. He said that was something that was mentioned in the Comprehensive Plan. Finally, he stated there were a series of street and right of way improvements along Alma near the intersection with University that were proposed. He explained that while there were a few others not mentioned these were the major public benefits suggested. He said that there were a few key issues including the height of the building and parking. The height was five stories, 64 feet generally, with an 84 foot high tower at the southeast corner. The height over 50 feet was entirely the residential floor. He said that a year and a half ago the Council had a discussion about housing policies, the Housing Element, and the Comprehensive Plan that essentially allowed Staff to explore the idea of exceeding the 50 foot height limit for development that was proximate to transit. Parking had become a primary issue with the project recently. The commercial development would require 213 spaces per code if there were no adjustments or exceptions. He explained that there was a provision in the code that exempted first floor one-to-one floor area ratio. He said that two thirds of the project, about 14,500 square feet, was located in the parking district. So for that area, that exemption reduced the parking by 58 stalls. The Applicant would have to pay into the assessment district as opposed to 2 March 12, 2012 the In Lieu parking fee district that is used for construction. This left 155 commercial spaces still required. He stated that the Applicant requested a 30% parking reduction on the remainder, which was based on provisions of the code. The provisions allowed up to a 20% reduction for transportation demand management measures and up to a 20% reduction for proximity to transit. That request would reduce the parking requirement to 109 spaces. There were 14 residential spaces required, which resulted in 123 total spaces. The Applicant proposed 130 spaces and attendant parking. He stated that the project also preserved the five existing stalls along the Alma frontage. He said Staff recognized there was parking issues associated with the project. The project was set up as a Planned Community. That meant Council had discretion to look at this apart from those adjustments or reductions. With respect to the transportation demand management program the Applicant agreed to a number of measures associated with reducing the traffic and parking count at the site. He explained the primary measure was providing Caltrain Go passes for all of the employees and residents of the site. The minimum cost of those for 70 employees is $10,850, or $155 per employee. The Applicant had proposed this for all employees and for the lifetime of the project. The Applicant also proposed attendant parking, a valet type of service, which would allow tandem spaces in some portions of the parking lot. The Applicant suggested that would add an additional 34 spaces, which brought the potential vehicle parking to 164 spaces. He said that the Applicant also offered that 14 of the private underground spaces would be made available to the public on nights and weekends. He said that Staff thought the Caltrain Go passes and the proximity to transit were significant. The Metropolitan Transportation Commission (MTC) did a survey in 2000 that the Applicant quoted in showed transit was more advantageous proximate to office use than to residential use. Part of that survey saw about a 42% reduction in parking demand on the sites it studied. He said that Mr. Alsman had provided Council with a document that challenged the City’s California Environmental Quality Act (CEQA) analysis relative to the parking. He said that Staff believed the document is legally defensible and adequate. He said the parking itself was not an environmental impact under the law and Staff disagrees that this project would have any significant impact on any particular neighborhood. He stated that there were already existing impacts and that the project would not help if it was under parked. He said that the issue was not an environmental issue in Staff’s mind in terms of the deterioration of a physical character of neighborhoods. He said that parking was a valid issue for the Council in any Planned Community review. He explained that Staff was conducting some parking studies and discussions with neighborhoods to determine a more holistic approach which included future projects and provided more protection to residential neighborhoods. He stated that Staff’s perspective was that this project was an appropriate intensity and location that the uses are appropriate. He noted that one of the first floor uses could also be financial services. He said Staff had heard concerns from some of the 3 March 12, 2012 Council and the public about monitoring enforcement on a number of provisions like the subsidized retail component, the below market rate housing, the attendant parking, and parking availability to the public. Staff would try to craft conditions that agreements be developed with the City over those provisions and could come back to the Planning Commission or Council. He stated that parking appeared to be the key issue and that the alternatives included requiring more parking on the site or requiring parking funding either for neighborhood protection programs or that would help to construct garage space elsewhere in the downtown area. Susan Fineberg, Planning and Transportation Commission, stated that on February 22, 2012, the Planning and Transportation Commission (PTC) voted five to two and approved the initial study and Mitigated Negative Declaration (MND) for the proposed project. She said that the PTC also voted to adopt the Resolution amending the Comprehensive Plan and to approve the PC Ordinance. She explained that the required legislative findings were made for the resolution amending the Comprehensive Plan in Section 1 of the Resolutions in Council’s packet. The required legislative findings for the PC ordinance were stated in Section F of the PC Ordinance. She explained that the discussion at the February 22, 2012, meeting focused on the adequacy and the nature of the public benefits and parking. The height and intensity as proposed in the project on January 25, 2012, were supported by the majority of the PTC and were not subject to full discussion at the February 22, 2012, meeting. The minority opinion was from Commissioner Tanaka and herself. She said that Commissioner Tanaka expressed concerns about the adequacy of public benefits and parking. She said that her concern was related to the application of the Housing Density Bonus Laws in the absence of local implementation guidelines. Her other concern was about granting the exceptions for height in excess of the 50 foot height limit without having a Council policy approving this after CEQA review, which would inform the City about cumulative impacts and potentially required mitigations. Judith Wasserman, Architectural Review Board Member, stated that in Palo Alto parking drives all development and that it would behoove Council to decide if that was a good thing or not. She gave the example that there was RM zoning 1530 and 1540, and not a single project had ever maxed out on density because they could not be parked. She said that the Architectural Review Board (ARB) reviewed the PC. The ARB reviewed the architecture, urban design, and all the things they would with regular project knowing that this was a special case because it was a PC and that it needed to rise somewhat above the normal findings. She stated that in this case the ARB felt that it did and the project had unanimous approval. She said that the size, scale, and general uses of retail, office, and housing were appropriate for the site. She explained that there was an idea that “Palo Alto” would be put prominently on the building so it was visible by train riders. This would 4 March 12, 2012 complement another project happening on Hamilton that may also have “Palo Alto” on it for the northbound trains. She said that was the gateway concept. She explained that when the ARB looked at projects it was very concerned with the streetscape and the pedestrian experience at the street level. The ARB felt this project met the street quite well as the Linton Avenue side was broken up into smaller units and the Alma side had some very nicely proportioned two story elements which worked well at the ground level. She said that the Planning and Transportation Commission asked her whether she thought this was a great or iconic building. She hoped they would not ask that question. She said that was not an appropriate question. Being great or iconic was not required for a PC. She said that she thought this building was a good building and was appropriate for the location. She said that as Council did not have the ARB minutes she would explain the several conditions they had. She said that there was some landscaping at the intersection of the project in the northeast corner where the project intersects some single family residences and there was some specific details regarding signage that the ARB had not seen. She said that there was also some lighting details that they were interested in as well as the bike rack selection. She said that the project had an attractive bike rack that the ARB hoped Public Works would approve. The main thing that ARB wanted to see was further development of the tower because the tower was the thing that would make the project special. At the time the ARB saw it, it was not developed to the ARB’s satisfaction and they asked that it be developed further. She explained that would include providing further lighting details as there were some very interesting proposals for using lighting on the tower to make it special. Council Member Holman asked about the ARB vote. Amy French, Acting Assistant Director Planning, stated that in the Planning and Transportation Commission Report from January 2012, it said it was a three to one vote. She said that the member who was opposed, was opposed because he did not feel that the screening at the northeast corner of the project was especially helpful for the adjacent residential. She said that this was even though the adjacent residential owner said that it was not a problem and that the screening was fine. Mayor Yeh invited the Applicant for a 10 minute presentation. He said that the City Council would have an initial round of questions following the presentation. After the questions, the public hearing would be opened. He said that there were 25 speakers already and requested that any additional speakers complete cards and submit them to the City Clerks. He stated that all Council members would be required to disclose all meetings that were conducted prior to the public hearing. Following public comment, the Applicant would have three minutes for rebuttal. He said that Council would then make final questions, comments or motions. 5 March 12, 2012 Boyd Smith said he was a member of the Applicant team. He said he was “battle fatigued” but was an improved Applicant. He said that Mr. Williams had done a wonderful job summarizing the project. He said that he wanted to discuss the Transportation Demand Management (TDM) program. They had been in the public process for about 15 months now and until about 45 prior to the City Council meeting, a total of seven people had spoken in opposition to the project. Then the Applicant heard that resident neighbor groups were concerned about the impacts that the project may have on their on-street parking. He stated that they had done everything they could to be thoughtful and responsive to neighborhood concerns. He explained that they had met with representatives of Downtown North and Professorville and that it was clear that the representatives wanted a resident permit parking program. He showed a slide that summarized what they had done in the last 45 days to be thoughtful and responsive developers. He said they increased the parking to 164 stalls through a very innovative commercial attendant parking program, which would be the first of its kind downtown. The Applicant opened 8 stalls in the private parking garage to the public every day and 14 stalls on nights and weekends. The Applicant agreed to provide up to $250,000 to help fund the resident parking permit and to also contribute to the City Transportation Division so it could analyze and explore improving and expanding the existing parking infrastructure. He explained the valet type system would be run by a first class operator. He stated this was an innovative, responsible, green answer to the neighbor’s requests. The attendant parking allowed for the efficient use of the parking garage in a way that balances transportation policy land use and protected the residential neighbors from intrusive parking on their streets. Elizabeth Hughes said she was the President of TDM Specialists, Inc. and Vice President of the Association for Commuter Transportation, Sacramento Valley Chapter. She explained that her industry practitioner experience was 12 years of customizing TDM plans for development projects and also implementing and managing commuter programs. Some of the projects she worked on included Facebook, Broadcom and Amgen. She said that the 101 Lytton project was extremely well located to multiple options for transit, which was the reason why Transportation Demand Management would work very well at the location. She said that TDM worked well. Commercial projects that were not served by rail could achieve 20 to 30% alternative mode use vehicle reductions. She explained that mixed use components added enhancements for TDM programs because they provided the amenities that support transit users. She stated that near proximity to transit further enhanced vehicle trip reductions and that this was why this project would be a poster project for a transit oriented development or even a smart growth project. She said the TDM premise was broken into three sections. First they looked at the infrastructure and physical measures that support TDM. 6 March 12, 2012 Second, through the outreach and commuter program management they looked at the day to day communication and messaging and made sure they were reaching all the occupants of the project. Third, she explained that monitoring was an important feature to highlight the successes of the project and an opportunity to retool if there was ever any need to do so. She said that the 101 Lytton Avenue mixed use TDM was a tremendously progressive plan that contained 27 measures that were specifically designed for this unique project. She said that the Caltrain Go Pass was the first of its kind in Palo Alto for a mixed use project as it was typically an employer provided component for employees. The electric vehicle chargers and Zip Car played a dual role because they provided benefits not only to the occupants but also to the community at large. Attendant parking was a complementary and supporting car management strategy for this project. Key findings from the 2007 Palo Alto Climate Protection Plan identified that vehicles account for 40% of total emissions in the city. She said that the TDM plan for the 101 Lytton project would ultimately reduce greenhouse gas emissions and support the City’s climate action goals. James Baer said PC zones were a mix of policy and politics that were both difficult and complex. The project evolution showed that they increased the residential unit count. He said this was a TOD project, which was encouraged by the Planning Commission and Staff. He said that the project was a five story building with fifth floor residential because of the Comprehensive Plan Housing Element comments by the Planning Commission to the City Council which said, “We should consider exceeding 50 feet for TOD projects this close to transit.” He said that this project was a good test case and that they increased the BMR to 50%, the residential size increased, the office square footage had not increased, retail sized increased, and the parking had increased to 164. He explained that the 34 attendant parking spaces were progressive because they were managed and monitored to the demand. The area would not be over-parked if that was successful forward transportation management, but it would also not be under-parked if there was impact on neighbors. He said that he spoke on parking because it was such a misunderstood issue. Were there no benefits allowed under the zoning code the project would be required 227 parking spaces, 4 per thousand for the commercial, and one per unit under State law for each of the one bedroom and studio apartment units with no guest parking. He said that when Council looked at the 3 non-PC zone, but zoning ordinance reductions of parking, two of those were mentioned. The first was a 20% reduction for a TDM program, and MTC showed there was a 42% savings in vehicle use and parking when a project was near transit. The second was that the project would get another 10% by being near transit. This meant that the project would receive a 30% reduction off the 227, which would leave 159 spaces. He stated that the project provided 164 spaces. He explained that there was a third benefit, which was unique to the assessment district in the downtown, which was that 7 March 12, 2012 parcels were allowed a one-to-one Floor Area Ratio (FAR) exempt from onsite parking but must pay into the parking assessment district. He wanted to be clear that the parking issue was not from the PC zone. There were inquiries about whether the allocation of total dollars for public benefit and parking should focus more on parking. He stated that the only hard cost in the public benefits of significance was the fifth floor rental apartment units and BMR. He said that those were enormously expensive, and that nobody built rental rather than for sale projects because there was not significant return. He said that one of the questions Council would look at would be if it preferred the project to be a 50 story building that was not TOD because it would not have housing. Then Council could look at the allocation of very large dollars from housing to parking solutions. He said that the Applicants thought this was a great TOD project in that they provided 164 parking spaces when only 159 would be required. Council Member Klein disclosed a meeting with Mr. Baer and Mr. Smith about a year ago. He had no information he could recall from that meeting. Vice Mayor Scharff had several phone calls with Mr. Baer and one with Mr. Smith and he had no information to disclose from those conversations that was not disclosed in the Staff Report. He also sat on a Parking Committee with Commissioner Tanaka, who voted against the project based on parking. He spoke about the things being under-parked and stated that had influenced his thinking. Council Member Burt received a phone call from Mr. Baer and did not learn any information that was not disclosed in the Staff Report. Council Member Holman had a couple conversations with the public and learned that Mountain View allowed ten percent rather than 30 percent parking reduction. Council Member Price had questions about the TDM program. Related to the issue of the commercial attendant parking she asked what had been the experience in other communities. Ms. Hughes said that it had not always been a feature of a project that was without mixed use. They found that the valet parking tended to be more of a balanced car management feature rather than adding more parking. She said that added parking to the TDM plan or a project would reduce or erode the effectiveness of the TDM goals. She said that they found that the valet parking was a way to balance a situation. As this project was mixed use, this would help the residents, tenants, employees, and community at large. 8 March 12, 2012 Council Member Price said the issue of monitoring and reporting was analogous to a mitigation monitoring program. She asked to what extent the TDM program and Applicant would address inaccuracies in the plan. Ms. Hughes said that in her professional experience the surveys done gave them more information than just what was going on and what was successful. She said that doing the survey year to year as a living document the TDM plan allowed them to retool based on the information about what people were looking for, what was working for them, and what they needed. She said that was specifically for the occupants of the project themselves and that surveys were very useful and easily accommodating to the retooling of a plan. Council Member Price said in the Staff presentation there was a discussion of contribution to the City Transportation Division for downtown parking analysis improvements and expansion. Another element that was included in the presentation suggested the possibility of $250,000 to fund a residential parking program. She questioned when that modification emerged in this project as an expansion of funding related to transportation. Mr. Smith said that was a result of their meeting with the representatives of Downtown North and Professorville. He said that the increase in funding was a direct response to that meeting. Council Member Price asked if City Staff was notified of the potential expansion of funding contribution. Mr. Smith said that he did not believe they had been notified in time. The meeting was that morning, so that was a real time modification. Council Member Price said one of her concerns was the parking and the degree to which the TDM program with all its elements could address the concerns. Council Member Holman discussed policy issues this project brought to light. One was the 50 foot height limit, on which there was no Council directive. She said that the 50 foot height limit was a long standing City standard that had broad community interest. The second was parking. The third policy issue was the ongoing questions about the Density Bonus Law and how it would be applied or not applied. She asked why the Staff had not brought the project to the Council for policy direction. Mr. Williams said projects go through the process and it would be difficult for Staff to take the project out of the process to take it to Council. He said that would have been nice to do, but he suspected the Council wanted to hear from the Commission on the project too. He said the other option would be to 9 March 12, 2012 come first to Council, and that could be the first step in any Planned Community going forward. He said that Council Member Holman had a good point, but that it was hard to do in the middle of a process. Council Member Holman said that she was not advocating that the first step would be to come to Council. She said that it was a hindsight question. She asked if the Council could limit the occupancy load of the office component of a PC project as a condition of approval, or if the Staff could make it a condition of approval of the occupancy permit in a non-PC project. Mr. Williams said there was one project where that happened, and that was the Development Agreement for 260 Homer. There was a cap on the number of workstations on that which was written into the leases. Over time that was another project that was well documented, but as far as monitoring he did not know how it would play out. He said that he did not know a reason why they could not do that legally. Donald Larkin, Assistant City Attorney, said that he did not know any reason why there could not be limits on occupancy in a commercial building. He said that for housing the City was restricted in its ability to limit occupancy. However, he was not aware of similar case law around commercial buildings. Council Member Holman said that it was not clear to her in response to a question at the Planning and Transportation Commission how this project would impact the jobs/housing imbalance in Palo Alto. She said that they were pushing back on MTC and Association of Bay Area Governments (ABAG), and that this project was heavy on office space, but light on housing. She questioned how that would impact the City’s complexion. Mr. Williams said that it did not help the jobs/housing imbalance. Palo Alto had tried to portray most recently with the Sustainable Community Strategy and ABAG responses that there needed to be a broader look at how jobs and housing interplay across the sub region than just focused within the boundaries of the City. He said that some of the Council would meet later in the week with the Regional Housing Mandate Committee and would talk about the latest version of the projections by ABAG. Those numbers essentially represent a jobs/housing balance of about four or five to one for Palo Alto. He said that he thought they were starting to understand the arguments that were in making some of those adjustments. From the inception, Staff pushed for more housing on this project. The main reasons were: 1) it was difficult to find places for housing that were not in the middle of neighborhoods and more impacting; and 2) the Applicants were willing to do rental housing with relatively small units which had less impact on schools. He said that there seemed to be an opportunity with the project that the City had not come across often, but despite Staff’s suggestions there were not many housing 10 March 12, 2012 units suggested initially. The Planning Commission pushed for more housing to get up to the 14 units that are now proposed. Council Member Holman said she was liaison for two years to the Palo Alto Housing Corporation and that previously the Housing Corporation was involved early on in the design of BMR housing programs. She stated that the Housing Corporation had not been involved as of late. The ordinance for the project did not indicate what units would be BMR and which ones would not. The description was that the majority would be the studios, not the one bedroom apartments. She questioned why the Housing Corporation was not involved earlier. Mr. Williams said he would have to look at that. He had not understood that the Housing Corporation got involved until they got into the specifics of the BMR agreement. He said that at this point they usually understand how many units and what income levels they are targeted for, but when they come for the entitlements they do not usually know specifically which units are designated. The Applicant did show on the plan that five studios and two one bedrooms were designated BMR. He said that there could still be discussion about those units and their location. The units were spread out among the 14 units. He said that Council and the Housing Corporation could discuss that, but that it was really not their determination. It was more of how the program was administered and not how many of what kind of units there were. He said that at this stage he was not accustomed to having those discussions with the Housing Corporation Council Member Espinosa asked Mr. Williams what guidance was given to the Applicant from the City regarding parking. He said that he knew he had given his opinion before, but the City under-parked projects as policy in the smart growth environmental leadership context and was trying to lead to cultural change, which was a policy he did not agree with. He said that people drive and want to drive and that causing frustration so that people change was not good policy making. There was already a problem in Professorville and University South and Downtown North had issues as well, so he questioned what guidance was given. He explained he had to balance his feelings about policy with the fact that an Applicant has followed the guidance it has been given along the way. If the Applicant had been given clear instructions about parking expectations by Staff, that was important for him to understand in his decision making process. Mr. Williams said Staff had provided guidance that parking reductions were appropriate because of the proximity to transit and the TDM. Staff did not guide the Applicant to the one-to-one exemption for first floor parking. The Applicant guided Staff to that. He indicated that was a difficult provision to deal with, and that Staff understood it was in the code. Once Staff concurred 11 March 12, 2012 with the Applicant’s legal interpretation of how that worked it was difficult to request more parking because the Applicant seemed to have met those code requirements. He said they told the Applicant that parking was an issue and that they had concerns and requested the Applicant find more parking. He said that if all these systems did not work perfectly there would be some impacts down the line. Vice Mayor Scharff asked about the ground floor retail. When he read the Staff Report thought that one of the public benefits was that retail would create sales tax, a lively street scene, and those kinds of benefits. However, when he read the actual public benefits, it said, “ground floor retail—personal service or financial service area.” He asked the Applicant how it felt about deleting “personal service or financial service” and having real retail. Mr. Baer said they were not comfortable because in that location was largely pedestrian driven, not destination driven, and that financial services and retail banking services for train riders was meaningful. He asked how Council would distinguish personal service from retail service. Vice Mayor Scharff asked Staff to define what “retail” was versus “personal services.” He asked if sales tax was charged on personal services. Ms. French said that was correct. Personal services were in the nature of salons. Retail carried with it sales tax. Vice Mayor Scharff said that the purpose of a PC was to grant exceptions because there was a public benefit. One public benefit that he believed there was, at least from the Staff Report, was that retail would provide sales tax. He asked if there would be any traditional retail concept. Mr. Baer said that they would be glad to eliminate the personal service component. Vice Mayor Scharff asked what kind of retail would be included in the project. Mr. Smith said that the Lytton piece would be well suited for traditional retail such as a coffee shop that would serve train passengers. He said that the Alma site was a tougher retail location based on discussions with brokers. The Planning Commission liked the idea of a financial institution on Alma Street. Vice Mayor Scharff asked about the square footage. Mr. Smith said that it was about 1,500 on Lytton and about 2,600 or 2,700 square feet along Alma. 12 March 12, 2012 Vice Mayor Scharff said that there was about 1,500 square feet on the ground floor that the Applicant would charge about 50% of the market for retail. He said that he could understand that if it went to a non-profit. He questioned why it was 50% for retail, how the tenant would be chosen, and why the City would subsidize a for profit retail business. Mr. Smith said they presented the option to the Planning Commission to have a nonprofit office or subsidized retail and the Planning Commission chose the subsidized retail. He said that they would be happy to do a nonprofit office. He liked the retail component because it would bring foot traffic to the corner that was needed, so he thought retail was a better fit. He said that they were happy to do either one. Vice Mayor Scharff questioned if the Applicant was willing to do either one, if it would be willing to do it in the building itself. Mr. Smith requested clarification. Vice Mayor Scharff said there were two components to the project, an office component on the other three floors, ground floor retail, and a residential top floor. He said that nonprofit was an office use, at least most of them were an office use. Therefore, he questioned if the Applicant would be willing to put the nonprofit on another floor beside the ground floor. Mr. Smith said they offered to the Planning Commission to eliminate five apartments and put a nonprofit office on the fifth floor. He said that they were reluctant to break up the floor plates on the second, third, and fourth floors. He said that they thought this would likely bring a single tenant and for security and overall planning of the building they would like to maintain the second, third, and fourth floor as office. He said that they had proposed that idea for the fifth floor. Vice Mayor Scharff asked if the charging stations were the fast charging stations where a car could be charged in an hour, or if they were the ones that took longer. Mr. Smith said that it was a combination. The ones on the street were fast chargers, called Level 3. The ones in the garage were Level 2. The thinking behind that was that the people who would park in the garage would tend to be there longer than the people parking on the street. It was two Level 3 charges and three Level 2 chargers. 13 March 12, 2012 Vice Mayor Scharff said he had questions for the Applicant related to parking. He asked how much they would pay into the parking district for the one-to- one exemption. Mr. Baer said it was a proportion share of the total bond which covered a parking deficit of about 9,000 deficit parking spaces. So if we were 48 deficit parking spaces, we would pay 58 of the 9,900 plus 58. He pointed out that if they took only the TDM and proximately to transit deductions under the code and did not take the one-to-one, they were still providing more parking. He said they could eliminate the one-to-one exemption and still have exceeded the parking required of the project, 164 spaces rather than 159, because the 159 derived from the TDM and proximity to transit. Vice Mayor Scharff said he disagreed because the Applicant was not entitled to any parking as far as he was concerned. The project was a PC, and it was whether or not the Council made that policy decision. Mr. Baer said that he did not mean to use the word entitled and apologized if he had done so. Vice Mayor Scharff asked Staff to explain how the parking worked since the City had given the Applicant a one-to-one exemption which meant the Applicant did not have to provide parking for approximately 14,400 square feet. He said that he understood the Applicant would have to pay into a parking district, but there was no new money in the parking district which would create no new parking spaces. Mr. Williams said that was Staff’s understanding of the situation. He said that it reduced the cost for other participants in the assessment district, but it would not pay into a fund that would be used to create additional parking. Vice Mayor Scharff asked if Council had the option to tell the Applicant not to pay into the parking district and instead pay an In Lieu fee for the 58 missing parking spaces. Mr. Williams said that with a Planned Community Council had that option. Vice Mayor Scharff confirmed there was no legal requirement for the Applicant to pay into the parking district and that Council could tell them to pay an In Lieu fee for the 58 spaces. Mr. Williams said that there would be a legal obligation to pay into the assessment district if Council agreed with the way it was proposed. 14 March 12, 2012 Vice Mayor Scharff said that Council could do that and then the Applicant would not have the obligation or expense of paying into the parking district, but would pay the 58 space In Lieu fee. Mr. Baer said that because the cost of In Lieu was so great in the revisions they did not take the 58 parking spaces that would have been exempt. He said that they only took the 10% for location and proximity to transit and the 20% for TDM. Vice Mayor Scharff said he needed a clarification in procedure. He asked if it was right for the Applicant answer questions, whether or not the question was addressed to the Applicant. Mayor Yeh said that at a later point in the process the Applicant would be provided with a three minute rebuttal. If there was a question directed to the Applicant, the Applicant could be invited to speak at that point. Vice Mayor Scharff said that he was confused because what Mr. Baer said did not seem to be the same as what Staff said related to the one-to-one. He said that he understood that they had taken the one-to-one and that was how this arose, but the Applicant just stated that they had not taken the one-to- one. Mr. Williams said that the Applicant took the one-to-one. He said that what Mr. Baer was suggesting was that if they did not take the one-to-one and just applied a 30% reduction, it would get them to the 164 spaces. Council would have to allow the 30% reduction. He explained the Applicant was providing 164 spaces, but at the time it was discussed originally there were not the additional 34 spaces. There have been seven plus spaces added and the potential 34 tandem attendant spaces would be included in that. Vice Mayor Scharff stated that on the Staff Report with respect to attendant parking it said there would be 25 to 34 spaces, but the Applicant said there would be 34 spaces. He asked if there was a plan and if 34 spaces was the best case scenario. Mr. Williams said that the Applicant represented 34 as the best case scenario. The Staff had not seen detailed plans to date. Vice Mayor Scharff said that code required a certain number of spaces the Applicant had to meet, but nothing in the code said anything about attendant parking being a space. So when Staff says that the Applicant created 164 spaces, he disagreed. He said that they created 130 spaces and came up with the other 34 in a creative way, which he welcomed. However, he said that if the Applicant wanted to be technical, which he thought the Applicant did when 15 March 12, 2012 it talked about taking different exemptions, then it had not created the spaces. He said that he was not sure how the Applicant got to 164 spaces under the code, when the code provided no ability to do attendant parking. Mr. Williams said that Vice Mayor Scharff was correct and that it would only be allowed if the Council approved it as part of the PC. Vice Mayor Scharff said the Applicant said it provided 34 spaces with the attendant parking, but the Staff Report said 25 to 34 spaces. He asked the Applicant if it had a commitment that it could do 34 spaces. Mr. Smith said that he was not aware there was a range and that they could commit to 34 spaces. Vice Mayor Scharff asked how the attendant parking would work. Michelle Wendler of Wadree Design said they did the layout for the attendant parking and the facility. She said that if Council would look at middle level plan, it showed the green spaces as the attendant parking. She said that you would park in the drive aisle behind the spaces that were parked perpendicular and then there would still be space in the drive aisle to drive behind. It was proposed to be filled from the bottom to the top. She said that was how it worked on one of the floors. Vice Mayor Scharff asked how a person would retrieve his car. Ms. Wendler said there were two levels. The first level was called stack parking. Stack parking was where the first person parks their car and takes their keys with them and when someone comes and parks in the drive out they leave their keys with the attendant so that car could be moved. She said that tended to be very customer service oriented so those who parked first would not need to find the attendant except to move another car out of the way. She said that this was useful in this type of environment as opposed to a full valet where you have a drop off spot and a place for the cars to queue. In this case people would self-park and then when it got full the attendant would take the keys from those who park behind and give them a ticket. Vice Mayor Scharff asked if the $250,000 was on top of the $60,000, or did it include the $60,000. Mr. Smith said that they included the $60,000 within the $250,000. Council Member Shepherd asked the Applicant what retail nonprofit use there would be. She asked if it would be a credit union or something similar. 16 March 12, 2012 Mr. Smith asked to address the previous question briefly. He said that they were happy to discuss having the $250,000 be in addition to the $60,000. With the retail they envisioned a local retailer. They had discussed a flower or coffee shop. Council Member Shepherd confirmed that was not nonprofit, but just a business with subsidized rent. Mr. Smith said that he thought Mr. Baer had ideas of businesses that catered to the local community. He said that they were open to anything. Council Member Shepherd asked who paid the bill for the outdoor Electric Vehicle (EV) charging station. Mr. Smith said that they had to further define. It could be paid by the user. Council Member Shepherd she wanted to understand if it was hooked into the building’s electrical. Mr. Smith said that it was, but then said that Mr. Baer had a clarification. Mr. Baer said that they met with one of the regional EV charging stations and it operated a billing system where the consumer would use a credit card or another card that was specifically designated for EV. The cost of the charging would be paid by the customer. The installation, which could be $100,000, was paid for by the developer. Council Member Shepherd confirmed that the power would be from the building owner but it may be separately metered. She said that she wanted to discuss the Go Passes and that Council had discussed them with Stanford and its development agreement. She knew there was a percentage calculated for trip diversion by offering Go Passes and stated that VTA also offed Eco Passes. She asked if Eco Passes were discussed as they stop at the same spot. If Palo Alto got Bus Rapid Transit it would come up El Camino with many riders. Many people in Palo Alto ride Caltrain, specifically from the spot with all the Marguerite services, so she wanted to understand if they would be measuring usage or if the Applicant would be just offering Go Passes. She said that if Go Passes transformed into something else that might be very expensive and asked for the Applicant’s thoughts. Mr. Smith said they had discussed both the Eco Passes and the Go Passes. They thought the Go Passes were more significant and would be more used and would reduce the single vehicle use more than the Eco Pass. He said that he believed the language they agreed to with Mr. Rodriguez was over time if Go Passes evolved into something else the requirement would evolve with 17 March 12, 2012 that as something comparable. He said that he believed there was language in the approval for the Planning Commission that stated that would adapt as necessary. Council Member Shepherd said she saw that, but was curious because Caltrain did not make money on Go Passes; it made money on its fare. She said that at the same time at the Intermodal Station you could get a bus over to Freemont BART, you could also go up San Mateo. She requested confirmation the Applicant would stay with the Caltrain Go Pass and not an Eco Pass with VTA. Mr. Smith said they were open to discussion. He said that TDM was a tool they would use to try to figure out if that was the best option. He said that the solution might a combination of Go Passes and Eco Passes. Council Member Shepherd said that there were eight surface parking spaces and fourteen garage spaces on nights and weekends. She asked Staff if they would be subject to the two hour limit so they could circulate with shoppers. Jaime Rodriguez, Chief Transportation Official, said that they had not discussed the level of signage as part of the project. He said that anything within the street extended into the two hour parking limit. He explained that when they reached the design stage they would work out the details inside the lot. Council Member Shepherd said she wanted to make sure that they were used for the retail as opposed to the building parking. She indicated she had questions for Ms. Wasserman and said that there was a conversation about an iconic building. She would not ask Ms. Wasserman about what iconic meant. This was a gateway design and a gateway project, so she thought this would be a significant piece. She asked what they would be looking at and what features were they looking for in the architectural review process. Ms. Wasserman stated that the technical term was “wow factor.” She said that when you look at a gateway situation you look at something that was formally designed for that area, like the towers and palm trees in front of Stanford. She said that this was not a situation like that so the Architectural Review Board looked for some kind of landmark, technically called an “event,” that was different from the surroundings. She explained an event made one think that they had arrived at a special place. There was a proposal at one point that was a screening of redwood trees on glass. If that was visible from the street and the train it would be very exciting. If it disappeared into the glass and was not properly lit it would be a disappointment. That was the kind of thing the Architectural Review Board wanted to see come back 18 March 12, 2012 because the project really was significant since Palo Alto had a limited number of gateways. Council Member Shepherd clarified that after the project was approved by Council the Architectural Review Board would review the tower. Ms. Wasserman said it was up to the Applicant to come back to the Architectural Review Board. She said that they approved it with conditions. She said that it could move forward through the process after Council’s approval. Council Member Schmid said he was struggling with the notion of public benefits, which were subjective. He said that the Chair of the Planning Commission stopped a meeting and said that there needed to be a heartfelt discussion about public benefits instead of dealing with applications one at a time. In his four and a half years on the Council it had only once had a discussion that dealt with guiding principles and that was in May 2010 regarding the criteria for the preparation of the Housing Element Sites Inventory. They passed a motion that said that generally building height was not to exceed 50 feet, but that Staff was to evaluate and return with exceptions within a quarter mile of fixed rail stations. He said that was a guiding principle for a public benefit that Council agreed on. Over the last 14 months the City discussed the Alma/Lytton site and had many detailed discussions and emerged with 14 housing units as a public benefit. ABAG and Regional Housing Needs Allocation (RHND) asked for 2,700 housing units in the next eight years. 14 units were only one half of one percent of that figure. In order to reach 2,700, the City would have to repeat this process in 200 other places. He asked the Staff to evaluate how successful this policy would be in getting the City to its Housing Inventory number. Mr. Williams said he was not sure how to respond to the question as it was made up of many different parts. He said that they were not expecting the over 50 foot height projects would provide all of those units. He said that the City would most likely achieve numbers by small increments in many different places. He hoped it would not be 200 different 14 unit projects, but he hoped that there would be more housing on this site, but there should be more specific planned approaches than dealing site by site. Council Member Schmid asked if Mr. Williams would say that for this one target what they emerged with was disappointing on this ideal site. Mr. Williams said they hoped to have had more housing. Council Member Schmid said that at the end of each application there was a resource impact statement. This application stated that the project was likely 19 March 12, 2012 to have Property Tax, Sales Tax, and Utility Users Tax in the range of $70,000-$90,000. He stated that during the Stanford project they had a couple economists and one worked for the City. The economists worked out a system which could judge the cost to the City of an increase in either workers or residences. They evaluated the per capita share, the number against the total in the City, and he thought that this project would add about 175 workers or residences in this site. He explained that if Palo Alto had a daytime population of 100,000 that came to about two tenths of a percent. Two tenths of a percent of our General Fund service budget was $280,000. So if the Stanford technique were applied to assess the cost of this, what we end up with is a deficit of about $190,000 per year over the life of the project. He said that did not sound like a positive public benefit. He asked the Staff if Council should take that into account in thinking about the impact on the City. Mr. Williams said he would have to look at the Stanford study. He recalled that they also accounted for the income generators of people going to lunch and purchasing goods and services in the city, which was a positive that they had not considered here. He said that this was basically just what the fees and property tax revenue would be. What Council Member Schmid discussed would be a much more complex analysis. Staff had not thought to do that with a project that was primarily commercial and did not generate a lot of occupancy tax or sales tax. He said most non-residential projects seemed to be a plus in terms of property taxes and other revenue sources relative to a population that probably provides more in terms of buying goods and services than our need to service them. Council Member Schmid said that his point was that as they started thinking in terms of public benefits or justification for changes and maybe impacts on parking it was important to do a more sophisticated look at the impact on the General Fund. He stated that as we move forward that would be important in the Council’s analysis, as it certainly was in the Stanford case. Council Member Burt said the discussion had not taken the direction he had expected in terms of the question of costs to the community of residential versus office or workers increasing versus residents increasing. He did not think the Council could go through that debate in detail that night. He recalled a series of studies over the last decade which had consistently found that residents have more of a financial impact on the City than workers. He said that if that was the premise that some of his colleagues had, he did not think it was correct. He said that Palo Alto had argued to ABAG that transit use by office workers was a higher use than transit use by residents in the same proximity to the transit station. He said that he thought they were arguing at cross purposes there. He wanted to return to the issue raised by Vice Mayor Scharff about the In Lieu fee. He said that he understood that paying into the assessment district would reduce the payment of the rest of 20 March 12, 2012 the participants already in the assessment district, that it essentially diluted what the participants paid. Mr. Williams said that was correct, but that Mr. Larkin knew more details than he did. Mr. Larkin said that was correct. Council Member Burt confirmed that if the Applicant paid the In Lieu fee that those dollars would go into an In Lieu Fund and be dedicated toward creating new parking spaces downtown at a future date. Mr. Williams said that was correct and that the In Lieu Fund was targeted toward construction. Council Member Burt said that they had heard different arguments about to what degree TDM programs reduced the need for parking. He said that Council Member Espinosa was concerned that they were designed to essentially force people out of cars essentially, versus whether they would be programs that would reduce people’s choice to drive and therefore have less need for parking spaces. He asked what the intention was of the TDM program; was it to choke off parking to force people to not drive or was it to provide a bunch of initiatives so that as studies have proven people would drive less and use transit more. Mr. Williams said the objective was to provide more choices and opportunities to use different modes of transportation. He said that if the City would close off all other options like using a residential permit parking system all over downtown it could be looked at another way, which was that the City was sort of forcing people to take transit or do something else or park at the next neighborhood out. Council Member Burt said that the community was concerned that TDM programs would not have the degree of impact on reducing the demand for parking that was stated in the proposal. He said that there were a number of studies that were alluded to and suggested that if the Council did not close on the proposal that evening the studies could be provided on the website. He said that he would like the public to have access to the information and suggested there could be a range of studies provided so the community would have the opportunity to read them and judge them. He said that he hoped the studies included would be the ones that Staff identified as credible and reflecting a range of professional opinion. Mr. Williams said Staff could post the studies. 21 March 12, 2012 Council Member Burt said that if the TDM was as successful at reducing demand as the Applicant believed then having additional parking supplied through In Lieu or onsite might be construed as a public benefit. If it was less successful there might be a need to mitigate the demand that was created. He said that he did not know that the issue could be resolved that evening, but stated he would not want to see the dollars go into the assessment district and reduce the cost to others. He wanted parking increased in the downtown area, which was certainly part of the solution to the problem. He said that some people thought added parking was a primary solution and others disagreed, but he did not think there was much debate that the City presently had a shortage of downtown parking. He stated that the site was formerly a gas station, which was ground floor retail. He asked if it was categorized that way. Ms. French said the land use classification was considered automotive services. Council Member Burt said that about two years ago they readjusted the downtown retail boundaries, which were the areas that must have ground floor retail. He stated that outside the boundaries sites were not required to be ground floor. The recommendations were made by downtown property owners and Staff. The lines were redrawn and the areas that were not good for retail were removed from the district and some areas that were identified as good for retail were added. He said that this project was outside of the boundaries for downtown retail, but that retail was so important to the project that it was considered a public benefit of the project. He explained that if the site was in the downtown retail district it would not be a public benefit at all, it would be a requirement for the project. He said that it seemed Council needed to reconsider the boundaries, because the site was good for retail or it was not and they were wrong to insist on retail. Mr. Williams said that generally Lytton was not a retail street, but this corner had that potential because it was proximate to the train station. He said that it was hard and a mapping exercise to make that leap, but it worked on a single project single site basis. Council Member Burt said that they had bookended retail nodes around transit areas. He said that they should be part of what they are conceiving, and that if they were pushing for retail at the site then they ought to acknowledge that and not put categorize it as a public benefit whether it was part of the contiguous downtown retail or not. With respect to housing, he viewed this building site as one of the most valuable in downtown Palo Alto and therefore one of the most valuable land areas in the US. He said that Council was considering having half of the top floor being affordable housing which was, by definition, penthouse housing. He said they would be moderately small 22 March 12, 2012 penthouses, but they were still seven affordable housing penthouses. He questioned if the dollars spent creating the affordable housing at that site would be better spent creating more affordable housing in other areas that were not the gateway or iconic building of the downtown. He asked who would get the affordable units and if they were concerned that people would quit Google jobs to join the lottery to get the units. He asked how they would select seven residents who would get penthouse apartments in a very high end building in one of the premier spots in the country. Mr. Williams said that it would be worked through the BMR list like other BMR units. Council Member Burt said that was a lottery. He stated that was not good policy and said he would be interested in exploring other alternatives later on about how that could be adjusted and rationalized better. He concurred with Council Member Shepherd’s raising of the Eco Pass issue. He did not believe that Eco Passes were as widely utilized as Caltrain, but believed if residents and employees could have a choice between an Eco Pass and a Go Pass that was a better TDM system. He expected most people to choose Caltrain, but stated a choice would be better. Council Member Klein said his questions fell into two categories. The first was the parking issue raised by Vice Mayor Scharff and again by Council Member Burt. He said he was confused with the talk of the various reductions. He requested clarification that the Council could throw out all of the reductions in the requirements if it wanted to since this was a PC application. Mr. Williams said yes. Council Member Klein stated that they were starting fresh as to how much parking should be required on the project. Mr. Williams said yes and that he had portrayed it in the response as being an evaluation tool to compare to what typically would be required. Council Member Klein asked if the assessment district and the one-to-one exclusion was code. Mr. Williams said that was code but had not been used except for one other project. It really applied to sites that were vacant or had very little land on it. He explained the other project was 135 Hamilton, which was the vacant land at Hamilton and High Street. Council Member Klein said that would be an exception to the idea that Council was starting fresh. 23 March 12, 2012 Mr. Williams said 135 Hamilton was not a PC. Council Member Klein clarified he was talking about the Lytton project. Mr. Williams said yes. Council Member Klein said if it was code then it was a matter of law that both Council and the Applicant had to obey. Mr. Williams explained that not true in a PC situation. In a PC situation Council could vary and create its own zoning standards. Council Member Klein said that meant the City was not required to have the Applicant pay into the assessment district. With respect to the public benefits, he could not make a clear delineation as to what he thought was appropriate public benefits without looking at what the Applicant was getting with the PC zoning compared to what it would have gotten through regular zoning. He asked if there was a chart along those lines. Ms. French said the chart was in the Planning and Transportation Commission’s Staff Report of February 22, 2012. She said it was titled Attachment D, Table 1. Mr. Williams said it was an attachment to an e-mail of earlier that day. It was previously included in the PTC attachment, but that was not in Council’s packet. He said that Council Member Price had the correct document in her hand. It compared what was proposed to what would be allowed under the existing zoning. Council Member Klein said that was not quite what he had looked for, but that it would be helpful. He asked what the square footage was of the building that could have been built under the existing zoning, with no exceptions, variances, and etcetera. Mr. Williams said that it was not one-to-one because a portion of the site was not zoned CDC downtown Commercial, so what the Applicant proposed originally was a 17,000 square foot non-residential office building. There was potential for some mixed use as well with that, but they did not look at that initially. The potential for mixed use would allow residential. Council Member Klein said the chart did not answer all his questions. He assumed that the profit for the developer was in the office building. Mr. Williams said that was a fair assumption. 24 March 12, 2012 Council Member Klein said under the PC application they would round up to 45,000 square feet in office space. Mr. Williams stated they would have been able to build 17,000 square feet. Council Member Klein confirmed the Applicant received an additional 28,000 square feet. Mr. Williams said 49,000 square feet was proposed, so it would be more than an additional 28,000 square feet. Council Member Klein asked if Mr. Williams included the ground floor retail space. Mr. Williams said the ground floor retail was in addition to the 49,000 square feet of office space. 17,000 square feet was what the Applicant would have been able to do with no special approvals, so the building was 32,000 square feet above. Council Member Klein explained the way he would analyze the project going forward was that if the Applicant got an additional 32,000 square feet then it could be multiplied by whatever was the appropriate profit per square foot to determine the potential profit of the developer. Then he would compare the profit to what he thought was the value of the public benefits. He asked if that was an improper way to look at the matter. Mr. Williams said that the thought that was a legitimate way to look at it. Council Member Klein said he had to determine what he thought was the value of the public benefits. He agreed with Council Member Burt that the City would be building the “Taj Mahal” of Below Market Rate units when the value of the land was considered. He thought that if the City was to do something along those lines it would be far better off having the Applicant contribute cash to the Housing Fund. That money could be used more efficiently than to build the “penthouse” BMR’s. He said he was not excited about the retail in the project. He did not think that was an exciting place for retail and we believed the City was right when it drew the retail district map. He stated that the public benefit idea was wrong for another reason. If the Applicant built the project and wanted to put in a coffee shop or things of that nature, he thought that they should do that on their own because they think it might enhance their building. He did not think it would enhance the community, so the idea of it being a public benefit did not strike him as valid. He said the idea of a nonprofit space was even more problematic since there was only enough space there for one very fortunate nonprofit. He felt that if 25 March 12, 2012 the Applicant chose to make the space for a nonprofit, then that was the Applicant’s own charitable decision. That was not necessarily a public benefit because the community was not choosing the nonprofit. He said that he did not like the idea that the City Council ought to choose which nonprofit because there were so many good nonprofits he would not know how to choose a subsidized rent on that basis. Mayor Yeh said that the City recently refunded the downtown parking district bonds and part of the assessment on the ratings for the bonds was based on the current rate payer. He asked if bond council had reviewed the potential for an additional entity to be paying into diffusing the downtown parking bonds. Mr. Williams said that they had not had a chance to review it. He said that the thought was that it was so minimal relative to the overall picture that they would not review it yet. He said that it likely would not have an impact, but it was something that could be run by them if the Council goes that direction. Mayor Yeh stated that in general the importance of creating choices for residents or new employees on this site needed to be balanced out with the need for additional parking. He associated himself with colleagues who leaned more toward the Parking Fund and the ability to create additional parking spaces rather than further spreading the existing costs across more payers. He asked Staff if that was part of the discussion with the Applicant at any point during the entire process in terms of the In Lieu payments versus paying down the existing assessment district. Mr. Williams said that they talked about the fact that one would help create spaces but the discussion centered more on what the code called for, which was being part of the assessment district as opposed to paying In Lieu fees. Mayor Yeh said he understood the the Applicant had pointed that provision out to Staff. He clarified that the City Council had more policy leeway to be able to interpret and move forward on PC projects and that was the basis for including it up to this point within the application. Mr. Williams said that was right and that Staff was very interested to hear what Council’s opinions even though the City might not have many more projects in that type of situation. Mayor Yeh asked if there was an estimate of the per-unit cost for the affordable housing units. He stated that they had a figure that was used in other projects but he wanted to know about this particular site. 26 March 12, 2012 Mr. Williams he said that the per-unit cost ranged greatly in other projects. He suggested that the Applicant would have a better sense of what the cost was for actually constructing the units. He said that Staff only knew the income range the units would be eligible for and what the income of the persons living there would be, but not what the cost of the unit would be. Mayor Yeh directed the question to the Applicant to see if there was an estimated range of per-unit cost for the seven affordable housing units. Mr. Baer said he would answer and that he also had a related comment. When the City funded the purchase of land construction with underground parking and financing costs, $500,000 per unit was not an exaggeration. For this project, not only was it $500,000 for each of the seven BMR units, it was that much on which there would not be an adequate return on for rental units. He said that was why condos were built in mixed use projects and not rental units. He said that his comment related to the questions about if they had misallocated public benefit in a confused way rather than really looking at the issue both politically and policy based about parking. He said one of the questions when they came to the City with a transit oriented development project was to test and see whether this was a good location for a fifth floor of housing. He said that they would suggest removing the housing and revisiting if there would then be more funds available for parking fees including In Lieu fees. He stated that there would be 14 more parking spaces by getting rid of the 14 tenants. He apologized because that option was very difficult to present. He said that the “penthouse” units were extremely expensive due to underground parking, expensive land, an expensive steel building, and a separate elevator core. He said those were massive expenses and they had been for the City’s nonprofit when they build complex projects. He stated this was a really expensive for rental housing and the public benefit units were about $500,000 each. Mayor Yeh continued with Council Member Klein’s questions and asked if Staff was comfortable doing the analysis. He asked if Staff were to take the delta for office space and look at market rates, if they would be able to review the public benefits and assign a range of estimated value for the public benefits compared to the estimated profits that would be gained through a PC proposal versus using the existing zoning. Mr. Williams said Staff would not feel comfortable doing that; they probably would want to hire someone to do that. Without the Applicant’s input on what all their costs were it would be speculative. He said that Staff could do a ballpark analysis of that and make that kind of comparison. Mayor Yeh said that he knew that everyone had asked their questions. He explained that there were 25 submitted public speaker cards. He stated each 27 March 12, 2012 speaker would have two minutes and that he would call the speakers in the order they were submitted. Public Hearing Opened: 10:03 p.m. Irwin Dawid said he was a resident of Palo Alto and a representative of Sierra Club’s Land Use and Cool City Committee teams. He expressed disappointment about the discussion and the Council’s questions. He said that he thought Council was “letting the tail wag the dog.” He said this was a stellar transit oriented project and that Sierra Club normally would not comment on a predominantly office building. However they were speaking about this project because there were so many elements that would not just make it a gateway but would really give a meaning to the entrance of downtown Palo Alto. He was disappointed the discussion had centered on attempting to figure out what the appropriate amount of parking was and if the City was providing too much parking. He said that if a five story parking garage was built in that location there would still be a parking problem downtown, but that was another issue. He said that issue was that the City does not manage its parking correctly. The problem was that there was no pricing. He said that Council Member Espinosa was right, people want to park. He hoped that the $60,000 would be used to provide a comprehensive parking study that would look at all parking strategies. He said that residential parking permits were a strategy that the Sierra Club supported. The most important thing to do was attach pricing and the City does not do that so it has a parking problem. He said that the evening’s issue was not to fix the City’s chronic parking problem but to approve a stellar TOD. Ron Babiera stated he was with the Palo Alto Housing Corporation. The Palo Alto Housing Corporation supported the provision of below market rate units as public benefit requirements for the proposed project. The organization believed that BMR units were still greatly needed in Palo Alto and that every single BMR unit counted toward meeting the need for affordable housing in the City. Tina Peak said that the proposed gateway building encompassed everything that was wrong with the planning process in the City. She said the building was massively sized and exceeded the current zoning for the parcel, which was for a two story building. The project also exceeded the 50 foot height limit which was supposed to be a hard limit for all Palo Alto buildings according to the City’s current Comprehensive Plan. She said that while the City Council, Planning Commission, and developers may want to rewrite the current Comprehensive Plan and allow for more massive buildings throughout the City, the future Comprehensive Plan and its wish for density changes had not yet been approved. She said that there had been no environmental impact reports to support new expanded densities throughout the City. She 28 March 12, 2012 said that she was not a lawyer and could not comment on the legality of continuously ignoring the current Comprehensive Plan, but she could comment that as a citizen she was offended that Palo Alto’s elected officials, appointed committees, and hired staff disregarded the document that should guide development. She stated that PC exemptions were in the current Comprehensive Plan for extraordinary exemptions, not for every office or residential building that certain developers bring before the Council. She said that this was a perverted plan in process and it had turned the zoning codes into a “free for all, growth at any cost planning rodeo.” She asked why City Planners, hired with citizen’s tax dollars to protect the zoning codes and Comprehensive Plan, were writing reports that described this building as “a landmark for downtown.” The reports were not an unbiased analysis. She also asked why unelected Planning Commissioners, peopled appointed presumably to represent citizens of Palo Alto, were demanding taller and bigger buildings when they had no mandate from the electorate to drive the process. She said that it was clear that the growth was inevitable mantra and the idea that planned growth was all good was “Kool-Aid” spouted by politically connected developers and their friends who profited from the growth and drove the process. She said that citizens were fed the line that growth was good for our economy, for our community’s livability, for the environment and that was not true. She said that in a finite City continuous growth was not good. It had negative effects which included crowed roads, packed parks, oversubscribed schools, and more air pollution. She stated that growth was not inevitable and that City Council needed to send this project back to the drawing board, or better to the chopping block so it could be brought down to size. Lad Wilson said that he was most impacted by the project as he owned all the surrounding properties. He said he had the two parcels on the front on Elm Street and four parcels in the back. He said that the block had been practicing mixed use for the last 50 years or more along with keeping in mind the primary environment that they provided which was that of a small neighborhood with great karma. He said he had easy access to all his questions and that he was intensely consulted on both the height of the building and the daylight plane issues. He said that he had access to the Lytton project group and to the Butler Company and everyone had been great with openness, communication, and full disclosure. He thanked the City Planning Department, the ARB, and everyone else involved. He said that he saw the 101 building as a smarter use of urban space. He said the development was an infill mixed use project representing an investment in mass transportation. Since the project was occupying land near a rail link it would do a better job of connecting the existing vibrant suburban downtown center of Palo Alto to cities of San Francisco and San Jose and having those incoming and outgoing commuters using 101 Lytton space more efficiently thus creating enormous public benefit. He said that the public benefit was 29 March 12, 2012 even more pronounced with the Lytton gateway project providing Caltrain Go Passes or the equivalent for all residents and employees for the life of the project. He encouraged the City Council to endorse the project because it incorporated a great transit element that would greatly improve the block and provide services to the surrounding residents. Harold Justman said he lived in the downtown area since 1998. He said that a significant number of homes in downtown Palo Alto either had no off-street parking or inadequate off-street parking. The inadequate off-street parking was often a result of a poorly constructed garage or one with shed doors that have to be dragged open and closed. He said that the knee jerk solution was to ask office building owners to build off-street parking, but there was another solution that he had seen successfully used in the past. In 1985 he purchased a duplex at 834 Ramona from Bill Reller. Mr. Reller rebuilt the property and added three off-street parking sites. In 1999, he rebuilt his house at 828 Ramona. Prior to rebuilding it had no garage at all. He said he added a two car garage and also remodeled a duplex at 242 and added a two car garage. He said that was three properties since 1985 on Ramona Street that had added seven parking spaces which then freed up the driveway for tandem and guest parking for a total of 13 parking spaces. He said that residential homeowners in the downtown area could be part of the parking solution and he did not think it was a comprehensive analysis to always ask developers to solve the parking problem. David Van Nata of Hanna & Van Nata explained he was an attorney for the development Applicant. He said they submitted a letter which hopefully Council received in its package in response to Mr. Alsman’s letter regarding the Mitigated Negative Declaration and the points Mr. Alsman made regarding that Mitigated Negative Declaration. He said he wanted to point out that they felt that the Mitigated Negative Declaration number one adequately covered the parking issue as far as the Environmental Quality Act was concerned and in addition as stated by Staff, the parking issue in and of itself was not a physical attribute which was required to be covered under CEQA. He said they also had much discussion of the mitigation measures which he thought would be adequate for Council’s findings in establishing that the CEQA matters were handled under the Mitigated Negative Declaration by making the appropriate findings with respect to those mitigation measures. Mary Grace Bertsch said Russell Hancock asked her to speak tonight because he could not attend. She explained he wrote a memo and read it verbatim as follows: “My name is Russell Hancock and I live in the St. Claire Gardens neighborhood. In my professional life I am the President of Joint Venture Silicon Valley, but I am writing you today as a 25 year resident of Palo Alto to express my support for the project being proposed for 101 Lytton. In my view the project is a model of urban design and sustainability. It has the 30 March 12, 2012 support of many disparate groups including the Sierra Club, the Palo Alto Housing Corporation, and The League of Women Voters. It has no opposition from its direct neighbors and has the endorsement of Palo Alto City Staff. In my view, which is widely shared by professionals in the field of urban planning and design, the 101 Lytton proposal is precisely what cities across our nation need to be doing in the face of climate change. The project situates housing, retail, and office space directly adjacent to transit and densifies in a place where density makes perfect sense. The developers are even providing Caltrain passes to the residents and tenants. I am also satisfied that the developers have addressed all the last remaining issues associated with parking. The Lytton site is a gateway to Palo Alto and merits a significant piece of architecture. I urge you to move forward on the project. Thank you.” Sally-Ann Rudd of 204 Cowper Street said she represented Downtown North and that for many years Downtown North was overflow parking lot for the downtown parking district. She said that in recent years the use of PC zoning along Lytton Avenue had made the problem much worse. Successive PC zone projects resulted in large office buildings without providing enough parking for the people who work in them. She said that those people together with downtown employees and people who use Caltrain but do not use the Caltrain lot, flood the neighborhood with extra car trips on a daily basis. She explained that they take up all the street parking in front of people’s houses. She felt it was high time the neighborhood was offered relief in the form of a neighborhood permit parking program. Because there was unlimited free public parking in the surrounding neighborhood there was no incentive for people to use public transport. She said that if Council wanted to get people out of their cars and onto public transit it would have to choke off the supply of free parking. She said that Stanford University had successfully managed expansion and growth while at the same time enforcing a no new net trips policy as part of its general use permit. She urged Council to accept the developer’s $250,000 toward a residential permit parking program for Downtown South and North. She asked for the implementation of the parking permit program to be before April 2014 when this building was finished. She explained that by taking those steps Council would provide relief directly to people who were impacted by this project and others who had already been impacted by past projects within the downtown parking district adjoining Downtown North. Joe Durand said he lived in Downtown North. He said that Lytton gateway masqueraded as a multi-use building but mixed use buildings were really about balance. He said that ideally they were a balance of housing, jobs, and parking resulting in no added traffic, housing, or parking burden. He understood there were lots of reasons why the City might want to compromise on this ratio, but a compromise seemed to him to be very different than what 31 March 12, 2012 this project produced. He stated that the Lytton gateway would provide only 14 units of housing, half of which were studios that were not suited for families. There was perhaps 10% retail space and really only maybe one store that could generate sales tax. Additionally the project only provided about 60% of the parking that was probably going to be required. He asked if the City could do better. He felt that the Lytton gateway project was not really multi-use and that there was no public benefit; it was just a glorified office building with not enough office parking. Mark Nanevicz said he lived in Downtown North for the past 22 years. He had been involved with the neighborhood association and the residential permit parking program which was approved by City Council over a decade ago but was tabled. He said that residents were told they would have the residential permits implemented after the parking garages were completed. He said that the parking lots were complete and still nothing had been done. He stated that it seemed like every time one a giant project came along parking in the residential neighborhoods becomes the big problem and the big push back. He said if the City would ever just implement a residential permit parking program it would not have this fight every time someone wanted to build something as there would already be a limit on how many cars could be parked on the streets. He wished the City would go ahead and implement a residential permit program. Landis Wilson was called, but he had to step out for a moment and had asked an unidentified speaker to read a letter from Stan Christensen, resident of Palo Alto. The unidentified speaker read as follows: “I am writing to enthusiastically endorse the 101 Lytton project that is before you tonight. As a Palo Alto resident for over ten years and a Professor at Stanford in sustainable development, this project embodies that TOD aims to be; dense, adequately parked, mixed use, and implementing progressive programs such as Caltrain Go Passes for all tenants and residents. Directly across the street from the downtown Caltrain station, this is an excellent opportunity for the City to solidify its commitment to sustainable development. Best regards, Stan Christensen.” Richard Brand said that he was a member of the University South neighborhood group. He said that he opposed this project and that his opposition was on record. He became more concerned during the evening’s meeting which highlighted how broken the planning system was in how the project was rolled out and all the exceptions made to get it justified. He agreed that transit was important, but thought this building was too big for the space. He was concerned with the lack of coordination between Staff and the Planning Commission. He said that the public was frustrated because they do not understand what was going on. He said it was Staff’s job to make sure that when something comes in front of the Planning Commission and was 32 March 12, 2012 obviously short of parking that the answer would be no. He stated that the City had a parking problem and everyone knows that. He had been to Council five times, there were meetings, Mr. Williams was working with his group and there was still no parking solution. He encouraged Council to focus on what the City needed and hold back on the exceptions to these projects that would further complicate the parking situation. Matt Horton said he moved to downtown Palo Alto about 13 years ago. What attracted him to the City was that it was a great walkable community and he was able to work downtown and walk. He was pleased that he did not need to take his car to travel around. He said that one of the real benefits to having a train downtown was that it gave the City great opportunity for transit oriented development. He stated that he runs a renewals fuel company and it was important for his company to have access to transit for its employees. They had to relocate to Redwood City and got a spot right across from the train station there. His company provided their employees with Caltrain passes and about a third of them use the train so they do not use that much on-street parking. He believed this project was a great opportunity for a beautiful transit oriented development. He wished that his company could be in the building. He said that he heard there was clearly a parking issue, but he recommended not trying to solve that on the back of one project. He hoped the Council would support the project. Michael Griffin believed that the employees of the building would park their cars in the neighborhoods surrounding the project as parking was free and had no time limits posted. He said that made a mockery of transit oriented development and caused environmental damage to the neighborhoods with new traffic. He suggested that if the concept of transit oriented development was to force employees onto the train, then it made no sense to build an under parked PC right next to a residential neighborhood offering free parking as a very seductive alternative to transit. He said that all the City was doing was making the voters in the R1 zone pay the price for a flawed system that rewarded only the PC developer. To him that was confused public policy. He said that Council had already faced this problem with College Terrace. He proposed a residential parking permit system based on College Terrace for both the north and south sides of University Avenue and said that in the meantime the Lytton gateway PC should not be permitted. He said that the developers should pay the cost for the full implementation of a parking permit system. He believed that the PC public benefit should directly mitigate the environmental impact it visited upon the community, specifically in the neighborhoods that were adversely affected by the project. That means $250,000 for the residential permit parking program and an additional $60,000 for the study that was discussed. 33 March 12, 2012 Carl King thanked Council for its insightful questions. He said that many questions he had were already addressed by Council’s questions. He questioned who paid for the attendant parking and asked that if the Applicant was, was it also committing to pay for that in perpetuity. He said that Council Member Klein asked about the additional profit on the 32,000 square feet. He said that he believed that the building at the corner of Alma and Hamilton sold for $1,000 a square foot, so that would be $32 million as a sale price. He also commented that in general he felt PC’s were subject to abuse. He said that developers were doing their best to get what they could in development right. With the Alma PC he thought there was an issue of a last minute offer by Mr. Nellis the night of the Council meeting which he thought was deemed inappropriate and he thought that there was also a last minute offer that evening which was not discussed with anyone. He stated that was not fair. His other point with PC’s was that he had asked Staff about how public benefits of PC’s were tracked and their performance over time. Staff answered that they did not have that information. He said that he knew there were instances where in 800 High Street some of the public benefit went to restaurants, some went to Café Riace, so he was very concerned about our ability to monitor the PC’s over time. Jackie Funk stated she was not a Palo Alto resident, but that she had traveled there and spent time in the area. She said that she lived in San Jose and she had listened and followed what was going on with the project. She was interested in the availability and the connection with Caltrain. She said that as the price of gas continued to skyrocket to have a place where business was near public transportation is good. She liked that the project was near public transportation and that it offered a wonderful opportunity for a mix of retail, business, and housing. Michael Wright said he had lived in downtown a block from the site for over 25 years and supported the Lytton project. He said that it was a nice looking building that would enhance the community. He liked the benefits of the retail space that would serve those who used public transit. He also liked the electric vehicle charging stations as a form of infrastructure which the City needed. He said that the controversy over parking had two separate issues. One was whether this project was providing sufficient parking for the people who work there. He said that from what he gathered, the developers obeyed all the rules and were consistent with the code. He did not see why they should be denied. The second issue was separate and it was whether or not there was enough parking in Palo Alto. He said there needed to be some help there and that he was also hurt by not having a residential parking program. His perspective was that 25 years ago when he moved to downtown there were only two public garages and now there were nine. He thought that the City Council over time had done what it could and he believed that it would continue to do so and eventually the parking issue would be under control. 34 March 12, 2012 Pat Markevitch said that she lived two blocks from the project. She said that the residents, downtown workers, train commuters, people who work at Stanford and pull bikes from their trunks to ride to campus, and the people who come to shop and eat in the restaurants all park in the neighborhoods. She asked if a study had been done on the PC site which was the Old Mill site in Mountainview. She asked how many of the people that lived near the San Antonio Station actually use the train and how many of them own cars and use them instead of taking the train. She stated the Go Passes would only work if one lived and worked along the transit lines. She said that people still owned cars and would have to park them somewhere as transit was a nine to five solution. She explained that the highest concentration of cars in the neighborhood was from Alma to about Cowper and then it weakened as it got closer to Middlefield. She was also concerned that Everett was slated to become a proposed bike boulevard. She worried the additional parking and traffic in that corridor would be a problem for the bikes. Michael Hodos echoed the earlier comment about the incisive questions from the Council. He said that he had been wowed. He said that there were two points that had not been raised that were worth mentioning. First, the Downtown Parking Working Group, which had 15 members comprised of the business community, the Professorville area, and the Staff had been working diligently since December to develop parking strategies that would meet the needs of the businesses and the adjacent residential neighborhoods. He said that if Council approved this project as proposed without addressing the parking shortfall, it would be shoveling sand against a tide. He stated he was in the group with Vice Mayor Scharff. He believed that the line must be drawn so the City could get the parking situation under control. The second issue he raised was about the fund Council Members had mentioned for In Lieu fees. From what he had been able to learn, there was no such fund. All the In Lieu fees went into the General Fund. He said that there was no tracking of how much of the In Lieu fees were ever used for the purpose for which they were intended, which was to mitigate the problems caused by lack of parking. He urged the Council to direct the City Manager to recapture the In Lieu fees in the General Fund and redirect them to a dedicated fund used strictly for parking. He stated that they had been told that there was about $100,000 in the General Fund of In Lieu fees, which was ridiculously low. He stated that the City of Mountainview had over a million dollars in its In Lieu Fund and would have almost $1.5 million by the end of the calendar year. Ken Alsman said there were a lot of people who would not speak who were concerned about the residential parking issues in the Professorville area. He requested that they raise their hands so that Council could see them. He stated that some people had already gone home. He said that he had a pleasurable meeting that morning with members of the development team. 35 March 12, 2012 He thought that they were gentlemen and were genuine in their interest to help the residents get the necessary residential permit parking. He thought that they were to be credited. He said that they had proposed to do considerably more than the other 10 projects currently in the downtown development pipeline. He said the 10 projects would probably generate approximately 400 additional un-parked vehicles in the neighborhood. The environmental question he raised was common sense. CEQA was intended to provide information for decision makers and the public. To ignore the fact that there was a huge concern about parking in the neighborhood and say that it was not legally required was crazy. He said that in the assessment district, the current assessment based on numbers he received from the City was $0.09 a square foot per month to the downtown property owners against $5.00, $6.00, or $7.00 rents per month. That was less than 2%. Robert Moss said that with respect to public versus private benefits for PC’s, he understood Council’s pain, as he had tried for over 20 years to quantify it and on this project I did. Unfortunately the table that I presented to the Planning Commission was not included in the evening’s packet. He stated they should read page 290. He stated that the public versus private benefits had changed because the project was modified so often. When he did the quantification, he came up with the following private benefits over $25 million and public benefits less than $3 million dollars over 20 years. He asked how the benefits could be quantified and suggested the BMR units should not be mostly studios. Secondly, they should be low income, not moderate income housing. Third, parking must be dealt with on this project. He said that this project should fix the parking problem it created and then some. He said that one of the easiest ways would be to remove a floor of offices, which would reduce the impact to parking, the disparity between public and private benefits, and the impacts to the community which would make it a more useful project. He said that $250,000 was nice for having parking restrictions downtown and in the neighborhood but suggested they add a couple hundred thousand more in case that would be necessary. Geoff Ball said that he would like to see limitations placed on visitor parking in Downtown North. He said that he worked for a while with MUNI. He explained there was great ridership to downtown San Francisco because parking was incredibly expensive there. He said he wanted the parking rate in downtown Palo Alto increased. Secondly, he wanted to see the data on the under parking collected, kept, and made visible to the public and the Council. He stated that the Planning Staff should be required to keep a database on the parking that could be used for decision making on future projects. Joseph Rosas said that as a candidate for State Assembly whose district included Palo Alto, he brought insight gleamed from similar experiments in Silicon Valley. He said he was also conscientious of the fact that an 36 March 12, 2012 investigation into San Francisco’s foreclosure crisis discovered significant fraud in 84% of all mortgages in foreclosure. Abuses were so egregious that Occupy San Jose and Occupy Redwood City called for investigations in their respective Counties. He said that with so many people losing their homes or underwater it reminded us that we need more affordable housing in the area. He said that 101 Lytton was beginning to look an awful lot like Santana Row in San Jose, which was a development that used a small amount of low cost housing as justification for its high end retail empire. He indicated that he was not necessarily asking for work to stop on the project, but there were alternate plans which could contain much more affordable housing. The foreclosure crisis has caused many residents to flee Santana Row, which resulted in a serious drain on tax revenue and more importantly a significant brain drain in the South Bay. He said that Palo Alto was next door to one of the best and most recognized universities in the world. He urged the Council to help the real job creators, the new graduates and entrepreneurs, remain in Palo Alto and build housing that included the whole community. Elaine Meyer said she was President of the University South Neighborhood Association. She opposed the rezoning of the PC because it gave the developer millions of dollars at the expense of the neighborhood. She said that the corner of Alma and Lytton did not need major reconstruction. She said that it was a reasonably well functioning intersection. She felt the changes were being misrepresented as public benefits were in fact mitigation for the project’s impact. She questioned where the cars would park from this project. She stated that the parking loopholes were truly dysfunctional and the overburdened neighborhood would suffer further. She understood that the developer was offering $250,000 for a parking study. She said that the City should be outraged by the attempted bribery. She stated that there should be balance between the added value of loose zoning and the value of the public benefits to the community. In the past the PC was described as a “license to print money.” She said that the City should not give millions in profit to a developer and make the neighborhood residents bear the brunt of this. Herb Borock stated that the Council should reject the project and direct Staff to process the Applicant’s original proposal for a 17,000 square foot building that conformed to the zoning. He said that Staff should process applications that conformed to zoning rather than becoming part of the Applicant’s development team and trying to figure out how much money the Applicant should donate to various funds in order to get the Council to approve a 49,000 square foot office building instead of a 17,000 square foot office building. He stated that projects that go to the ARB because they conform to the zoning do not go to the Planning and Transportation Commission unless they have a site and design designation or the Applicant, Council, or Staff initiates a development prescreening process that was in the zoning code. He 37 March 12, 2012 said that if the Council wanted to consider this application, it should continue the meeting until the verbatim minutes of the ARB meeting was available and everyone had a chance to comment on them. Also it should be continued because under Council’s policy it could be continued when there were last minute offers such as the $250,000 bribe. He said that people who were tempted to take that $250,000 bribe should look at the last time there was an attempt to have a downtown permit program which was essentially sabotaged by the Staff and majority of the Council. He said that if Council wanted to approve the project that exceeded zoning it should not have a PC application when the project was already getting concessions under Code 65915. He also thought the valet parking could easily turn into valet parking in the neighborhood as there were no guarantees that all cars would go into the building. He thought that the Eco Passes and Caltrain passes were only for employers, not for residents. Additionally he did not think that there was an alternative to paying the In Lieu fee for parking which was now over $50,000 per space. He said that the office space in the PC zone and the CZ zone were treated the same under the 1986 downtown study. Owen Byrd said he lived at 483 Hawthorne and had lived downtown on and off since 1988. He said that was his fifth residence in his neighborhood. He said that almost 20 years ago one of his residences inspired him to write a piece that he pulled out of his files entitled “Why I Love My Neighborhood’s Density.” He said that done right density could help solve the City’s housing shortage and make for a great place to live. He said that he still believed everything he wrote in the article. He said that the project would cause Palo Alto to miss a once in a lifetime opportunity. He opposed the project because it was not big enough. He said that this was the most transit oriented site in town and should be at least 8 to 12, maybe 14 stories high. He said that it should not come with parking if the City was making a transition to a post automobile transportation system. He said that they had to build the urban form that would best deliver the environmental protections, the social justice solutions in terms of affordable housing, and the equity and opportunity that comes from having vital new development downtown. He stated that he had served on the Planning Commission, on the CDBG Commission, had been a public interest advocate for land use, and had done development and what he knew from 25 years of being involved was that when a project was picked apart the City ended up with the least of all of the things he mentioned. He said that they should do the most they could for the right reasons. Public Hearing Closed: 10:51 Mr. Baer said that there were two things they needed guidance on. First, with the many meetings with the Planning Commission this project was supposed to be a transit oriented development that included housing. He said that was not inconsistent with what th City Planning and Transportation Commission 38 March 12, 2012 and City Council discussed when reviewing its Housing Element. If however, the perceived deficiency in parking in this political and policy environment was the major issue, then he suggested taking funds that would otherwise have been put into the housing and put them into parking. He asked Council to give them that guidance. He explained that the cost of housing was probably in the $5 million range. He stated this was a ground lease so the economics were not normal. He said that they could not say here was $3 million of parking benefit if they are were providing $5 million of housing on which they would not get an adequate return. He stated that if he had more time he could explain that point more fully, but there was not an accurate return on a steel framed, underground parked, rental housing. He requested guidance as to if funds should be put into parking or parking programming, or to housing. He said that it would be one or the other, or the alternative would not be unpleasant for either the City or the Applicant, which would be to build a two story surface parked building. He said that would be a beautiful building if it was determined that was what they should do. Council Member Price requested clarification related to residential parking programs. The number that was discussed ranged from $250,000 to $310,000 if the $60,000 for the parking improvements feasibility study potential structure parking was included. She questioned what it would take for an appropriate residential parking program, not just the analysis, but the implementation and the annual cost for ongoing implementation. Mr. Williams said that Staff was not prepared to answer her question, particularly with respect to the ongoing cost without more analysis. He said that their sense was to get things started up. There was $100,000 to start the College Terrace program and that was used for a consultant to help do some analysis of how the programs worked and then for the installation of signage and some of the equipment associated with getting it started. There was a little left over to help subsidize the first year. He said that they would not need that consulting help again. He stated that they needed work in terms of outreaching with the neighborhood to determine what level of support there was, what the different varieties of ways to implement it were, and if it would be two hour parking throughout or what. Signs were another cost. He said that they worked with the Police Department and Administrative Services to try to define their costs and particularly the cost for the patrol vehicle that they use and some of the initial input for the permitting system led him to believe that the initial startup costs would be between $50,000 and $100,000. Perhaps more significant, depending on the level of enforcement you have are the ongoing costs. He thought that they ended up with a figure for the Professorville area for full time enforcement of approximately $250,000 per year. Mr. Rodriquez said $250,000 per year over five years was about right. 39 March 12, 2012 Mr. Williams said that was a five year amortization cost. He stated that with College Terrace they did a program with less than half time enforcement, which seemed to be working well there. He said that because Facebook had moved out there was not the same level of pressure in that area that was in downtown. He said that they had to do a more detailed analysis but the startup costs were in the $50,000 to $100,000 range. Council Member Price confirmed it was $100,000 for the startup and requested clarification about the annual cost. Mr. Williams said that the $250,000 was for a full time community service officer from the Police Department, the support necessary for processing the permits in the Administrative Services Department, and some of the amortized initial cost spread out over five years. He explained that was for a full time approach, but it could be that half time was all that would be necessary. He said that the cost was not insignificant, but depending on the participation there would be permit fees and penalty revenue which could balance out. Council Member Price clarified that the Eco Pass versus Caltrain Go Pass issue was not germane because there was a Clipper pass that already exists. She said that it was available for Caltrain, Muni, BART, AC Transit, SamTrans and the ferry, so no matter where you want to go and how you want to get there, there was a Clipper pass that was currently available and VTA was in phase one of using it as part of the monthly pass. She commented that in the discussions around the TDM program that there was a program that already existed that really utilized this concept. However, distinction between these different things was less germane and she wanted to make that point. Council Member Burt stated he had questions and then would make a motion. He asked Mr. Williams if there were some significant changes to Council’s recommendations on this project where it would head for modifications and what would the process be. He asked if it would return through the whole loop of the Planning Commission and ARB. He stated that if the design was fundamentally the same but Council did something different with the parking or public benefits he wanted to know where the project would go. Mr. Williams said that was largely up to the Council. He stated that if the design was fundamentally the same, it would seem the ARB would not need to see it again except for the elements they had previously requested. If the public benefits were a matter of deciding this one versus another it could be done at the level of the Council. He explained that where the Planning and Transportation Commission would get involved was if Council directed them to look at some alternative parking approaches or more than one option. 40 March 12, 2012 MOTION: Council Member Burt moved, seconded by Vice Mayor Scharff to 1) request that Staff meet with Applicant to discuss means to reduce the amount of onsite affordable housing and potentially the overall housing element, to redirect the public benefits and the dollars that would result from that toward the housing fund and downtown parking in-lieu fund and on other measures that would reduce the impact of parking on adjacent neighborhoods, 2) to discuss replacing subsidized retail with subsidized office to be provided to downtown serving non profits. Council Member Burt clarified his position on the retail. He stated it was not an argument that this was a great retail spot, it was that if Council thought it was such a good retail spot that it insisted it be part of a PC, then it should be part of the retail zoning rather than having to achieve that through a PC. He also said that the Applicant responded to the direction received from the process. He said that until a project got to the City Council, it did not have the public showing up like this. The project already went through the Planning and Transportation Commission meetings and somehow the City has to try to get the public to participate earlier in the process. He said that if Council Meetings were where the community and the Council were coming down on their priorities then it was fair that the Applicant know that at the outset. He said that the Applicant was open to looking at other ways to address community concerns and he hoped that they could find a design that would work. He knew that this remained a large and tall building, but thought that it was a gateway building with the opportunity to have outstanding design. He stated he would trade off some concerns over height and mass for other values to the community. Vice Mayor Scharff said that he seconded the motion for discussion purposes. He agreed with much of what Council Member Bert said, but wanted clarification on some items. He felt the Motion was a good starting point. If the design was not changed he questioned why Council could not make some decisions that evening. Council Member Burt answered that it would be bad process. He said that the Applicant came forward with good intentions and went to the neighborhood with a proposal on funding a downtown parking permit program. He said that there was not a City Council determination on that policy. That was part of the reason he had a broader description of the measures that would be used to reduce the overflow parking impacts. Second, he said that Council was looking at making very substantial changes to a project that went through the City’s system for over a year. He thought that the Council did not make good decisions that way. He was on the Planning Commission for nine years and the Council for four and he said he had seen a lot of projects go through the City and had found the outcomes were bad when Council made big decisions 41 March 12, 2012 on the fly with lots of changes. He said that if he had to make decisions that evening he might agree with Vice Mayor Scharff, but he thought it was the wrong process. Vice Mayor Scharff spoke to his second. He said that Council received many e-mails on the PC and there was fear in the community and feelings that there were not benefits. He thought that was a struggle with the project. He said that the PC had to be a positive benefit. It was missing 103 parking spaces, which was a lot of parking spaces. That made the situation worse, not better. He found it hard to support a PC in which things would not get better. He said the Applicant needed to solve that issue. He said he gave the Applicant credit for the transit oriented development, but only 20%. It went back to the 58 spaces in his mind. He could support a higher number, but he thought the Applicant needed to pay an In Lieu fee on the 58 spaces. He said that he did not believe the notion that the Applicant would not get a return. He recalled what Council Member Klein said about the office space increasing from 17,000 to 49,000 square feet. Office space was worth at least $1,000 a square foot when it cost $500-600 a square foot. He said that there was an extra value of $15 to $20 million for that extra square footage. He said that he did not believe that it was impossible to fully park the project. He felt it was really important to show the community that the Council would not make the parking issue worse by doing the PC. If the PC did not make the parking worse, then he thought it was valuable. One of the public benefits was having a large office building next to transit because it reduced trips, greenhouse gasses, and moved the City in the direction of getting people out of their cars. As Council Member Espinosa discussed, having a policy that punished people for driving their cars was the wrong approach. He thought the right approach was to make transit more convenient and easier. He said that the office building near transit with TOD passes was great and where the City wanted to go. He also agreed with Council Member Burt, and thought he had heard it from Council Member Klein, that where the City ended up on the housing was that seven people would win the lottery and get “penthouse” studios. That was not a huge public benefit for the rest of Palo Alto. He thought they needed to take some of that money and put it into the Low Income Housing Fund. What he heard Council Member Burt say in the motion was to come back with this and work with the Applicant on coming up with a plan that did those kind of things and also provided some nonprofit space. He said that he thought the nonprofit space for a downtown serving nonprofit should be moved to the 2,500 square feet where the financial institution would have gone. This was primarily because the Applicant did not want to break up floors two through four. He stated that if there would not be housing on floor five and the Applicant could do office space there, then there would be enough money to pay for the Housing Fund, fully park the project, and provide other community benefits. He asked Council Member Burt to confirm that what he said was what Council Member Burt had in mind. 42 March 12, 2012 Council Member Burt said that he did not believe that he had heard any substantial differences. He was not explicit on the amount of space for the downtown serving nonprofit and he thought that he would like to keep that open for the moment, but he concurred that it could be on the top floor. Council Member Shepherd liked the direction the motion was going. She stated that the way she understood it was the initial request that was being made that evening, for numbers one, two, and three, numbers one and two could be done except for the fact that the Planned Community public benefits seemed to be in play. She wanted to make sure that the developer had some certainty so that when it came back with the approval of the initial study and Mitigated Negative Declaration, then the adoption of the resolution for the Comprehensive Plan would not need to be addressed in this motion. Council Member Burt asked Mr. Williams if he felt comfortable including in the motion approval of one and two and the conflict between the direction of the motion if Council were to approve one and two that evening. Mr. Williams said that he thought those were consistent. INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE MAKER AND THE SECONDER to approve the Initial Study and Mitigated Negative Declaration (attachment C) for the proposed mixed use development at 335 and 355 Alma Street; and adopt a Resolution (Attachment B) amending the Comprehensive Plan designation for a portion of the site (335 Alma) from neighborhood commercial to regional/community commercial. Council Member Price said she was not really comfortable with the issue because if there was a substantial modification of the project then the Mitigated Negative Declaration and all of the work done would not relate to a vastly revised project. She said that if there were significant project modifications, then there would have to be additional work on the environmental issues. She stated that could not be shifted as it changed the definition of the project. Mr. Williams said he understood what Council Member Price said. He said it sounded to him that what substantively change might would be losing some or the entire housing component. He said that they had analyzed the worst case scenario as far as the intensity and unless the intent was that housing became 10,000 square feet more of office it would not change, but he did not hear that seem to be the direction. Vice Mayor Scharff said he thought that was a possibility. 43 March 12, 2012 Mr. Williams asked if he thought that. Vice Mayor Scharff said he did. Mr. Williams said if the office square footage increased, it would be more of a parking demand. Mr. Larkin said he did not think there was any harm in doing this now. He thought that if there was a substantial change to the project that would create additional environmental impacts that they would need to review the negative declaration and recirculate and start all over with that, but there was no harm in approving it tonight with the understanding that if the project did come back significantly changed that it would start the ball rolling again. Council Member Shepherd said that in that case, it seemed to her that there were some concerns in parts of the portion of Attachment A. She thought that having it be developed more specifically and returned to Council and possibly the Planning and Transportation Commission was a wise way to go. She stated she would support the motion. She loved the idea of having a nonprofit in the building and believed that the Council needed to start thinking in that way. She said the City might lose some nonprofit space with Cubberley if the School District took it over and the Council would have to rethink what a public benefit was. She stated nonprofits were good servants to the community and that it would be a wise thing to do in an office space. She said that it was not important to her to have it at a retail level, which she thought would be more of an attraction for how the landowner and landlord want to integrate that into the viability of retail on the first floor. She appreciated the Zip Car and thought that was an innovative public benefit. With respect to item number six on the public benefits portion regarding the Go Passes, she said that the Clipper Card was really a different feature that might an Eco Pass but was not the Eco Pass. She suggested researching that more. She said that when she heard Pat Markevitch talk about people taking their bicycle out of the back of their vehicle so they could ride to Stanford, she knew that the City subsidized Stanford with traffic overflow. Stanford had also provided an incredible shuttle service. She suggested thinking about hiring a transit manager for the downtown area. She said that she thought the City was in transition. She said that in the area of Palo Alto where they had the second largest Caltrain ticket sales after San Francisco and before the Millbrae Hub and Diridon Station, she thought the community did take this trip diversion seriously and said they needed to continue to improve on that. She said that the mass of the building was not a concern to her, or she would not support the motion to go ahead with the declarations. She said that was because the project was in direct relationship to the train station and the whole area along Alma was an important area to look at as gateway projects. She said that way this type of development would not be imposed on the rest 44 March 12, 2012 of Palo Alto community and yet at the same time solves the overflow parking so the neighborhoods could have their quality of life back. She looked forward to the Architectural Review Board working on a “wow” factor and she looked forward to finding new ways to incorporate more parking. She said that they could not handle the overflow unless they actually figure out how to get people either trip diverted to Caltrain or VTA or build more parking garages. Council Member Klein stated that he would move a substitute motion, which incorporated part but not all that was on the floor and added several additional points. He thought that they needed to say as a matter of formality that they were continuing the item. Second, he thought that they should say that they wanted to reduce the size of the building by one floor. He said that he thought that was implicit in what they had said. SUBSTITUTE MOTION: Council Member Klein moved, seconded by Council Member Schmid to request Staff meet with the Applicant to 1) discuss the elimination of onsite affordable housing and potentially redirect public benefit dollars toward the Housing Fund, the Downtown Parking In Lieu Fund, and towards other measures to reduce parking in adjacent downtown neighborhoods, and 2) reduce the size of the building by one floor. Additionally to approve the Initial Study and Mitigated Negative Declaration (Attachment C) for the proposed mixed use development at 335 and 355 Alma Street; and Adopt a Resolution (Attachment B) amending the Comprehensive Plan designation for a portion of the site (335 Alma) from neighborhood commercial to regional/community commercial. Furthermore, to continue this item to another Council meeting. Council Member Burt said that it was not implicit and nothing in the motion spoke to it one way or another. What was in the motion was an element of adding potentially the nonprofit on the fifth floor and less BMR on the project site. He said that there were parameters, but it was not an explicit direction. Council Member Klein said his substitute motion said that Council was reducing the size of the building by one floor and would eliminate the requirement of subsidized retail. He said that he would leave that up to the Applicant regarding what it wanted to do. He explained the motion would be one and two from the Staff recommendation, the first paragraph or portion of Council Member Burt’s motion eliminating the nonprofit and the subsidized retail, and would reduce the size of the building by one floor and continue the item for further discussion. Council Member Burt asked if Council Member Klein understood his motion to continue having subsidized retail. 45 March 12, 2012 Council Member Klein said yes. Council Member Burt said it was to replace the subsidized retail with a subsidized office. Council Member Klein said that it was not part of his motion. He restated his substitute motion. Mayor Yeh said there was a proposed substitute motion and asked if there was a second. He stated that it was moved and seconded and asked if Council Member Klein would like to speak to his motion. Council Member Klein said that he thought the main thing was to reduce the size of the building by one floor. He said that the profit in the building was on floors two through four, and that allowing the Applicant to have a fifth floor would increase their profit making ability that much more if it did not have housing on it. He said that Council should recognize that they needed to reduce the scale of the building which would also reduce the amount of parking needed and in turn reduce the potential for overflow parking in the neighborhood. He said that further discussion was needed. He agreed with Council Member Burt who talked about process. He did not feel Council could make a final decision that evening. He said that the basic decision they could make was whether this should be a five story or a four story building. He stated that there had been confusion about if the project should just address the parking it would create. He thought it should go further than that as it was a PC which should have public benefits, not just park or house itself. That was what Council saw as the tradeoff for getting more than the existing zoning. He said that the two benefits that stood out for the City to obtain were funds for additional parking in the area and funds for affordable housing elsewhere in the community. The reason not to have housing at that project was because it was not cost effective. He thought more units could be built elsewhere as this was a very expensive property. He said that he did not think the system the City had for affordable housing should be called a lottery as they had used the system for 40 years or so and that there was a sign up list and whoever was on the list that met qualifications would get the unit. He said that the system had worked well for the City over the years. This particular site would produce BMR units that were ridiculously expensive and he thought the money would be better used elsewhere. He also stated that the City Council should not get into the nonprofit business for the same reasons. It was very expensive space for a nonprofit and it would only be for one nonprofit. He stated that he saw many problems in choosing the one nonprofit. It sounded appealing, but if the Applicant wanted to do something for nonprofits it could do so on its own. He said that many other landlords had found spaces for nonprofits over the years without having the Council’s opinion on that. 46 March 12, 2012 Council Member Schmid thought the discussion of office space and private gain was very important. He said that the increase of office space by 32,000 square feet, if it was worth $5.00 a square foot in the market would generate $2 million a year, which at present value comes to a value of $30 million dollars. He said that the public benefit should be a bigger participant in the PC. He said that the City Council deciding that evening if the money should go to nonprofit or retail was not appropriate. He said that he was upset about the loss of housing. He understood that they were expensive units and had been quoted in the Staff report at $625,000 for a 500 square foot studio, but he did not want to have a precedent that there should be no BMR’s in expensive neighborhoods. He said that if they had to deal with BMR’s they had to do so all over town and he saw this project as a big mixed use development near transit where housing was an appropriate use. He asked the maker of the motion to accept a modification of at least continuing to look at BMR units. Council Member Klein said that was inconsistent with reducing the size of the building by a story. Council Member Schmid asked if Council Member Klein was suggesting just taking off the BMR’s. Council Member Klein said he suggested that the first portion of Council Member Burt’s motion suggested a substantial In Lieu contribution to the Housing Fund. Council Member Burt said that there were two differences in the substitute motion from the original motion. One was to eliminate all the housing onsite and that being in the fifth floor. The second was to eliminate the subsidized nonprofit. He made an amendment to the motion regarding the portion of the retail that was designated as retail on Lytton and that would be subsidized ground floor nonprofit. AMENDMENT TO SUBSTITUTE MOTION: Council Member Burt moved, seconded by Vice Mayor Scharff to direct Staff to explore with the Applicant shifting the former subsidized retail area to be designated as subsidized downtown serving non-profit on the ground floor. Council Member Klein said that there was another major difference between the first motion and his substitute motion and that was the elimination of the fifth floor. 47 March 12, 2012 Council Member Burt stated that he recognized and accepted that. He said that he did not think the housing added to the revenue for the developer. Even at market rental housing would be unlikely to add significant revenue for the developer and the dollars put into Below Market Rate at this site would be better spent in the Housing Fund to be used more efficiently at another location. He said that his best judgment was that it would not cause a substantive difference in “pencils out” for the developer and it does reduce the parking some on the site. Mayor Yeh restated the proposed amendment to the substitute motion. Vice Mayor Scharff said that he thought Council Member Klein made a good point about the profit being in the second through fourth floors. He stated this was marginal retail space and that Palo Alto had deserving downtown serving nonprofits that had a really hard time finding office space. He said that was a real public benefit and it was important to look at. He also said there would be more profit in floors two through five as office and he could understand that by doing away with the housing that there was still enough profit to do it. He thought they were losing the ability to consider the fifth floor for a large community benefit that would solve some real problems in terms of downtown parking. Mayor Yeh said that got back to the substitute motion. He said that Council was speaking only to the amendment. Council Member Holman said she appreciated the intention but would not support the amendment. She said that there were nonprofits at Cubberley that needed new locations too and she thought the amendment was too narrow. She said she wanted a broader consideration of the nonprofits, not just that they were downtown serving. She questioned what downtown serving meant and how it would be identified. She said that she did not like losing retail sales tax dollars but that she was ok with subsidized nonprofit. However, this was too narrow of a definition of nonprofit. Council Member Schmid said he would not support the amendment. He said that they were talking about the future of Alma Street and if at some point a tunnel was built from the shopping center to Everett and a new bike path was opened through the University Avenue area to the shopping center, with the train station there and other retail sites potentially up Alma he could envision this becoming a more pedestrian street. He thought a retail operation could be a valuable part of that long term development. He stated that Council should not make a decision that evening about specifying how the space on the ground floor would be used. 48 March 12, 2012 Council Member Shepherd said she thought Council was starting to divine the project. She said that concerned her and that she would rather allow the Applicant to return with its thinking. She was not sure what would happen with the ground floor because she thought it was a new project without the fifth floor. She hoped that Council could allow the Applicant to look a fifth floor so Council could see how that might cash flow a large contribution towards downtown parking, solving the downtown parking problem, and BMR units generally in the community. She wanted to give more flexibility to the Applicant. Council Member Holman said that she was going to say something which Council Member Shepherd had essentially said. The City Council talked about not wanting to design a project at this hour on the fly, but that was exactly what they were doing by divining specific sections of the building for specific purpose. She said that allowing flexibility for consideration was fine, but trying to divine something that specific was not a good idea. Vice Mayor Scharff said that they needed to speak to the nonprofit shortage. He said that the Chamber of Commerce was having a hard time finding anyplace downtown that it could afford. He said that the bid itself had a similar issue. He knew they looked at getting together and that they were losing the Red Cross spot where they currently were and were having a real issue finding a lease they could afford. He thought that was an example of downtown serving that we need to support as a Council and get our Chamber of Commerce downtown and have it stay there. He said that they did not need to decide that evening that the Chamber of Commerce would be the tenant, but that was the kind of use necessary. He explained that the Chamber of Commerce had severe financial problems the last time it entered into a market rate lease. He hoped colleagues would think about why it was important to have that component for a nonprofit in the project. Council Member Espinosa said he would not support the amendment but that it was the only part of the original motion he had a problem with. He said that for the same reasons Council Member Shepherd expressed, he would not support the amendment. Council Member Price said she thought the Council was getting too prescriptive. She said that she was a big proponent of nonprofits and the dilemmas they face in finding space, but that it was a bigger debate. She said that she would not support the amendment. Mayor Yeh said he agreed with the intention of the amendment and if this project was considered a gateway location the kind of nonprofit that had been mentioned by the Vice Mayor made absolute sense because of proximity to public transportation and location within downtown in general. He agreed 49 March 12, 2012 with colleagues that he would rather the language be an “exploration” rather than a “direct.” Council Member Burt accepted the change. Vice Mayor Scharff seconded. Mayor Yeh stated he would support the Amendment with the change. AMENDMENT PASSED: 5-4, Espinosa, Holman, Klein, Schmid, no AMENDMENT: Council Member Shepherd moved, seconded by Vice Mayor Scharff to have the Applicant explore the development of the fifth floor as office space and explain what community benefits they could provide in exchange for the fifth floor office space. Council Member Shepherd said that she supported the amendment after Mayor Yeh made the change. With respect to the substitute motion she offered a friendly amendment to fold it into the original motion so it could be worked forward by the Applicant so that they could explain what the use of a fifth floor could be for community benefits. She stated that it could certainly cash flow better for them and that would “pencil out” for more community benefits for the downtown area, or a four story building. She stated that she did not see a reason for Council to make that decision that evening. She asked if it was possible to be incorporated as a friendly amendment to attach it to the original motion, or if it needed to be voted up or down. Mr. Williams said he thought they were here to make basic decisions and not to fine tune the project. He said he thought this was a basic decision and it was a competition between two very different visions. Council Member Shepherd stated she would make it an unfriendly motion. She said that she was curious to see how this project would work with the adjustments made by Council Members Burt and Scharff. She asked Mr. Williams if the fifth floor was approximately 10,000 square feet. Mr. Williams said the fifth floor was a little less than 10,000 square feet because there was equipment on that floor. Council Member Shepherd said that it seemed to her that the square footage could enable the project to solve some of the concerns in the neighborhoods. She said that she did not want to eliminate that possibility. She said that the Applicant could choose to eliminate the floor and then it might have a building that had no net new parking for the downtown area, no contribution to Below Market Rent housing, etcetera. She wanted to keep the option available. 50 March 12, 2012 Mayor Yeh said Staff wanted to check the language of the amendment and asked Council Member Shepherd for clarification. He stated he would clear the lights and allow the Council to discuss the Amendment. Council Member Espinosa said he had a point of order. He understood that for item number 13 they had a consultant who was there to address Council that evening. He said that he was prepared to continue with that evening’s agenda, but wanted confirmation from his colleagues so that they could let the consultant go home if they were not going to address item 13. Mayor Yeh stated that they had deleted item 12 so there was one remaining item. He asked if colleagues were committed to doing the item. He confirmed that Council would consider item 13 that evening. Vice Mayor Scharff spoke to his second. He said the flexibility was important and that the project could end up without a fifth floor, but that Council did not know what dollars could come from it and how the parking issue or some other community benefit could be impacted. He said that there could be a cash payment to the City which could solve other issues in the community that could not currently be addressed. The other point was that this was a great site for transit oriented development. He said that it was probably the best site in the city and given that the City had decided that it did not want to just go with 17,000 square feet. He asked why not add the fifth floor if it made sense to do so and pointed out that the fifth floor remained, the building would not have to be redesigned. A PC meant that a project could provide benefits. It did not hurt the City or the Applicant to explore the fifth floor. Council Member Holman said she would not support the amendment. She said that fifth floor office created a different environmental impact. She said that there was no harm in delaying items one and two and she thought it was safer to do so. She was concerned about the environmental document and stated that some of the questions she sent in the day before were not answered. She thought the building at five floors was too big. She agreed it was a good location for a transit oriented office but this project was too large. She continued to have concerns about the ARB findings. She said that number 6 stated, “The design is compatible with approved improvements both on and off the site in that the proposed building as condition includes improvements necessary for the new mixed use development.” She said that it did not address compatibility whatsoever. The ARB findings did not address the compatibility issue or other issues. She said that she would not support the amendment and hoped that they would not approve one and two that evening. She thought this item should be continued to a time when the 51 March 12, 2012 Council had fresh minds because she did not want to send an Applicant away with half thought out considerations. Council Member Klein said that eliminating the fifth floor brought the project under the 50 foot height limit. He said that he did not see the case for exceeding the 50 foot height limit. He said that Vice Mayor Scharff’s argument was dangerous. He said that having heard the testimony it was Council’s place to make basic decisions such as if this was a four or five floor building. Council Member Burt said he was not going to support the amendment. He explained that a significant increase in the office would reopen both the parking and transportation impacts on the environmental analysis and having four floors of office was going too far on this site. He said that he had not ruled out consideration of exceeding 50 feet, but that he was concerned about the sequence. He said that they had not adopted that change in policy to date. He said that it was a future Comprehensive Plan change for consideration and he thought it was not right for Council to act as if it had adopted a policy that it had not. Council Member Espinosa said there were very few opportunities in the City for creative higher density work. He said he supported the amendment. He commented broadly on the project, that while he had real concerns about parking and other issues that this was a building from his perspective he would love to work in. If there were housing, he would love to live there. He said that he hoped the first floor was as vibrant as possible and that they would really think about the kind of retail needed. He said it was the right kind of development from his perspective that the City had been talking about for this type of site. He thought the Applicant did a good job with scale and scope. Council Member Price said she would support the amendment for many of the reasons stated. She said that she liked the original project as proposed because Palo Alto needed affordable housing. This project met many of the City’s goals and purposes. She said that on this amendment it was responsible for Council to ask the Applicant to explore the fifth floor. She was also a proponent of having this site hold a building with five floors. She assumed that Council would have further discussion of the height limit. She said that the concepts as stated were solid and that she absolutely supported the amendment. Council Member Schmid said he was opposed to the size and scale of the building. He said that they had lost some of the mixed use and the project had become primarily office space. He said that while the original amendment 52 March 12, 2012 cut parking to some extent this increased it by a shift of probably 60 spaces, and there was no mention of the traffic impacts and implications of it. Mayor Yeh asked about the 84 foot tower, which was taller than the five stories. Vice Mayor Scharff said he thought the tower was the architectural element that made the building. He said that was what they heard from the ARB and he thought it should stay. Council Member Klein said that he had a point of order. He asked if there would be a second round of discussion. Mayor Yeh said his assumption was that there would be a subsequent amendment related to the tower, or a whole round of discussion related to the tower as it related to the height. He said that was his concern and the reason he asked for clarification. Council Member Burt said that the real problem was that Council Member Klein’s motion did not speak to the tower, not that the amendment did not. Mayor Yeh said that ultimately his concern was that they would be going back to the substitute motion and he would rather build that into the amendment now. Council Member Klein said that if someone wanted to make an amendment in regard to the tower, it was one thing, but the fifth floor was a different thing. He said that they were talking specifically about the fifth floor. Mayor Yeh said that he favored removing the fifth floor and retaining some form of the tower. He said that he was opposed to the amendment. AMENDMENT FAILED: 4-5, Burt, Holman, Klein, Schmid, Yeh no INCORPORATED INTO THE SUBSTITUE MOTION WITH THE CONSENT OF THE MAKER AND THE SECONDER to maintain the tower element in the project design, but in proportion with the four story building. Council Member Holman said she wanted the motion to be broader. She stated that the public benefits that had been described were pretty narrow and she thought there might be other public benefits which might be determined or discovered. She said she had a language concern with the substitute motion being too prescriptive because it said that potentially overall Housing Element redirect public benefit dollars toward the Housing Fund and Downtown Parking In Lieu Fund and towards other measures to reduce 53 March 12, 2012 parking. She said that was prescriptive. She asked if they were better off using the money in an In Lieu Fund. She said that if the intention was to try to solve parking problems or to come up with parking solutions, that was one thing, but the language was prescriptive. She said alternative language could be to “redirect public benefit dollars to varying means to alleviate downtown parking impacts.” She explained the difference was that the language as it was listed specific ways that it was to do that. Council Member Schmid confirmed that she was not proposing to take out the Housing Fund. Council Member Klein said that he thought what Council Member Holman was saying was covered in the last clause of the sentence, “and towards other measures to reduce parking in downtown adjacent neighborhoods.” Council Member Holman said that it was “and” so if it was to explore those, that was not how she read it. She said that she had missed it. She offered a friendly amendment to explore other public benefits beyond parking and housing. INCORPORATED INTO THE SUBSTITUE MOTION WITH THE CONSENT OF THE MAKER AND THE SECONDER to explore other public benefits beyond parking and housing. Vice Mayor Scharff stated that as a point of clarification, it said “to request Staff to meet with the Applicant to discuss the means to reduce the amount of onsite affordable housing.” He asked for confirmation that by doing away with the fifth floor the Council eliminated onsite affordable housing. He said that he thought it should say, “to request staff to meet with the Applicant” and indicate that the housing was been eliminated. Council Member Klein said yes. Vice Mayor Scharff said that it should say “to eliminate the housing component,” instead of “to reduce the amount of onsite affordable.” Council Member Espinosa said that the changes he wanted to make to the substitute motion had all either been addressed or were not relevant any longer. He said that he understood the “penthouse” issue in general, but needed to clarify his thinking as the housing option was eliminated. He said that he liked that even in expensive areas of town they had focused on the integration of affordable housing projects and BMR projects. He said that as they increasingly thought of higher density around the transit hubs in downtown they may have other expensive buildings which would call for high rents. He said that he needed additional information moving forward to think 54 March 12, 2012 though how to reconcile that. He said that it was crazy to offer “penthouse” but that he knew Council would see something like it again. Council Member Shepherd said she thought this was a very new project. She clarified that Council was still moving items number one and number two from the Staff recommendation. She asked if the 35 foot height limit at 335 Alma was now changed to 50 feet. Mr. Williams said that did not happen until the Council changed the zoning. He said that the Comprehensive Plan designation did not determine the height. Council Member Shepherd asked if the Applicant could build a building inside all the prescriptions Council made, what obligation was there to make any kind of contribution for parking and resolving the neighborhood issues. She asked if they could self-park all of their parking spots, possibly without a management team, what could come back. She asked if the Applicant could come back without asking the project to be a PC. Mr. Williams said the Applicant could decide not to move forward with it as a PC and go back to the two story 17,000 square foot option. Council Member Shepherd asked if they could stay inside the framework so that they would not have to do the tower. She confirmed they could still come back with a little over the 17,000 because of the height change to 335 Alma. Mr. Williams said that was not correct, the height limit had not changed. Council Member Shepherd confirmed that to come back with a PC the Applicant would make a contribution to the Housing Fund. Mr. Williams said that the direction they had gotten was that in order to come back with the PC Council expected to see some kind of contribution both to Housing Fund and to resolving the parking issues. He said that Staff would meet with the Applicant and explore the variety of options. Council Member Shepherd asked if eliminating the fifth floor would change the look of the building. Mr. Williams said that he did not believe the architectural design would change other than the fifth floor leaving and some modification to the tower. He said that he wanted to say that Staff had to explore, now that the housing portion was out and the government code provision concessions were out, there may be variances required to do some of these things or design 55 March 12, 2012 enhancement exceptions or something. He said that the City Attorney needed to look at if there were variances associated with it, and then it would have to go through the Planning and Transportation Commission before it would go back to the Council. Council Member Shepherd said she would prefer more options for the Applicant. Council Member Price said she would not support the substitute motion because she agreed with parts of it, particularly the issue related to reduction of parking in the downtown and having contributions toward that in terms of a feasibility study and/or residential parking program. She said that because of the location of the site and because those kinds of sites were not frequently available she believed that five stories made a lot of sense and she liked the original proposal with housing. She recognized the dollars toward the Housing Fund could be used for housing purposes but given the land costs and given the proximity to transit she stated she felt that five stories made sense. She said she would not support the substitute motion because she did not agree with all of it. Council Member Burt said he wanted to put two things in context because Council got wrapped up in looking at the proposal before them and suddenly that became the definition of the incremental increase of a PC. He said that historically when they looked at PC’s the projects were have been much smaller increases over permitted zoning than what was in the substitute motion. He said that they were still talking about going from a 17,000 square foot building up to a 53,000 square foot building with a significant architectural element above the 50 foot height limit. He said that if that had been the original proposal that would have been a conversation about how it was a big PC. He stated they had gotten trapped into thinking this was insignificant. He did not remember a PC that had this much of an incremental increase above the baseline zoning. He still thought for the reasons stated that at this location it was a reasonable thing to do. Second, he spoke to the housing portion. He thought that by allowing a large office PC at this location it was reasonable that they would look for a significant contribution to the Housing Fund to be able to provide affordable housing elsewhere as an offset to the office creation. He thought that would serve the affordable housing aspirations better than what had been proposed in this project. He stated that the housing had been well intentioned, but was not a good approach in the end. Council Member Holman asked if the intention was to bring the project back to council or to send it back to Planning and Transportation or ARB. 56 March 12, 2012 57 March 12, 2012 Council Member Klein said his intention was to bring it back to Council, but as Mr. Williams said that may not be possible. Council Member Holman said that she would rather see the project go to PTC. She thought the direction the project was going in was an improvement. As she stated earlier she had concerns about the environmental process and while the project would be smaller, there were still questions she had that did not all have to do with the size of the project. She said that approving one and two was part of this motion, and for that reason she was unable to support it because of environmental analysis concerns. She said that this was a considerable increase in the allowable floor area ratio and she was not certain that four stories was the right size. She said that there ought to be more latitude in what they considered. SUBSTITUTE MOTION AS AMENDED PASSED: 6-3, Holman, Price, Shepherd no 101 Lytton Avenue April 18, 2012 This Letter of Application requests Site and Design approval of the proposed 101 Lytton Avenue project. The site plan and design of this project have evolved over the past several months based on input from the City Council, Planning and Transportation Commission, Architectural Review Board and City of Palo Alto Planning Staff. Project Description This application proposes a 4 story, 52,163 sf. mixed-use project at 101 Lytton Avenue. The existing site is occupied by a non-operational gas station and is located at an important city corner across from the Palo Alto CalTrain Station. To the south-east of the site along Alma Street are multi-story commercial office buildings and multi-family residential buildings. To the north-east along Lytton Avenue are smaller commercial buildings. The proposed building is a sensitive addition to the neighborhood. The massing is broken up along Lytton to reduce the scale of the building. The design appears to read as two buildings that are in scale with the existing developments on Lytton. A taller expression at the corner provides a visual anchor for the project. Along Alma, the mass reduces down to 4 storys and stretches the entire length of the property. On the edge facing the adjacent residential parcels, the mass of the building is held back from the property line thereby respecting the daylight plane. The building program consists of a mix of commercial office, non-profit office and retail uses. The retail use is located at the street level along Alma Street. The non-profit office use is located at the street level along Lytton. Office and Public Parking lobbies are also located on the street level. The commercial office uses are located on floors 2 through 4. Parking for the project is located in 2.5 levels of below grade parking. The exterior skin of the building is designed with high-quality materials such as clear double paned glazing, cast concrete panels and painted aluminum panels. The Street level provides pedestrian scaled elements including a two-story base, recessed storefronts, multiple doorways, floor to ceiling retail glazing and canopies. The office level glazing is detailed with butt jointed glazing and sunshades at the south facing elevations. At the corner, the feature element is detailed using elegant point supported glazing. An outdoor deck for the use of office tenants is being explored and would activate the roof level. The project will incorporate a number of sustainable features. The Office portion will meet CalGreen Tier 2 standards. On-site planters will provide treatment for the stormwater. Charging stations will be provided for electric vehicles. Showers will be provided along with bicycle racks and lockers. Other notable sustainable features include the use of spectrally selective, low-emissivity, high performance glazing. Sunshades will be provided on the south facing elevations. The project will exceed Title 24 energy standards by at least 15%. 1 MEMBERS Palo Alto City Council c/o Curtis Williams 250 Hamilton Ave. 5th Floor Palo Alto, CA 94301 Re: 101 Lytton/355 Alma – Public Benefit And Parking Analysis Dear Council Members: It is important the City Council recognize that the Applicant has only leased the land (a ground lease) upon which 101 Lytton Project (the “101 Project”) would be developed. Therefore, the economic benefit to the Applicant under this ground lease is less than would be available under perpetual and full ownership of the land and the building improvements. Any financial analysis of the value to the 101 Project should recognize the greater costs and much reduced value for the 101 Project under its limited ground lease. The 101 Project returns to City Council following the continuance directed by the Council at its March 12, 2012 meeting. Applicant has been in the Palo Alto public approval process for 15 months, consisting of 8 public hearings with two super-majority votes by the Architectural Review Board (ARB) and the Planning and Transportation Commission (P&TC) recommending to the City Council that it approve the 101 Project as it had been presented to ARB and P&TC. The broad direction we received from City Council was to consider removal of the fifth floor of rental and affordable BMR housing, and, instead, to “redirect” financial resources to parking innovations and solutions, to more suitable affordable housing units as may be directed by the Palo Alto Housing Corporation, to urban design features that enhance this important Gateway, to leadership with energy and environmental programs for the Downtown --- among other substantial Public Benefits. The 101 Project is not only responsive to the City Council directions, but we hope you will find that the 101 Project has become exemplary for how a project should proceed through a PC Zone process by embracing a variety and very costly set of Public Benefits. We are not timid in our responsiveness to City Council and Staff. The Public Benefit package now offered by the 101 Project exceeds benefits provided by any other PC Zone application in the Downtown, and beyond the Downtown: $6,158,700. A bulleted summary of our response to the City Council’s directions are set forth below. A. Reduced Building Size & Height By 20% 1. We have reduced the size of the 101 Project by 12,907 square feet (20%) by removing the fifth floor apartments and by adjustments to the offices. 2. The 101 Project no longer exceeds the 50’ height limit. 3. We have increased the size of the Ground Floor Non-Profit Area. 4. We have increased the size of the Ground Floor Retail Area. B. Largest Affordable Housing Contribution: $2,078,000 1. As requested by City Council, the 101 Project now makes a Public Benefit contribution of $1,250,000 (the largest contribution ever made by a commercial project for housing when no contribution is mandated). This Public Benefit contribution supplements the City’s Housing Impact Fee of over $828,000. The total funding for affordable housing by the 101 Project will exceed $2,078,000. This will enable the City, or its agent, such as Palo Alto Housing Corporation, to acquire land for the development of 30 or more 2 affordable housing units – more than twice as many residences as buildable under the previous 101 Project. C. Significant Parking Innovations And Improvements: $2,686,200 1. Not being allowed credit for 58 spaces per the 1:1 FAR exemption parking credit (that is not a discretionary parking exemption) will cost the 101 Project $3,891,800. This calculation is precise and is calculated in Section II of the Narrative Section further below. 2. $250,000 for Neighborhood Parking Preservation Project. These funds will be donated to the Professorville and Downtown North neighborhoods to help with initiation and operation of a pilot Residential Parking Permit Program 3. $1,476,200 in lieu parking fee: This is by far the largest parking fee ever contributed by a project for the Downtown in the nearly 20 years that the In Lieu Parking Fee Ordinance has been in effect. The 101 Project considers this in lieu fee as an element of Public Benefit because the in lieu fee is only necessary because the City Council has disallowed the non-discretionary parking exemption for 58 spaces allowed under PAMC 18.52.060.a(2). 4. Attendant parking: 40 stalls for which we seek credit for only 10 of these spaces. Attendant parking could remove many on-street parking uses even by businesses occupying other buildings, 5. 22 parking spaces at grade and in the underground garage of the 101 Project will be made available for public use. 6. $60,000 for Transportation Division enhancements for the Downtown Parking Assessment District. 7. 3 parking lifts as have been approved for other projects, including 1805 El Camino and 450 Cambridge –the Palo Alto Weekly building. 8. Train and Bus Transit passes for all employees within the 101 Project. This is far more ambitious than typical TDM plans. 9. A Comprehensive TDM Plan will be educational and with effective monitoring objectives to significantly reduce single-car occupancy vehicles and to significantly reduce parking demands. D. Energy And Environmental Leadership: $650,000 1. Applicant is providing Palo Alto’s first privately-installed electrical vehicle charging stations. 2. Train and Bus Transit passes are provided for all tenants and employees. 3. On-site Zipcar availability. 4. Exceeding building standards for improved energy and water conservation. E. Urban Design And Gateway Features: $650,000 including City Transportation Division estimates. 1. Significant Tree Canopy provided along the East and West side of Alma. 2. Widened sidewalks on Alma and Lytton to improve the pedestrian experience. 3. Shortened crosswalks to improve street crossing safety. 4. Storefronts permanently recessed by 4’ along Alma and Lytton to widen sidewalks. 5. Driveway curb cuts reduced from 4 by the former Shell gas station to 1 for the 101 Project. 6. Bulb-outs provided at the Alma/Lytton intersection for pedestrian and bicyclist safety. 7. Improved bike lanes along Alma – avoiding bicycle-automobile conflicts. 8. Improved traffic signals for all four corners. 9. Improved street lighting and new street furniture along Alma Street. 10. Additional turn lanes and medians to improve traffic flow for Alma and Lytton. 3 The Comprehensive Narrative that follows, includes these sections: I. Commercial Uses Enhance City Finances II. Disallowing The Non-Discretionary 1:1 Parking Exemption Will Cost The 101 Project $3,891,800 For Parking Benefits. III. Active Public Hearing Participation IV. Reduced Building Size V. Going The Distance For Greatly Improved Parking VI. Housing Benefits Reconsidered VII. Urban Design And Gateway Features VIII. Energy And Environmental Leadership IX. Impact Fees & Revenues X. Public Benefits I. Office And Commercial Uses Greatly Enhances City Finances One Council Member questioned whether the 101 Project would harm or help Palo Alto’s General Fund Resources. This assertion was that the 101 Project was an unfortunate “loser” for the City. This misunderstanding was corrected by one or more other Council Members at the March 12 hearing. The City’s own 2009 Municipal Economic and Finance Report prepared for the CEQA analysis for the Comprehensive Plan update, addresses commercial and residential developments with great clarity. The May 5, 2009 report prepared by the City’s consultant, Applied Development Economics (“ADE”) explains that commercial (non-hotel) users contribute $12,949,122 (over $12 million) to the City’s surplus while multi-family housing requires $11,832,379 of City support; single family homes are an even more severe negative impact on City resources (See Table One below). The 101 Project is a substantial positive contributor on a recurring annual basis. These recurring revenues are approximately $260,000 in addition to providing initial Impact Fees of $1,290,890. ADE concludes: “It is critical for the City to continue to maintain and expand the revenue capacity of its commercial districts.” Table One 4 II. Disallowing The 1:1 Far Parking Exemption Will Cost $3,891,800 The City Council encouraged denial of the use of the 1:1 FAR Parking Exemption a zoning benefit (that is not discretionary) for any zone district other than a PC Zone (PAMC 18.52.060.a(2)). The exemption would have provided relief from 58 parking spaces for the 101 Project that are now uniquely disallowed. Based only on the current per stall in-lieu fee of $67,100, these 58 spaces will cost the 101 Project $3,891,800. Providing in lieu payments or increased spaces for these 58 stalls are of enormous help to Downtown parking solutions and are a community benefit but are as you can see an enormous financial burden adopted by the 101 Project as City Council requested. “Within the downtown parking assessment area, "exempt floor area" means all or a portion of that floor area of a building which is located at or nearest grade and which does not exceed a floor area ratio of 1.0 to 1.0.” - PAMC 18.52.060.a(2) We encourage that the City Council prepare the PC Zone so that these funds can be used as parking covenant payments and not just as in lieu parking fees. The covenant for a proportional share of annual Bond payments is not applied to reduce the Bond principal balance, and, unlike in-lieu fees, these parking covenant payments are not required to be used for construction of new stalls. Instead parking covenant payments provide greater flexibility for repairs, studies, and operational advancements for Downtown parking. This provides much greater flexibility for transportation opportunities proposed by the Transportation Division for the Downtown Parking Assessment District. III. Active Public Hearing Participation We identify 8 public hearings since March 16, 2011 for the 101 Project. Both the ARB and P&TC recommended that the City Council approve the 101 Project. March 16, 2011: P&TC hearing whereby the PC Zone District was formally initiated by a 6-1 vote. June 2, 2011: Preliminary ARB hearing. June 29, 2011: Preliminary P&TC hearing. October 20, 2011: Formal (CEQA) ARB hearing #1. November 3, 2011: Formal ARB hearing #2, ARB recommended approval of the project by a 3-1 vote subject to relatively minor conditions. January 25, 2012: Formal P&TC Hearing #1, building approved 6-1. P&TC directed the project to return for evaluation of public benefits. February 22, 2012: Formal P&TC Hearing #2. P&TC recommended approval of the 101 Project, including its public benefits by a 5-2 vote. March 12, 2012: Formal City Council Hearing #1. The 101 Project was continued for further evaluation of public benefits, and with a shift of focus from affordable housing to parking adequacy and benefits. Council Motion: “Discuss the elimination of onsite affordable housing and potentially redirect public benefit dollars toward the Housing Fund, the Downtown Parking In Lieu Fund, and towards other measures to reduce parking in adjacent downtown neighborhoods.” 5 IV. Reduced Building Size The Applicant has made extensive changes to reduce the size of the 101 Project. 1. There is no longer a 5th floor with fourteen rental residential units and with a proportional share of vertical circulation (stairs and elevators) on the previous four lower commercial floors has been eliminated -- this reduces the 101 Project by 12,907 (65,070 – 52,163) square feet. 2. Ground Floor Area on Lytton Avenue. The City Council has discussed use of the “Lytton Ground Floor Area” for use, if possible, by a “Non-Profit Organization”. The Lytton Ground Floor Area will be leased to a Non-Profit Organization for a ten-year term, and the rent shall be subsidized so that the Non-Profit Organization shall pay not more than 25% of market rent for ground floor space located in Downtown Palo Alto. The Lytton Ground Floor Area was previously 1,500 square feet and has been increased to 1,640 square feet. 3. Ground Floor Area on Alma Street. The “Alma Ground Floor Area” was previously 2,665 square feet and is now 3,807 square feet. This Alma Ground Floor Area shall be available for Retail Services, Personal Services, General Business Services, Dining and Eating Services and Financial Services. Any Financial Service use must serve the public such as a customer branch bank or credit union. 4. The “Office Area” (excluding the area for the Non-Profit Organization) consisting of the ground floor lobby and all of Floors 2, 3 & 4 has been reduced by 4.7% or 2,308 square feet, from 49,024 square feet to 46,716 square feet. 5. The building area of the 101 Project was previously 65,070 square feet and has been reduced by 12,907 square feet (20.0%) to 52,163 square feet. This includes 2,308 square feet of Office area (4.7%) for some areas excluded from being treated as “Gross Floor Area” under PAMC 18.04.030(65)(B). Table Two on the following page compares the former and current 101 Project size. 6 Table Two City Council Hearing (March 12, 2012) Current Project Residential Unit Count 14 0 Residential BMR 7 0 Residential SF 11,831 0 Office SF 49,024 46,716 Subsidized Retail SF 1,550 0 Non-Profit Office 0 1,640 Alma Retail SF 2,665 3,807 Total SF 65,070 52,163 Project FAR 2.9 2.3 Open Space 6,400 6,400 Stories 5 4 V. Going The Distance For Greatly Improved Parking The 101 Project has been modified to increase its on-site parking and to provide many innovative parking benefits. The parking features of the 101 Project are set forth in Table Three below and further described in the following Narrative. 1. The City Council Has Denied Use Of The 1:1 Far Parking Exemption This parking exemption is non-discretionary in the Downtown Parking Assessment District other than is being applied under this PC Zone (PAMC 18.52.060.A(2)). This increases the parking obligation of the 101 Project by 58 Spaces. 2. Basic PAMC Parking Requirements For The Proposed Building In the CD Zone District and Downtown Parking Assessment District, the required parking is one space for every 250 square feet. For a Building of 52,163 square feet, 208 parking spaces are required. 3. The Applicant Has Increased On-Site Parking The 101 Project now provides 18 more commercial parking spaces than on March 12 because of (i) the elimination of the 5th floor housing, (ii) the use of parking lifts, and (iii) elimination of residential elevator at parking level 2. The 101 Project now provides 134 parking spaces, including the parking lift spaces, but not including attendant spaces. We provide as Attachment #1 diagrams of the 3 parking floors. 7 4. Parking Lift Spaces The 101 Project now provides 6 parking lift spaces in 3 parking lift devices. The lifts provide 3 net new additional parking spaces. Parking lifts have been approved for several Palo Alto commercial buildings: 450 Cambridge, and 1805 El Camino, among others. 5. Public Access To 22 Parking Spaces in the Private Garage of the 101 Project The 101 Project offers 22 parking spaces for public use. 8 surface parking stalls shall be available to the public at all hours and an additional 14 parking stalls shall be available to the public on nights and weekends. The 14 spaces are located on the first floor of the private garage. This offering is not without substantial cost to the 101 Project. A separate elevator must be provided for the public parking users to bring visitors to the street level. And there must be additional security and cleaning services. The 101 Project does not seek any credit towards its parking requirement because of these parking spaces made specifically available as public spaces. 6. City Council members commented that they would be comfortable with a 20% TDM parking reduction but not with the 10% parking reduction for proximity to transit. a. The 101 Project appreciates the 20% TDM reduction providing relief for 42 parking spaces (PAMC 18.52.050 Table 4). We provide as Attachment #2 PAMC 18.52.050 Table 4. These code provisions provide greater parking reductions than the 20% reduction allowed for similarly situated projects in the Downtown. b. The Metropolitan Transportation Commission and other studies suggest that parking is reduced by as much as 42% for commercial buildings that are close to train stations. We provide as Attachment #2 published materials about parking reductions near train stations. 7. Successful And Proven Attendant Parking The 101 Project has hired Corinthian International Parking Service to manage their attendant parking service. Among Corinthian’s clients are: Apple, VM Ware, Yahoo! and the Veterans Hospital. Corinthian has analyzed the attendant parking program at the 101 Project and has fully endorsed parking an additional 40 cars. We are only requesting that ten (25%) of these spaces be credited toward our on-site parking requirement. 8. Greatest Ever In Lieu Fee Contribution: $1,476,200 The 101 Project will make an in lieu parking fee contribution in the amount of $1,476,200. This will be by far the greatest parking contribution ever made in the Downtown. The 101 Project considers this in lieu fee as an element of Public Benefit because the City Council’s decision to disallow the non-discretionary parking exemption for 58 spaces. 9. Neighborhood Parking Preservation Projects: $250,000 The 101 Project has offered $250,000 for Neighborhood Parking Preservation Projects to be used for the Professorville neighborhood, and the Downtown North neighborhood, to make possible the initiation of a residential permit parking program if such a program is approved by City Council. Staff has advised the 101 Project that Stanford contributed $150,000 to College Terrace for implementation of its residential parking permit program following 8 occupancy by Facebook. The Stanford donation was adequate to implement the College Terrace parking permit program. Excess funds offered by the 101 Project may be used by the neighborhoods near the Downtown for operational parking management issues as approved by the Transportation Division. 10. Funding The City’s Traffic Division For Downtown Parking Assistance: $60,000 The 101 Project has offered the City’s Transportation Division a contribution of $60,000 for supporting any studies, parking improvements or enhancements for the Downtown Parking Assessment District. Table Three 101 Lytton Parking Solutions In Lieu Parking Fee: 22 stalls at $67,100 per stall = $1,476,200 (This is by far the greatest in-lieu fee ever paid in the Downtown) Fund Neighborhood Preservation Projects to be used for Resident Permit Parking Program ($250,000) Fund City's Traffic Division for Downtown Parking Assistance ($60,000) Public Access to 22 parking spaces Parking Lift Spaces (+3 spaces) & Additional standard stall (+1 space) Full-Service Attendant Parking Program increasing on-site vehicle capacity (+40 spaces) VI. Housing Benefits Reconsidered: $2,075,000+ At the March 12, 2012 City Council Hearing, the Council directed the 101 Project to eliminate the onsite housing and to redirect Public Benefit dollars more specifically to the Housing Fund and towards Parking. In addition to the Housing Impact Fee of $826,765, the 101 Project has committed to provide $1,250,000 towards efforts to further housing goals. The combined contribution of over $2,000,000 allows the City to pursue timely acquisitions of land for specific projects that would otherwise be unattainable. While the 101 Project cannot accelerate the delivery of housing funds differently than for a normal project fee (lender constraints), the 101 Project will provide assurances and do whatever else is reasonably necessary so the City can loan or advance funds based on the $2,076,765 to be paid by the 101 Project. We have had several conversations with the Palo Alto Housing Corporation about its land acquisitions that would benefit from our contribution and would yield over 30 BMR rental units. VII. Urban Design And Gateway Policies And Accomplishment: $750,000+ The urban design and transportation features of the 101 Project exceed $750,000, $500,000 of which will be directed to programs identified by the Transportation Division. The 101 Project preserves key urban design features that best serve the community and train riders so that the 101 Project remains the single, most spectacular “Gateway” to the Downtown. Following are the urban design features, which are neither conditions of approval nor mitigation measures. Accordingly, these fine features are Public Benefits - even if also improving the beauty of the Lytton/Alma corner that also of benefits the quality of the 101 Project. 1. 13 Street trees added to the west (train station) side of Alma. These trees will provide a future, predictable canopy for pedestrians and vehicles and will greatly shade and r educe the heat of this portion of Lytton Avenue. We provide as Attachment #3 an aerial view of the Tree 9 Canopy and a future canopy elevation. 2. Increase trees beside the 101 Project. By removing the driveway ramps of the former gasoline station, the 101 Project is able to add additional public street trees. The sidewalk, curb cuts and curbside parking are rebuilt and reconfigured, and the numbers of street trees are increased. 3. Street lighting and street furniture. Decorative pedestrian height post-top streetlights, bicycle racks, and other street furnishings will be placed along the sidewalk to provide safe lighting and amenities for pedestrians. 4. Driveway curb cuts are reduced from 4 to 1 driveway curb cut, and relocated from Lytton Avenue to Alma Street thereby eliminating a significant source of traffic friction and conflict, and reduced interference with pedestrian movement. 5. Storefronts are permanently recessed by 4’ along Alma and Lytton. Because the 101 Project designs are an element of the PC Zone approval, this 4’ recess at every window along Alma Street becomes useful for widening the sidewalk for pedestrian benefit, in perpetuity. 6. At Alma/Lytton intersection a sidewalk corner "bulb-out" is added. This becomes both a visual and safety benefit. The result is a larger resting area and improved visibility for all 4 corners. This reduces the width for a pedestrian by 8 feet when crossing Alma Street and by 4 feet when crossing Lytton Avenue. A high visibility crosswalk treatment will be provided. 7. Street Light standards. Increase the number of street lights to improve visibility and enhance aesthetics. 8. Improve Traffic Signal at Lytton Avenue/Alma Street. In conjunction with the new bulbouts, the traffic signal will be upgraded. The entire intersection will be reviewed for compliance with Americans with Disability Act standards and brought up to current code. Crosswalks and bike lanes will be enhanced with high visibility striping. 9. Alma Street improvements. Turn pockets and other street improvements requested by the Transportation Division. VIII. Energy And Environmental Leadership By being proximate to the train depot and the bus transit center, the 101 Project is by its location an extraordinary environmental leader with many employees commuting by train and bus to the 101 Project. 1. The 101 Project is providing Palo Alto’s first privately funded installation of electrical vehicle charging stations. 2. Transit passes are provided for all tenants and employees. 3. On-site Zipcar. 4. Exceeding building standards for improved energy and water conservation. IX. Impact Fees & Revenues: $1,290,890 The 101 Project is a commercial project, with office and retail uses only, and will generate $1,288,701 in Impact Fees for the City, as well as recurring annual revenue of about $260,000. The "new gross square footage” for the 101 Project is 47,902 square feet. The 101 Project requests that only 50% the subsidized area for the Non-Profit Organization of 1,640 square feet (50% is 820 square feet) shall be subject to the Impact fees. This 50% reduction is less than the almost 75% reduction in market rent that has been offered, and will assist with covering the costs of Tenant Improvements for the Non-Profit Area that will be borne by the 101 Project. Under this proposal, the area of the 101 Project subject to impact fees shall be 47,082 square feet. 1. PAUSD Fee. The amount of the PAUSD fee for the 101 Project shall be $0.47 per square foot for 47,082 square feet or $22,128. 10 2. Parks, Community Center and Libraries. The amount of the Park fee shall be $4.908 per square foot for 47,082 square feet or $231,078. 3. Citywide Transportation Impact Fee. The amount of the Citywide Transportation fee shall be $4.45 per square foot for 47,082 square feet or $209,515. 4. Quimby Fee. There is no parkland dedication fee known as a Quimby fee for the 101 Project because there is no subdivision for the 101 Project. The Parkland Dedication Fee is $0.00. 5. Housing Impact Fee. The amount of the Housing Impact fee is $17.59 per square feet for 47,082 square feet or $828,172. Total Impact Fees: $1,290,890 11 X. Public Benefits: $6,158,700+ The 101 Project provides the public with a wide variety of benefits, and as of the March 12 City Council hearing, has redirected finances from developing a fifth floor of residences to vastly improve downtown parking solutions and BMR development throughout the City. The proposed Public Benefits for the 101 Project are set forth in Table Four below. Table Four Proposed Costs 22 in-lieu parking fees ($1,476,200) $1,476,200 $1,250,000 Contribution to Affordable Housing Program (in addition to the $828,172 housing impact fee) $1,250,000 1,640 SF of subsidized non-profit office at less than 25% of market rent (value = $1.25 NNN rent v. $5.00 NNN rent @ 8% cap rate) $922,500 Public Improvements and Traffic Enhancements (see diagram) $500,000 $250,000 Contribution to City for Neighborhood Parking Preservation Project $250,000 8 surface stalls open to public all days 16 garage spaces open to the public on nights and weekends $150,000 Planting of 13 trees and landscape improvements on City's property next to Caltrain $150,000 1 Level 3 EV charging station & 3 Level 2 EV Charging Stations $150,000 $60,000 Contribution to City Transportation Division for downtown parking $60,000 TDM Program Transit Passes Attendant Parking (75%) $500,000 (over 10 years) $750,000 (over 10 years) Total $6,158,700