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2012-06-18 City Council Agenda Packet
CITY OF PALO ALTO CITY COUNCIL Special Meeting Council Chambers June 18, 2012 5:30 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 June 18, 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 Potential Litigation Relating to the Mitchell Park Library and Community Center Construction Government Code Section 54956.9(b)-Significant Exposure to Litigation- 1 Case Government Code Section 54956.9(c)-Potential Initiation of Litigation- 1 Case 2. CONFERENCE WITH CITY ATTORNEY Potential Litigation Relating to State Water Project Property Tax Levy Government Code Section 54956.9(c) - Potential Initiation of Litigation- 1 Case 3. CONFERENCE WITH CITY ATTORNEY Potential Litigation Relating to High Speed Rail Government Code Section 54956.9(c) - Potential Initiation of Litigation - 1 Case City Manager Comments 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. 2 June 18, 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. Consent Calendar Items will be voted on in one motion unless removed from the calendar by two Council Members. 4. Finance Committee Recommendation to Accept the Auditor's Office Quarterly Report as of March 31, 2012 5. Annual Adoption of the City’s Investment Policy 6. Adoption of a Resolution Relating to Amendment to Utilities Rate Schedule E- 15 (Service Connections) and Rules and Regulations 3, 4, 6, 7, 11, 26 and 27 (General Utility Service, Application for Service, Establishment of Credit, Deposits, Billing Adjustments, Fiber Optics Regulations, and Generating Facilities Interconnections) 7. Finance Committee Recommendations Regarding Water and Wastewater Rates Policy Issues 8. Adoption of Resolution Determining the Proposed Calculation of the Appropriations Limit for Fiscal Year 2013 9. Adoption of a Resolution Authorizing the City Manager to File an Application for 2012/2013 Transportation Development Act Funds in the Amount of $43,359 for Fabian Way Enhanced Bike Lane Improvements Project 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. 3 June 18, 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. Action Items Include: Reports of Committees/Commissions, Ordinances and Resolutions, Public Hearings, Reports of Officials, Unfinished Business and Council Matters. 10.Public Hearing - Fiscal Year 2013 Proposed Budget Review Follow-Up Items – and Proposition 218 Utility Rate Changes; Approval of an Ordinance Adopting the Fiscal Year 2013 Budget, including the Fiscal Year 2013 Capital Improvement Program, and Changes to the Municipal Fee Schedule; Adoption of 10 Resolutions to: 1) Adopt a Dark Fiber Utility Rate Increase and Amend Utility Rate Schedules; 2) Amend Gas Utility Rate Schedules for a Rate Decrease and Amend Utility Rules and Regulations; 3) Adopt a Wastewater Collection Utility Rate Increase and Amend Utility Rate Schedules (Proposition 218 Hearing); 4) Adopt a Water Utility Rate Increase and Amending Utility Rate Schedules (Proposition 218 Hearing); 5) Amend Storm Drain Utility Rate Schedules for a Rate Increase; 6) Amend Refuse Utility Rate Schedules for a Rate Increase (Proposition 218 Hearing); 7) Amend the 2010-2011 Compensation Plan for Management and Professional and Council Appointees; 8) Amend the 2010-2011 Memorandum of Agreement for the Service Employees International Union (SEIU); 9) Amend the 2010-2014 Compensation Plan for the International Association of Fire Fighters (IAFF); and 10) Amend the 2010-2014 Compensation Plan for the Fire Chiefs’ Association (FCA) (Continued from June 11, 2012) 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. 4 June 18, 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 City/School Packet Schedule of Meetings Schedule of Meetings Tentative Agenda Tentative Agenda Finance Committee Tentative Agenda Informational Report Palo Alto's Notice of Preparation of an Environmental Impact Report to Expand the Plastic Bag Restriction Ordinance (Municipal Code Chapter 5.35) to include all Retail Services and Restaurants and to Implement a Store Charge for Paper Checkout Bag Use Public Letters to Council CITY OF PALO ALTO OFFICE OF THE CITY AUDITOR June 18, 2012 The Honorable City Council Palo Alto, California Finance Committee Recommendation to Accept the Auditor's Office Quarterly Report as of March 31, 2012 The City Auditor’s Office recommends acceptance of the Auditor’s Office Quarterly Report as of March 31, 2012. At its meeting on May 8, 2012, the Finance Committee approved and unanimously recommended the City Council accept the report. The Finance Committee minutes are included in this packet. Respectfully submitted, Jim Pelletier City Auditor ATTACHMENTS: Attachment A: Auditor's Office Quarterly Report as of March 31, 2012 (PDF) Attachment B: Finance Committee Meeting Minutes Excerpt (May 8, 2012) (PDF) Department Head: Jim Pelletier, City Auditor Updated: 6/12/2012 1:31 PM by Deniz Tunc Page 2 CITY OF PALO ALTO OFFICE OF THE CITY AUDITOR May 8, 2012 The Honorable City Council Attention: Policy & Services Committee Palo Alto, California Auditor's Office Quarterly Report as of March 31, 2012 RECOMMENDATION The City Auditor’s Office recommends the Policy and Services Committee review and recommend to the City Council acceptance of the Auditor’s Office Quarterly Report as of March 31, 2012. SUMMARY OF RESULTS In accordance with the Municipal Code, the City Auditor prepares an annual work plan and issues quarterly reports to the City Council describing the status and progress towards completion of the work plan. This report provides the City Council with an update through the first three quarters of activities and summarizes our Fiscal Year (FY) 2012 Work Plan activities. Information on the status of each assigned project is attached (pages A-1 through A-4). Completed Projects During the third quarter of FY 2012, the City Auditor’s Office completed the following reports: Sales Tax Digest Summary Third Quarter Sales (July - September 2011) Service Efforts and Accomplishments Report for Fiscal Year 2011 Annual Report on City Government Performance and Citizen-Centric Report Auditor's Office Quarterly Report as of December 31, 2011 Special Advisory Memorandum - Security Vulnerability in the City's SAP Enterprise Resource Planning System Attachment A Updated: 5/2/2012 11:00 AM by Deniz Tunc Page 2 In-process Projects The following projects were in-process as of March 31, 2012: Implementation of Employee-only Fraud, Waste, and Abuse Hotline Contract Administration Audit Utilities Reserves Audit Other Information The recruitment process began to fill the vacant Senior Performance Auditor position and Yuki Matsuura from the County of San Diego has been selected. Yuki Matsuura had an article published in Internal Auditor magazine titled “Using the Whole Mind for Risk Management”. On behalf of the City Auditor’s Office, I would like to express my appreciation to City staff for their cooperation and assistance during our reviews throughout this past year. Respectfully submitted, Jim Pelletier City Auditor ATTACHMENTS: Attachment A: Status of Audit Projects as of March 31, 2012 (PDF) Department Head: Jim Pelletier, City Auditor Attachment A Updated: 5/2/2012 11:00 AM by Deniz Tunc Page 3 Attachment A City Auditor’s Quarterly Report A – 1 As of March 31, 2012 Status of Audit Projects as of March 31, 2012 Audit Project Description and Preliminary Objectives Status Accomplishments Year-To-Date Target date for Items to be Completed AUDIT ADMINISTRATION, FOLLOW-UP AND OTHER RESPONSIBILITIES 1) Annual Audit Work Plan and Quarterly Status Reports – The Auditor’s Office submits quarterly reports to the City Council outlining project status and progress towards completing the assignments on this annual work plan. In process Annual work plan to be issued in September 2012. 2) Annual Audit Recommendation Status Report – The Municipal Code requires the City Auditor to issue an annual report on the implementation status of recommendations from recently completed audits. We also meet with the departments involved during the year to discuss progress towards implementing open audit recommendations. In process The last report was issued in April 2011, and the Finance Committee provided direction that the next report should be for the period ending June 30, 2012. The Auditor’s Office will continue to meet with departments during the year to discuss progress towards implementing open audit recommendations. Target completion date: Fall 2012 3) Meeting Attendance – To facilitate internal communication and coordination of efforts, the City Auditor attends: a. City Manager’s weekly Executive Leadership Team, Agenda Planning meetings. b. Utility Risk Oversight and Coordinating Committee (UROCC) – Since issuance of our Assessment of Utility Risk Management Procedures in July 2002, the City Auditor has acted as an advisor to the UROCC. c. Design Team Steering Committee meetings. On-going On-going On-going The City Auditor will regularly attend weekly Executive Leadership Team meetings, Agenda Planning meetings, and UROCC meetings. A Senior Performance Auditor is a member of the Design Team Steering Committee which promotes creative problem solving through design thinking and collaboration. Attachment AAttachment A City Auditor’s Quarterly Report A – 2 As of March 31, 2012 Audit Project Description and Preliminary Objectives Status Accomplishments Year-To-Date Target date for Items to be Completed REVENUE AUDITS AND MONITORING 4) Sales and Use Tax Allocation Reviews – Sales and use tax represents about 14%, or $20.2 million, of the City’s projected General Fund revenue for fiscal year 2012. The Auditor’s Office contracts with MuniServices for quarterly sales and use tax recovery and information services, and we also conduct sales and use tax monitoring in-house. The purpose of this monitoring is to identify misallocations of local sales and use tax of companies doing business in Palo Alto. In addition, MuniServices prepares the quarterly sales and use tax information reports that are provided to the City Council as informational items. The contract with MuniServices continues through April 30, 2014. On-going In the first quarter of FY 2012, the City did not receive sales and use tax recoveries although there were potential misallocations pending resolution. In the second quarter of FY 2012, the City received $71,018 in sales and use tax recoveries related to the misallocation of taxes from three companies. In the third quarter of FY 2012, the City received $5,933 in sales and use tax recoveries related to the misallocation of taxes from two companies. Moreover, potential misallocations from 47 companies (22 MuniServices and 25 City of Palo Alto) are pending resolution by the State Board of Equalization. Total Sales and Use Tax Recoveries: FY 2012 $76,951 (City of Palo Alto $76,951) 5) Alternative Fuel Tax Credit Recoveries – As part of the Auditor’s Office continuous revenue monitoring efforts and findings from the Audit of Fleet Utilization and Replacement (April 2010), the Auditor’s Office initiated revenue recoveries from the Federal government’s alternative fuel tax program, which was originally in effect through December 31, 2009, and subsequently extended through December 31, 2011. Completed The Auditor’s Office worked with ASD, and Utilities to prepare and file claims for the alternative fuel tax credit totaling $49,235 for the period of January through December 2011. The City received payment for the claims in early 2012. FINANCIAL AUDITS AND PROCEDURAL REVIEWS 6) Annual External Financial Audit (contracted audit service) – The City Charter requires that the City Council engage an independent certified public Completed The FY 2011 audited financial statements were issued in December 2011 and Attachment AAttachment A City Auditor’s Quarterly Report A – 3 As of March 31, 2012 Audit Project Description and Preliminary Objectives Status Accomplishments Year-To-Date Target date for Items to be Completed accounting firm to conduct the annual external audit. presented to the Finance Committee on December 14, 2011. PERFORMANCE AUDITS AND SPECIAL PROJECTS 7) Annual Service Efforts and Accomplishments (SEA) Report Completed The 10th annual SEA Report and 3rd annual Citizen-Centric Report (CCR) for Fiscal Year 2011 was issued in January 2012. The reports were presented to the City Council at a study session on March 19, 2012. 8) Audit of Library Bond Proceeds – Through the 2008 voter-approved Measure N, the City issued general obligation bonds to rebuild the Mitchell Park Library and adjacent community center, and renovate the Main and Downtown libraries. This audit will evaluate controls for the use of the general obligation bond funds to ensure the funds are used efficiently and in compliance with federal regulations for the use of tax- exempt bond funds. Completed Audit of Library Bond Proceeds issued in December 2011. 9) Audit of Purchasing Card Transactions – The purpose of this audit is to determine the adequacy of controls over purchasing card transactions, and to assess compliance with existing guidelines and procedures. Completed Audit of Purchasing Card Transactions issued in September 2011. 10) Utilities Department Risk Assessment Completed In FY 2011, a Senior Performance Auditor position was added to the Auditor’s Office budget to provide on-going and continuous audits of Enterprise Fund activities. The Senior Performance Auditor worked with a utilities consultant to perform a risk assessment to identify areas of strength, as well as opportunities for improvement within each division of the Utilities Department. The risk assessment was completed in August 2011 and the results are incorporated into the FY 2012 work plan and will be used to identify audits to be included in future work plans. 11) SAP Security Audit – In planning the SAP audit, which was included in the City Auditor’s Fiscal Year 2011 Annual Audit work plan, the Auditor’s Office detected a significant SAP security vulnerability resulting from an Completed Audit of SAP Security issued in October 2011. Attachment AAttachment A City Auditor’s Quarterly Report A – 4 As of March 31, 2012 Audit Project Description and Preliminary Objectives Status Accomplishments Year-To-Date Target date for Items to be Completed unsecured system-provided SAP user account. The unsecured user account allowed the Auditor’s Office unrestricted access to sensitive and confidential information. This initial finding prompted an audit to assess controls required to secure SAP access. 12) Human Resources Employee Benefits –This audit will review benefit oversight, costs and administration through the Human Resources Department. On hold . Currently on hold due to staff turnover and re- evaluation of audit work plan 13) Contract Administration Audit – This audit will assess key oversight controls pertaining to City contracts, with a focus on pricing accuracy. In process Audit planning and survey phases have been completed and fieldwork is in progress. Target completion date: June 2012 14) Alarm Permitting Program - The audit will assess the effectiveness and efficiency of the City’s alarm permitting ordinance. Not started 15) Grants Management - The audit will assess the effectiveness and efficiency of the City’s grant management practices. Not started 16) Utilities Reserves –This audit will review Utilities Reserves to determine the reasonableness and appropriateness of reserves policy, balance, guideline, and use. In process Audit planning and survey phases have been completed and fieldwork is in progress. Target completion date: June 2012 17) Utility Users Tax Revenues - Utility Users Tax Revenues related to cell phone usage have dropped significantly in the past few years. For instance, Utility Users Tax Revenues from telephones dropped by $530,000 from FY 2010 to FY 2011. Accordingly, the Administrative Services Director has requested the Auditor’s Office to contract with a utility tax auditor to determine if the City is receiving all of the Utility Users Tax Revenues from cell phones that it is entitled. This item also ranked high on the Citywide Risk Assessment. Not started 18) Construction Process – This audit was recommended by the Finance Committee and will review various construction projects as it relates to the bidding and change order process. The audit would assess the effectiveness and efficiency of the City’s construction management practices. Not started Attachment AAttachment A Policy and Services Committee DRAFT EXCERPT Page 1 of 5 Special Meeting Tuesday, May 8, 2012 2. Auditor’s Office Quarterly Report as of March 31, 2012 Jim Pelletier, City Auditor presented the Auditor’s Office Quarterly Report as of March 31, 2012. He said the sales tax recoveries had been updated and for the third quarter they added approximately $6,000 in sales tax recoveries, which totaled about $77,000 recovered year to date. Those were recognized by the Staff as 100% recovered. Staff finished the Service Efforts and Accomplishments Report (SEA) for the fiscal year and completed the last quarterly report. They issued the Special Advisory Memo (SAM). Projects in process included the implementation of the Employee Fraud, Waste, and Abuse Hotline (Hotline). He stated they would fall behind a little bit in that process. He did not give the City Attorney enough time to do a thorough review of the policy in order to keep it on that week’s Policy and Services Committee (Committee) agenda. He said it would be on the next available Committee agenda in June. The Hotline would be ready to launch as soon as the full Council gave its approval. The Contract Administration Audit and the Utilities Reserve Audit were close to the report writing stage and would be completed by the end of the fiscal year. The recruitment process for the Senior Performance Auditor position was complete and the new Senior Auditor would begin work the following week. Council Member Espinosa the HR Employee Benefits Audit. Mr. Pelletier said the HR Employee Benefits audit was being done by the Senior Auditor that left. It had been on hold during the recruitment process and would be considered for the first project for the new hire. However, there were other projects they could prioritize as well. He thought that it was a good first project for someone that was new to the City to get grounded in. Council Member Espinosa asked for a timeline of when the “not started yet” audits would begin. Attachment B DRAFT EXCERPT Page 2 of 5 Policy and Services Committee Special Meeting Draft Excerpt 5/8/12 Mr. Pelletier said that they discussed that in a previous Finance Committee meeting. The “not started” projects would be part of his risk assessment planning for the next year. So those would receive a higher priority consideration when he developed the plan for the next year. Council Member Espinosa asked why the audits were not started. Mr. Pelletier said when he evaluated the plan earlier in the year he realized it was clearly not feasible. He chose to work on the Contract Administration and the Utilities Reserve Audits because they were something his department could finish in the fiscal year. He said that the loss of Staff and the time it took to replace that loss also affected the amount of work that was completed. He said that the remaining audits would be considered for the following year. Council Member Schmid asked about the “on hold” Human Resources Audit and how it would be narrowly focused. He also asked if it was an oversight of the department or a look at the system as a whole. Mr. Pelletier said that every audit started with a review of the system as a whole. His plan for the Human Resources Audit was to limit the amount of time spent on it. Once the initial survey for the Audit was completed they would review and prioritize the risks associated with the area. The Audit would be scoped to focus on the higher level risks. Council Member Schmid confirmed they would look at risk. Mr. Pelletier said yes, that was his approach on every audit. Council Member Schmid confirmed that it was not just how the City clerically took care of its current employees, but the audit was also an assessment of the risk in the current system. Mr. Pelletier said that was correct. He stated that a risk assessment is performed for every audit. That was in terms of the key objectives of the department, program, or function that was audited. He said that they looked at what risks Attachment B DRAFT EXCERPT Page 3 of 5 Policy and Services Committee Special Meeting Draft Excerpt 5/8/12 existed that could keep them from reaching those objectives. He said that they looked at that across the scale and the function and then prioritized. Council Member Schmid asked if he was looking at the actuarial report. Mr. Pelletier said he did not know yet. He said that he did not like to fine tune the scope until they could make a decision based on the data versus just his judgment. He said that his judgment played a factor in it, but that he wanted to make sure they did sufficient research and analysis before the scope was limited. The initial research was not done and they could not say where it would lead them. The data would lead them in the direction the audit would need to go. Council Member Schmid asked about the Utility Reserve audit. Mr. Pelletier said that predated his hire date, but he understood that some level of a utility wide risk assessment was performed. The audits that were identified came out of that process. Council Member Schmid asked if there were others that were suggested. Mr. Pelletier thought that the other main one was the Utility User Tax. He said that was made under the previous year’s plan. He stated he had not looked at what was performed to consider what might be coming in this year’s plan. He explained he was currently in the process of doing his assessment for next year’s plan. Council Member Schmid asked when next year’s plan would begin. Mr. Pelletier said that would come relatively soon. He said they were looking at close to the end of the fiscal year depending on the Council’s schedule. Council Member Schmid asked what they could expect to see in the SAM and what others may be coming. Mr. Pelletier said that the SAM was used as items came up. He said it was a tool he introduced to provide flexibility to report on matters as they arose. In the instance of the SAM he released earlier, it was something that came up after the audit was finalized and the report was nearly complete. He said that they did not Attachment B DRAFT EXCERPT Page 4 of 5 Policy and Services Committee Special Meeting Draft Excerpt 5/8/12 want to go back and do extra work that would delay the report. SAM provided the opportunity to say that there was another issue that needed to be resolved. They worked closely with the City Management team to resolve it and worked together to develop the memo. Council Member Schmid asked if the other report was amended. Mr. Pelletier said that was correct. He planned to carve out time in his time budget for the next year to allow flexibility to release additional SAM’s as issues arose. He said that SAM was a tool to be used as issues arose so they did not have to launch an intense audit every time they encountered a new issue. He said that sometimes they would need to launch a new audit, but when possible they could use a SAM. Chair Holman discussed the Grants Management section of the Staff Report. She said it read to her as though it included a process of making grant applications and tracking when grant applications were due so that they were made. She asked if that would be included. Mr. Pelletier said that it could be included. He said that they would look at the grant management process as a whole to start the assessment and then focus in on the areas they felt were the highest risk. He said that if they believed the timing of grant applications was more of a challenge for the City than say, the documentation to ensure they got full reimbursement on certain types of grants, then they would focus on that area. However, if the assessment showed weakness in the documentation area, Staff would focus on that and would provide the City with recommendations on how to improve that. He said it really depended on the initial assessment. He understood that the Committee was looking for more specific information but preferred to keep things open so that they could focus on the right things as they went through the audit process. Chair Holman asked if she understood that when Mr. Pelletier developed his work plan for the next year that he would assign different amounts of time to different projects. She asked if the Committee would be presented with his recommendations or a list of options so that they could evaluate if something else should be a higher priority. She asked if they had an ability to move priorities around with the time allotment. Attachment B DRAFT EXCERPT Page 5 of 5 Policy and Services Committee Special Meeting Draft Excerpt 5/8/12 Mr. Pelletier said he would offer the Committee a plan that would show what he had available for Staff and time in his budget. He said that would include the audits he would recommend based on the outcome of the risk assessment they were currently working on. Additionally, he would provide a larger risk assessment that would show where he pulled the audits from to help the Committee understand why he pulled those audits. Then the Committee would have the opportunity to comment on the plan. He said that everything had to balance with the hours they had available to finish audits so that they did not design a plan that was unattainable. MOTION: Council Member Klein moved, seconded by Council Member Espinosa to recommend the City Council approve the Auditor’s Office Quarterly Report as of March 31, 2012. MOTION PASSED: 4‐0 Attachment B City of Palo Alto (ID # 2908) City Council Staff Report Report Type: Consent Calendar Meeting Date: 6/18/2012 June 18, 2012 Page 1 of 2 (ID # 2908) Summary Title: Investment Policy Update Title: Annual Adoption of the City’s Investment Policy From: City Manager Lead Department: Administrative Services Recommendation Staff recommends that Council approve the City’s Investment Policy without any changes. Discussion During the annual budget process, staff submits the Investment Policy to Council for review and approval (Attachment A). For Fiscal Year (FY) 2013, staff is proposing no changes to the investment policy. Resource Impact There is no fiscal impact associated with this report. Policy Implications This recommendation does not represent any change to City’s policies. Environmental Review The actions requested in this report do not constitute a project for the purposes of the California Environmental Quality Act (CEQA). Attachments: Attachment A: Adopted Investment Policy 2012-13 (PDF) Prepared By: Tarun Narayan, Senior Financial Analyst June 18, 2012 Page 2 of 2 (ID # 2908) Department Head: Lalo Perez, Chief Financial Officer City Manager Approval: ____________________________________ James Keene, City Manager ATTACHMENT A PROPOSED 2012-13 CITY OF PALO ALTO Investment Policy With No Proposed Changes INTRODUCTION The City of Palo Alto invests its pooled idle cash according to State of California law and the charter of the City of Palo Alto. In particular, the City follows “The Prudent Investor Standard” cited in the State Government Code (Section 53600.3). Under this standard, all governing bodies of local agencies or persons authorized to make investment decisions on behalf of the City are trustees and therefore fiduciaries subject to the prudent investor standard. When investing, reinvesting, purchasing, acquiring, exchanging, selling, or managing public funds, a trustee shall act with care, skill, prudence, and diligence under the circumstances then prevailing, including, but not limited to the general economic conditions and the anticipated needs of the agency, that a prudent person acting in a like capacity and familiarity with those matters would use in the conduct of funds of a like character and with like aims, to safeguard the principal and maintain the liquidity needs of the agency. INVESTMENT PHILOSOPHY The basic principles underlying Palo Alto's investment philosophy is to ensure the safety of public funds; provide that sufficient money is always available to meet current expenditures; and achieve a reasonable rate of return on its investments. The City's preferred and chief practice is to buy securities and to hold them to their date of maturity rather than to trade or sell securities prior to maturity. The City may, however, elect to sell a security prior to its maturity should there be a significant financial need. If securities are purchased and held to their maturity date, then any changes in the market value of those securities during their life will have no effect on their principal value. Under a buy and hold philosophy, the City is able to protect its invested principal. The economy, the money markets, and various financial institutions (such as the Federal Reserve System) are monitored carefully to make prudent investments and to assess the condition of the City’s portfolio. 1 INVESTMENT OBJECTIVES The primary objectives, in priority order, of investment activities shall be safety, liquidity, and yield: 1. Safety: Safety of principal is the foremost objective of the investment program. Investments shall be undertaken in a manner that seeks to ensure the preservation of capital in the overall portfolio. The objective will be to mitigate credit risk and interest rate risk. a) Credit risk is the risk that an obligation will not be paid and a loss will result. The City will seek to minimize this risk by: Limiting investment to the safest types of securities as listed in the “Authorized Investment” section. Diversifying its investments among the types of securities that are authorized under this investment policy. b) Interest rate risk is the risk that changes in interest rates will adversely affect the value of an investor’s portfolio. For example, an investor with large holdings in long-term bonds has assumed significant interest rate risk because the value of the bonds will fall if interest rates rise. The City can minimize this risk by: Buying and holding its securities until maturity. Structuring the investment portfolio so that securities mature to meet cash flow requirements. To further achieve the objective of safety, the amount that can be invested in all investment categories, excluding obligations of the U.S. Government and its agencies, is limited either as a percentage of the portfolio or by a specific dollar amount. These limits are defined under the “Authorized Investments” section. 2. Liquidity: Liquidity is the second most important objective of the investment program. The investment portfolio shall remain sufficiently liquid to meet all operating requirements that may be reasonably anticipated. This is accomplished by maintaining a portion of the portfolio in liquid money market mutual funds or local government investment pools. In addition, the City will maintain one month’s cash needs in short term investments and at least $50 million shall be maintained in securities maturing in less than two years. Since all possible cash demands cannot be anticipated, however, the portfolio will consist of securities with active secondary or resale markets should the need to sell a security prior to maturity arises. 2 3. Yield: Yield on the City’s portfolio is last in priority among investment objectives. The investment portfolio shall be designed to obtain a market rate of return that reflects the authorized investments, risk constraints, and liquidity needs outlined in the City’s investment policy. Compared to similar sized cities, the City of Palo Alto should be able to take advantage of its relatively large reserve balances to achieve higher yields through long-term investments. In addition, the City will strive to maintain the level of investment of idle funds as close to 100 percent as possible. SCOPE A. This investment policy shall apply to all financial assets of the City of Palo Alto as accounted for in the Comprehensive Annual Financial Report (CAFR), including but not limited to the following funds: 1. General Fund 2. Special Revenue Funds 3. Debt Service Funds 4. Capital Project Fund 5. Enterprise Funds 6. Internal Service Funds 7. Trust and Agency Funds B. The policy does not cover funds held by the Public Employees Retirement System or funds of the Deferred Compensation program. C. Investments of bond proceeds shall be governed by the provisions of the related bond indentures. GENERAL INVESTMENT GUIDELINES 1. The maximum stated final maturity of individual securities in the portfolio should be ten years. 2. A maximum of 30 percent of the par value of the portfolio shall be invested in securities with maturities beyond five years. 3. The City shall maintain a minimum of one month’s cash needs in short term investments. 4. At least $50 million shall be maintained in securities maturing in less than 2 years. 5. Should the ratio of the market value of the portfolio to the book value of the portfolio fall below 95 percent, the Administrative Services Department will report this fact to the City Council within a reasonable time frame and evaluate whether there is any risk of holding any of the securities to maturity. 3 6. Commitments to purchase securities newly introduced on the market shall be made no more than three (3) working days before pricing. 7. Whenever possible, the City will obtain three or more quotations on the purchase or sale of comparable securities and take the higher yield on purchase or higher price on sale. This rule will not apply to new issues, which are purchased at market no more than three (3) working days before pricing, as well as to LAIF, City of Palo Alto bonds, money market accounts and mutual funds, all of which shall be evaluated separately. 8. Where the Investment Policy specifies a percentage limitation for a particular category of investment, that percentage is applicable only at the date of purchase. A later increase or decrease in a percentage resulting from a change in the portfolio’s assets or values shall not constitute a violation of that restriction. As soon as possible, percentage limitations will be restored as investments mature in each category. AUTHORIZED INVESTMENTS The California Government Code( Sections 53600 et seq.) governs investment of City funds. The following investments are authorized: 1. U.S. Government Securities (e.g. Treasury notes, bonds and bills) Securities that are backed by the full faith and credit of the United States a) There is no limit on purchase of these securities. b) Securities will not exceed 10 years maturity. c) All purchased securities must have an explicit or a de facto backing of the full faith and credit of the U.S. Government. 2. U.S. Government Agency Securities – Obligations issued by the Federal Government agencies (e.g. Federal National Mortgage Association). a) There is no limit on purchase of these securities except for: Callable and Multi-step-up securities provided that: - The potential call dates are known at the time of purchase; - the interest rates at which they “step-up” are known at the time of purchase; and - the entire face value of the security is redeemed at the call date. - No more than 25 percent of the par value of the portfolio. b) Securities will not exceed 10 years maturity. 4 3. Bonds of State of California Municipal Agencies a) Having at time of investment a minimum Double A (AA/AA2) rating as provided by a nationally recognized rating service (e.g. Moody’s and/or Standard and Poor’s). b) May not exceed 10 percent of the par value of the portfolio. 4. Certificates of Deposit (CD) - A debt instrument issued by a bank for a specified period of time at a specified rate of interest. a) May not exceed 20 percent of the par value of the portfolio. b) No more than 10 percent of the par value of the portfolio in collateralized CDs in any institution. c) Purchase collateralized deposits only from federally insured large banks that are rated by a nationally recognized rating service (e.g. Moody’s and/or Standard and Poor’s). d) For non-rated banks, deposit should be limited to amounts federally insured (FDIC). – See Appendix C e) Rollovers are not permitted without specific instruction from authorized City staff. 5. Banker's Acceptance Notes (BA) – Bills of exchange or time drafts drawn on and accepted by commercial banks. Purchase of banker’s acceptances are limited to: a) No more than 30 percent of the par value of the portfolio. b) Not to exceed 180 days maturity. c) No more than $5 million with any one institution. 6. Commercial Paper - Short-term unsecured obligations issued by banks, corporations, and other borrowers. Purchases of commercial paper are limited to: a) Having highest letter or numerical rating as provided for by a nationally recognized rating service (e.g. Moody’s and/or Standard and Poor’s). b) No more than 15 percent of the par value of the portfolio. c) Not to exceed 270 days maturity. 5 d) No more than $3 million or 10 percent of the outstanding commercial paper of any one institution, whichever is lesser. 7. Local Agency Investment Fund (LAIF) – A State of California managed investment pool may be used up to the maximum permitted by California State Law. 8. Short-Term Repurchase Agreements (REPO) – A contractual agreement between a seller and a buyer, usually of U.S. government securities, whereby the seller agrees to repurchase the securities at an agreed upon price and, usually, at a stated time. a) Not to exceed 1 year. b) Market value of securities that underlay a repurchase agreement shall be valued at 102 percent or greater of the funds borrowed against those securities. c) A Master Repurchase agreement must be signed with the bank or dealer. 9. Money Market Deposit Accounts – Liquid bank accounts which seek to maintain a net asset value of $1.00. 10. Mutual Funds which seek to maintain a net asset value of $1.00 and which are limited essentially to the above investments and further defined in note 9 of Appendix A a) No more than 20 percent of the par value of the portfolio. b) No more than 10 percent of the par value with any one institution. 11. Negotiable Certificates of Deposit (NCD) issued by nationally or state chartered banks and state or federal savings institutions and further defined in note 11 of Appendix A. Purchases of negotiable certificates of deposit: a) May not exceed 10 percent of the par value of the portfolio. b) No more than $5 million in any one institution. 12. Medium-Term Corporate Notes – Issued by corporation organized and operating within the United States or by depository institutions licensed by the United States or any state and operating with the United States. a) Not to exceed 5 years maturity. b) Securities eligible for investment shall have a minimum rating of AA from a nationally recognized rating service (e.g. Moody’s and/or 6 c) No more than 10 percent of the par value of the portfolio. d) No more than $5 million of the par value may be invested in securities of any single issuer, other than the U.S. Government, its agencies and instrumentality. e) If securities owned by the City are downgraded by either Moody’s or Standard & Poors to a level below AA, it shall be the City’s policy to review the credit situation and make a determination as to whether to sell or retain such securities in the portfolio. Appendix A provides a more detailed description of each investment vehicle and its security and liquidity features. Most of the City's short-term investments will be in securities which pay principal upon maturity, while long-term investments may be in securities that periodically repay principal, as well as interest. Most of the City's investments will be at a fixed rate. However, some of the investments may be at a variable rate, so long as that rate changes on specified dates in pre- determined increments. PROHIBITED INVESTMENTS: Includes all investments not specified above, and in particular: 1. Reverse repurchase agreements 2. Derivatives, as defined in Appendix B Appendix B provides a more detailed description of each investment, which is prohibited, for City investment. AUTHORIZED INVESTMENT PERSONNEL Idle cash management and investment transactions are the responsibility of the Administrative Services Department. The Administrative Services Department is under the control of the Director of Administrative Services (Director), as treasurer, who is subject to the direction and supervision of the City Manager. The Assistant Directors of Administrative Services, who reports to the Director, are authorized to make all investment transactions allowed by the Statement of Investment Policy. He or she may authorize the Senior Financial Analyst/Investments (Analyst) to enter into investments within clearly specified parameters. The Investment function is under the supervision of the Assistant Director of Administrative Services (Assistant). The Assistant is charged with the responsibility to manage the investment program (portfolio), which includes developing and monitoring the City's cash flow model and developing long-term revenue and financing strategies and forecasts. 7 The Analyst is subject to the direction and supervision of the Assistant. The Analyst assists the Assistant, in the purchase and sale of securities. The Analyst also prepares the quarterly report, and records daily all investment transactions as to the type of investment, amount, yield, and maturity. Cash flow projections are prepared as needed. In all circumstances, approval from the Director of Administrative Services is required before selling securities from the City's portfolio. The Analyst may also transfer no more than a total of $8 million a day from the City's general account to any one financial institution, without the prior approval of the Assistant Director of Administrative Services. No other person has authority to make investment transactions without the written authority of the Assistant Director of Administrative Services. USE OF BROKERS AND DEALERS The Administrative Services Department maintains a list of acceptable dealers. A dealer acts as a principal in security transactions, selling securities from and buying securities for their own position. A dealer must have a) At least three years experience operating with California municipalities; b) Maintain an inventory of trading securities of at least $10 million; and c) Be approved by the Assistant Administrative Services Director before being added to the City's list of approved dealers. In addition, individual traders or agents representing a dealer: A dealer will be removed from the list should there develop a history of problems to include: failure to deliver securities as promised, failure to honor transactions as quoted, or failure to provide accurate information. SAFEKEEPING AND CUSTODY All securities shall be delivered to the City's safekeeping custodian and held in the name of the City of Palo Alto, with the exception of the following investments: a) Certificates of deposit, which may be held by the City itself. b) City shares in pooled investment funds, under contract. c) Mutual funds d) Local Agency Investment Fund (LAIF) POLICY REVIEW AND REPORTING ON INVESTMENTS 8 Monthly, the Administrative Services Department will review performance in relation to Council- adopted Policy. Quarterly, the Department will report to Council on: its performance in comparison to policy, explain any variances from policy, provide any recommendations for policy changes, and discuss overall compliance with the City’s Investment Policy. In addition, the Department will provide Council with: a) A detailed list of all securities, investments and monies held by the City, and b) Report on the City’s ability to meet expenditure requirements over the next six months. Annually, the Administrative Services Department will present a Proposed Statement of Investment Policy, to include the delegation of investment authority, to the City Council for review during the annual budget process. All proposed changes in policy must be approved by the Council prior to implementation. Adopted by City Council October 22, 1984 Amended by City Council June 23, 1997 Monthly reporting effective January 1985 Amended by City Council January 26, 1998 Amended and Adopted by City Council June 24, 1985 Amended by City Council June 22, 1998 Amended by City Council December 2, 1985 Amended by City Council June 28, 1999 Amended by City Council June 23, 1986 Amended by City Council June 19, 2000 Amended by City Council June 22, 1987 Amended by City Council June 11, 2001 Amended by City Council August 8, 1988 Amended by City Council June 17, 2002 Amended by City Council November 28, 1988 Amended by City Council June 17, 2003 Amended by City Council June 26, 1989 Amended by City Council June 28, 2004 Amended by City Council May 14, 1990 Amended by City Council June 20, 2005 Amended by City Council June 24, 1991 Amended by City Council June 12, 2006 Amended by City Council June 22, 1992 Amended by City Council June 11, 2007 Amended by City Council June 23, 1993 Amended by City Council June 09, 2008 Amended by City Council June 20, 1994 Amended by City Council June 15, 2009 Amended by City Council June 19, 1995 Amended by City Council June 28, 2010 Amended by City Council June 24, 1996 Amended by City Council June 20, 2011 9 APPENDIX A EXPLANATION OF PERMITTED INVESTMENTS 1. U.S. Government Securities – United States Treasury notes, bonds, bills, or certificates of indebtedness or those for which the faith and credit of the United States are pledged for the payment of principal and interest. 2. U.S. Government Agency Securities - U.S. Government Agency Obligations include the securities of the Federal National Mortgage Association (FNMA), Federal Land Banks (FLB), Federal Intermediate Credit Banks (FICB), banks for cooperatives, Federal Home Loan Banks (FHLB), Government National Mortgage Association (GNMA), Federal Home Loan Mortgage Corporation (FHLMC), Student Loan Marketing Association (SLMA), Small Business Administration (SBA), Federal Farm Credit (FFC), Federal Agricultural Mortgage Corporation (FAMC or FMAC), and Tennessee Valley Authority (TVA). Federal Agency securities are debt obligations that essentially result from lending programs of the Government. Federal agency securities differ from other types of securities, as well as among themselves. Their characteristics depend on the issuing agency. It is possible to distinguish three types of issues: (A) participation certificates (pooled securities), (B) Certificates of interest (pooled loans), (C) notes, bonds, and debentures. The securities of a few agencies are explicitly backed by the full faith and credit of the U.S. Government. All other issues purchased by the City have the de facto backing from the federal government, and it is highly unlikely that the government would let any agency default on its obligations. 3. Certificates of Deposit - A certificate of deposit (CDs) is a receipt for funds deposited in a bank, savings bank, or savings and loan association for a specified period of time at a specified rate of interest. Denominations are $250,000 and up. The first $250,000 of a certificate of deposit is guaranteed by the Federal Deposit Insurance Corporation (FDIC), if the deposit is with a bank or savings bank, or the Savings Association Insurance Fund (SAIF), if the deposit is with a savings and loan. CDs with a face value in excess of $250,000 can be collateralized by U.S. Government Agency and Treasury Department securities or first mortgage loans. Government securities must be at least 110 percent of the face value of the CD collateralized in excess of the first $250,000. The value of first mortgages must be at least 150 percent of the face value of the CD balance insured in excess of the first $250,000. Generally, CDs are issued for more than 30 days and the maturity can be selected by the purchaser. 4. Bankers' Acceptance - A Banker's acceptance (BA) is a negotiable time draft or bill of exchange drawn on and accepted by a commercial bank. Acceptance of the draft irrevocably obligates the bank to pay the bearer the face amount of the draft at maturity. BAs are usually created to finance the import and export of goods, the shipment of goods within the United States and storage of readily marketable staple commodities. In over 70 years of usage in the United States, there has been no known instance of principal loss to any investor in BAs. In addition to the guarantee by the accepting bank, the transaction is identified with a specific commodity. Warehouse receipts verify that the pledged commodities exist, and, by 10 BAs enjoy marketability since the Federal Reserve Bank is authorized to buy and sell prime BAs with maturities of up to nine months. The Federal Reserve Bank enters into repurchase agreements in the normal course of open market operations with BA dealers. As are sold at a discount from par. An acceptance is tied to a specific loan transaction; therefore, the amount and maturity of the acceptance is fixed. 5. Commercial Paper - Commercial paper notes are unsecured promissory notes of industrial corporations, utilities, and bank holding companies. Interest is discounted from par and calculated using actual number of days on a 360-day year. The notes are in bearer form, with maturities up to 270 days selected by the purchaser, and denominations generally start at $100,000. There is a small secondary market for commercial paper notes and an investor may sell a note prior to maturity. Commercial paper notes are backed by unused lines of credit from major banks. Some issuer's notes are insured, while some are backed by irrevocable letters of credit from major banks. State law limits a City to investments in United States corporations having assets in excess of five hundred million dollars with an "A" or higher rating by a nationally recognized rating service for the issuer's debentures. Cities may not invest more than 25 percent of idle cash in commercial paper. 6. Local Agency Investment Fund Demand Deposit - The Local Agency Investment Fund LAIF) was established by the State to enable treasurers to place funds in a pool for investments. The City is limited to an investment of the amount allowed by LAIF (currently $40 million). LAIF has been particularly beneficial to those jurisdictions with small portfolios. Palo Alto uses this fund for short-term investment, liquidity, and yield. 7. Repurchase Agreements - A Repurchase Agreement (REPOS) is not a security, but a contractual arrangement between a financial institution or dealer and an investor. The agreement normally can run for one or more days. The investor puts up funds for a certain number of days at a stated yield. In return, the investor takes title to a given block of securities as collateral. At maturity, the securities are repurchased and the funds repaid, plus interest. Usually, amounts are $500,000 or more, but some REPOS can be smaller. 8. Money Market Deposit Accounts - Money Market Deposit Accounts are market-sensitive bank accounts, which are available to depositors at any time, without penalty. The interest rate is generally comparable to rates on money market mutual funds, though any individual bank's rate may be higher or lower. These accounts are insured by the Federal Deposit Insurance Corporation or the Savings Association Insurance Fund. 11 9. Mutual Funds - Mutual funds are shares of beneficial interest issued by diversified management companies, as defined by section 23701 M of the Revenue and Taxation Code. To be eligible for investment, these funds must: a) Attain the highest ranking in the highest letter and numerical rating provided by not less than two of the three largest nationally recognized rating services; or b) Have an investment advisor registered with the Securities and Exchange Commission with not less than five years experience investing in the securities and obligations, as authorized by subdivisions (a) to (n), inclusive, of Section 53601 of the California Government Code, and with assets under management in excess of five hundred million dollars; and c) Invest solely in those securities and obligations authorized by Sections 53601 and 53635 of the California Government Code. Where the Investment Policy of the City of Palo Alto may be more restrictive than the State Code, the Policy authorizes investments in mutual funds that shall have minimal investment in securities otherwise restricted by the City's Policy. Minimal investment is defined as less than 5 percent of the mutual fund portfolio; and d) The purchase price of shares of beneficial interest purchased shall not include any commission that these companies may charge. e) Have a net asset value of $1.00. 10. Callable Securities and Multi-Step-ups: Callable securities are defined as fixed interest rate government agency securities that give the issuing agency the option of returning the invested funds at a specific point in time to the purchaser. Multi-step-ups are government agency securities in which the interest rate increases ("steps-up") at preset intervals, and which also have a callable option that allows the issuing agency to return the invested funds at a preset interval. Callable and multi-step-ups are permitted, provided that: the potential call dates are known at the time of purchase; the interest rates at which they “step-up” are known at the time of purchase; and the entire face value of the security is redeemed at the call date. 12 11. Negotiable Certificates of Deposit (NCD). NCDs are large-dollar-amount, short-term certificate of deposit. Such certificates are issued by large banks and bought mainly by corporations and institutional investors. They are payable either to the bearer or to the order of the depositor, and, being negotiable, they enjoy an active secondary market, where they trade in round lots of $5 million. Although they can be issued in any denomination from $100,000 up, the typical amount is $1 million. They have a minimum original maturity of 14 days; most original maturities are under six months. Also called a Jumbo Certificate of Deposit. State law prohibits the investment of local agency funds in negotiable certificates of deposit issued by a state or federal credit union if a member of the legislative body of the local agency, or any person with investment decision making authority in the administrative, manager’s, budget, auditor-controller’s, or treasurer’s offices of the local agency also serves on the board of directors, other credit committee or the supervisory committee of the state or federal credit union issuing the negotiable certificate of deposit. 12. Medium-Term Corporate Notes: Notes of a maximum of five years maturity issued by corporations organized and operating with the United States or by depository institutions licensed by the United States or any state and operating with the United States. According to California Code Section 53601, “Notes eligible for investment under this subdivision shall be rated in the rating category of “Double A” or its equivalent or better by a nationally recognized rating service. Purchase of medium-term notes may not exceed 30 percent of the agency’s surplus money which may be invested pursuant to this section.” 13 APPENDIX B EXPLANATION OF PROHIBITED INVESTMENTS 1. Reverse Repurchase Agreements: A Reverse Repurchase Agreement (Reverse REPO) is a contractual agreement by the investor (e.g. local agency) to post a security it owns as collateral, and a bank or dealer temporarily exchanges cash for this collateral, for a specific period of time, at an agreed-upon interest rate. During the period of the agreement, the local agency may use this cash for any purpose. At maturity, the securities are repurchased from the bank or dealer, plus interest. California law contains a number of restrictions on the use of Reverse REPOS by local agencies. 2. Derivatives: A derivative is a financial instrument created from, or whose value depends on (is derived from), the value of one or more underlying assets or indices. The term "derivative" refers to instruments or features, such as collateralized mortgage obligations, forwards, futures, currency and interest rate swaps, options, caps and floors. Except for those callable and multi-step-up securities as described under Permitted Investments, derivatives are prohibited. Certain derivative products have characteristics which could include high price volatility, liquid markets, products that are not market-tested, products that are highly leveraged, products requiring a high degree of sophistication to manage, and products that are difficult to value. According to California law, a local agency shall not invest any funds in inverse floaters, range notes, or interest-only strips that are derived from a pool of mortgages. 14 APPENDIX C GLOSSARY OF INVESTMENT TERMS AGENCIES: Federal agency and instrumentality securities. ASKED: The price at which securities are offered. BID: The price offered by a buyer of securities (when one sells securities, one asks for a bid). See “Offer”. BROKER: A broker brings buyers and sellers together so that he can earn a commission. COLLATERAL: Securities, evidence of deposit, or other property, which a borrower pledges to secure repayment of a loan. Also refers to securities pledged by a bank to secure deposits of public monies. COMPREHENSIVE ANNUAL FINANCIAL REPORT (“CAFR”): The official annual report for the City of Palo Alto. It includes combined financial statements for each individual fund and account group prepared in conformity with GAAP. It also includes supporting schedules that are necessary to demonstrate compliance with finance-related legal and contractual provisions, extensive introductory material, and a detailed statistical section. COUPON: (a) The annual rate of interest that a bond’s issuer promises to pay the bondholder on the bond’s face value. (b) A certificate attached to a bond evidencing interest due on a payment date. DEALER: A dealer, as opposed to a broker, acts as a principal in all transactions, buying and selling for his own account. DEBENTURE: A bond secured only by the general credit of the issuer. DELIVERY VERSUS PAYMENT: There are two methods of delivery of securities: (1) delivery versus payment (DVP); and (2) delivery versus receipt (DVR). DVP is delivery of securities with an exchange of money for the securities. DVR is delivery of securities with an exchange of a signed receipt for the securities. DISCOUNT: The difference between the acquisition cost of a security and its value at maturity when quoted at lower than face value. A security that sells below original offering price shortly after sale, is also is considered to be at a discount. DISCOUNT SECURITIES: Non-interest bearing money market instruments that are issued a discount and that are redeemed at maturity for full face value (e.g., U.S. Treasury Bills). DIVERSIFICATION: Dividing investment funds among a variety of securities that offer 15 independent returns. FEDERAL AGRICULTURAL MORTGAGE CORPORATION (“FAMC” or “FMAC”): A federal agency established in 1988 to provide a secondary market for farm mortgage loans. Informally called Farmer Mac. FEDERAL CREDIT AGENCIES: Agencies of the Federal Government that were established to supply credit to various classes of institutions and individuals (e.g., S&Ls, small business firms, students, farmers, farm cooperatives, and exporters). FEDERAL DEPOSIT INSURANCE CORPORATION (“FDIC”): A federal agency that insures all types of deposits received at an insured bank, including deposits in a checking account, negotiable order of withdrawal (NOW) account, savings account, money market deposit account (MMDA) or time deposit such as a certificate of deposit (CD). FDIC insurance covers depositors' accounts at each insured bank, dollar-for-dollar, including principal and any accrued interest through the date of the insured bank's closing, up to the insurance limit. The FDIC does not insure money invested in stocks, bonds, mutual funds, life insurance policies, annuities or municipal securities, even if these investments are purchased at an insured bank. The FDIC does not insure U.S. Treasury bills, bonds or notes, but these investments are backed by the full faith and credit of the United States government. The standard maximum deposit insurance amount is described as the “SMDIA” in FDIC regulations. The SMDIA is $250,000 per depositor, per insured bank. FEDERAL FUNDS RATE: The rate of interest at which Fed funds are traded. This rate is currently pegged by the Federal Reserve through open-market operations. FEDERAL HOME LOAN BANKS (“FHLB”): Government-sponsored wholesale banks (currently 12 regional banks) which lend funds and provide correspondent banking services to member commercial banks, thrift institutions, credit unions, and insurance companies. The mission of the FHLBs is to liquefy the housing-related assets of its members, who must purchase stock in their District Bank. FEDERAL NATIONAL MORTGAGE ASSOCIATION (“FNMA”): FNMA, like GNMA, was chartered under the Federal National Mortgage Association Act in 1938. FNMA is a federal corporation working under the auspices of the Department of Housing and Urban Development (HUD). It is the largest single provider of residential mortgage funds in the United States. Fannie Mae, as the corporation is called, is a private stockholder-owned corporation. The corporation’s purchases include a variety of adjustable mortgages and second loans, in addition to fixed-rate mortgages. FNMA’s securities are also highly liquid and are widely accepted. FNMA assumes and guarantees that all security holders will receive timely payment of principal and interest. FEDERAL OPEN MARKET COMMITTEE (“FOMC”): The FOMC consists of seven members of the Federal Reserve Board and five of the 12 Federal Reserve Bank Presidents. The 16 President of the New York Federal Reserve Bank is a permanent member, while the other Presidents serve on a rotating basis. The Committee periodically meets to set Federal Reserve guidelines regarding purchases and sales of government securities in the open market, as a means of influencing the volume of bank credit and money. FEDERAL RESERVE SYSTEM: The central bank of the United States created by Congress and consisting of a seven-member Board of Governors in Washington, D.C., 12 regional banks, and about 5,700 commercial banks that are members of the system. GOVERNMENT NATIONAL MORTGAGE ASSOCIATION (“GNMA” or “Ginnie Mae”): Securities that influence the volume of bank credit that is guaranteed by GNMA and issued by mortgage bankers, commercial banks, savings and loan associations, and other institutions. A security holder is protected by the full faith and credit of the U.S. Government. Ginnie Mae securities are backed by the FHA, VA, or FMHM mortgages. The term “pass-throughs” is often used to describe Ginnie Maes. LIQUIDITY: A liquid asset is one that can be converted easily and rapidly into cash without a substantial loss of value. In the money market, a security is said to be liquid if the spread between bid and asked prices is narrow, and reasonable amount can be done at those quotes. LOCAL GOVERNMENT INVESTMENT FUND (“LAIF”): Monies from local governmental units may be remitted to the California State Treasurer for deposit in this special fund for the purpose of investment. MARKET VALUE: The price at which a security is trading and could presumably be purchased or sold. MASTER REPURCHASE AGREEMENT: A written contract covering all future transactions between the parties to repurchase-reverse repurchase agreements, that establishes each party’s rights in the transactions. A master agreement will often specify, among other things, the right of the buyer (lender) to liquidate the underlying securities in the event of default by the seller (borrower). MATURITY: The date upon which the principal or stated value of an investment becomes due and payable. MONEY MARKET: The market in which short-term debt instruments (e.g., bills, commercial paper, and bankers’ acceptances) are issued and traded. OFFER: The price asked by a seller of securities (when one buys securities, one asks for an offer). See “Asked” and “Bid”. OPEN MARKET OPERATIONS: Purchases and sales of government and certain other securities in the open market by the New York Federal Reserve Bank, as directed by the FOMC in order to influence the volume of money and credit in the economy. Purchases inject reserves into the bank system and stimulate growth of money and credit; sales have the opposite effect. Open market operations are the Federal Reserve’s most important and most flexible monetary policy tool. 17 PORTFOLIO: A collection of securities that an investor holds. PRIMARY DEALER: A group of government securities dealers that submit daily reports of market activity and positions, and monthly financial statements to the Federal Reserve Bank of New York, and are subject to its informal oversight. Primary dealers include Securities and Exchange Commission (SEC) -- registered securities broker-dealers, banks, and a few unregulated firms. PRUDENT INVESTOR RULE: An investment standard cited in the California Government Code (CGC) Section 53600 et seq. Under this standard, all governing bodies of local agencies or persons authorized to make investment decisions on behalf of the City are trustees and therefore fiduciaries subject to the prudent investor standard. When investing, reinvesting, purchasing, acquiring, exchanging, selling, or managing public funds, a trustee shall act with care, skill, prudence, and diligence under the circumstances then prevailing, including, but not limited to the general economic conditions and the anticipated needs of the agency, that a prudent person acting in a like capacity and familiarity with those matters would use in the conduct of funds of a like character and with like aims, to safeguard the principal and maintain the liquidity needs of the agency. QUALIFIED PUBLIC DEPOSITORIES: A financial institution that: (1) does not claim exemption from the payment of any sales, compensating use, or ad valorem taxes under the laws of this state; (2) has segregated for the benefit of the commission eligible collateral having a value of not less than its maximum liability; and (3) has been approved by the Public Deposit Protection Commission to hold public deposits. RATE OF RETURN: The yield obtainable on a security based on its purchase price or its current market price. SAFEKEEPING: A service to customers rendered by banks for a fee whereby securities and valuables of all types and descriptions are held in the bank‘s vaults for protection. SECONDARY MARKET: A market made for the purchase and sale of outstanding issues following the initial distribution. SECURITIES AND EXCHANGE COMMISSION: An agency created by Congress to administer securities legislation for the purpose of protecting investors in securities transactions. STRUCTURED NOTES: Notes issued by instrumentalities (e.g., FHLB, FNMA, SLMA) and by corporations, that have imbedded options (e.g., call features, step-up coupons, floating rate coupons, derivative-based returns) in their debt structure. The market performance of structured notes is affected by fluctuating interest rates; the volatility of imbedded options; and shifts in the yield curve. TIME CERTIFICATE OF DEPOSIT: A non-negotiable certificate of deposit, which cannot be sold prior to maturity. TREASURY BILLS: A non-interest bearing discount security that is issued by the U.S. Treasury to finance the national debt. Most T-bills are issued to mature in three months, six months, or one 18 19 year. TREASURY BONDS: Long-term, coupon-bearing U.S. Treasury securities that are issued as direct obligations of the U.S. Government, and having initial maturities of more than 10 years. TREASURY NOTES: Medium-term, coupon-bearing U.S. Treasury securities that are issued as direct obligations of the U.S. Government, and having initial maturities of two to 10 years. YIELD: The rate of annual income return on an investment, expressed as a percentage. YIELD-TO-CALL (YTC): The rate of return an investor earns from a bond assuming the bond is redeemed (called) prior to its nominal maturity date. YIELD-TO-MATURITY: The current income yield minus any premium above par or plus any discount from par in purchase price, with the adjustment spread over the period from the date of purchase to the date of maturity. ZERO-COUPON SECURITIES: Security that is issued at a discount and makes no periodic interest payments. The rate of return consists of a gradual accretion of the principal of the security and is payable at par upon maturity. City of Palo Alto (ID # 2915) City Council Staff Report Report Type: Consent Calendar Meeting Date: 6/18/2012 June 18, 2012 Page 1 of 4 (ID # 2915) Summary Title: Miscellaneous Utility Rule and Rate Schedule Changes Title: Adoption of a Resolution Relating to Amendment to Utilities Rate Schedule E-15 (Service Connections) and Rules and Regulations 3, 4, 6, 7, 11, 26 and 27 (General Utility Service, Application for Service, Establishment of Credit, Deposits, Billing Adjustments, Fiber Optics Regulations, and Generating Facilities Interconnections) From: City Manager Lead Department: Utilities Recommendation Staff recommends that Council adopt a resolution relating to the amendment of Utilities Rule and Regulation 3, 4, 6, 7, 11, 26, and 27, and Utilities Rate Schedule E-15, as attached. Executive Summary Utilities Rate Schedules and Utilities Rules and Regulations are updated as required based on rules and regulations governing the Utilities operations. Rate schedules may be updated as part of the annual budget process to align utilities revenues with budgeted expenses. From time to time, rate schedules are also revised to add new provisions, delete outdated sections or schedules, update language for clarity, or to reflect changes to practices and procedures. Background Rule and Regulation 3 (Description of Utility Services) establishes the basis for providing utility service, including a listing of available services, location of Points of Service, delivery capacity, and load limitations, for the electric, fiber, water, gas, and wastewater utilities. In 1996, based on 15 years of successful trials of pad-mounting equipment in Palo Alto, Council adopted a resolution mandating the use of pad-mounted equipment for all new underground electric facilities installed in Palo Alto. Since then, the successful migration from underground facilities to pad-mounted facilities has encouraged the City to pad-mount additional facilities. Rule and Regulation 4, 6, 7 and 11 are customer service-related requirements that are periodically updated to keep operating conditions and requirements for providing service current. June 18, 2012 Page 2 of 4 (ID # 2915) Rule and Regulation 26 (Special Fiber Optic Utility Regulation) describes equipment and other requirements for providing fiber optic services. Rule and Regulation 27 (Generator Interconnections) establishes the standards for connecting a generator to the CPAU distribution system. It was adopted in 2006 to enable the power from Local Ultra-Clean Generation Incentive (PLUG-In) program, which provides incentives for installation of customer-sited distributed generation facilities. It was last updated in 2012 during adoption of the Palo Alto CLEAN (Clean Local Energy Accessible Now) program. Utility Rate Schedule E-15 (Electric Service Connection Fees) lists the fees for connecting customer facilities to the CPAU distribution system. Discussion Utilities Rule and Regulation 3 (Description of Services) In the past 15 years since the adoption of the resolution in 1996, the electric utility has pad- mounted most new equipment for capital improvement projects greater than 120 volt (V), 200 ampere equipment. This amendment formalizes that successful practice for aesthetic and operational reasons. With the increased use of electrical power devices in homes and businesses, the need to upsize and/or increase the quantity of overhead transformers in general has been solved with pad-mount transformers. The pad-mounted solution provides an opportunity for improved aesthetics by limiting the extent of the overhead utility canopy. Pad- mounting also provides a more accessible means to operate equipment on the ground rather than in the air and increases safety for linemen. Specifying a Point of Delivery with the applicant has become necessary in practice to avoid physical conflicts with operating equipment in the field. Formalizing that practice will limit delays in repairs or service restoration during normal maintenance and operation of the electric system, and will also limit delays during emergencies. The proposed changes to Rule and Regulation 3 include corrections in the maximum demand loads in section 7 to 3600 kilovolt-ampere (kVA) at 4,160 V and 11,000 kVA at 12,470 V. Utilities Rule and Regulation 4 (Application for Service) The proposed amendment to Rule and Regulation 4 (Application for Service) clarifies the applicability of Unmetered Services, clarifies Fiber Optic installations to be completed within six to eight weeks following the receipt of full payment and clarifies that a customer’s refusal to provide a required identifier will warrant termination of the Application for Service process. Utilities Rule and Regulation 6 (Establishment and Reestablishment of Credit) The proposed amendment to Rule and Regulation 6 (Establishment and Reestablishment of Credit) involves minor corrections and grammatical improvements. Utilities Rule and Regulation 7 (Deposits) The proposed amendment to Rule and Regulation 7 (Deposits) involves clarification that the addition of a new service address to an already existing business partner (commercial June 18, 2012 Page 3 of 4 (ID # 2915) customer) is not considered a new application for service and therefore no additional deposit is required. Utilities Rule and Regulation 11 (Billing, Adjustments and Payment of Bills) The proposed amendment to Rule and Regulation 11 (Billing, Adjustments and Payment of Bills) involves identifying additional bill payment methods such as online bill payment using “My Utilities Account” and the “Revert to Owner” agreement option for property managers. The changes also include increasing the retroactive bill adjustment period for over- or under- charging of utility bills from one year to three years. This change will allow the City a longer period of time to recover any erroneous undercharges and affords customers the opportunity to receive reimbursement for any erroneous overcharges. Utilities Rule and Regulation 26 (Special Fiber Optic Utility Regulation) The proposed amendment to Rule and Regulation 26 (Special Fiber Optic Utility Regulation) consists of minor language edits. Utilities Rules and Regulation 27 (Generator Interconnections) and Utility Rate Schedule E-15 (Electric Service Connections) The proposed amendment to Rule and Regulation 27 (Generator Interconnection) is non- substantive. Rule and Regulation 27 (Generator Interconnections) establishes the technical standards for connecting a customer-sited generator to the CPAU distribution system. It also establishes a process for reviewing and acting on applications to connect a customer-sited generator. The fees for that review are shown in the Rule and Regulation. The City’s preferred practice is to establish fees in Rate Schedules, not Rules and Regulations. The proposed amendments to Rule and Regulation 27 (Generator Interconnections) move the fees for reviewing generator interconnection applications to Utility Rate Schedule E-15 (Electric Service Connection Fees). The fee amounts and applicability remain unchanged. Resource Impact Approval of changes to Utilities Rule and Regulation 3, 4, 6, 7, 11, 26 and 27 will not result in a significant change in operating revenues or expenses. Approval of changes to Utility Rate Schedule E-15 will not result in a change in revenues or expenses Policy Implications This recommendation does not represent a change to current City policies. Environmental Review These changes in Utility Rules and Regulations and Utility Rate Schedules are not subject to the California Environmental Quality Act (CEQA), pursuant to California Public Resources Code Section 21080(b)(8) and Title 14 of the California Code of Regulations Section 15273(a)(1) and (3). June 18, 2012 Page 4 of 4 (ID # 2915) Attachments: Attachment A: Resolution (PDF) Attachment B: Utility Rule and Regulation 3 (PDF) Attachment C: Utility Rule and Regulation 4 (PDF) Attachment D: Utility Rule and Regulation 6 (PDF) Attachment E: Utility Rule and Regulation 7 (PDF) Attachment F: Utility Rule and Regulation 11 (PDF) Attachment G: Utility Rule and Regulation 26 (PDF) Attachment H: Utility Rule and Regulation 27 (PDF) Attachment I: Utility Rate Schedule E-15 (PDF) Prepared By: Ipek Connolly, Sr. Resource Planner Department Head: Valerie Fong, Director City Manager Approval: ____________________________________ James Keene, City Manager *Not Yet Approved* 120605 dm 00710036 Resolution No. _________ Resolution of the Council of the City of Palo Alto Amending Utility Rate Schedule E-15 (Electric Service Connections) And Approving Amendments To Utilities Rule and Regulation 3 (Description of Services), Utilities Rule And Regulation 4 (Application for Service), Utilities Rule And Regulation 6 (Establish and Reestablishment of Credit), Utilities Rule and Regulation 7 (Deposits), Rule and Regulation 11 (Billing, Adjustments and Payment of Bills), Utilities Rule and Regulation 26 (Special Fiber Optic Utility Regulation), And Rule and Regulation 27 (Generator Interconnection) The Council of the City of Palo Alto does hereby RESOLVE as follows: SECTION 1. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule E-15 (Electric Service Connections) is hereby amended as attached and incorporated. Utility Rate Schedule E-15, as amended, shall become effective July 1, 2012. SECTION 2. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utilities Rule and Regulation 3 (Description of Services) is hereby amended as attached and incorporated. Utility Rule and Regulation 3, as amended, shall become effective July 1, 2012. SECTION 3. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utilities Rule and Regulation 4 (Application for Service) is hereby amended as attached and incorporated. Utility Rule and Regulation 4, as amended, shall become effective July 1, 2012. SECTION 4. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utilities Rule and Regulation 6 (Establishment and Reestablishment of Credit) is hereby amended as attached and incorporated. Utility Rule and Regulation 6, as amended, shall become effective July 1, 2012. SECTION 5. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utilities Rule and Regulation 7 (Deposits) is hereby amended as attached and incorporated. Utility Rule and Regulation 7, as amended, shall become effective July 1, 2012. SECTION 6. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utilities Rule and Regulation 11 (Billing, Adjustments and Payment of Bills) is hereby amended as attached and incorporated. Utility Rule and Regulation 11, as amended, shall become effective July 1, 2012. SECTION 7. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utilities Rule and Regulation 26 (Special Fiber Optic Utility Regulation) is hereby amended as attached and incorporated. Utility Rule and Regulation 26, as amended, shall become effective July 1, 2012. *Not Yet Approved* 120605 dm 00710036 SECTION 8. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utilities Rule and Regulation 27 (Generating Facility Interconnections) is hereby amended as attached and incorporated. Utility Rule and Regulation 27, as amended, shall become effective July 1, 2012. SECTION 9. The Council finds that the adoption of this Resolution does not constitute a project under the California Environmental Quality Act, California Public Resources Code Section 21080, subdivision (b)(8). 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 _____________________________ Director of Administrative Services DESCRIPTION OF UTILITY SERVICES RULE AND REGULATION 3 CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council Effective 67-1-20102012 Sheet No 1 A. GENERAL Rule and Regulation 3 describes Services that are offered within the jurisdictional boundaries of the City of Palo Alto. For Rules specific to each type of Service, please refer to the following Rules and Regulations: Rule and Regulation 20 – Special Electric Utility Regulations Rule and Regulation 21 – Special Water Utility Regulations Rule and Regulation 22 – Special Gas Utility Regulations Rule and Regulation 23 – Special Wastewater Utility Regulations Rule and Regulation 24 – Special Refuse and Recycling Utility Regulations Rule and Regulation 25 – Special Storm and Surface Water Drainage Utility Regulations Rule and Regulation 26 – Special Fiber Optics Utility Regulations B. ELECTRIC SERVICE 1. BASIS OF SERVICE a. Unless otherwise provided in a Rate Schedule or contract, CPAU’s Electric rates are based upon the furnishing of Electric Service to Customer Premises at a single Point of Delivery at a single voltage and phase classification. Unless specified otherwise, each Point of Delivery shall be metered and billed separately under the appropriate Rate Schedule. Any additional Service supplied to the same Customer at other Points of Delivery or at a different voltage or phase classification shall be separately metered and billed. b. The type of distribution Service (voltage, Secondary, Primary) available at any particular location may be determined by inquiry at CPAU’s Engineering Office located at 1007 Elwell Court or at the Development to a CPAU Engineering representative. Center at 285 Hamilton Avenue. c. The Customer is responsible for all cost of providing Secondary or Primary Services, at the request of the Customer or for his or her convenience, to a Point of Delivery other than the normal Point of Delivery, as determined by CPAU c. If the Customer, for his or her convenience, requests Secondary or Primary Services at an alternate Point of Delivery other than the normal Point of Delivery as DESCRIPTION OF UTILITY SERVICES RULE AND REGULATION 3 CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council Effective 67-1-20102012 Sheet No 2 determined by CPAU, the Customer is responsible for all cost of providing Secondary or Primary Services at such alternate location. d. CPAU assumes no duty or liability for inspecting, validating or approving the safe operating condition of the Customer’s Service, appliances, or equipment downstream of the Utility Meter. e. See Rule and Regulation 20. "Special Electric Utility Regulations" regarding special Service requirements. 2. LOCATION OF POINT OF SERVICE a. SECONDARY SERVICE 1. OVERHEAD SERVICE AT SECONDARY VOLTAGES The Point of Service for Overhead Service at secondary voltages will normally be located at a power pole on the perimeter of the parcel to be served, which is, in CPAU’s judgment, most conveniently located and in compliance with CPAU standards and specifications and applicable building and electrical codes. 2. UNDERGROUND SERVICE AT SECONDARY VOLTAGE The Point of Service for Underground Service at secondary voltages will normally be located at the Secondary connectors of the transformer serving the Customer’s Load, or in the Secondary hand hole, if available. b. PRIMARY SERVICE The Point of Service for Primary Service will normally be at the point near the property line of the premises to be served which is, in CPAU’s judgment, most conveniently located with respect to CPAU’s transmission or distribution facilities. c. EXCEPTIONS DESCRIPTION OF UTILITY SERVICES RULE AND REGULATION 3 CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council Effective 67-1-20102012 Sheet No 3 If several buildings are occupied and used by one Customer in a single business or other activity, CPAU may, at its discretion, furnish Service for the entire group of buildings through one Service connection at one Point of Service. 3. EQUIPMENT REQUIREMENTS All new underground equipment in underground areas required to provide electric service to a Customer shall be pad-mounted. All transformers and facilities required to provide Secondary Electric Service over 400 amps will be pad-mounted.In addition, anyll Tthree-Phase electric services connection and any electric service connection rated atequal to or greater thanover 400 Amps or greater which is located either in an underground or overhead area must be served from a require a pad- mounted transformer. The Applicant, when requested by CPAU, shall provide a Public Utility Easement in recordable form for installation of such facilities within the boundaries of the property. All pad-mounted equipment will be subject to CPAU’s aesthetic guidelines. The Utilities Director, or his/her designee, may authorize an exception to the above provisions the installation of new submersible or vault installed facilities when, in his/her opinion, a pad-mounted equipment installation in any particular instance would not be feasible or practical. Such pad-mounted equipment installations will bemay be considered “Special Facilities” as defined described in Rule and Regulation 20, and all costs associated with such installation including such continuing ownership and additional maintenance shall be borne by the Applicant. These costs will be calculated by CPAU based on the net present value, and shall be paid in advance by the Applicantthe Applicant will be responsible for the costs described such in the rule. If the Applicant wants a Point of Delivery other than at the location determined by the CPUACPAU, the CPAU will work with the Applicant to assist in the selection of the alternate Point of Delivery location ofor the electric service equipment within the boundaries of the Applicant’s property. When the Applicant chooses a Point of Delivery location other than the location which has been determined by the CPAU, the Applicant must acknowledge that such an alternate Point of Delivery location will cause CPAU personnel to incur delays DESCRIPTION OF UTILITY SERVICES RULE AND REGULATION 3 CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council Effective 67-1-20102012 Sheet No 4 when performing repairs or service restoration during emergencies. In addition to being responsible to pay for the initial cost of installation of such electric service equipment in an alternate location, the Applicantproperty owner shall also be responsible to pay for any future additional labor and materials costs incurred by the CPAU related to , or providing sion ofany special equipment necessary to facilitate, the replacement, removeal, or relocateion of any electric service equipment which has been installed placed in an alternate Point of Delivery location inaccessible to CPAU equipment that is done at the Applicant’s or Property Owner’s request. Equipment in inaccessible locations will cause delays in repairs or service restoration during emergencies. Any installation intended to assist in “screening” of electric service equipment by landscaping or structures must be constructed in a manner which meets all meet of the CPAU’s clearance standards. The plans for such screening must be approved by the City of Palo Alto and CPAU prior to beginning work on the screening installation. The Applicant, wWhen requested by CPAU, the Applicant shall provide a Public Utility Easement in recordable form for installation of such facilities within the boundaries of the property. All pad-mounted equipment will be subject to CPAU’s aesthetic guidelines. 34. EMERGENCY AND STANDBY SERVICES CPAU may provide back up Emergency, and other Standby Service to Customers as Special Facilities. See Rule and Regulation 20 "Special Electric Utility Regulations" regarding special Service requirements. 45. SERVICE DELIVERY VOLTAGE The following are the standard Service voltages normally available. Not all standard Service voltages are available at each Point of Delivery. These Service voltages are available in locations that already have this Service voltage and have sufficient capacity, as determined by CPAU, to serve the new Load. Any equipment installed on 120/240, 3 wire or 240/120, 4-wire Services shall have the capability of converting to a 120/208, 3 wire or 208 Y/120, 4-Wire Service. DESCRIPTION OF UTILITY SERVICES RULE AND REGULATION 3 CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council Effective 67-1-20102012 Sheet No 5 a. DISTRIBUTION OF VOLTAGE Alternating-current Service will be regularly supplied at a nominal frequency of approximately 60-Hertz (cycles per second). Single-Phase Three-Phase Three-Phase Secondary Secondary Primary 120/240, 3 -wire 240/120, 4-wire* 12,470, 3-wire 120/208, 3-wire 240, 3-wire* 208 Y/120, 4-wire 480 Y/277, 4-wire *Limited availability: maximum 400 ampere main, consult CPAUNot available for new installationsOnly available in special conditions as determined by the Electric Engineering Manager. b. All voltages referred to in this Rule and appearing in some Rate Schedules are nominal Service voltages at the Point of Delivery. CPAU’s facilities are designed and operated to provide sustained Service voltage at the Point of Delivery, but the voltage at a particular Point of Delivery will vary within satisfactory operating range limits. c. In areas where a certain standard Secondary voltage is being delivered to one or more Customers, CPAU may require an Applicant for new Service in such areas to receive the same standard voltage supplied to existing Customers. d. CPAU may change the voltage at which Service is delivered, including converting existing 4160 volt Primary Service to 12,470 volt Service. If CPAU notifies the Customer that a Service voltage change is necessary, the Customer will be required to provide Service equipment capable of accepting the new voltage and meeting other CPAU requirements. Costs to provide suitable Customer’s Service entrance equipment and any other associated equipment to receive Service at the new voltage shall be borne by the Customer. 56. VOLTAGE AND FREQUENCY CONTROL DESCRIPTION OF UTILITY SERVICES RULE AND REGULATION 3 CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council Effective 67-1-20102012 Sheet No 6 a. Under normal Load conditions, CPAU’s distribution circuits will be operated so as to maintain Service voltage levels to Customers within plus or minus 5 percent of the nominal Service voltage at the Point of Delivery. Subject to the limitations above, CPAU will maintain the voltage balance between phases as close as practicable to 2.5% maximum deviation from the average voltage between the three phases. b. Voltages may be outside the limits specified above when the variations: 1. arise from Service interruptions; 2. arise from temporary separation of parts of the system from the main system; 3. are minor momentary fluctuations and transient voltage excursions of short duration which may occur in the normal operation of CPAU system; 4. are beyond CPAU’s control. c. Due to conditions beyond the control of CPAU, the Customer, or both, there will be infrequent and limited periods when voltages will occur outside of the nominal Service voltage ranges. Utilization equipment may not operate satisfactorily under these conditions, and protective devices in the equipment may operate to protect the equipment. d. Where the operation of the Customer’s equipment requires stable voltage regulation or other stringent voltage control beyond that supplied by CPAU in the normal operation of its system, the Customer, at its own expense, is responsible for installing, owning, operating, and maintaining any special or auxiliary equipment on the Load side of the Service delivery point as deemed necessary by the Customer. e. The Customer shall be responsible for designing and operating its Service facilities between the Point of Delivery and the utilization equipment to maintain proper utilization voltage at the line terminals of the utilization equipment. f. The Customer shall not impose a Load on CPAU’s system that will cause the voltage limits in this section to be exceeded for an adjacent Service delivery point. g. When there is reasonable indication of a problem, CPAU shall test for excessive fluctuations at its own expense. Voltage checks requested by the Customer more than once in any twelve month period shall be paid by the Customer, unless CPAU determines that excessive voltage fluctuation exists. DESCRIPTION OF UTILITY SERVICES RULE AND REGULATION 3 CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council Effective 67-1-20102012 Sheet No 7 h. CPAU may institute measures to prevent the continuous operation of equipment detrimental to Service to other Customers or may discontinue Electric Service to the offending Customer. (See Rule and Regulation 20, Special Electric Utility Regulations). i. Customers are responsible for protecting their connected Loads, audio, video, and electronic equipment, including computers, from sudden voltage or frequency fluctuations outside nominal Service and frequency ranges. Such protection may include, but is not limited to, surge protectors. 67. GENERAL LOAD LIMITATIONS a. SINGLE-PHASE SERVICE 1. Single-phase Service normally will be 3-wire, 120/240 volts (or 3-wire, 120/208 volts at certain locations as now or hereafter established by CPAU) where the size of any single motor does not exceed 7-1/2 horsepower (10 horsepower at the option of CPAU). For any single-phase Service, the maximum Service size shall be 400 ampere. If the Load exceeds the capability of a 400 ampere single phase Service the Service shall be three- phase. 2. In locations where CPAU maintains a 120/208 volt secondary system, 3-wire single-phase Service normally shall be limited to that which can be supplied by a main switch or Service entrance rating of 200 amperes. Single-phase Loads in these locations in excess of that which can be supplied by a 200 ampere main switch or Service entrance rating normally will be supplied with a 208Y/120 volt, three-phase, 4-wire Service. b. THREE-PHASE SERVICE (480 VOLTS OR LESS) Minimum Load Maximum Demand Normal Voltage Requirements Load Permitted 240/120 5 hp, 3-phase connected 400 Amperes 240 5 hp, 3-phase connected 400 Amperes DESCRIPTION OF UTILITY SERVICES RULE AND REGULATION 3 CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council Effective 67-1-20102012 Sheet No 8 208Y/120 Demand Load 75 kVA 500 kVA 480Y/277 Demand Load 112 kVA 2,500 kVA(See Note 1) Note 1. Applicants or existing Customers with a planned or existing single or multiple building development having a maximum Demand in excess of 2500 kVA, as determined by CPAU, will be required to take delivery at the available primary voltage and are required to provide their own primary switchgear and transformer(s). Determination of maximum Demand and Service voltage will be made by CPAU and the decision of the Electric Engineering Manager will be final. 1. Where three-phase Service is supplied, CPAU reserves the right to use single- phase transformers, connected open-delta or closed-delta, or three-phase transformers. 2. Three-phase Service will be supplied on request for installations aggregating less than the minimum listed above, but not less than 3 horsepower (hp), three-phase Service, where existing transformer capacity is available. If three- phase Service is not readily available, or for Service to Loads less than 3 hp, Service shall be provided in accordance with CPAU’s applicable Rule 20 on Special Power Service requirements. 3. An Applicant or existing Customer requiring Service with a maximum Demand in excess of 1000 kVA, as determined by CPAU, shall be served by a padmount transformer. No submersible or vault-installed transformers in excess of 1000 kVA will be installed by CPAU. Where an existing underground Service must be upgraded beyond 1000 kVA, the Customer shall be required to provide adequate space for installation of the padmount transformer. In the event the Customer is unable to provide adequate space for the padmount transformer, then the Customer shall make arrangements at his or her expense to receive Service at primary voltage. c. THREE-PHASE SERVICE (OVER 2,000 VOLTS) The following three-phase primary voltage may be available as an isolated Service for a single Applicant; and where that Applicant’s Demand Load justifies such voltage. The determination will be made by CPAU. DESCRIPTION OF UTILITY SERVICES RULE AND REGULATION 3 CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council Effective 67-1-20102012 Sheet No 9 Minimum Demand Maximum Demand Normal Voltage Bank Installed Load Permitted 4,160 500 kVA 15,0003,600 kVA 12,470 1,000 kVA 1511,000 kVA Note: 4,160 volt Services will not be furnished for new Services. 78. TEMPORARY SERVICE Temporary Service is Electric Service which, in CPAU’s opinion, is of an indefinite duration at the same location, or for operations of a speculative character or of questionable permanency, or any other Service which is estimated to last less than one year. CPAU will furnish Temporary Service if the furnishing of such Service will not create undue hardship for CPAU, or its Customers, and the following conditions are met: a. The Applicant for such Temporary Service shall apply for Service on an Application form provided by CPAU Engineering and shall pay to CPAU in advance the cost of installing and removing any facilities necessary in connection with the furnishing of such Service by CPAU. b. Each Applicant for Temporary Service shall prepay a Temporary Service Fee in accordance with Electric Service Connection Fees Rate Schedule E-15. c. Nothing in this Rule and Regulation shall be construed as limiting or in any way affecting the right of CPAU to collect from the Customer an additional sum of money by reason of the Temporary Service furnished or to be furnished or removed hereunder. d. If the Temporary Service connection time exceeds one-year, the Applicant shall apply for an extension of the Temporary Service. The Director of Utilities or his/her designee will determine if the Service should be reclassified as a permanent Service. 89. SERVICE DOWNSTREAM OF METER CPAU assumes no duty or liability for inspecting, validating or approving the safe operating condition of the Customer’s Service, appliances, or equipment downstream of the Utility Meter. C. FIBER OPTIC SERVICE DESCRIPTION OF UTILITY SERVICES RULE AND REGULATION 3 CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council Effective 67-1-20102012 Sheet No 10 Fiber Optic Service includes the custom construction and licensing of single mode Fiber routes between points within the City of Palo Alto. It is the Customer’s responsibility to establish all electronic devices and networks required to pass data over their licensed CPAU Dark Fiber routes. 1. LICENSING SERVICES All Dark Fiber routes are licensed in accordance with the currently approved Dark Fiber Rate Schedules, and in compliance with the Utilities Rules and Regulations. See Rule and Regulation 26, “Special Fiber Optic Utility Regulation,” regarding special Service requirements. All CPAU fibers terminate within the jurisdictional boundaries of the City of Palo Alto. 2. OTHER SERVICES CPAU offers custom Dark Fiber construction and ancillary Services such as Fiber Optic cable splicing, engineering feasibility studies, and when specifically requested by the Customer, multimode Fiber cable installations. 3. QUALITY Dark Fiber routes in the City of Palo Alto comprised of single mode Fiber comply with generally accepted industrial standards and specifications. All construction is done using industry accepted techniques and procedures. All constructed routes are Performance Tested to assure the industry quality standards are met. D. WATER SERVICE 1. SOURCE OF SUPPLY CPAU’s primary source of Water is the Hetch Hetchy aqueduct system, managed by the San Francisco Public Utilities Commission (SFPUC). CPAU wells also provide Emergency supply. See Rule and Regulation 21, “Special Water Utility Regulation” regarding special Service requirements. 2. QUALITY DESCRIPTION OF UTILITY SERVICES RULE AND REGULATION 3 CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council Effective 67-1-20102012 Sheet No 11 Hardness generally varies between 1 and 4 grains per gallon depending on the source. An analysis of the mineral content of the Water is available upon request from CPAU Engineering. 3. PRESSURE Water pressure varies from 30 to 125 pounds per square inch. CPAU maintains an average of 50 pounds per square inch, with the maximum and minimum pressures being experienced at the lower and higher elevations of the Distribution System. CPAU assumes no responsibility for loss or damage due to lack of Water pressure but agrees to furnish such pressures as are available in its general Distribution System. If low Water pressure occurs due to additional on-site development, it shall be the responsibility of the property owner to replace the existing Water Service with a new Water Service designed for the current site. All costs of the required new Service upgrade shall be borne by the property owner. 4. TREATMENT CPAU currently does not treat Water supplied by the SFPUC. The pH of the Water supplied is adjusted by the SFPUC to reduce its corrosive action. 5. SERVICE DOWNSTREAM OF METER CPAU assumes no duty or liability for inspecting, validating or approving the safe operating condition of the Customer’s Service, appliances, or equipment downstream of the Utility Meter. E. GAS 1. TYPES OF SERVICES CPAU offers two general types of Gas Service: Full Service and Gas Direct Access Service. Full Service includes Gas supply, transport, and Distribution Services. Gas Direct Access Service is an unbundled Service where CPAU provides Distribution Services and outside Gas Service Providers supply Gas-commodity and transport. In order to initiate Gas Direct Access Service, Customers must complete a Gas Direct Access Service Request form. Gas Service Providers will be required to execute a Gas Service Provider Agreement (GSPA). Operational requirements as well as delivery specifications, administrative fees, security deposits, Metering requirements and other requirements will be addressed in the GSPA. DESCRIPTION OF UTILITY SERVICES RULE AND REGULATION 3 CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council Effective 67-1-20102012 Sheet No 12 2. KIND AND HEATING VALUE CPAU purchases natural Gas from several/various natural Gas suppliers. The heating value of natural Gas supplied varies depending upon the Gas fields being drawn upon. At times of insufficient supply, some artificial Gas may be supplied or mixed with the natural Gas. The average monthly heating value in British Thermal Units (Btu)-dry basis per cubic foot of the natural Gas served may vary within the limits of 750 to 1150 Btu. This average heating value is converted to a Therm factor for use as one of the factors used in calculating a composite multiplier for billing purposes. The Therm factor will be based upon the heat factor used by CPAU’s supplier of natural Gas for the preceding month. Gas is supplied by CPAU either at standard “low pressure” or at “medium pressure”. Low pressure Service is available at all points where Gas is supplied. Where available from existing high pressure mains, at the option of CPAU, high pressure Service may be supplied. However, CPAU reserves the right to lower the pressure or to discontinue the delivery of Gas at high pressure. The standard pressure for low pressure is seven inches of Water Column (WC), which is approximately 1/4 pound per square inch (psi) above atmospheric pressure. In limited circumstances, increased pressure may be provided for domestic use at 14” Water Column. This increased pressure will only be provided for domestic use if the houseline size required is greater than 2” diameter, or CPAU determines, based upon satisfactory information from the manufacturer, provided by the Customer, that an appliance to be located in the residence requires increased pressure at the inlet that cannot be obtained by resizing or relocating the houseline. Increased pressure may be provided for commercial uses only if the use of the houseline size required is greater than 4” diameter, or evidence as described above establishes that equipment on the site requires increased pressure at the inlet that cannot be obtained by resizing or relocating the houseline. For commercial uses, the available pressures are 7” WC, 14” WC (approximately 1/2 psi), 1 psi, 2 psi and 5 psi. All increased pressure above 7”WC requires review and approval of the Engineering Manager, a plumbing permit and testing of the existing Gas piping with a building Inspector present in accordance with the latest adopted version of the California Plumbing Code See Rule and Regulation 22, “Special Gas Utility Regulations” regarding special Service requirements. DESCRIPTION OF UTILITY SERVICES RULE AND REGULATION 3 CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council Effective 67-1-20102012 Sheet No 13 3. DETERMINATION OF THERMS TO BE BILLED The unit of measure for billing is the Therm which is defined as the quantity of Gas having a heating value of 100,000 Btu. Gas Meters measure volume of Gas in ccf at ambient temperature and pressure conditions. Therms are derived from the metered data by subtracting the Meter reading for the previous reading cycle from the current reading. The difference (uncorrected ccf) is multiplied by the pressure factor required to convert the measured consumption volume to a standard volume (at standard temperature and pressure conditions). This standard volume, in pressure-corrected ccf, is then multiplied by the Therm factor (a variable determined by periodic analysis of CPAU’s Gas supply) to produce the final number of Therms billed. The composite correction factor (the product of the Therm factor and the pressure correction factor) is shown on bills under the heading “multiplier.” 4. SERVICE DOWNSTREAM OF METER CPAU assumes no duty or liability for inspecting, validating or approving the safe operating condition of the Customer’s Service, appliances, or equipment downstream of the Utility Meter. F. WASTEWATER COLLECTION AND TREATMENT 1. COLLECTION CPAU operates and maintains a Wastewater Collection System separate from the storm and surface Water Collection System. A connection to the Wastewater Collection System is required for all water users where wastewater service is available. For the disposal of Wastewater from basements and floors below ground level, it will be necessary for the Customer to provide pumps or ejectors for satisfactory drainage, as approved by the Water-Gas-Wastewater Engineering Manager. If the elevation of the basement floor is above the rim elevation of the next upstream manhole, Applicant shall provide a survey by a licensed Civil Engineer indicating the elevations of the basement floor and the rim elevation of the next upstream manhole. Submission of this survey and approval by the Engineering Manager is required for exemption from the pump/ejector requirement. 2. REGULATION DESCRIPTION OF UTILITY SERVICES RULE AND REGULATION 3 CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council Effective 67-1-20102012 Sheet No 14 Chapter 16.09 of the Municipal Code regulates the discharge into the Wastewater Collection System of substances other than domestic Wastewater. See Rule and Regulation 23, “Special Wastewater Utility Regulations” regarding special Service requirements. 3. TREATMENT The collection system transports the Wastewater to the Palo Alto Regional Water Quality Control Plant for treatment. At this tertiary treatment plant, the City of Palo Alto processes the Wastewater from Mountain View, Los Altos, Los Alto Hills, Stanford University, and East Palo Alto Sanitary District, as well as its own. The treatment is performed in accordance with the National Pollution Discharge Elimination Permit issued by the San Francisco Bay Area Regional Water Quality Control Board before the treated water is discharged into the San Francisco Bay Estuary. 4. LIMITATION OF SERVICE CPAU reserves the right to limit the size of connection and the quantity of wastes disposed and to prohibit the use of the sewer for disposal of toxic or hazardous wastes detrimental to the Wastewater system or treatment plant. G. REFUSE AND RECYCLING COLLECTION 1. REGULATION All solid waste and Recyclable Materials are governed by Chapter 5.20 of the Palo Alto Municipal Code, regulations promulgated by the City Manager pursuant to Chapter 5.20, these Rules and Regulations and the contract between the City and the City’s Collector. See Rule and Regulation 24, “Special Refuse and Recycling Regulations” regarding special Service requirements. 2. REFUSE COLLECTION The City’s Collector provides collection of solid waste, Recyclable Materials, compostables and Yard Trimmings. A minimum of one collection per week of solid waste is required of all occupied Premises. An occupied premise is one to which Water, Gas and/or Electric Service is rendered. The automatic solid waste Service level is one Standard Container for Residential Customers and two Standard Containers for Commercial Customers The minimum Service for Residential Premises is one twenty gallon can or wheeled cart provided by the City’s DESCRIPTION OF UTILITY SERVICES RULE AND REGULATION 3 CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council Effective 67-1-20102012 Sheet No 15 Collector. The City’s Collector will provide wheeled carts at Customer’s request for curbside solid waste collection, which are subject to the same rate structure and volume capacity as the Standard Container. Customers opting for a wheeled cart must use one provided by the City’s Collector-to ensure compatibility with collection vehicles. Contents of wheeled carts shall not exceed a weight of 200 pounds. Each Customer shall receive collection Service on a City specified day of each week. Solid waste in excess of the Service level subscribed by the Customer will be removed by the City’s Collector, for an additional Charge, upon Customer request or notification. Customers exceeding their subscribed Service level repeatedly are required to subscribe to additional collection Service at the City-established rates. H. STORM AND SURFACE WATER DRAINAGE 1. RESPONSIBILITY AND PURPOSE The City of Palo Alto Public Works Department is responsible for all Drainage Facilities in the street and public right of way that collect storm and surface Water and convey it to the major channels and creeks within the jurisdictional boundaries of the City of Palo Alto. Examples include curbs and gutters, catch basins, pipelines, culverts, street, channels and pumping stations. The purpose of the Storm and Surface Water control facilities is to improve the quality of control, or protect life or property from any storm, flood or surplus waters. See Rule and Regulation 25, “Special Storm and Surface Water Drainage Regulations,” regarding special Service requirements. 2. STORM DRAINAGE FEE A Storm Drainage fee shall be payable to the City monthly by the owner or occupier of each and every developed parcel in accordance with Rule and Regulation 25. (END) APPLICATION FOR SERVICE RULE AND REGULATION 4 CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council Effective 67-1-20102012 Sheet No 1 A. APPLICATION FOR SERVICE 1. These Rules for Application of Service apply to all Utility Services. Electric, Fiber Optics, Water, Gas and Wastewater Collection Utility Services are provided by the City of Palo Alto Utilities Department (CPAU), and Refuse & Recycling, and Storm & Surface Water Drainage Services are provided by the City of Palo Alto Public Works Department. Application for all Services is handled through CPAU. Unmetered Services: Utility services for Refuse & Recycling, Storm & Surface Water Drainage and Wastewater Collection are unmetered services. These Utility Services are applied to existing utility accounts when two of the three metered services including Electric, Gas and Water Service are set up and established. 2. An Applicant’s request for Service does not bind the City to serve except under reasonable conditions, nor does it bind the Customer to take Service for a longer period than the minimum requirements of the applicable Service. 3. CPAU will require each prospective Customer to provide any information that may be reasonably needed to furnish Service or administer the Account. This information may include, but is not limited to, the following: For Residential Customers: a. Legal name(s) of Applicant. b. Name of a spouse, domestic partner or other Person(s) identified as a responsible party for the Account by the Applicant and authorized to access and manage the Applicant’s Utilities Account. Without the addition of an authorized responsible party, access and management of the Utilities Account will be restricted to the Applicant/Customer. c. A Customer’s surviving spouse, domestic partner or estate executor can be added to the Account upon furnishing proof of the Customer’s death or incapacity. A surviving sibling or other family member will be required to apply for a new Utility Account. For Commercial Customers: d. Legal business name. APPLICATION FOR SERVICE RULE AND REGULATION 4 CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council Effective 67-1-20102012 Sheet No 2 e. Responsible party for Utilities bill payment. f. Address of Premises to be served. For all Customers: g. Effective date of Service. h. Physical address to which bills or other communications are to be mailed or delivered. i. Whether Premises have been previously served. If the Applicant requires Service upgrades, Fiber Optic installations, and/or new meter installs, Utility Services will be installed between 30 and 45 days following receipt of full payment. Fiber Optic facilities will be installedinstallations will be completed between within six to eight weeks following the of receipt of documentation andfull payment. j. Whether Applicant is the property owner, agent or tenant of Premises to be served. k. Purpose for which Service is to be used for North American Industry Classification System reporting purposes. l. Rate Schedule desired if an optional rate is available. m. Identifiers, unique to the Applicant or Customer, are required to establish credit with CPAU to manage the security of the Account, maintain communication with the Customer, and allow for collection action in the event of payment default. These include: 1. Social Security Number 2. California Drivers License Number 3. Current Passport Number 4. Employer Name 5. Business Telephone 6. Primary Contact Telephone Number 7. Alternate Contact Telephone Number 8. Email Address (if Customer requests electronic communication) Customer refusal to provide a required identifier will terminate the Application for Service process. 4. Applicants for Commercial Service at more than one location shall be required to furnish information and establish credit for each location in accordance with section A.3 and Rule and Regulation 6 (Establishment and Re-establishment of Credit). APPLICATION FOR SERVICE RULE AND REGULATION 4 CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council Effective 67-1-20102012 Sheet No 3 5. The Applicant and additional responsible parties on the same Application for Service or established Account shall be jointly and severally liable for Utility Services supplied. Only one bill will be rendered for such joint Service. 6. A tenant who opens an Account for a metered Service serving more than one dwelling will be required to provide a letter in writing to CPAU that he or she understands that the Meter(s) serves additional dwellings and that he or she is willing to accept responsibility for all Charges on said Meter(s). Otherwise, the Account shall be in the name of the owner or property manager. B. CHANGE IN CUSTOMER’S EQUIPMENT OR OPERATION 1. Customers shall give CPAU written notice of any material changes in the size, character, or extent of Utilities equipment or operations for which the City is supplying Utility Service before making any such change. 2. Notwithstanding any Rule and Regulation herein to the contrary, no change or alteration of any Utility Service, agreement, connection, or facility, including any installation or reinstatement thereof, shall be made or permitted by CPAU where the purpose or effect would be to serve, facilitate or make possible a use or occupancy of a structure or other condition which is or would be in violation of the Zoning Ordinance, the Building Code or any ordinance of the City of Palo Alto. C. SERVICE WITHOUT PROPER APPLICATION Anyone using Utility Services, without having first complied with the requirements for Service, will be held liable from the date of the first Service as determined by the City. Failure to pay accumulated Charges may result in discontinuance of Service without further notice. D. RIGHTS OF WAY The City shall not be required to connect with, or render Service to, an Applicant unless and until the Applicant has obtained or been granted all necessary Utility operating rights, including rights-of- way, easements, and permits. APPLICATION FOR SERVICE RULE AND REGULATION 4 CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council Effective 67-1-20102012 Sheet No 4 E. RESALE PROHIBITED 1. Customer shall use Services only for the purposes specified at the time of application for Service. Utility Services shall not be resold except as provided in this Rule. 2. Premises that are receiving Service in conflict with this Rule as of the effective date of this Rule may continue to receive Service under such conditions if so authorized in writing by the City. 3. Sub-metering shall be considered sufficient evidence that Utilities are being resold, with the exception of Provision in Section F.1. “SUBMETERING”. F. SUBMETERING 1. Property owners may bill the cost of providing Services to individual tenants. Under no circumstances can the total costs of the Utility Services allocated to tenants exceed the costs of the Utility Services billed to the property owner by the City. A property owner must disclose all information used to determine a tenant’s Utilities bill to the tenant upon request, including copies of past bills. Resolution of Utility bill disputes between property owners and tenants can be mediated through the City of Palo Alto, Community Services Department, Human Services Division’s Palo Alto Mediation Program’s Mandatory Response Program. 2. Those who license Fiber Optic Services may use Fiber Optics to serve themselves or third parties; however, compliance with all Rules and Regulations, and payment of all fees is the responsibility of the license holder. (END) ESTABLISHMENT AND REESTABLISHMENT OF CREDIT RULE AND REGULATION 6 CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council Effective 67-1-20102012 Sheet No 1 A. ESTABLISHMENT OF CREDIT FOR RESIDENTIAL SERVICE The Applicant’s credit with CPAU shall be established upon CPAU verification of either of the following: a) sufficient cash deposit as required by Rule and Regulation 7 (Deposits); or, b) two or fewer 10ten D-day Ppast Ddue notices within the last prior twelve12 consecutive months of prior Utility sService, if the Applicant has been a Customer of CPAU for a minimum of within the past two24 yearsmonths. B. ESTABLISHMENT OF CREDIT FOR COMMERCIAL SERVICE The Applicant’s credit with CPAU will be established upon CPAU verification of either of the following: a) sufficient cash deposit as required by Rule and Regulation 7 (Deposits); or, b) a Certificate of Ddeposit drawn on a local bank or savings and loan association, or a surety bond of equal or greater value than the cash deposit. C. REESTABLISHMENT OF CREDIT 1. An Applicant who has been a Utility Utilities Customer and whose sService has been discontinued for any reason, including failure to pay Utility bills, may be required to reestablish credit before sService is resumed, by making a cash deposit and by paying all outstanding past due bills. Applicants for rResidential sService may not be denied sService for failure to pay outstanding past due bills for commercial classes of sService. 2. A Customer who’s whose uUtility sService is terminated for non-payment will be required to pay reconnection fees (Utility Rate Schedule C-1), all outstanding past due bills, and provide a new cash deposit (Rule and Regulation 7, Deposits) prior to the reestablishment of Service. 3. A Customer may be required to reestablish credit in accordance with this section if the conditions of sService or basis on which credit was originally established have, in the opinion of CPAU, materially changed. 4. If a Customer files for bankruptcy protection under Chapter 7, Chapter 11, or Chapter 13, the ESTABLISHMENT AND REESTABLISHMENT OF CREDIT RULE AND REGULATION 6 CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council Effective 67-1-20102012 Sheet No 2 Customer shall be required to re-establish credit. D. CUSTOMER CREDIT RATING SYSTEM 1. CPAU Creditworthiness Ratings are based on the Customer or responsible party’s payment history. Adequate Creditworthiness is a requirement for sService for the Applicant or responsible party for of the Account. The creditworthiness of an Applicant or responsible party is established by the Applicant’s or Customer’s CPAU payment history and determines when a security deposit is required to maintain the Account in good standing. New Applicants begin sService with an “Excellent” Creditworthiness rating. Failure to pay in full or late payments automatically results in erosion of Creditworthiness ratings. Similarly, continued good payment history over time improves the rating. Creditworthiness ratings are established and maintained by the City of Palo Alto for internal use only and are not reported to external credit reporting agencies. CREDITWORTHINESS RATING Credit Worthiness Status Maximum Points Allowed Excellent 0 - 23 Good 24 - 43 Average 44 - 75 Below Average 76 - 999 2. Creditworthiness status isreports are updated in the CPAU billing system manually or automatically by for different business transactions including such as when : a payment is returned for insufficient funds, issuance of a payment or when delinquency ndunning notices (10 Day Past Due, past due, 48-Hour Disconnection) or when an uncollected account balance is written-off as Bad Debt.disconnection warning, and write-off of Account balances) are issued. 3. Creditworthiness points are adjusted or eliminated by the City of Palo Alto if erroneous Charges for a past-due notice or returned payment are corrected by CPAU. ESTABLISHMENT AND REESTABLISHMENT OF CREDIT RULE AND REGULATION 6 CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council Effective 67-1-20102012 Sheet No 3 (END) DEPOSITS RULE AND REGULATION 7 CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council Effective 67-1-20102012 Sheet No 1 A deposit is required for a new Application for Service. For commercial customers, the addition of a new service address to an already existing business partner is not considered a new Application for Service and shall not require an additional deposit. A deposit is also required for reconnection after termination of Service. Deposits are credited to Accounts upon termination of Service, or after 36 months of good payment history, whichever comes first. A. AMOUNT OF DEPOSIT 1. The amount of deposit required for a Residential Account shall be set forth in Customer Deposits Rate Schedule C-2, with each separate Account number requiring a separate deposit. 2. The amount of deposit required for a Commercial Account shall be determined based on estimated Utility Services Charges for a three-month period. 3. Deposits for Commercial Accounts may be increased if the Customer’s usage substantially differs from when Service was first established. 4. Deposits can be in the form of a Certificate of Deposit at a local financial institution or cash. B. RETURN OF DEPOSIT 1. Upon discontinuance of Service, CPAU will refund or credit any remaining deposit balance in excess of unpaid CPAU Charges. 2. CPAU, at its option, may refund a Customer’s deposit by draft or by applying the deposit to the unpaid balance on the Customer’s Account. 3. If an existing Customer establishes Service at a new location, CPAU, at its option, may apply an existing deposit for the new Account toward the deposit obligation for the new Account. 4. CPAU will not pay interest on Customer deposits. (END) BILLING, ADJUSTMENTS AND PAYMENT OF BILLS RULE AND REGULATION 11 CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council Effective 67-1-20102012 Sheet No 1 A. BILLING UNITS All metered billing units used for billing purposes shall be determined to the nearest whole unit. Such units may include, kW, kWh, kVA, kVar, hp, Therms, and/or ccf. B. PAYMENT OF BILLS CPAU issues bills to its Customers on a regular interval. Bills shall be deemed received upon physical or electronic delivery to Customer, or three calendar days following the deposit of the bill in the United States Mail to the Customer’s billing address. Bills for CPAU Services are due and payable 20 calendar days following issuance of the bill statement. Bills unpaid after the 20 day period are considered delinquent (“past due”). If a Customer’s payment is not received by CPAU after 25 days of bill issuance, the outstanding balance will be assessed a late payment Charge. For the convenience of Customers there are a number of ways to pay CPAU bills: 1. By enclosing the bill stub and check and mailing to: CPAU, P.O. Box 10097, Palo Alto, CA 94303-0897. 2. By enrolling in the Utilities Bank Draft Program. Payments will be drafted from a Customer’s designated checking or saving account and automatically applied to the Customer’s Utility Account for each current Billing Period. 3. By paying in Person at the Civic Center, Revenue Collections, 1st Floor, 250 Hamilton Avenue, Palo Alto between the hours of 8:00 a.m. and 4:30 p.m. The City offices are closed on alternate Fridays. Customers should call 650-329-2317 to ensure the office is open. Credit card payments are accepted at Revenue Collections. Customers should call to see which credit cards are accepted. Customers can pay delinquent bills with a credit card by phone by calling the Utility Customer Service Center during business hours. 4. By dDepositing the payment in the walk-up Night Depository Box in the front of the City Hall building on the Civic Center Plaza, or at the drive-up Night Depository Box in the Civic Center Garage, on “A” Level. 5. By paying online through the “My Utilities Account” application, accessible from the Utilities’ website. Payment through the “My Utilities Account” may be made by credit card BILLING, ADJUSTMENTS AND PAYMENT OF BILLS RULE AND REGULATION 11 CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council Effective 67-1-20102012 Sheet No 2 or by bank draft. 6. By eEnrolling at a financial institution or service company that can provide electronic payments to CPAU on behalf of the Customer. 5.7. By Property Managers completing a “Revert to Owner (RTO) Agreement” in order to maintain utility service to units during the interim period between tenants. C. BUDGET BILLING PAYMENT PROGRAM The Budget Billing Payment Program establishes equalized monthly payments and is available to all Residential Customers who qualify as set forth below: 1. Customers may join the Budget Billing Payment Program at any time providing the Customer Account balance is zero and the Customer has not been previously removed from the Budget Billing Program for non-payment. 2. A Customer electing to utilize the program shall agree to make monthly payments based on CPAU’s forward estimate of the Customers’ Charges for the subsequent twelve-month period. 3. CPAU does not guarantee that the total actual Charges will not exceed, or be less than, its original estimate. Customers should review their Account on an ongoing basis and request changes to the budget billing amount in response to changes in their household usage. CPAU may require that Customers pay a revised monthly amount as a condition to continuing participation in the plan, if CPAU determines that substantial changes in Customer usage patterns or consumption has occurred. 4. CPAU will perform an annual true-up on Customer Budget Billing Accounts every twelve months. This will result in either a Customer credit for CPAU over-collection or an outstanding balance due from the Customer for under-collection by CPAU during the prior twelve months. D. DISCONTINUANCE OF BUDGET BILLING The Customer’s Budget Billing Payment Program shall remain in effect, subject to review of the monthly payment amount, and shall terminate when: BILLING, ADJUSTMENTS AND PAYMENT OF BILLS RULE AND REGULATION 11 CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council Effective 67-1-20102012 Sheet No 3 1. The Customer notifies CPAU to terminate participation in the Budget Billing Program; 2. CPAU notifies the Customer of the termination of its Budget Billing Payment Program: 3. The Customer no longer takes Service at the Premises; or 4. The Customer owes an amount of two or more monthly payments. However, if the Customer eliminates the delinquency, removal from the program will not occur. Upon termination of either Utility Service or participation in the Budget Billing Payment Program, any amount owed by the Customer for actual Charges shall immediately become due and payable or any amount due to the Customer shall be refunded or credited. E. INSUFFICIENT FUNDS FOR PAYMENT 1. A Service Charge will be made and collected by the City of Palo Alto for each check returned by a bank to CPAU for the reason of insufficient funds in accordance with Rate Schedule C-1. 2. Unsuccessful Bank Drafts due to insufficient funds will be subject to late payment fees in accordance with Rate Schedule C-1. F. PRORATION OF BILLS 1. Bills for Utility Services will be prepared for each Billing Period in accordance with the applicable Rate Schedules or CPAU contract applicable to the Premises served. 2. Proration is intended to produce a uniform average unit cost for the commodity regardless of the number of days in the Service period. Services will be prorated if the number of actual Service days differs from the number of days in the applicable Billing Period. Electric Demand (kW) and Electric Power Factor Charges will not be prorated. Proration will not occur for those Rate Schedules that contain Meter fees, connection fees, deposits, and other miscellaneous fees. 3. If Rate Schedules change during the Billing Period, Charges will be prorated on the basis of the number of days covered by the previous Rate Schedule and the number of days covered BILLING, ADJUSTMENTS AND PAYMENT OF BILLS RULE AND REGULATION 11 CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council Effective 67-1-20102012 Sheet No 4 by the new Rate Schedule. G. DELINQUENT BILLS AND LATE PAYMENT CHARGES 1. Utilities Charges incurred in the applicable Billing Period are due and payable by the “Due Date” indicated on the front of the bill statement. Bills unpaid by the due date are delinquent and a late payment Charge will be added to the outstanding balance as specified in Rate Schedule C-1. 2. Residential and commercial Accounts having unpaid balances older than 180 days shall be subject to collection action by the City. Collection action may result in notifications to credit reporting agencies. 3. Late payment Charges may be suspended by CPAU if the Customer is withholding full or partial payment pending final resolution of disputed bill. The late payment Charge may be waived by CPAU based upon the ultimate resolution of a disputed Charge. 4. Full or partial payments towards outstanding balances will be applied to the oldest outstanding Charges. Failure to pay outstanding balances will result in late fees and termination of Service for non-payment. 5. In the event that a Customer donating to the ProjectPLEDGE Program has a delinquent bill, the late Charge percentage will not be applied to the amount of the Customer’s pledge. However, the Customer’s participation in ProjectPLEDGE will be discontinued after three consecutive Billing Periods in which the Customer has not included their pledge amount in the bill. 6. Customers whose Utility bills include payments of principal and/or interest on loans from CPAU which are secured by deeds of trust on real property shall be charged a late payment Charge when any current Utility bill includes an unpaid installment on such loan from a prior bill. Nothing in this Rule and Regulation shall be construed to alter in any way the duty of the Customer to pay any installment on a loan from CPAU when due, or to alter the rights of CPAU to enforce the payment of such installments. H. DISPUTED BILLS If bill accuracy is questioned or disputed by the Customer, Customers shall request an explanation BILLING, ADJUSTMENTS AND PAYMENT OF BILLS RULE AND REGULATION 11 CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council Effective 67-1-20102012 Sheet No 5 from CPAU within the current Billing Period or as soon as reasonably possible. After reviewing the disputed bill, CPAU will: 1. Issue a corrected bill to the Customer or reflect the correction on the bill in a subsequent Billing Period. 2. Determine if an amortization period (“payment arrangement”) for the Charge-in-question shall be provided by CPAU. If a payment arrangement is offered by CPAU, and agreed to by the Customer, Utility Services will not be discontinued for nonpayment while the Customer complies with the payment arrangement for the “past due” balance , and subsequent Utilities bills are paid on time during the payment arrangement period. 3. Advise the Customer that the bill is correct as presented. The Customer may choose, at the Customer’s option, to have the Meter removed for testing under the Provisions of Rule 15 “Metering” and payment of the applicable fee found in Rate Schedule C-1 “Exchange Meter for Accuracy Test”. I. METERED SERVICE BILLING ERRORS AND ADJUSTMENTS Where a Customer has been undercharged or overcharged for metered Service, the date and cause of which can be reliably established where a customer has been undercharged or overcharged, the retroactive billing adjustment (back bill or refund) shall not exceed three years. the period to be back-billed or refunded shall not exceed 12 months. 1. When, as a result of either a CPAU or a Customer-initiated accuracy test, a Meter is found to register more than two percent (2%) fast, CPAU will refund the Customer the overcharge based upon the corrected Meter readings for the period the Meter was in use, or one yearthree years, whichever is less. Any applicable late payment will be waived. 2. When, as a result of a test, a Customer Meter is found not to register, or to register more than two percent (2%) slow, CPAU may bill the Customer for the undercharge base on an average bill. The bill will be computed based on an estimate of the Customer’s consumption during a prior month in the same season or on the consumption in the same period of the prior yearthree years. J. UNMETERED SERVICE BILLING ERRORS AND ADJUSTMENTS BILLING, ADJUSTMENTS AND PAYMENT OF BILLS RULE AND REGULATION 11 CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council Effective 67-1-20102012 Sheet No 6 Where a Customer has been undercharged or overcharged for unmetered Service, the date and cause of which can be reliably established where a customer has been undercharged or overcharged, the retroactive billing adjustment (back bill or refund) shall not exceed three years. Where a Customer has been undercharged or overcharged for unmetered Service, the period to be back-billed or refunded shall not exceed 12 months. K. THEFT OF SERVICE Where there is evidence that theft of Utility Service has occurred, CPAU will retroactively bill, and collect any underpayment or nonpayment of Charges. The applicable period to assess Charges shall commence from the date it can be reasonably established the theft began to the date in which the underpayment was discovered and initially established. All underpayments or non-payments shall become immediately due and payable. Customers committing theft of Utility Service may be subject to legal action. L. WATER OR GAS LEAK CREDITS It is the Customer’s responsibility to maintain their lines and equipment in a reasonable condition such that leaks do not occur. CPAU shall not make billing adjustments for Water, Gas or Wastewater Charges resulting from leakage in a line on the Customer Premises beyond the CPAU Meter, unless CPAU determines that City staff were or other City staff were solely responsible for such leakage. M. REFUSE BILLING ERRORS, DISPUTES AND ADJUSTMENTS 1. Adjustments to the Refuse bill shall be requested to the City’s Collector. Customers with adjustments unresolved by the City’s Collector, may dispute their claim with the City’s Public Works Department, Refuse. Billing adjustments will be resolved by following the City’s Rules and Regulations, Chapter 5.20 of the Palo Alto Municipal Code and specific regulations promulgated by the City Manager pursuant to the authority established in Chapter 5.20. 2. When an error in billing has occurred, the date and cause of which can be reliably established where a Customer has been undercharged or overcharged, the retroactive billing adjustment shall not exceed three years. one year. 3. Customers requesting solid waste or Recyclable Materials collection Services to be suspended shall obtain from the City a statement of non-occupancy status. The refuse bill shall be adjusted accordingly upon approval from the City. BILLING, ADJUSTMENTS AND PAYMENT OF BILLS RULE AND REGULATION 11 CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council Effective 67-1-20102012 Sheet No 7 (END) SPECIAL FIBER OPTIC UTILITY REGULATION RULE AND REGULATION 26 CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council Effective 67-1-20102012 Sheet No. 1 A. GENERAL In addition to the general requirements outlined in Rule and Regulation 18 for Utility Service Connections and Facilities on Customers’ Premises, the following is required: To receive any Fiber Optic Service offered by CPAU, the Customer must sign a Dark Fiber License Agreement, and a Proposal for each Fiber Optic project which the Customer chooses to license. B. SERVICE CONNECTION REQUIREMENTS 1. FIBER ENGINEERING STUDY A fiber engineering study is may be needed to determine the routing of the fiber and associated costs for the installation. The Customer is responsible for the cost of the study. The first step to initiate the study is to request advanced engineering. Fees for an advanced engineering request (AER) must be paid by the Customer in accordance with CPAU Rate Schedule EDF-2. Upon receipt of payment for the AER, CPAU will conduct a fiber engineering study and prepare a report. If Fiber Optic Service is feasible, the report will include a Proposal, delineating the associated fees, terms and conditions, and instructions on how to obtain a Dark Fiber License Agreement. If the Customer wishes to proceed with a fiber optic connection, the Customer will need to furnish a completed form (Exhibit “E”) that contains Customer contact and other information. This will allow CPAU to create a Dark Fiber Master License Agreement (first time Customers only) necessary for obtaining Dark Fiber Services from the City. 2. SERVICE CONNECTION Upon the receipt of a Proposal signed by the Customer, and for first time Customers, two copies of the properly signed Dark Fiber License Agreement, CPAU will construct the proposed connection as described in the Proposal, provided that all of the following conditions have been met: a. The Customer has paid the Service connection Fee to CPAU Revenue Collections as set forth in the Proposal. b. The Customer is responsible for the completion of all the private property construction required to receive the City’s Fiber Optic Service as specified in the Proposal, including procuring legal permission from the land owner to make these modifications. Unless otherwise declared in writing by CPAU, the project will be completed within 8 weeks after the Customer has completed the tasks in paragraphs a. and b., above. SPECIAL FIBER OPTIC UTILITY REGULATION RULE AND REGULATION 26 CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council Effective 67-1-20102012 Sheet No. 2 3. TESTING SERVICE DATE a. Upon completion of the Fiber Optic Service connection, CPAU will conduct a Performance Test of the fibers licensed by the Customer, and CPAU will certify that the Fiber performance is equal to or better than the Performance Specifications listed below. The Performance Test report will be provided to the Customer within 5 business days of after the completion of the Performance Test. b. If the Customer wishes to protest the Performance Test results, the Customer must notify CPAU within 10 days, otherwise the fibers will be deemed accepted by the Customer. The 11th day after the Performance Test is conducted will be considered the first day of Service for billing purposes. If the Performance Test is challenged, then CPAU may, at its own expense, retest the fibers. 1. If CPAU produces evidence of performance compliance with CPAU standards, and the Customer and CPAU cannot come to agreement within 30 days, then the project shall be terminated, and Customer construction fees will not be returned. 2. If CPAU cannot produce evidence of performance compliance with CPAU standards, and the Customer and CPAU cannot come to agreement within 30 days, then the project shall be terminated and the Customer’s construction fee will be returned to the Customer. c. Similarly, Fiber Optic Service revisions requested by the Customer and made by CPAU to the Fiber Optic Service will be Performance Tested by CPAU and the test results provided to the Customer. The same process as described in paragraph B.3.b. for protesting the Performance Testing shall apply to revisions. However, CPAU will only return those fees associated with the revisions. Description Maximum Optical Attenuation/Insertion Loss Single Mode Fiber Optic Cable 0.5 dB/km Splice 0.3 dB/Splice Connector 0.75 dB/connector SPECIAL FIBER OPTIC UTILITY REGULATION RULE AND REGULATION 26 CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council Effective 67-1-20102012 Sheet No. 3 C. OWNERSHIP AND RESPONSIBILITY FOR SERVICE FACILITIES ON CUSTOMER’S PREMISES 1. GENERAL a. The Customer may request the location of the Demarcation Point of the Proposed Fiber Optic Service. The requested location must be approved by CPAU. Only one Demarcation Point is allowed per building and it must be situated at a location suited for Utility facilities and openly accessible for Fiber Optic Service to other authorized building tenants, where applicable. b. CPAU may, at its discretion, establish a single Demarcation Point at one building, or other suitable location, on a single parcel with multiple buildings. Service to other buildings on the parcel shall emanate from this Demarcation Point. c. CPAU will only extend Fiber Optic cables into buildings using existing conduit structures, and only if a clear proven path with a functioning pull-rope is present over the full path. It is the Customer’s responsibility to maintain all conduit from the Point of Service to the Demarcation Point in good operating order at all times during the project license. The Customer is responsible for all new construction on private property required to establish a conduit and appropriate pathway for the project. d. CPAU and the Customer will each assume responsibility for performing splice work and Fiber maintenance activities on their respective sides of the Demarcation Point. The Customer is prohibited from accessing any portion of the Fiber backbone, with the exception of the ends of CPAU licensed Fiber which are extended into the Demarcation Point. e. CPAU reserves the right to install additional fibers and associated infrastructure beyond that required for the Customer when responding to a Service Connection request. 2. MISCELLANEOUS SERVICE EQUIPMENT a. EQUIPMENT FURNISHED BY CUSTOMER All Service equipment required in connection with Service on the Customer’s side of the Demarcation Point shall be furnished, installed, owned and maintained by the Customer in accordance with CPAU requirements. SPECIAL FIBER OPTIC UTILITY REGULATION RULE AND REGULATION 26 CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council Effective 67-1-20102012 Sheet No. 4 b. EQUIPMENT FURNISHED BY CPAU 1. CPAU will furnish, install, own and maintain the necessary facilities in the public right of way, and the Fiber Optic cable up to the Demarcation Point, conditioned upon the Customer maintaining the clear pathway from the property line to the Demarcation Point. 2. Customer will provide a suitable means for CPAU to place its seal on Fiber Optic equipment installed at Customer’s Premises. Such seals shall be broken only by authorized CPAU representatives. Detailed information will be furnished by CPAU on request. D. SERVICE TERMINATION 1. All rights to a Fiber Optic Service connection including all materials and equipment on the CPAU side of the Demarcation Point shall revert back to CPAU once the Service Connection is terminated for any reason. 2. For Fiber Optic Service that is licensed to a Customer for the purpose of re-selling communications services within one or more Premises, the following conditions apply: a. The Customer must secure access for CPAU personnel to maintain CPAU’s Fiber Optic Service equipment whether the Premise is occupied or vacant. b. If the Premise is vacant, or if the Customer is no longer providing communications services within the Premise, the Customer may request that the Service be maintained to the demarcation point. CPAU may grant the request as long as payment to CPAU is maintained. c. If necessary, CPAU will, at the Customer’s request and expense, re-splice the licensed fibers within the CPAU Fiber Optic infrastructure to maintain the Customer’s system topology. E. FINANCIAL TERMINATION When a customer seeks termination of Fiber Optics Services, the Customer shall submit a completed CPA Fiber Optics Service Disconnection Form to their Key Account Rep, thirty days prior to Service termination. (END) GENERATING FACILITY INTERCONNECTIONS RULE AND REGULATION 27 CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council Effective 4-2-2012 Sheet No. 1 A. APPLICABILITY This Rule describes the Interconnection, Operating and Metering requirements for Generating Facilities to be connected to the City of Palo Alto Utilities (CPAU) Electric Distribution System. Subject to the requirements of this Rule, CPAU will allow the Interconnection of Generating Facilities with its Distribution System. In order to provide for uniformity and to encourage the Interconnection of renewable energy generation, this Rule has been written to be consistent with the technical requirements of CPUC Rule 21 and IEEE 1547. Language from IEEE 1547 that has been adopted directly (as opposed to paraphrased language or previous language that was determined to be consistent with IEEE 1547) is followed by a citation that lists the clause from which the language derived. For example, IEEE 1547-4.1.1 is a reference to Clause 4.1.1. In the event of any conflict between this Rule and any of the standards listed herein, the requirements of this Rule shall take precedence. B. GENERAL RULES, RIGHTS AND OBLIGATIONS 1. Authorization Required to Operate. A Producer must comply with this Rule, execute an Interconnection Agreement or, if a Producer is a customer-generator, as that term is used in Rule and Regulation 29, a Net Energy Metering and Interconnection Agreement with CPAU, and receive CPAU’s express written permission before Parallel Operation of its Generating Facility with CPAU’s Distribution System. CPAU shall apply this Rule in a non- discriminatory manner and shall not unreasonably withhold its permission for Parallel Operation of Producer’s Generating Facility with CPAU’s Distribution System. 2. Separate Agreements Required for Other Services. A Producer requiring other Electric Services from CPAU including, but not limited to, Distribution Service provided by CPAU during periods of Curtailment or interruption of the Producer’s Generating Facility, will enter into agreements with CPAU for such Services in accordance with CPAU’s Rules & Regulations and Utility Rates. 3. Service Not Provided With Interconnection. Interconnection with CPAU's Distribution System under this Rule does not provide a Producer any rights to utilize CPAU's Distribution System for the transmission, distribution, or wheeling of Electric power. GENERATING FACILITY INTERCONNECTIONS RULE AND REGULATION 27 CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council Effective 4-2-2012 Sheet No. 2 4. Compliance With Laws, Rules & Regulations and Utility Rates. A Producer shall ascertain and comply with applicable CPAU Rules & Regulations and Utility Rates; applicable Federal Energy Regulatory Commission (FERC) approved rules, tariffs and regulations; and any local, state or federal Law, statute or regulation which applies to the design, siting, construction, installation, operation, or any other aspect of the Producer’s Generating Facility and Interconnection Facilities. 5. Design Reviews and Inspections. CPAU shall have the right to review the design of a Producer’s Generating Facility and Interconnection Facilities and to inspect a Producer’s Generating Facility and/or Interconnection Facilities prior to the commencement of Parallel Operation with CPAU’s Distribution System. CPAU may require a Producer to make modifications as necessary to comply with the requirements of this Rule. CPAU’s review and authorization for Parallel Operation shall not be construed as confirming or endorsing the Producer’s design or as warranting the Generating Facility and/or Interconnection Facilities’ safety, durability or reliability. CPAU shall not, by reason of such review or lack of review, be responsible for the adequacy or capacity of such equipment. 6. Right to Access. A Producer’s Generating Facility and Interconnection Facilities shall be accessible to CPAU personnel whenever necessary for CPAU to perform its duties and exercise its rights under its Rules & Regulations and Utility Rates and any Interconnection Agreement, including the Net Energy Metering and Interconnection Agreement, between CPAU and the Producer. 7. Confidentiality of Information. Any information pertaining to Generating Facility and/or Interconnection Facilities provided to CPAU by a Producer shall be treated by CPAU in a confidential manner. CPAU shall not use information contained in the Application to propose discounted rates to the Customer unless authorized to do so by the Customer or the information is provided to CPAU by the Customer through other means. 8. Prudent Operation and Maintenance Required. A Producer shall operate and maintain its Generating Facility and Interconnection Facilities in accordance with Prudent Electrical Practices and shall maintain compliance with this Rule. 9. Curtailment and Disconnection. CPAU may limit the operation or disconnect or require the disconnection of a Producer’s Generating Facility from CPAU’s Distribution System at any time, with or without notice, in the event of an Emergency, or to correct Unsafe Operating Conditions. CPAU may also limit the operation or disconnect or require the disconnection of GENERATING FACILITY INTERCONNECTIONS RULE AND REGULATION 27 CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council Effective 4-2-2012 Sheet No. 3 a Producer’s Generating Facility from CPAU’s Distribution System upon the Provision of reasonable written notice: (1) to allow for routine maintenance, repairs or modifications to CPAU’s Distribution System; (2) upon CPAU’s determination that a Producer’s Generating Facility is not in compliance with this Rule; or (3) upon termination of the Interconnection Agreement or the Net Energy Metering and Interconnection Agreement. Upon the Producer’s written request, CPAU shall provide a written explanation of the reason for such Curtailment or disconnection. C. APPLICATION AND INTERCONNECTION PROCESS 1. APPLICATION PROCESS a. Applicant initiates contact with CPAU. Upon request, CPAU will provide information and documents (such as sample agreements, Load Sheets, technical information, listing of Certified Equipment, applicable Rate Schedules and Metering requirements) to a potential Applicant. Unless otherwise agreed upon, all such information shall normally be sent to the Applicant within three (3) Business Days following the initial request from the Applicant. b. Applicant Completes a Load Sheet. All Applicants shall complete and submit a Load Sheet and 3 sets of plan drawings for review. Load Sheets and plans may be dropped off at the Development Center at 285 Hamilton Avenue, or Utilities Engineering at 1007 Elwell Court. 1. CPAU shall complete the Initial Review, absent any extraordinary circumstances, within 10 Business Days of receiving the Load Sheet and plans. If defects are noted, CPAU and Applicant shall cooperate to establish a satisfactory Application. 2. Applications that are over one year old (from the date of CPAU’s acknowledgement) without a signed Interconnection Agreement or Net Energy Metering and Interconnection Agreement, or a Generating Facility that has not been approved for Parallel Operation within one year of completion of all applicable review and/or studies are subject to cancellation by CPAU; however, CPAU may not cancel an Application if the Producer provides reasonable evidence that the project is still active. GENERATING FACILITY INTERCONNECTIONS RULE AND REGULATION 27 CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council Effective 4-2-2012 Sheet No. 4 c. CPAU Performs an Initial and Supplemental Review and Develops Preliminary Cost Estimates and Interconnection Requirements. 1. Upon receipt of a satisfactorily completed Application and any additional information necessary to evaluate the Interconnection of a Generating Facility, CPAU shall perform an Initial Review using the process defined in Section G. The Initial Review determines if: (a) the Generating Facility qualifies for Simplified Interconnection; or (b) the Generating Facility requires a Supplemental Review. 2. CPAU shall complete its Initial Review, absent any extraordinary circumstances, within 10 Business Days after receipt of a completed Application including Load Sheet and plan drawings. If the Initial Review determines the proposed Generating Facility can be Interconnected by means of a Simplified Interconnection, CPAU will provide the Applicant with an Interconnection Agreement for Applicant’s signature. 3. If the Generating Facility does not pass the Initial Review for Simplified Interconnection as proposed, CPAU will notify the Applicant and perform a Supplemental Review. Applicant shall pay the applicable Advance Engineering Fee described in Rate Schedule E-15shown in Table C.1, below, unless the Application is withdrawn. The Supplemental Review will result in CPAU providing either: (a) Interconnection requirements beyond those for a Simplified Interconnection, and an Interconnection Agreement or the Net Energy Metering and Interconnection Agreement for Applicant’s signature; or (b) a cost estimate and schedule for an Interconnection Study. The Supplemental Review shall be completed, absent any extraordinary circumstances, within 20 Business Days of receipt of a completed Application and fees. The Interconnection Study may require additional fees and more time to complete, depending on the complexity of the project to be studied. If the Supplemental Review determines that new or modified Utility-owned distribution and/or protection facilities are required, the Applicant will be charged the estimated cost of any Utility-owned facilities determined to be required by the Review. These facilities will be treated as Special Facilities for the purpose of determining Applicant costs. GENERATING FACILITY INTERCONNECTIONS RULE AND REGULATION 27 CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council Effective 4-2-2012 Sheet No. 5 d. When Required, Applicant and CPAU Commit to Additional Interconnection Study Steps. When a Supplemental Review reveals that the proposed Generating Facility cannot be Interconnected to CPAU’s Distribution System by means of a Simplified Interconnection, or that significant Interconnection Facilities installed on CPAU’s system or Distribution System modifications will be needed to accommodate an Applicant’s Generating Facility, CPAU and Applicant shall enter into an agreement that provides for CPAU to perform additional studies, facility design and engineering, and to provide an estimate for actual cost billing to the Applicant, at the Applicant’s expense (the Advanced Engineering Fee). The Interconnection Study agreement shall set forth CPAU’s estimated schedule and Charges for completing such work. TABLE C.1 Summary of Fees and Exemptions Generating Facility Type Initial Review Fee Advance Engineering Fee Interconnection Study Fees All Net Energy Metering projects. $0 $0 $0 Non-Net Energy Metering projects smaller than 100 kW capacity $0 $600 As Specified by CPAU Non-Net Energy Metering Projects 100 kW to 499 kW in capacity. $0 $4,000 As determined by estimate Non-Net Energy Metering 500 kW or greater in capacity. $0 $7,500 As determined by estimate GENERATING FACILITY INTERCONNECTIONS RULE AND REGULATION 27 CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council Effective 4-2-2012 Sheet No. 6 2. INTERCONNECTION PROCESS a. Applicant and CPAU enter into an Interconnection Agreement or a New Energy Metering and Interconnection Agreement and, where required, a Special Facilities Agreement for Interconnection Facilities or Distribution System Modifications. CPAU shall provide the Applicant with an executable version of the Interconnection Agreement or the Net Energy Metering and Interconnection Agreement as appropriate, for the Applicant’s Generating Facility and desired mode of operation. Where the Supplemental Review or Interconnection Study performed by CPAU has determined that modifications or additions to its Distribution System are required, or that additional Interconnection Facilities will be necessary to accommodate an Applicant’s Generating Facility, CPAU may also provide the Applicant with a Special Facilities Agreement. This agreement shall set forth CPAU and the Applicant’s responsibilities, completion schedules, and estimated costs for the required work. b. Where applicable, CPAU installs required Interconnection Facilities or modifies CPAU’s Distribution System. After executing the applicable agreements, CPAU will commence construction/ installation of CPAU’s Distribution System modifications or Interconnection Facilities which have been identified in the agreements. The parties will use good faith efforts to meet schedules and estimated costs as appropriate. c. Producer arranges for and completes Pre-parallel Testing of Generating Facility and Producer’s Interconnection Facilities. The Producer is responsible for testing new Generating Facilities and associated Interconnection Facilities to ensure compliance with the safety and reliability Provisions of this Rule prior to being operated in parallel with CPAU’s Distribution System. GENERATING FACILITY INTERCONNECTIONS RULE AND REGULATION 27 CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council Effective 4-2-2012 Sheet No. 7 Where applicable, the test plan shall include the installation test procedures published by the manufacturer of the generation or Interconnection equipment. Facility testing shall be conducted at a mutually agreeable time, and CPAU and Producer shall be given the opportunity to witness the tests. d. CPAU Authorizes Parallel Operation or Momentary Parallel Operation. CPAU shall authorize the Producer’s Generating Facility for Parallel Operation or Momentary Parallel Operation with CPAU’s Distribution System, in writing, within 5 days of satisfactory compliance with the terms of all applicable agreements. Compliance may include, but not be limited to, Provision of any required documentation and satisfactorily completing any required inspections or tests as described herein or in the agreements formed between the Producer and CPAU. A Producer shall not commence Parallel Operation of its Generating Facility with CPAU’s system unless it has received CPAU’s express written permission to do so. D. GENERATING FACILITY DESIGN AND OPERATING REQUIREMENTS This section has been revised to be consistent with the requirements of ANSI/IEEE 1547-2003 Standard for Interconnecting Distributed Resources with Electric Power Systems (IEEE 1547). Exceptions are taken to IEEE 1547 Clauses 4.1.4.2 Distribution Secondary Spot Networks and Clauses 4.1.8.1 or 5.1.3.1, which address Protection from Electromagnetic Interference. Also, RULE AND REGULATION 27 does not adopt the Generating Facility power limitation of 10 MW incorporated in IEEE 1547. 1. GENERAL INTERCONNECTION AND PROTECTION FUNCTION REQUIREMENTS The Protective Functions and requirements of this Rule are designed to protect CPAU’s Distribution System and not the Generating Facility. A Producer shall be solely responsible for providing adequate protection for its Generating Facility and Interconnection Facilities. The Producer’s Protective Functions shall not impact the operation of other Protective Functions utilized on CPAU’s Distribution System in a manner that would affect CPAU’s capability of providing reliable service to its Customers. GENERATING FACILITY INTERCONNECTIONS RULE AND REGULATION 27 CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council Effective 4-2-2012 Sheet No. 8 a. Protective Functions Required. A Generating Facility operating in parallel with CPAU’s Distribution System shall be equipped with the following Protective Functions to sense abnormal conditions on CPAU’s Distribution System and cause the Generating Facility to be automatically disconnected from CPAU’s Distribution System or to prevent the Generating Facility from being connected to CPAU’s Distribution System inappropriately: 1. Over and under voltage trip functions and over and under frequency trip functions; 2. A voltage and frequency sensing and time-delay Function to prevent the Generating Facility from energizing a de-energized Distribution System circuit and to prevent the Generating Facility from reconnecting with CPAU’s Distribution System unless CPAU’s Distribution System service voltage and frequency is within the ANSI C84.1-1995 Table 1 Range B Voltage Range of 106V to 127V on a 120V basis, inclusive, and a frequency range of 59.3 Hz to 60.5 Hz, inclusive, and are stable for at least 60 seconds, and; 3. A Function to prevent the Generating Facility from contributing to the formation of an Unintended Island, and cease to energize the CPAU system within two seconds of the formation of an Unintended Island. The Generating Facility shall cease to energize CPAU’s Distribution System for faults on CPAU’s Distribution System circuit to which it is connected (IEEE1547-4.2.1). The Generating Facility shall cease to energize CPAU’s Distribution circuit prior to re-closure by CPAU’s Distribution System equipment (IEEE1547-4.2.2). b. Momentary Paralleling Generating Facilities. With CPAU’s approval, the transfer switch or scheme used to transfer the Producer’s Loads from CPAU’s Distribution System to Producer’s Generating Facility may be used in lieu of the Protective Functions required for Parallel Operation. GENERATING FACILITY INTERCONNECTIONS RULE AND REGULATION 27 CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council Effective 4-2-2012 Sheet No. 9 c. Suitable Equipment Required. Circuit breakers or other interrupting devices located at the Point of Common Coupling must be Certified or "Listed" (as defined in Article 100, the Definitions Section of the National Electrical Code) as suitable for their intended application. This includes being capable of interrupting the maximum available fault current expected at their location. Producer’s Generating Facility and Interconnection Facilities shall be designed so that the failure of any one device shall not potentially compromise the safety and reliability of CPAU’s Distribution System. The Generating Facility’s paralleling-device shall be capable of withstanding 220% of the Interconnection Facilities’ rated voltage (IEEE 1547-4.1.8.3). The Interconnection Facilities shall have the capability to withstand voltage and current surges in accordance with the environments defined in IEEE Std C62.41.2-2002 or IEEE Std C37.90.1-2002 as applicable and as described in IEEE 1547-4.1.8.2. d. Visible Disconnect Required: The Producer shall furnish and install a ganged, manually-operated isolating switch (or a comparable device mutually agreed upon by CPAU and the Producer) near the Point of Interconnection to isolate the Generating Facility from CPAU’s Distribution System. The device does not have to be rated for Load break nor provide over-current protection. The device must: 1. Allow visible verification that separation has been accomplished. (This requirement may be met by opening the enclosure to observe contact separation.) Molded case circuit breakers do not meet the visible contact requirement and are not acceptable as a Visible Disconnect device. 2. Include markings or signage that clearly indicates open and closed positions. 3. Be capable of being reached quickly and conveniently 24 hours a day by CPAU personnel for construction, maintenance, inspection, testing or reading, without obstacles or requiring those seeking access to obtain keys, special permission, or security clearances. 4. Be capable of being locked in the open position. GENERATING FACILITY INTERCONNECTIONS RULE AND REGULATION 27 CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council Effective 4-2-2012 Sheet No. 10 5. Be clearly marked on the submitted Single Line Diagram and its type and location approved by the CPAU prior to installation. If the device is not adjacent to the PCC, permanent signage must be installed at a CPAU- approved location providing a clear description of the location of the device. Generating Facilities with Non-Islanding inverters totaling one (1) kilovolt- ampere (kVA) or less are exempt from this requirement. e. Drawings Required. Prior to Parallel Operation or Momentary Parallel Operation of the Generating Facility, CPAU shall approve the Producer's Protective Function and control diagrams. A Generating Facility equipped with a Protective Function and control scheme previously approved by CPAU for system-wide application or only Certified Equipment may satisfy this requirement by reference to previously approved drawings and diagrams. f. Generating Facility Conditions Not Identified. In the event this Rule does not address the Interconnection conditions for a particular Generating Facility, CPAU and Producer may agree upon other arrangements. 2. PREVENTION OF INTERFERENCE The Producer shall not operate a Generating Facility or Interconnection Facilities that superimpose a voltage or current upon CPAU’s Distribution System that interferes with CPAU operations, service to CPAU Customers, or communication facilities. If such interference occurs, the Producer must diligently pursue and take corrective action at its own expense after being given notice and reasonable time to do so by CPAU. If the Producer does not take corrective action in a timely manner, or continues to operate the facilities causing interference without restriction or limit, CPAU may, without liability, disconnect the Producer's facilities from CPAU’s Distribution System, in accordance with Section B.9 of this Rule. To eliminate undesirable interference caused by its operation, each Generating Facility shall meet the following criteria: a. Voltage Regulation. The Generating Facility shall not actively regulate the voltage at the PCC while in parallel with CPAU’s Distribution System. The Generating Facility shall not cause the service voltage at other Customers to go outside the requirements of ANSI C84.1-1995, Range A (IEEE 1547-4.1.1). GENERATING FACILITY INTERCONNECTIONS RULE AND REGULATION 27 CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council Effective 4-2-2012 Sheet No. 11 b. Operating Voltage Range. The voltage ranges in Table D.1 define protective trip limits for the Protective Function and are not intended to define or imply a voltage regulation Function. A Generating Facility shall cease to energize CPAU’s Distribution System within the prescribed trip time whenever the voltage at the PCC deviates from the allowable voltage operating range. The Protective Function shall detect and respond to voltage on all phases to which the Generating Facility is connected. 1. Generating Facilities (30 kVA or less). Generating Facilities with a Gross Nameplate Rating of 30 kVA or less shall be capable of operating within the voltage range normally experienced on CPAU’s Distribution System. The operating range shall be selected in a manner that minimizes nuisance tripping between 106 volts and 132 volts on a 120-volt base (88-110% of nominal voltage). Voltage shall be detected at either the PCC or the Point of Interconnection. 2. Generating Facilities (greater than 30 kVA). CPAU may have specific operating voltage ranges for a Generating Facility with a Gross Nameplate Rating greater than 30 kVA, and may require adjustable operating voltage settings. In the absence of such requirements, the Generating Facility shall operate at a range between 88% and 110% of the applicable Interconnection voltage. Voltage shall be detected at either the PCC or the Point of Interconnection, with settings compensated to account for the voltage at the PCC. Generating Facilities that are Certified Non-Islanding or that meet one of the options of the Export Screen (Section l.3.b) may detect voltage at the Point of Interconnection without compensation. 3. Voltage Disturbances. Whenever CPAU’s Distribution System voltage at the PCC varies from and remains outside normal (nominally 120 volts) by the predetermined amounts set forth in Table D-1, the Generating Facility’s Protective Functions shall cause the Generator(s) to become isolated from CPAU’s Distribution System: GENERATING FACILITY INTERCONNECTIONS RULE AND REGULATION 27 CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council Effective 4-2-2012 Sheet No. 12 TABLE D.1: Voltage Trip Settings Voltage at Point of Common Coupling Maximum Trip Time(1) Assuming 120 V Base % of Nominal Voltage # of Cycles (Assuming 60 Hz Nominal) Seconds Less than 60 Volts Less than 50% 10 Cycles 0.16 Seconds Greater than or equal to 60 Volts but less than 106 Volts Greater than or equal to 50% but less than 88% 120 Cycles 2 Seconds Greater than or equal to 106 Volts but less than or equal to 132 Volts Greater than or equal to 88% but less than or equal to 110% Normal Operation Greater than 132 Volts but less than or equal to 144 Volts Greater than 110% but less than or equal to 120% 60 Cycles 1 Second Greater than 144 Volts Greater than 120% 10 Cycles 0.16 Seconds (1) “Maximum Trip time” refers to the time between the onset of the abnormal condition and the Generating Facility ceasing to energize CPAU’s Distribution System. Protective Function sensing equipment and circuits may remain connected to CPAU’s Distribution System to allow sensing of electrical conditions for use by the “reconnect” feature. The purpose of the allowed time delay is to allow a Generating Facility to “ride through” short-term disturbances to avoid nuisance tripping. Set points shall not be user adjustable (though they may be field adjustable by qualified personnel). For Generating Facilities with a Gross Nameplate Rating greater than 30 kVA, set points shall be field adjustable and different voltage set points and trip times from those in Table D.1 may be negotiated with CPAU. c. Paralleling. The Generating Facility shall parallel with CPAU’s Distribution System without causing a voltage fluctuation at the PCC greater than ±5% of the prevailing voltage level of CPAU’s Distribution System at the PCC, and meet the flicker requirements of D.2.d. GENERATING FACILITY INTERCONNECTIONS RULE AND REGULATION 27 CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council Effective 4-2-2012 Sheet No. 13 d. Flicker. The Generating Facility shall not create objectionable flicker for other Customers on CPAU’s Distribution System. To minimize the adverse voltage effects experienced by other Customers (IEEE 1547-4.3.2), flicker at the PCC caused by the Generating Facility should not exceed the limits defined by the “Maximum Borderline of Irritation Curve” identified in IEEE 519-1992 (IEEE Recommended Practices and Requirements for Harmonic Control in Electric Power Systems, IEEE STD 519-1992, Institute of Electrical and Electronic Engineers, Piscataway, NJ). This requirement is necessary to minimize the adverse voltage affects experienced by others Customers on CPAU’s Distribution System. Generators may be connected and brought up to synchronous speed (as an induction motor) provided these flicker limits are not exceeded. e. Integration with CPAU’s Distribution System Grounding. The grounding scheme of the Generating Facility Interconnection shall not cause over-voltages that exceed the rating of the equipment connected to CPAU and shall not disrupt the coordination of the ground fault protection on CPAU’s Distribution System (IEEE 1547-4.1.2). Also see Section F. f. Frequency. CPAU’s controls system frequency, and the Generating Facility shall operate in synchronism with CPAU’s Distribution System. Whenever CPAU’s Distribution System Frequency at the PCC varies from and remains outside normal (nominally 60 Hz) by the predetermined amounts set forth in Table D.2, the Generating Facility’s Protective Functions shall cease to energize CPAU’s Distribution System within the stated maximum trip time. TABLE D.2: Frequency Trip Settings Generating Facility Rating Frequency Range (Assuming 60 Hz Nominal) Maximum Trip Time (1) (Assuming 60 Cycles per Second Less or equal to 30 kW Less than 59.3 Hz 10 Cycles Greater than 60.5 Hz 10 Cycles Greater than 30 kW Less than 57 Hz 10 Cycles Less than an adjustable value between 59.8 Hz and 57 Hz but greater than 57 Hz (2) Adjustable between 10 and 18,000 Cycles (2),(3) Greater than 60.5 Hz 10 Cycles GENERATING FACILITY INTERCONNECTIONS RULE AND REGULATION 27 CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council Effective 4-2-2012 Sheet No. 14 (1) “Maximum Trip time” refers to the time between the onset of the abnormal condition and the Generating Facility ceasing to energize CPAU’s Distribution System. Protective Function sensing equipment and circuits may remain connected to CPAU’s Distribution System to allow sensing of electrical conditions for use by the “reconnect” feature. The purpose of the allowed time delay is to allow a Generating Facility to “ride through” short-term disturbances to avoid nuisance tripping. Set points shall not be user adjustable (though they may be field adjustable by qualified personnel). For Generating Facilities with a Gross Nameplate Rating greater than 30 kVA, set points shall be field adjustable and different voltage set points and trip times from those in Table D.2 may be negotiated with CPAU. (2) Unless otherwise required by CPAU, a trip frequency of 59.3 Hz and a maximum trip time of 10 cycles shall be used. (3) When a 10-cycle maximum trip time is used, a second under frequency trip setting is not required. g. Harmonics. When the Generating Facility is serving balanced linear Loads, harmonic current injection into CPAU’s Distribution System at the PCC shall not exceed the limits stated below in Table D.3. The harmonic current injections shall be exclusive of any harmonic currents due to harmonic voltage distortion present in CPAU’s Distribution System without the Generating Facility connected (IEEE 1547- 4.3.3). The harmonic distortion of a Generating Facility located at a Customer’s site shall be evaluated using the same criteria as for the Host Loads. Table D.3 Maximum Harmonic Current Distortion in Percent of Current (I)(1,2) Individual Harmonic Order h, (odd harmonics) 3 h<11 11 ≤ h < 17 17 ≤ h < 23 23 ≤ h < 35 35 ≤ h Total Demand distortion (TDD) Max Distortion (%) 4.0 2.0 1.5 0.6 0.3 5.0 (1) IEEE 1547-4.3.3 (2) I = the greater of the maximum Host Load current average Demand over 15 or 30 minutes without the GF, or the GF rated current capacity (transformed to the PCC when a transformer exists between the GF and the PCC). (3) Even harmonics are limited to 25% of the odd harmonic limits above. GENERATING FACILITY INTERCONNECTIONS RULE AND REGULATION 27 CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council Effective 4-2-2012 Sheet No. 15 h. Direct Current Injection. Generating Facilities should not inject direct current greater than 0.5% of rated output current into CPAU’s Distribution System. i. Power Factor. Each Generator in a Generating Facility shall be capable of operating at some point within a Power Factor range from 0.9 leading to 0.9 lagging. Operation outside this range is acceptable provided the reactive power of the Generating Facility is used to meet the reactive power needs of the Host Loads or that reactive power is otherwise provided under tariff by CPAU. The Producer shall notify CPAU if it is using the Generating Facility for Power Factor correction. Unless otherwise agreed upon by the Producer and CPAU, Generating Facilities shall automatically regulate Power Factor, not voltage, while operating in parallel with CPAU’s Distribution System. 3. TECHNOLOGY SPECIFIC REQUIREMENTS a. Three-Phase Synchronous Generators. For three-phase Generators, the Generating Facility circuit breakers shall be three-phase devices with electronic or electromechanical control. The Producer shall be responsible for properly synchronizing its Generating Facility with CPAU’s Distribution System by means of either manual or automatic synchronizing equipment. Automatic synchronizing is required for all synchronous Generators that have a Short Circuit Contribution Ratio (SCCR) exceeding 0.05. Loss of synchronism protection is not required except as may be necessary to meet D.2.d (Flicker) (IEEE 1547-4.2.5). Unless otherwise agreed upon by the Producer and CPAU, synchronous Generators shall automatically regulate Power Factor, not voltage, while operating in parallel with CPAU’s Distribution System. A power system stabilization function is specifically not required for Generating Facilities under 10 MW Net Nameplate Rating. b. Induction Generators. Induction Generators (except self-excited Induction Generators) do not require a synchronizing Function. Starting or rapid Load fluctuations on induction Generators can adversely impact CPAU’s Distribution System's voltage. Corrective step-switched capacitors or other techniques may be necessary and may cause undesirable ferro-resonance. When these counter measures (e.g., additional capacitors) are installed on the Producer's side of the Point of Common Coupling, CPAU must review these measures. Additional equipment may be required as determined in a Supplemental Review or an Interconnection Study. GENERATING FACILITY INTERCONNECTIONS RULE AND REGULATION 27 CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council Effective 4-2-2012 Sheet No. 16 c. Inverters. Utility-interactive inverters do not require separate synchronizing equipment. Non-utility-interactive or “stand-alone” inverters shall not be used for Parallel Operation with CPAU’s Distribution System. d. Single-Phase Generators. For single-phase Generators connected to a shared single-phase secondary system, the maximum Net Nameplate Rating of the Generating Facilities shall be 20 kVA. Generators connected to a center-tapped neutral 240-volt service must be installed such that no more than 6 kVA of unbalanced power is applied to the two “legs” of the 240-volt service. For Dedicated Distribution Transformer Services, the maximum Net Nameplate Rating of a single-phase Generating Facility shall be the transformer nameplate rating. 4. SUPPLEMENTAL GENERATING FACILITY REQUIREMENTS a. Fault Detection. A Generating Facility with an SCCR exceeding 0.1 or one that does not cease to energize CPAU’s Distribution System within two seconds of the formation of an Unintended Island shall be equipped with Protective Functions designed to detect Distribution System faults, both line-to-line and line-to-ground, and shall cease to energize CPAU’s Distribution System within two seconds of the initiation of a fault. b. Transfer Trip. For a Generating Facility that cannot detect Distribution System faults (both line-to-line and line-to-ground) or the formation of an Unintended Island, and cease to energize CPAU’s Distribution System within two seconds, CPAU may require a Transfer Trip system or an equivalent Protective Function. For net metered or non-net metered Generating Facilities, the Facility will be considered capable of supporting an Unintended Island if the aggregate distributed generation output is 80% or more of the Distribution System real-time load kW seen at CPAU’s source- side Distribution Protection Device. c. Reclose Blocking. Where the aggregate Generating Facility capacity exceeds 15% of the peak Load on any automatic reclosing device, CPAU may require additional Protective Functions, including, but not limited to reclose-blocking on some of the automatic reclosing devices. GENERATING FACILITY INTERCONNECTIONS RULE AND REGULATION 27 CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council Effective 4-2-2012 Sheet No. 17 E. INTERCONNECTION FACILITIES AND DISTRIBUTION SYSTEM MODIFICATIONS OWNERSHIP AND FINANCING 1. SCOPE AND OWNERSHIP OF INTERCONNECTION FACILITIES AND DISTRIBUTION SYSTEM MODIFICATIONS a. Scope. Parallel Operation of Generating Facilities may require Interconnection Facilities or modifications to CPAU’s Distribution System (“Distribution System modifications”). The type, extent and costs of Interconnection Facilities and Distribution System modifications shall be consistent with this Rule and determined through the Supplemental Review and/or Interconnection Studies described in Section C. b. Ownership. Interconnection Facilities installed on Producer’s side of the Point of Common Coupling (PCC) may be owned, operated and maintained by the Producer or CPAU. Interconnection Facilities installed on CPAU’s side of the PCC and Distribution System modifications shall be owned, operated and maintained only by CPAU. 2. RESPONSIBILITY OF COSTS OF INTERCONNECTING A GENERATING FACILITY a. Study and Review Costs. A Producer shall be responsible for the reasonably incurred costs of the reviews and studies conducted pursuant to Section C.1 of this Rule. b. Facility Costs. A Producer shall be responsible for all costs associated with Interconnection Facilities owned by the Producer. The Producer shall also be responsible for any costs reasonably incurred by CPAU in providing, operating, or maintaining the Interconnection Facilities and Distribution System modifications required solely for the Interconnection of the Producer’s Generating Facility with CPAU’s Distribution System. c. Separation of Costs. Should CPAU combine the installation of Interconnection Facilities or Distribution System modifications required for the Interconnection of a Generating Facility with modifications to CPAU’s Distribution System to serve other Customers or Producers, CPAU shall not include the costs of such separate or incremental facilities in the amounts billed to the Producer. GENERATING FACILITY INTERCONNECTIONS RULE AND REGULATION 27 CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council Effective 4-2-2012 Sheet No. 18 d. Reconciliation of Costs and Payments. If the Producer selected a fixed price billing for the Interconnection Facilities or Distribution System modifications, no reconciliation will be necessary. If the Producer selected actual cost billing, a true- up will be required. Within a reasonable time after the Interconnection of a Producer’s Generating Facility, CPAU will reconcile its actual costs related to the Generating Facility against any advance payments made by the Producer. The Producer will receive either a bill for any balance due or a reimbursement for overpayment as determined by CPAU’s reconciliation. The Producer shall be entitled to a reasonably detailed and understandable accounting for the payments. 3. INSTALLATION AND FINANCING OF INTERCONNECTION FACILITIES AND DISTRIBUTION SYSTEM MODIFICATIONS a. Agreement Required. The costs for Interconnection Facilities and Distribution System modifications shall be paid by the Producer pursuant to the Provisions contained in the Special Facilities Agreement. Where the type and extent of the Interconnection Facilities or Distribution System modifications warrant additional detail, Producer and CPAU shall execute separate agreement(s) to more fully describe and allocate the parties’ responsibilities for installing, owning, operating and maintaining the Interconnection Facilities and Distribution System modifications. b. Interconnection Facilities and Distribution System Modifications. Interconnection Facilities connected to CPAU’s side of the Point of Common Coupling and Distribution System modifications shall be provided, installed, owned and maintained by CPAU at Producer’s expense. c. Reservation of Unused Facilities. When a Producer wishes to reserve CPAU-owned Interconnection Facilities or Distribution System modifications installed and operated as Special Facilities for the Producer at Producer’s expense, but idled by a change in the operation of the Producer's Generating Facility or otherwise, Producer may elect to abandon or reserve such facilities consistent with the terms of its agreement with CPAU. If Producer elects to reserve idle Interconnection Facilities or Distribution System modifications, CPAU shall be entitled to continue to Charge Producer for the costs related to the ongoing operation and maintenance of the Special Facilities. GENERATING FACILITY INTERCONNECTIONS RULE AND REGULATION 27 CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council Effective 4-2-2012 Sheet No. 20 d. Refund of Salvage Value. When a Producer elects to abandon the Special Facilities for which it has either advanced the installed costs or constructed and transferred to CPAU, the Producer shall, at a minimum, receive from CPAU a credit for the net salvage value of the Special Facilities. F. METERING, MONITORING AND TELEMETRY 1. GENERAL REQUIREMENTS All Generating Facilities shall be metered in accordance with this Section F and shall meet all applicable standards of CPAU contained in CPAU’s applicable rules and published CPAU manuals dealing with Metering specifications. For general metering requirements, see CPAU Rule and Regulation 15. For net metering requirements, see CPAU Rule and Regulation 29. 2. METERING BY CPAU The ownership, installation, operation, reading and testing of revenue Metering Equipment for Generating Facilities shall be by CPAU only. 3. NET GENERATION METERING For purposes of monitoring Generating Facility operation to determine standby Charges and applicable non-bypassable Charges as defined in CPAU’s tariffs, and for Distribution System planning and operations, consistent with Section B.4 of this Rule, CPAU shall have the right to specify the type, and require the installation of Net Generation Metering equipment. CPAU shall only require Net Generation Metering to the extent that less intrusive and/or more cost effective options for providing the necessary Generating Facility output data are not available. In exercising its discretion to require Net Generation Metering, CPAU shall consider all relevant factors, including but not limited to: a. Data requirements in proportion to need for information; b. Producer’s election to install equipment that adequately addresses CPAU’s operational requirements; c. Accuracy and type of required Metering consistent with purposes of collecting data; d. Cost of Metering relative to the need for and accuracy of the data; e. The Generating Facility’s size relative to the cost of the Metering/monitoring; f. Other means of obtaining the data (e.g., Generating Facility logs, proxy data etc.); GENERATING FACILITY INTERCONNECTIONS RULE AND REGULATION 27 CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council Effective 4-2-2012 Sheet No. 20 and g. Requirements under any Interconnection Agreement with the Producer. 4. POINT OF COMMON COUPLING METERING For purposes of assessing CPAU Charges for retail service, the Producer’s PCC Metering shall be reviewed by CPAU, and if required, replaced to ensure that it will appropriately measure Electric power according to the Provisions of the Customer’s Electric Service tariff. Where required, the Customer’s existing Meter may be replaced with a bi-directional meter so that power deliveries to and from the Producer’s site can be separately recorded. Alternately, the Producer may, at its sole option and cost, require CPAU to install Multi- Metering Equipment to separately record power deliveries to CPAU’s Distribution System and retail purchases from CPAU. Where necessary, such PCC Metering shall be designed to prevent reverse registration. 5. TELEMETERING If the nameplate rating of the Generating Facility is 1 MW or greater, Telemetering equipment at the Net Generator Metering location may be required at the Producer's expense. If the Generating Facility is Interconnected to a portion of CPAU’s Distribution System operating at a voltage below 10 kV, then Telemetering equipment may be required on Generating Facilities 250 kW or greater. CPAU shall only require Telemetering to the extent that less intrusive and/or more cost effective options for providing the necessary data in real time are not available 6. LOCATION Where CPAU-owned Metering is located on the Producer’s Premises, Producer shall provide, at no expense to CPAU, a suitable location for all such Metering Equipment. 7. COSTS OF METERING The Producer will bear all costs of the Metering required by this Rule, including the incremental costs of operating and maintaining the Metering Equipment. GENERATING FACILITY INTERCONNECTIONS RULE AND REGULATION 27 CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council Effective 4-2-2012 Sheet No. 20 G. SUPPLEMENTAL REVIEW If the Generating Facility meets any of the following criteria, the Facility does not qualify for Simplified Interconnection Review and must undergo a Supplemental Review: 1. Output from the Generating Facility at any time will be equal to or greater than 15% of the load on the distribution line section. 2. The aggregate distributed generation on the distribution line section exceeds 80% of the real- time peak load kW. 3. Startup, shutdown or other operating characteristics of the Generating Facility cause voltage drop or flicker to exceed CPAU’s allowable limits as specified in Section D. 4. The Generating Facility is connected to a 4kV distribution feeder which has line-to –neutral connected load and the Generating Facility nameplate rating exceeds 10% of the line section peak load. 5. The Generating Facility, in aggregate with other generation, shall not contribute more than 10% to the circuit’s maximum fault current (END) ELECTRIC SERVICE CONNECTION FEES UTILITY RATE SCHEDULE E-15 CITY OF PALO ALTO UTILITIES Issued by the City Council Effective 87-81-20082012 Supersedes Sheet No. E-15-1 dated 78-18-20062008 Sheet No.E-15-1 A. APPLICABILITY: This schedule applies to all connections, expansions, and upgrades to the City's electric distribution system except those that serve street lighting or traffic signals. B. TERRITORY: All territory within the incorporated limits of the City and land owned or leased by the City. C. ADVANCE ENGINEERING FEES Advance engineering fees must be paid to start the engineering process and are non-refundable. The engineering fees will be credited against the estimated job cost prior to the collection of construction fees. Advance engineering fees will not be collected for service connections that do not require a job estimate. D. ESTIMATED CONSTRUCTION AND SERVICE CONNECTION FEES All estimated on-site, off-site distribution system, and service connection fees must be paid prior to the scheduling of any construction or connections to the City's electrical distribution system. E. SUMMARY OF FEES: The following schedule is for summary purposes. Section F herein describes the specific fee and conditions in detail. 1. UNDERGROUND SYSTEMS: (A) Service Connections Which Do Not Require an Estimate Service Connection Fees (1) Residential ...................................................................................................... $450 (2) Residential: Rear Easement ............................................................................. $940 (3) Multi-Family/Commercial/Industrial 200A, Single Phase or Less .................. $720 (4) Multi-Family/Commercial/Industrial Greater Than 200A ......... By Estimate ELECTRIC SERVICE CONNECTION FEES UTILITY RATE SCHEDULE E-15 CITY OF PALO ALTO UTILITIES Issued by the City Council Effective 87-81-20082012 Supersedes Sheet No. E-15-2 dated 78-18-20062008 Sheet No.E-15-2 (B) Service Connections That Require Estimates Advance Engineering Fees (1) Residential .................................................................................................... $300 (2) Multi-Family/Commercial/Industrial 200A or Less ........................................ $600 (3) Multi-Family/Commercial/Industrial Greater Than 200A ................. By Estimate On-Site Distribution System Fees (1) Residential .................................................................................................... N/A (2) Multi-Family/Commercial/Industrial ……………… .......................... By Estimate Off-Site Distribution System Fees (1) Residential ......................................................................................... By Estimate (2) Multi-Family/Commercial/Industrial ............................ By Estimate 2. OVERHEAD SYSTEMS: All service connection fees are based on a 100-foot service length. If additional service length is required there may be additional fees. Service Connection Fees (1) Residential .................................................................................................... $620 (2) Multi-Family/Commercial/Industrial 200A or Less ………………………… $900 (3) Multi-Family/Commercial/Industrial Greater Than 200A ................. By Estimate 3. TEMPORARY SERVICES: Temporary service charges 200A maximum, 250 V maximum, 3-wire services 100' in length are shown in the following table. Fees for services requiring greater voltage or capacity will be determined by estimate. Overhead Service Connection Fees (1) Residential .................................................................................................... $840 (2) Multi-Family/Commercial/Industrial 200A or Less $840 (3) Multi-Family/Commercial/Industrial Greater Than 200A ................. ..By Estimate ELECTRIC SERVICE CONNECTION FEES UTILITY RATE SCHEDULE E-15 CITY OF PALO ALTO UTILITIES Issued by the City Council Effective 87-81-20082012 Supersedes Sheet No. E-15-3 dated 78-18-20062008 Sheet No.E-15-3 Underground Service Connection Fees (1) Residential .................................................................................................... $675 (2) Multi-Family/Commercial/Industrial 200A or Less …………………………..$675 (3) Multi-Family/Commercial/Industrial Greater Than 200A ................. ..By Estimate F. FEES: 1. UNDERGROUND SYSTEMS Connection fees for new or replacement services to the underground electrical system consist of one or more of the following: Service Connection Fee, On-site Distribution System Fee and/or Off-site Distribution System Fee. (A) Service Connection Fees: Where the City connects any Customer to the electrical distribution system, a service connection fee shall be charged. A one-time waiver of this fee is granted for services connected during the construction of an underground conversion district. (1) Residential - Single Family These fees apply to development in which electric metering will be on a single-family basis. (a) For a 250 volt maximum, 200 ampere maximum service ............................... $450 (b) For any connection requiring greater capacity the fee shall be the estimate of the installation cost or $450 whichever is greater. (c) For a 250 volt maximum, 200 ampere max service from a rear easement $940 (d) For any connection requiring greater capacity the fee shall be the estimate of the installation cost or $720, whichever is greater. (2) Commercial/Industrial These fees apply to commercial, industrial, multi-family residential services. (a) For a 250 volt maximum, 200 ampere maximum service ............................... $720 (b) For any connection requiring greater capacity, the fee shall be the estimate of the installation costs or $720, whichever is greater. ELECTRIC SERVICE CONNECTION FEES UTILITY RATE SCHEDULE E-15 CITY OF PALO ALTO UTILITIES Issued by the City Council Effective 87-81-20082012 Supersedes Sheet No. E-15-4 dated 78-18-20062008 Sheet No.E-15-4 Where the City installs, or will install, electric meters in a new development (single family, multi-family, or commercial/industrial inclusive) consisting of 30 (thirty) units or more, the connection fee shall include the estimate of the cost to furnish all electric meters with AMR-ERTs. (B) On-site Distribution System Fees: Where the City installs or will install the underground conductors (primary or secondary), switches or transformers in and on facilities provided by the developer within the boundaries of a sub-division or other development, an on-site distribution system fee shall be charged. The fee shall be the estimate of the installation costs. (C) Off-Site Distribution System Fees: Where the City installs or will install an electric distribution system, system extension, or system reinforcement outside the boundaries of a sub-division or other development to be served, an off-site distribution system fee shall apply. The fee shall be the estimate of the installation costs. 2. OVERHEAD SYSTEMS Connection fees shall apply for all new services or for service upgrades exceeding 200 amperes. Overhead services that do not require the addition of poles to the system will be the standard service for residential areas not in Underground Districts. Underground Service will be required for all new industrial, commercial, and multi-family residential construction. No new construction that will require new poles to be added to the system shall be permitted except with the approval of the Electrical Engineering Manager and only after a finding that an underground service is not feasible. Replacement of existing overhead services with new overhead services will be allowed so long as the new service does not exceed the size of the existing service or 200 Amperes for single-family residential or 400 amperes for all other, whichever is greater. Replacement of 250 volt, 200 ampere maximum, 3-wire overhead residential service drops to existing structures will be done by the City at no cost to the customer providing such a replacement does not require relocation of the connection at the pole or mid-span, does not require relocation at the house by more than 10 feet, and does not exceed 100 feet in length. ELECTRIC SERVICE CONNECTION FEES UTILITY RATE SCHEDULE E-15 CITY OF PALO ALTO UTILITIES Issued by the City Council Effective 87-81-20082012 Supersedes Sheet No. E-15-5 dated 78-18-20062008 Sheet No.E-15-5 (A) Overhead Service Connection Replacement Fees: (1) Residential – Single Family These fees apply to development in which electric metering will be on a single-family basis. (a) For a 250 Volt, 200 ampere, 3 wire, 100 feet in length Maximum services ....................................................... $620 (2) Commercial/ Industrial These fees apply to commercial, industrial, multi-family residential services. (a) For a 250 Volt, 200 ampere, 3 and 4 wire services, 100 feet in length maximum service .................................................... $900 (3) Replacement of Overhead Services of greater voltage, other than described above when done for the customer benefit, or when required due to damage by customer, shall be the estimate of the installation costs. 3. TEMPORARY SERVICE A fee shall be charged to connect temporary service. The Customer shall furnish all equipment up to the designated point-of-service. This point-of-service will usually be the weatherhead for overhead temporary services in overhead distribution areas or the secondary connection box for underground temporary services in underground distribution system areas. The City will not supply overhead temporary services in underground service areas or underground temporary services in overhead distribution system areas. The City will supply: overhead conductors and meter for overhead temporary services; and meter only for underground temporary services. The City will connect both overhead and underground services to the City's electrical distribution system. Any additional off-site facilities or work required shall be provided and removed by the utility at the customer's expense. (A) Overhead Temporary Service Fees: (1) For a 250 volt, 200 ampere, 3 wire service, 100 feet in length maximum service ................................................................ $840 ELECTRIC SERVICE CONNECTION FEES UTILITY RATE SCHEDULE E-15 CITY OF PALO ALTO UTILITIES Issued by the City Council Effective 8-8-2008Effective 7-1-2012 Supersedes Sheet No. E-15-6 dated 78-18-20062008 Sheet No.E-15-6 (2) The fees for a temporary service of greater length and capacity or voltage shall be the estimate of the installation and removal costs or $840, whichever is greater. (B) Underground Temporary Service Fees: (1) For a 250 volt, 200 ampere, 3-wire maximum service, If a service box is available at the property .................................................... $675 (2) If a service box is not available at the property, the charges to provide a service box will be at the customer’s expense. (3) The fees for a temporary service of greater length and capacity or voltage shall be the estimate of the installation or removal costs or $675, whichever is greater. 4. GENERATOR INTERCONNECTION A fee shall be charged for evaluation of generator interconnection applications performed pursuant to Rule and Regulation 27. An Initial Review for Simplified Interconnection will be performed. No fee is charged for this initial review. If it is determined that a Supplemental Review will be required, an Advance Engineering Fee will be charged. The Advance Engineering Fee will be applied to any Interconnection Study fees or Interconnection fees. (A) Advance Engineering Fees: (1) All net energy metering projects ..................................................................................$0 (2) Projects not subject to net metering and 100 kW or less in capacity .......................$600 (3) Projects not subject to net metering, greater than or equal to 100 kW but less than 500 kW in capacity...............................................$4,000 (4) Projects not subject to net metering, 500 kW or greater in capacity ....................$7,500 (B) Interconnection Study: (1) All net energy metering projects ..................................................................................$0 FormNot a Form0.66" Form Left:pt, Nu 2, 3, Aligne at: 1Not a 2.31" Form Form ELECTRIC SERVICE CONNECTION FEES UTILITY RATE SCHEDULE E-15 CITY OF PALO ALTO UTILITIES Issued by the City Council Effective 8-8-2008Effective 7-1-2012 Supersedes Sheet No. E-15-7 dated 78-18-20062008 Sheet No.E-15-7 (2) Projects not subject to net metering shall be responsible for the actual costs of the interconnection study. (C) Interconnection Fees: (1) All net energy metering projects ..................................................................................$0 (2) Projects not subject to net metering shall be responsible for the actual costs of design and installation of interconnection equipment. 5. PALO ALTO CLEAN LOCAL ENERGY ACCESSIBLE NOW PROGRAM A monthly fee shall be charged for meter maintenance and administrative services for generators participating in the Palo Alto Clean Local Energy Accessible Now (CLEAN) Program. (1) Metering and administrative fee ...........................................................................$34.73 G. NOTES: 1. These fees apply to all vacant land except where the fees are recorded as previously paid. 2. The Customer is responsible for the installation of all equipment from the facility to the designated point-of-service. For underground systems, this includes conduit and conductors. For overhead systems, because the point-of-service is the weatherhead or point of attachment to the facility, this includes the mast or riser and all conductors therein. 3. When the City replaces a service, the Customer is obligated to accept a shutdown of service during regular working hours. The time of the shutdown shall be agreed upon as mutually acceptable. When, for the convenience of the Customer, the shutdown is during other than regular working hours, it shall be done entirely at the Customer's expense. The Customer shall pay the entire cost of the overtime labor, not the incremental cost. 4. The City can generally provide service availability from 30 to 45 days after all fees are paid except when long lead-time equipment or materials are required. Consult the City for estimated lead-times. 5. The City cannot be held liable for delays in service connection caused by conditions beyond its control, including, but not limited to, delays in the arrival of equipment such as transformers, Form0.38" Form -0.07 1.31" Form Form After NumbAlignm after: Right-0.07 1.31" Form Numb Alignm after:at 0. Form Form ELECTRIC SERVICE CONNECTION FEES UTILITY RATE SCHEDULE E-15 CITY OF PALO ALTO UTILITIES Issued by the City Council Effective 8-8-2008Effective 7-1-2012 Supersedes Sheet No. E-15-8 dated 78-18-20062008 Sheet No.E-15-8 switches and cable. {End} City of Palo Alto (ID # 2871) City Council Staff Report Report Type: Consent Calendar Meeting Date: 6/18/2012 June 18, 2012 Page 1 of 4 (ID # 2871) Council Priority: Environmental Sustainability Summary Title: Water and Wastewater Rates Issues Title: Finance Committee Recommendations Regarding Water and Wastewater Rates Policy Issues From: City Manager Lead Department: Utilities Recommendation The Finance Committee recommends that Council: 1. Direct staff to begin an evaluation of limited, environmentally sound groundwater use; 2. Direct staff to include an evaluation of the costs to serve higher elevation customers when conducting the next Water Fund cost of service study; 3. Retain the position of pursuing conservation pricing to the maximum extent allowed by law; and 4. Direct staff to propose more descriptive names for the Wastewater Collection Utility Rate Schedules. Executive Summary The Finance Committee’s April 18, 2012 motion to recommend that Council approve the proposed water and wastewater rates included several additional requests. The proposed water and wastewater rates are included in the Fiscal Year (FY) 2013 proposed budget and this report describes the additional requests. Staff has plans to address each of the issues raised by the Finance Committee as follows: 1. Development of an updated Water Integrated Resource Plan is part of the FY 2013 work plan. This plan will re-evaluate the use of groundwater for water supply. 2. The cost to serve water customers located in higher elevations will be evaluated again in the next cost of service study for water. However, the next study is not expected to be completed for several years. 3. A resource pricing policy continuing to encourage conservation and efficiency will be discussed in a new Rates Policy, which will be developed in FY 2013. June 18, 2012 Page 2 of 4 (ID # 2871) 4. The current titles of the wastewater collection rate schedules will be addressed the next time adjustments to those rates are proposed. Background On April 18, 2012, the Finance Committee considered the proposed rate adjustments for the Water and Wastewater Collection Funds to be effective on July 1, 2012. The Finance Committee unanimously recommended approval of the proposed rate adjustments, which are included in the FY 2013 budget request. The Finance Committee’s motion to recommend Council approve the proposed Water Utility Rates included three additional requests: 1. Direct staff to begin an evaluation of limited, environmentally sound groundwater pumping; 2. Direct staff to include an evaluation of the cost to serve higher elevation customers when conducting the next Water Fund cost of service study; and 3. Retain the position of pursuing conservation pricing to the maximum extent allowed by law. The Finance Committee’s motion to recommend Council approve the proposed Wastewater Collection Utility Rates included a request for staff to return with a more descriptive name for these rates since these names can be confusing to the public. The minutes from the April 18, 2012 Finance Committee meeting are provided (Attachment A). Discussion Groundwater Evaluation The Water Integrated Resource Plan (WIRP) examines all water resource alternatives, including groundwater. The WIRP was last completed in 2003. Staff plans to update the WIRP in FY 2013, and the 2013 WIRP will include an updated evaluation of the potential for using groundwater sustainably. Water Cost of Service Analysis (COSA) The water storage reservoirs located in the foothills were originally built in anticipation of a level of development in the foothills area that never occurred. Water is pumped up to the reservoirs and allowed to flow back into the water distribution system on a daily basis to keep the water in the reservoirs fresh. Finance Committee members expressed concern that additional costs are being incurred solely to serve the higher elevation customers. The COSA completed this year for the water rates included an evaluation of whether there were additional costs to serve these customers. That study determined that the water reservoirs that are located in the higher elevations are used to maintain fire preparedness and emergency supplies for the entire system, not just the customers located in the higher elevations. The general practice is that a formal COSA and cost of service model is completed every three to five years for each Utilities Fund (typically on a staggered basis so not all funds are going through a COSA review simultaneously) unless there is a compelling reason to undertake a new June 18, 2012 Page 3 of 4 (ID # 2871) COSA in the intervening years. Annually, the existing COSA model is used to determine if there needs to be any cost of service alignment between customer classes. The question of the cost to serve higher elevation water customers will be revisited the next time that a Water COSA is completed, which is expected to happen in three to five years. Conservation Pricing The City’s general support of resource efficiency is realized in the Utilities rate-setting practices. “Conservation pricing” is the concept of encouraging conservation and efficient use of resources through economic incentives such as price signals. Staff is preparing a Rates Policy that will address conservation pricing and other rates-related goals. A Rates Policy will also provide clear direction on Council’s conservation goals, which will be useful when developing and completing future cost of service studies. The current schedule is for the Utilities Advisory Commission to review a draft Rates Policy in September 2012 and to make a recommendation on a Rates Policy in October 2012. After Finance Committee discussion and recommendation, the policy is expected to be ready for Council action in December 2012. Wastewater Collection rates The titles of the Wastewater Collection Fund rate schedules for the collection of wastewater (sanitary sewer) services are currently “Domestic Wastewater Collection and Disposal” for Utility Rate Schedule S-1 and “Commercial Wastewater Collection and Disposal” for Utility Rate Schedule S-2. At its April 18, 2012 meeting, the Finance Committee asked staff to return with a name for the rates that is more descriptive since the current titles may not be well understood by the public. Staff recommends that Utility Rate Schedule S-1 be retitled “Residential Wastewater Service” and Utility Rate Schedule S-2 be retitled “Commercial Wastewater Service” when these rates are next adjusted. These titles are similar to the titles of Utility Rate Schedules E-1 (Residential Electric Service) and G-1 (Residential Gas Service). In addition, new rate schedules proposed for implementation on July 1, 2012 include Utility Rate Schedules S-6 (“Restaurant Wastewater Collection and Disposal”) and S-7 (“Commercial Wastewater Collection and Disposal – Industrial Discharger”). Staff recommends that these rate schedules be retitled “Restaurant Wastewater Service” and “Industrial Discharger Wastewater Service”, respectively, when these rates are next adjusted. Resource Impact Any resource impact from implementation of these recommendations will be identified when the changes are proposed. Policy Implications Any policy implications resulting from implementation of these recommendations will be identified when the changes are proposed. June 18, 2012 Page 4 of 4 (ID # 2871) Environmental Reveiw Council’s consideration of these issues does not meet the definition of a “project” under Public Recourses Code Section Sec. 21065, thus, California Environmental Quality Act review is not required. Attachments: Attachment A: Draft Minutes from April 18 2012 Finance Committee Meeting (PDF) Prepared By: Jane Ratchye, Assistant Director Department Head: Valerie Fong, Director City Manager Approval: ____________________________________ James Keene, City Manager Finance Committee DRAFT MINUTES Page 1 of 26 Special Meeting April 18, 2012 Roll Call Chairperson Shepherd called the meeting to order 6:03 pm in the Council Conference Room, 250 Hamilton Avenue, Palo Alto, California. Present: Burt, Price, Scharff, Shepherd (Chair) Absent: Oral Communications None Agenda Items 1. Staff and Utilities Advisory Commission Recommendations on Proposed Water Utility Rate Adjustments Effective July 1, 2012. Ipek Connolly, Senior Resource Planner recommended the Finance Committee (FC) approve amendment of Utility Rate Schedules W-1, W-2, W-3, W-4, and W-7. Amending these Rate Schedules would result in an overall increase of retail water rates and annual Water Fund revenues by 15 percent or $4.7 million effective July 1, 2012. Because of investments in infrastructure, reliability, and safety the costs of the water supply would increase approximately $2.5 million in Fiscal Year 2013. Water purchase costs would also increase from $15 million in 2012 to $15.9 million in 2013. Capital Improvement Program (CIP) costs would increase from $4.4 million to $6 million in 2013. Along with this, Staff anticipated lower than expected revenue in both Fiscal Year 2012 and Fiscal Year 2013. Combined, these were the main factors driving the need for the rate increase. The cost of water had risen from $1 per ccf in 2006 to approximately $3 per ccf in 2012, with an DRAFT MINUTES Page 2 of 26 Finance Committee Special Meeting Draft Minutes 4/18/12 expected increase to $5 per ccf in less than ten years. This cost increase resulted from investments in infrastructure for upgrade of the water delivery system and seismic reinforcements. The Rate Stabilization Reserve Fund balance was slightly above the maximum amount stated in the guidelines; therefore, Staff proposed using some of the excess funds to minimize the rate increase. Staff planned to follow the minimum guidelines without falling below those guidelines in the future. The 15 percent revenue increase was an average increase. A Cost of Service Study, performed by Raftelis Financial Consultants, determined how the increase would be allocated to individual rate classes. The proposed rates were based on the Cost of Service Study as required by Proposition 218. Rates for the residential sector as a whole would increase by 13 percent, the commercial sector by 22 percent, irrigation by 5 percent, and Fire Service by 211 percent. For the residential sector, there was an increase in the fixed charge, a reduction in the Tier 2 price, and an increase in the Tier 1 price. Staff presented these amendments to the Utilities Advisory Commission (UAC), which recommended approval of the proposed rates and the sector-specific alignments. The UAC recommended not reducing Tier 2 rates, and using the increased revenue to decrease the residential Tier 1 rate. This would meet the revenue requirement of the residential sector. Staff recommended changing the Tier 1 price from $3.60 to $4.54, and Tier 2 from $7.34 to $7.06 based on the Cost of Service Study. The UAC recommended retaining the Tier 2 price of $7.34, and decreasing the Tier 1 price to $4.11. For a small user, the Staff recommendation resulted in a monthly bill of $48, which was $9 more than the current amount. The UAC's recommendation resulted in a bill of $45.74, which was an increase of $6.80. The impact would be similar for an average user. For a large user, the Staff recommendation resulted in a decrease of $0.14, and the UAC's recommendation resulted in an increase of $6.80 for all levels. Based on the Cost of Service Study, commercial rates would increase approximately 18.5 percent, and irrigation rates would decrease 7.6 percent. Based on financial projections, Staff did not expect any rate increases for the Electric Utility. Staff proposed a 15.9 percent increase in water rates, a 5 percent increase in wastewater rates, and a 10.8 percent increase in refuse rates. Staff expected an average 10 percent rate decrease in gas rates, but was still working on these numbers. The overall residential customer, who currently paid $235.00 per month, would have an $8.94 monthly bill impact. Because of Proposition 218 requirements, Staff would notify all residential customers of the proposed rate increases by May 1, 2012, and then the Council would hold a public hearing on June 18, 2012. If a majority of DRAFT MINUTES Page 3 of 26 Finance Committee Special Meeting Draft Minutes 4/18/12 customers protested the proposed rate increases, the Council could choose not to impose the proposed rates. Sudhir Pardiwala, Vice President of Raftelis Financial Consultants, Incorporated reported the primary purpose of the Study was to review the rates and demonstrate they were fair, equitable, and consistent with industry guidelines from the cost of service perspective. He reviewed the existing customer classifications to ensure the costs were being appropriately assessed to the different customer classes. One of the City's objectives was to ensure environmental sustainability, which meant sending a signal for conservation and providing an incentive to customers. Since this was a financial process, he viewed rates as one mechanism to send that signal. The City also had to meet the requirements of Proposition 218, which required rates to be proportional to the services provided. In the next fiscal year, the City needed a revenue adjustment of 15 percent to meet coverage requirements, to cover the shortfall from the higher cost of purchasing water, to cover operating costs, and to fund Capital Improvements. In the following two fiscal years, revenue adjustments would be 9 percent and 4 percent. Cost of service meant identifying revenue requirements, and allocating those revenue requirements to the different customer classes proportionate to the cost of providing service, with some flexibility in terms of designing the rate structures. The industry standard for cost of service was the American Water Works Association methodology called the base-extra capacity method. This required allocating costs to providing service under average and peaking conditions. The base was the average, and the extra capacity was the peaking. To do this, he had to identify the peaking characteristics of the different customer classes. After identifying revenue requirements, the next step was to perform the cost allocation. The different parameters identified in the cost allocation process were the base and the peaking. The maximum day and maximum hour were the maximum amount of water that could be used on the maximum day of the year on any given day, and the maximum hour was the maximum hour during that maximum day. Those represented the peaking cost. All customers had some kind of peaking requirement, because water was not used at a continuous pace throughout the day. Peaking was associated with season as well as a daily basis. Costs were allocated to Fire Service and customers with meters. This included not only the cost of maintaining the meters, but also the capacity involved in servicing those meters. Because a water system was designed to meet peaking requirements, there were costs associated with DRAFT MINUTES Page 4 of 26 Finance Committee Special Meeting Draft Minutes 4/18/12 providing that capacity. Those costs were considered in the meter charge. Billing and customer service costs were costs associated with meter reading, billing customers, and collecting payment. Those were constant for all customers irrespective of the meter size. He identified all the costs, separated them into functions, and then allocated it to the cost components to determine the unit cost. The unit cost was based on the units of service. After cost allocation, the next step was the rate structure review. His objective was to ensure the City had rates that were fair and equitable, and was passing on those costs equitably to customers. He examined the tier structure and the fixed variable component. He reviewed fixed charges, charges based on elevation, and master metered customers. After reviewing each of these elements, he recommended the City retain the two-tier structure for the individually metered residential W-1 class. The City had two objectives: 1) provide the cost of service rates, and 2) environmental sustainability. He decided that, based on the objectives, the two- tier structure would best meet those needs. He reviewed the fixed charges, and recommended increasing that fixed revenue component to 15 percent, recognizing that approximately 55 percent of costs were fixed. He did not believe there was any cost justification for having differential rates for customers at higher elevations based on discussions with engineering Staff. For multi-family customers or master metered customers, he recommended continuing the uniform rate. That recommendation was based on peaking characteristics closer to commercial users than single-family residential users; and, because users did not pay their own bill, a tiered structure would not send a signal for conservation. The next step was to review the rates. The meter service charge consisted of two components: 1) the meter charge, which varied with the size of the meter; and, 2) the billing charge, which was constant for all customers. Based on that methodology, he recommended the proposed changes, and recognized the fixed charges would increase from 11 percent to 15 percent. For the smallest meter, there would be a 37 percent increase in the meter charge, and most other meters would have larger percentage increases. The first tier was set at $4.54, an increase from the current rate of $3.60. The second tier rate decreased from $7.34 to $7.06. The average rate was $6.04, increasing from $5.83. The first tier rate did not consider any peaking costs. Many times supply costs and peaking costs were used for rate differentials. Because Palo Alto's supply cost didn't really change with the quantity of water purchased, peaking costs were used as a rate differential. This was the cleanest method to justify the rates under Proposition 218. It showed that the rate for the first tier had to increase to $4.54. Because DRAFT MINUTES Page 5 of 26 Finance Committee Special Meeting Draft Minutes 4/18/12 the balance of costs had to be recovered from that customer class, the second tier rate decreased to $7.06. He explained the rationale for the tier rates, because the UAC had a different recommendation. The commercial rate would increase from $4.93 to $5.75; that would also be the same rate for the master metered customers. The irrigation rate would drop slightly, based on the peaking characteristics of irrigation customers. The construction rate would be the same rate as the commercial rate. He recommended Fire Service charges increase significantly due to increased costs. When he performed the cost allocation, he apportioned those charges allocated to Fire Service to public and private Fire Service, and these rates resulted from that process. At the low end of individually metered residential customers, rates would increase by $7.50; at the high end, the change would be smaller. This resulted from the increase in the meter charge and the increase in the rate for the first tier. The biggest impacts would be felt by the lowest users in terms of percentages. These rates met the requirements of Proposition 218 and were consistent with the Cost of Service Study. One benefit of this type of rate structure was greater revenue stability resulting from significant conservation and reduction of usage. As irrigation rates were reduced, irrigation customers would see a net reduction in charges, while multi-family master metered customers would see some increase in charges. He was not a proponent of comparing rates with other agencies, because of the many variations in calculating rates. At the low end of usage, Palo Alto fell in the middle of the scale when compared to neighboring cities. As customers used more water, charges increased and Palo Alto moved to the upper end of the scale in terms of total bill. The proposed rates would tend to moderate that, and bring the City in line with other agencies. Council Member Price asked if the approach used to calculate rates was standard for the industry. Mr. Pardiwala indicated there were two methods used in the industry. The peaking factors for multi-family customers were closer to commercial peaking factors than to residential peaking factors. That resulted from multi-family customers having lower irrigation demands than single-family customers, and all customers in a multi-family dwelling not using water at the same time. That was why the peaking characteristics were lower. This structure would be more representative of the rate the City should be charging multi-family customers in a tiered structure. To have tiers for multi-family customers, the City would need DRAFT MINUTES Page 6 of 26 Finance Committee Special Meeting Draft Minutes 4/18/12 additional data to set that rate, and the billing system would have to be modified as well. That would take some time and effort. Council Member Price inquired if he meant multi-family rental units because they were metered separately. Mr. Pardiwala noted separately metered units would fall under the W-1 class, which was residential. Council Member Price asked why the percentage of change increased so greatly as meter size increased in the Fire Service charges. Mr. Pardiwala stated the charges were based on the capacity of those lines. They were strictly proportional to the capacity of those lines. Dhruu Khenna lived on Alistair Avenue and owned a winery in the Morgan Hill area, where he had three wells on 48-acres of property. He was also a member of the agricultural committee of the Santa Clara Valley Water District. He wanted to start a dialog, because some customers had 50 percent rate increases the prior year. Based on information received from Staff about groundwater pumping, he reported existing wells in Palo Alto from 1948 through 1962 pumped approximately 5,000 acre feet per year. Since then the water levels had risen on average more than 150 feet. As of 2003 Palo Alto water levels were at elevations comparable to the 1910s. In wet winters, wells in the Palo Alto, if not controlled, flowed at the ground surface. These studies were based solely on five or six wells in Palo Alto. On his property, he had three wells, and his neighbors had more than 15 or 20 wells in the area. Contamination was easily addressed by testing the water at least once a year at a cost of $3,000. Council Member Burt confirmed the amount of groundwater pumped was 5,000 acre feet per year in the time period stated. Mr. Khenna answered yes, based on the report he received. Council Member Burt inquired whether he had received information on the amount of water currently being pumped. DRAFT MINUTES Page 7 of 26 Finance Committee Special Meeting Draft Minutes 4/18/12 Mr. Khenna believed the current amount to be zero, because the wells served as a standby water source. Groundwater pumping came to a halt in 1962, except in drought years or on a specific basis. Council Member Burt asked if he was referring to City-owned wells rather than private wells. Mr. Khenna responded correct. His information concerned City wells. The discussions shouldn't be limited to the existing wells. Herb Borock said the Staff Report showed the average usage as 14 units, while the consultant report showed it as 12 units. The monthly bill comparison used the median usage of 9 units, rather than the average usage of 14 units. Historically when that monthly bill comparison had been shown to the Council, it had been the average number. He felt it should be consistent with what had been done in the past. In regard to the pressure zone charges, historically there were eight pressure zones. P. Srinagesh understood consultants had performed a Cost of Service Study the prior year, and afterwards the various committees and the City Council had changed the rates from those recommended in the Study. He asked if it would take another Study to get another set of rates. Chair Shepherd stated his questions were the same questions the FC would be asking, and asked Staff to respond. Mr. Pardiwala indicated Proposition 218 required the agency to ensure that rates were consistent with the cost of service. The Council could change rates in its discretion; however, that opened the Council to a legal challenge. Council Member Burt stated water was pumped to the highest reservoir. He asked if all water was pumped to the highest reservoir. Tomm Marshall, Assistant Director Utilities Engineering reported water was pumped to fill the reservoirs in the Foothills for fire protection, but it had to be turned over on a regular basis, because of the chloramine in the water. Staff turned over some portion of water daily. DRAFT MINUTES Page 8 of 26 Finance Committee Special Meeting Draft Minutes 4/18/12 Council Member Burt stated the reason for pumping water to the reservoirs was not for fire protection; rather residential uses were driving the high volume at the reservoirs. Mr. Marshall reported the City could not store undrinkable water in the potable water system; therefore, the water had to be turned over. Council Member Burt felt the cost of that service could be argued either way. He didn't understand where that was a clear distinction. Ms. Connolly stated it was a function of the system design that water was pumped up there, and then it flowed down; therefore, it benefited everyone. Council Member Burt didn't dispute that. He asked who benefited from that loop. The loop was there for the benefit of residential customers, not fire prevention. Mr. Pardiwala stated that didn't change the cost of service perspective. In terms of setting elevation charges, the same loop would be in place if there were no customers there. Council Member Burt asked whether there could be a reservoir dedicated to fire suppression to eliminate the loop. Mr. Marshall reported that was not possible, because they were connected through the same pipelines. Council Member Burt inquired why water needed to flow through the same pipeline if it wasn't being consumed. Mr. Marshall indicated water from the reservoirs was used for fire suppression in the lowlands. In an emergency, water would come from the reservoirs in the Foothills for fire protection, especially if the City were cut off from Hetch Hetchy. Council Member Burt asked if the lowlands were benefiting from the upland reservoirs. DRAFT MINUTES Page 9 of 26 Finance Committee Special Meeting Draft Minutes 4/18/12 Mr. Marshall answered yes. Council Member Burt inquired whether the cost should be divided proportionately between the lowlands for fire suppression and emergency and Foothills residents for consumption. Mr. Pardiwala understood all of the water went there and then flowed down for consumption. Mr. Marshall stated there was only enough water in the tanks for fire suppression, and it was turned over on a regular basis. Council Member Burt asked if there was a comparison of dollars per cubic foot for a small residential dwelling versus a small residence in a multi-family dwelling, which was charged at the commercial rate. Valerie Fong, Utilities Director stated the multi-family owner-occupied units would be upset if they had to pay a residential rate. They were satisfied with Staff's explanation and understood they benefited from paying the commercial rate. Council Member Burt inquired if they were paying less at the commercial rate. Ms. Fong replied yes. Ms. Connolly reported a multi-family building with ten units and using 4.1 ccf per month paid, under W-4 rates, total monthly charges of $229 for the ten units, or $23 per unit. The comparable rate for a W-1 customer with its own dedicated meter would be $248 for ten units, or $25 per unit. Multi-family dwellings were charged a higher volumetric rate, but the service charge was lower on a per-unit basis. Council Member Burt inquired if the cost of service to the multi-family residence was lower than to a single-family home because of the single meter to multiple consumers. DRAFT MINUTES Page 10 of 26 Finance Committee Special Meeting Draft Minutes 4/18/12 Ms. Connolly stated it was lower because of the low profile. The commercial sector had a lower or flatter load shape than residential sector. Council Member Burt asked why irrigation customers had a smaller percentage increase than others. Ms. Fong reported the City had missed the summer usage for irrigation when rates were applied the prior year; therefore, there was a larger rate increase for irrigation. Because summer usage was captured in the current year, the rate increase would not be as large. Ms. Connolly stated the City had to collect the same annual revenue from that rate class over nine months of lower usage in the prior year. Council Member Burt noted the percentage of supply costs was currently less than 50 percent, and by 2017 it would be approximately 50 percent. He asked what portion of the Hetch Hetchy supply cost was due to CIP and the 100-year rebuilding of the Hetch Hetchy system. Ms. Connolly did not know how their rates broke down. Mr. Pardiwala believed they started their CIP a couple of years ago. Council Member Burt asked if the City started paying immediately. Ms. Connolly stated the CIP started in approximately 2007. Council Member Burt felt Staff needed to convey clearly to the community that the increase was caused mainly by the rebuilding of the Hetch Hetchy system. He asked if the combined residential impact on Slide No. 11 was for an average size household. Ms. Connolly responded yes. The slide showed the median usage for all delivery services. Council Member Burt inquired how much of the $8.50 increase in water rates was attributable to the rebuild of the Hetch Hetchy system. DRAFT MINUTES Page 11 of 26 Finance Committee Special Meeting Draft Minutes 4/18/12 Ms. Connolly stated it had been increasing over time, so she didn't have that information. Ms. Fong reported two big components behind the current proposed rate increases were the Hetch Hetchy water system improvement project and the City's own CIP costs. Council Member Burt noted the proposed $8.50 increase in water rates for a median residence between 2012 and 2013. He inquired whether Staff had a sense of how much of that increase was attributable to the Hetch Hetchy system increase and the City's improvements to withstand emergencies. Ms. Connolly suggested the best way to provide that information was to review the percentage of costs due to operation of the system and CIPs. Council Member Burt noted for 2013 in the chart on page 4 approximately 60 percent was due to water supply and CIP. Water supply costs without that would be closer to the amount in 2006. Approximately 80 percent of the cost of the water supply was attributable to the increase in the Hetch Hetchy rebuild. The City had its own CIP, and was in a period of around double the normal CIP. Ms. Connolly suggested taking that 2011 amount back to 2006, and looking at the breakdown to determine how much the cost increased relative to others. Council Member Burt asked if the $8.50 increase for a median residence was all attributable to Hetch Hetchy and the City rebuilds of the water system. That was almost the same number as the entire increase in the residential utility bill for the year. He suspected, absent the rebuild of the Hetch Hetchy system, there would be no increase in the utility bill. That communication was not supplied to the public clearly. It was very important for the public to understand what was happening. Lalo Perez, Administrative Services Director didn't have all the historical numbers. The actual utility purchases and charges for water in 2010 were $9 million. The adopted 2011 charges were $12 million, and adopted 2012 were $15.8 million. DRAFT MINUTES Page 12 of 26 Finance Committee Special Meeting Draft Minutes 4/18/12 Obviously, other components needed to be discussed, but it demonstrated the increase over time. Council Member Burt stated this would be reported in the press the following day, and if this part of the story didn't lead, it would be misunderstood. The City had a sound rationale for increasing rates, and had to ensure it was understood accurately. Vice Mayor Scharff asked if the second tier was justified through the Cost of Service Study by considering peaking. Mr. Pardiwala reported once the costs allocated to each customer class were identified, and then the amount of revenue to be collected from the class was determined based on the overall peaking factors. Because the first tier did not collect any peaking costs, the second tier had to pick up all peaking costs associated with that class of customers. Vice Mayor Scharff asked how the first tier was set. Mr. Pardiwala indicated the first tier was the cost of providing water under average conditions. Vice Mayor Scharff asked if there was no second tier for multi-family commercial because there was no peaking. Mr. Pardiwala explained the peaking characteristics of commercial and multi- family were similar. Because they were non-homogenous, they could not be grouped. Creating tiers would require considering customers by individual dwellings. Chair Shepherd stated there was an anticipation that water rates would increase by approximately 300 percent over the life of the Hetch Hetchy project. She shared Council Member Burt's concerns about explaining rate increases to the public. The City's rental rates and their analysis were different from other communities. She wanted to understand how rental rates were determined throughout all Enterprise Funds. DRAFT MINUTES Page 13 of 26 Finance Committee Special Meeting Draft Minutes 4/18/12 Mr. Perez explained the City had an appraisal performed then, depending on the type and location of the land site, used market rates. Staff could present a listing of the sites and the rents from the various Enterprise Funds. Chair Shepherd asked if that was reviewed each budget year. Mr. Perez answered yes. Chair Shepherd inquired if the methodology or actual charges were reviewed. Mr. Perez replied the actual charges. Staff was determining whether to perform an appraisal yearly, or having an incremental increase yearly with an appraisal every few years. Chair Shepherd asked if that would be presented in May. Mr. Perez responded yes. That went across the majority of Enterprise Funds. Chair Shepherd noted other communities were also discussing water rate increases. She recalled the new regulation that required fire sprinklers for houses of a certain size. She asked if those residences had a 2-inch meter, or if that was determined by the size of the residence. Dean Batchelor Assistant Director Operations reported those would be mostly the 1-inch meters. A 2,000 square foot home would be required to have fire services. Chair Shepherd noted a 2-inch meter was the smallest size. Mr. Batchelor believed the services were based on commercial fire services. Ms. Connolly stated there was no separate meter for residences. Mr. Batchelor said it was all one meter. Chair Shepherd confirmed residences would not be charged for water unless there was a fire in the residence. DRAFT MINUTES Page 14 of 26 Finance Committee Special Meeting Draft Minutes 4/18/12 James Cook, Utilities Advisory Commission reported the UAC felt it was unusual to have large percentage increases for the smallest volume users on the residential side, while decreasing costs for large volume users. This didn't seem to encourage conservation and discourage high use. The UAC voted 5-1 based on the concept of altering the rate so this did not happen in this way. He understood there was some flexibility in setting rates, and wanted to have a discussion and adjustments based on that. Chair Shepherd stated Item No. 4 on the Motion approved by the UAC had been resolved. Council Member Burt noted the constraints of conservation being embedded in the California Constitution and Proposition 218 requiring a cost of use basis for charges. The City was required to have a strong, supportable rationale for the rate structure. He asked if that was an accurate portrayal of the City's circumstances and, if so, how much latitude the FC had in this discussion. Molly Stump, City Attorney said conservation and the requirements of Proposition 218 were both Constitutional requirements. The Court of Appeal addressed the two together and provided some guidance about how they worked together. The policy for conservation was broad and general, didn't provide methods for conservation, and made no reference to rate making or pricing structures. Proposition 218 had specific requirements, which were accurately described by the City's consultant. The FC was reviewing the requirement that the property- based rate charges were proportional to the cost of providing service to the parcel. The Court of Appeal stated, in theory, it was permissible to have a tiered rate structure, so long as the tiers were proportional to the cost of providing service to the parcel. The City had to follow Proposition 218 requirements and could promote conservation goals to the extent they were consistent with Proposition 218. The Constitutional policy of conservation was not a defense to ignoring the Proposition 218 requirement. The Courts were looking for the analytical work performed by the consultant. When the City set rates consistent with the third-party methodology, it established compliance with the proportionality requirement. If the City did not follow the third-party methodology, then there was a question of whether the proportionality requirement was met. There was no suggestion that rate setting occurred without people inputs. Multi-member bodies played an important role in DRAFT MINUTES Page 15 of 26 Finance Committee Special Meeting Draft Minutes 4/18/12 evaluating the process, watching it over time, expressing policy preferences, and ultimately making decisions. Council Member Burt lacked clarity as to whether the Council was obliged to follow any and all of the consultant's determinations without deviation. Given the context of consultants disagreeing on procedure, he asked if the Council was highly constrained from deviating from the consultant's recommendations. Ms. Stump stated as a procedural matter, it was the Council's determination to set the rates consistent with the procedural requirements of Proposition 218. She thought he was asking what would happen next if the Council did this versus that. That type of question moved into the area of potential degree of risk, and there were a lot of factors that went into that. This body would take the vote and have the authority ultimately to make the decision appropriate for Palo Alto. Council Member Burt stated when the Council made land use decisions it was a quasi-judicial matter. Even though they were legal findings, there were subjective interpretations. He understood this had a lot less gray area than when making findings on compliance of a project proposal with a quasi-judicial component. Molly Stump indicated if the Council set the rates consistent with the methodology and the recommendations prepared by the consultant, Staff would have a high degree of confidence that those rates could be defended if someone challenged them. If the Council did something else, then that evaluation would be different. She needed to help him understand that depending on what he was thinking, and she probably needed to do that in a different forum. Ms. Fong reported Staff heard and shared the Council's concerns with the consultant, and he kept them in mind as he worked on this. He understood there were a number of guiding policies. Vice Mayor Scharff noted rates were reaching the limits of conservation pricing. The consultant included conservation pricing as much as possible within the rate structure. He asked the consultant to comment on that. Mr. Pardiwala indicated there had been a reduction in usage as a result of various factors. The significant difference in rates between the first and second tiers sent DRAFT MINUTES Page 16 of 26 Finance Committee Special Meeting Draft Minutes 4/18/12 a strong conservation message. If rates increased and usage continued to decrease, then rates would have to increase more. At some point, it became a self-fulfilling prophecy and spiraled down. The current $7 rate was a high rate for a second tier. He wasn't sure the FC wanted to send a strong signal to further reduce usage. Vice Mayor Scharff felt the Council could do several things within a rate structure like that. It could set the second tier at 5 ccfs or 8 ccfs. The Council had decided the strong decision to focus on conservation pricing. That was why rates were hitting the limits of conservation pricing. He was surprised and pleased the consultant could justify a second tier. He was glad the UAC had reviewed it. He felt the Council had quite a bit of discretion still. Chair Shepherd felt the debates concerning conservation were important. She had heard the community question water bills remaining level when consumption decreased. This was an important incremental step in addition to the vetting by the UAC. She would consider Staff's recommendations for the rate increases. Council Member Burt heard the consultant say the City still had a strong conservation pricing structure. He didn't hear him say the proposals were the maximum possible. Mr. Pardiwala wouldn't say it was the maximum. He determined a reasonable method for setting the first tier, and the second tier resulted from that. Ms. Fong indicated the method was used throughout the industry. Council Member Burt believed the community felt there was no point in conserving water, because their bills continued to increase. He noted in 2013 about 40 percent of costs was supply. He asked if everyone conserved water, bills would decrease along with those supply costs. Mr. Pardiwala answered yes. With conservation, the cost of purchasing water decreased; therefore, the water revenue requirement would also decrease. DRAFT MINUTES Page 17 of 26 Finance Committee Special Meeting Draft Minutes 4/18/12 Council Member Burt stated the comparison to surrounding communities wasn't accurate, because it compared trailing rates. He inquired if there were any transfers to the General Fund from the Water Utility. Ms. Connolly answered no. Council Member Burt suggested Staff emphasize that point to the community. He asked why Palo Alto's rates were that much higher than other communities also using Hetch Hetchy water. Ms. Connolly reported there were more CIP expenditures currently, and the City typically paid those as they occurred. Council Member Burt stated the increase was primarily due to rebuilding the emergency water supply system, which had more than doubled the City's CIP costs. He asked if the City had higher CIP costs on an ongoing basis from maintaining a better system. Ms. Connolly explained general the City had higher CIP expenditures, and higher debt service payments because of the bond issued in 2010. Council Member Burt noted other communities had also created an emergency water supply system. He asked what the community was receiving for those extra costs. If rates were higher due to increased CIP spending, then presumably residents were getting something for that. Mr. Pardiwala reported not all agencies purchased water from Hetch Hetchy. Council Member Burt didn't include Santa Clara in that comparison. Mountain View purchased approximately 90 percent of their water from Hetch Hetchy, so they were close to the same. Mr. Pardiwala indicated there was a large difference in price between local water and purchased water. The size of the community was also important. DRAFT MINUTES Page 18 of 26 Finance Committee Special Meeting Draft Minutes 4/18/12 Council Member Burt noted there were other cities that had lower costs and used either entirely or predominantly Hetch Hetchy water, but Palo Alto was still compared to Redwood City and was approximately 15 percent higher. Ms. Connolly stated a section in the report, on page 10 under the comparison of Palo Alto water rates and surrounding cities, discussed the benchmark study in 2010. The summary of the findings in terms of explaining the differences were spending more on the replacement of aging infrastructure; lack of access to lower-cost water supply; more expensive service terrain to serve; and higher quality of services. This came from customer surveys performed consistently for other cities, and Palo Alto customers indicated a higher quality of service in those surveys. The City also had higher rent payment for use of real estate in the service territory. Rents were priced at the commercial prevailing real estate rates. Other cities either didn't have these large areas to rent or their charges were much lower. Council Member Burt felt most of those elements had a higher value to the ratepayer. Those were sound explanations for increasing rates and rates higher than neighboring cities, but Staff needed to bring that portion of the report to the front. Ratepayers needed to see those explanations. He was moderately familiar with groundwater pumping, and stated there were reasons not to over pump groundwater. There were areas where Staff might reasonably consider a modest amount of groundwater pumping, that would not degrade the quality of drinking water, would reduce costs, and would not damage the environment or the existing groundwater reservoir. He suggested having groundwater pumping as part of water analysis in the future. Mr. Pardiwala reported establishing a second source of water which was not a potable source would reduce total sales of potable water, and cause rates to increase. Council Member Burt asked if projections of revenue included additional conservation. Ms. Connolly indicated Staff built in a response to the rate increases in terms of demand reduction. DRAFT MINUTES Page 19 of 26 Finance Committee Special Meeting Draft Minutes 4/18/12 Council Member Burt stated a low-cost water source wouldn't provide a 1:1 reduction in costs. That needed to be explained to the public. MOTION: Council Member Price moved, seconded by Vice Mayor Scharff, that the Finance Committee recommend the City Council approve the Staff recommendation to 1) increase overall retail water rates and annual revenues for the Water Fund by 15.0 percent, or $4.7 million, effective July 1, 2012, and 2) Amend Utility Rate Schedules W-1, W-2, W-3, W-4, and W-7 as indicated in the Staff Report. Council Member Price felt the need for a detailed and clearly stated rationale for changes in the rates given the concerns about Proposition 218. She was comfortable with the quality of the work, which made her comfortable in reviewing and agreeing with the Staff recommendation. The Cost of Service Study was critical to this debate. The results of the Study and the quality of community input and Staff work made the rationale defensible, and less risky to accept Staff's recommendation. She concurred with earlier comments regarding the need to inform the public of cost factors. Vice Mayor Scharff agreed with Council Member Burt's comments regarding the message to the public. Water rates were increasing primarily because of Hetch Hetchy water costs. He also agreed with Council Member Burt's comments regarding groundwater pumping. Pumping groundwater was a form of recycling if done in the correct amount. This could be an interim measure until the salt problems in recycling were solved. Chair Shepherd stated it was a privilege to be on the Hetch Hetchy system, yet there was a ballot initiative that might change the scenario. Council Member Burt agreed with the Motion in broad terms. The Santa Clara County Water District purchased water to pump into underground reservoirs, and Palo Alto residents paid a portion of that cost. Other cities in the Valley were pumping water from the reservoirs and using it. In Palo Alto residents paid to pump water into reservoirs, but didn't get any back. DRAFT MINUTES Page 20 of 26 Finance Committee Special Meeting Draft Minutes 4/18/12 INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER to request that Staff begin an evaluation of limited, environmentally sound, groundwater pumping. Council Member Price agreed in concept, but was concerned about adding this project to Staff's workload. Council Member Burt asked how the Council had sound actions if it didn't do them. Council Member Price indicated she would agree if it was kept in that statement. Council Member Burt stated that was the Motion. Council Member Price wanted it made clear that it didn't have to be done within the next three months. Council Member Burt said the Amendment was to initiate, not complete, the project over the next year. Council Member Price would accept the Amendment with her previously stated cautionary note. INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE MAKER AND THE SECONDER that the next Cost of Service Study include a revaluation of the higher elevation customers. Vice Mayor Scharff asked if the Motion was to do that in the next Cost of Service Study, rather than to revisit the current Study. Ms. Fong reported Cost of Service Studies were not usually performed yearly. Council Member Burt stated it would be next Cost of Service Study. It didn't need immediate attention, because the dollar amounts weren't high. DRAFT MINUTES Page 21 of 26 Finance Committee Special Meeting Draft Minutes 4/18/12 INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE MAKER AND THE SECONDER to retain the position of pursuing conservation pricing to the extent it is reasonable by law. Council Member Price asked if that was an existing policy, and did it need to be stated again. Ms. Fong wasn't sure it was an existing policy. Council Member Burt felt it was an important principle. Vice Mayor Scharff asked where it would be stated. Ms. Fong suggested it could be stated in the Water Integration and Usage Plan or the Strategic Plan. Council Member Burt confirmed the City had a Water Resource Plan, a Strategic Plan, and a Comprehensive Plan. Ms. Fong indicated Staff would determine which plan it should be included in. It would be official if the majority of the Council approved it. Council Member Price supported the Amendment. Vice Mayor Scharff asked Staff if there were any issues with the proposed policy. Ms. Fong reported Staff assumed this was a policy, but couldn't find it in writing as a guiding policy. Council Member Burt said it was the role of the Council to establish policy. There was a practice, but not a policy. Vice Mayor Scharff accepted the Amendment. MOTION AS AMENDED PASSED: 4-0 2. Utilities Advisory Commission Recommendation on Proposed Wastewater DRAFT MINUTES Page 22 of 26 Finance Committee Special Meeting Draft Minutes 4/18/12 Collection Utility Rate Adjustments Effective July 1, 2012. Ipek Connolly Senior Resource Planner reported Staff recommended approval of amendments to Rate Schedules S-1 and S-2 and the addition of new Rate Schedules S-6 and S-7. The amendments would increase overall retail wastewater collection rates and annual revenues for the Wastewater Collection Utility by 5 percent, or $715,000, effective July 1, 2012. The need for the rate increase resulted from the rising cost of treatment due to required capital expenditures for the treatment plant ($600,000 for 2013); and the rising cost of collection system operations due to increased workload ($400,000). Half of the costs in the Wastewater Collection Fund were from the treatment plant, 25 percent from the Capital Improvement Program (CIP), and 25 percent from operations. Revenues had been less than costs. The City had used excess funding in the Reserves to subsidize the revenue requirements. The residential fixed monthly charge under Rate Schedule S-1 would increase by 5 percent, from $27.91 to $29.31. Commercial, restaurant and special customers were part of Rate Schedule S-2. Staff proposed segregating commercial customers into S-2, restaurants into S6, and special customers requiring special discharge monitoring in S-7. Those Rate Schedules would have a minimum charge of $29.71, an increase consistent with the 5 percent rate increase. Volumetric charges would be adjusted by the required increase. Staff performed a Cost of Service Study for this Fund in the previous year, and reviewed the changes in customer usage patterns and costs in the current year to determine that alignment was adequate. Most commercial customers' current billing was based on monthly water consumption. Some large commercial customers with significant irrigation were exempt from this, and their rates were based on winter water consumption. Staff proposed basing charges on winter water consumption, because that established proportionality with respect to the amount of water doing down the drain as opposed to irrigation. Residential customers would have a bill impact of $1.40 per month. Restaurants were a special customer class, and rates were based on specific discharges. Their increase was 5 percent of the applicable rate. For business customers, the bill impact would depend on how these customers used water. A small commercial customer with steady year-round water usage would have a 5 percent increase. A medium commercial customer with steady year-round water usage would have an increase of 19 percent. A commercial customer with high summer water usage would have a decrease of 5 percent. Depending on customer usage profile, the change could be different. Staff reviewed actual customers and actual usage DRAFT MINUTES Page 23 of 26 Finance Committee Special Meeting Draft Minutes 4/18/12 levels, and determined some customers would have decreases greater than $600 on their monthly bill. 40 percent of customers would have a bill decrease, 63.1 percent would have no change, and some customers would see increases. The proposed change would apply rates more equitably to all customers. When comparing Palo Alto rates to neighboring cities, Menlo Park and Redwood City residential customers paid more than Palo Alto customers, and Alameda customers paid less than Palo Alto customers. The next steps would be notifying customers about the proposed rate changes, and the City Council holding a public hearing before the adoption of the proposed rates. James Cook, Utilities Advisory Commission reported the Utilities Advisory Commission (UAC) had no discussion on this topic, and passed it as is. Council Member Burt asked if commercial accounts were currently being charged winter-based rates and residential accounts were using year round. Ms. Connolly stated most commercial customers were currently using year-round rates. Council Member Burt inquired if Staff was recommending commercial customers' rates be based on winter usage. Ms. Connolly answered yes. Council Member Burt asked what the basis was for residential customers. Ms. Connolly indicated residential customers' charge was based on average winter usage. Because there was not much variation in the average, it was a fixed charge. Council Member Burt noted the title was Wastewater Collection Utility, and asked whether it also covered water treatment and recycling. Valerie Fong, Utilities Director indicated it didn't cover treatment, and there wasn't recycling at the current time. DRAFT MINUTES Page 24 of 26 Finance Committee Special Meeting Draft Minutes 4/18/12 Ms. Connolly stated treatment costs were collected, but were passed to the Water Quality Control Plant partners. The Utilities Department did not manage the treatment operation. Council Member Burt inquired if dollars in the Fund went to the treatment plant. Ms. Connolly answered yes, for Palo Alto's share of treatment. Council Member Burt confirmed these dollars were collected through Wastewater Collection as a method of measurement, but their purpose was for treatment. He asked if the City recycled some water. Ms. Fong indicated the treatment plant did recycle some water. Council Member Burt stated it would be Palo Alto's proportionate share of the water. Ms. Fong agreed. Council Member Burt suggested the City was underselling itself and the services it provided by not indicating all the services provided and charged for. Ms. Fong stated Staff would be happy to rename the Utility. Council Member Burt suggested including treatment and possibly recycling. Herb Borock understood large commercial customers would have a separate Rate Schedule for irrigation use. He asked how Staff was handling that. Ms. Fong (INAUDIBLE) irrigation was built into the Wastewater Collection System. Irrigation water didn't go into the Wastewater Collection System. The City recovered only the cost of the water that passed through the Wastewater Collection System. Herb Borock believed the large customers would have two different Rate Schedules, so that rates were determined by Rate Schedules rather than seasonally. DRAFT MINUTES Page 25 of 26 Finance Committee Special Meeting Draft Minutes 4/18/12 MOTION: Vice Mayor Scharff moved, seconded by Chair Shepherd, that the Finance Committee recommend the City Council approve Staff Recommendations to 1) increase overall retail wastewater collection rates and annual revenues for Wastewater Collection Utility by 5.0 percent or $715,000, effective July 1, 2012, 2) effect a change to utilize winter-based water usage rates for commercial customers under Rate Schedule S-2 Section C.3, and 3) amend Wastewater Collection Utility Rate Schedules S-1 and S-2, and add new Wastewater Collection Utility Rate Schedules S-6 and S-7 as indicated in the Staff Report. . Chair Shepherd noted the Staff Report was thorough, and she attended the UAC meetings. Council Member Burt suggested changing the title to Wastewater Collection, Treatment and Recycling to allow the community to better understand and appreciate what they were paying for. Chair Shepherd suggested having Staff return with suggested titles. INCORPORATED INTO THE MOTION WITH CONSENT OF THE MAKER AND SECONDER request Staff return with language for the title. Ms. Fong stated the title was confusing. If the name was changed to Wastewater Collection, Treatment and Recycling Utility, it would merge many of the different functions. Vice Mayor Scharff agreed this was confusing to the public. Council Member Burt stated the Motion was asking Staff to determine a more descriptive title if possible. Vice Mayor Scharff thought everyone knew what wastewater was. He asked what other cities called it. Ms. Fong stated sewer, wastewater collection or sanitary sewer. Vice Mayor Scharff was not okay with changing the title. DRAFT MINUTES Page 26 of 26 Finance Committee Special Meeting Draft Minutes 4/18/12 Council Member Burt was concerned with the title indicating merely collection. Ms. Fong suggested changing the title to Wastewater Utility, and eliminating references to collection. Council Member Burt preferred Staff determine a more descriptive name. MOTION PASSED AS AMENDED: 4-0 City of Palo Alto (ID # 2936) City Council Staff Report Report Type: Action ItemsMeeting Date: 6/18/2012 June 18, 2012 Page 1 of 2 (ID # 2936) Summary Title: GANN Limit Title: PUBLIC HEARING: Adoption of Resolution Determining the Proposed Calculation of the Appropriations Limit for Fiscal Year 2013 From: City Manager Lead Department: Administrative Services RECOMMENDATION Staff recommends that Council adopt the attached resolution determining the Proposition 4 (Gann) Appropriations Limit calculation for Fiscal Year 2013. The City's Fiscal Year 2013 appropriations are estimated to be $28.28 million under the limit, assuming Council approval of the Fiscal Year 2013 Adopted Budget. DISCUSSION Article XIIIB of the State Constitution (Proposition 4) limits the annual appropriations for State and local governments. The Appropriations Limit (Limit) is adjusted annually on the basis of population and per capita income “change factors.” These factors are received from the State in May, after the City's proposed budget has been submitted to Council. Attached is the final Appropriations Limit calculation, based on the “change factors” that have been received from the State. The Appropriations Limit for Fiscal Year 2013 is $125.01 million. When compared to the recommended 2013 Budget, the City's Fiscal Year 2013 budgeted appropriations are $28.28 million under the Limit. Based on Article XIIIB, the City of Palo Alto can use the larger of two measurements of population growth, (county or city population growth) in the Limit calculation. For Fiscal Year 2013, the City is using the Santa Clara County population factor, which is greater than the population factor for the City of Palo Alto. In Fiscal Year 2012, the Santa Clara County population factor was used in lieu of the City’s since the County’s population factor was higher than the City’s. The June 18, 2012 Page 2 of 2 (ID # 2936) City typically uses the highest factor in order to provide maximum appropriation flexibility. As required by State law, documentation used to compute the Limit has been made available to the public at least fifteen days prior to the Council meeting at which the Limit is being adopted, and notice was published of the availability of these materials. RESOURCE IMPACT The adoption of the Fiscal Year 2013 Limit has no impact on City resources. POLICY IMPLICATIONS This recommendation is consistent with existing City policies. ENVIRONMENTAL REVIEW This is not a project under section 21065 of the California Environmental Quality Act. Attachments: Attachment A: Resolution determining the calculation of the Appropriations Limit for fiscal year 2013 (DOC) Exhibit A: Appropriations Limitation Compliance Calculation for FY 2013 Adopted Budget (PDF) Prepared By: Scott Jensen, Management Specialist Department Head: Lalo Perez, Chief Financial Officer City Manager Approval: ____________________________________ James Keene, City Manager 1 RESOLUTION NO. RESOLUTION OF THE COUNCIL OF THE CITY OF PALO ALTO DETERMINING THE CALCULATION OF THE APPROPRIATIONS LIMIT FOR FISCAL YEAR 2013 WHEREAS, under Article XIIIB of the Constitution of the State of California, the City of Palo Alto (City) may not appropriate any proceeds of taxes in excess of its appropriations limit (Limit); and WHEREAS, since fiscal year 1991, the City is permitted to annually adjust its Limit in accordance with inflation and population adjustment factors; and WHEREAS, pursuant to Government Code Section 37200, the calculation of the Limit and the total appropriations subject to the limit were set forth in the annual budget of the City for fiscal year 2013, which was adopted by ordinance of the Council on June 18, 2013; and WHEREAS, pursuant to Government Code sections 7901 and 7910, the final calculation of the Limit has been determined, and the adjustment factors on which the calculation is based are a 3.77% percent change in California per capita income and a 1.24% percent change in the population growth for Santa Clara County; and WHEREAS, the documentation used in the determination of the Limit has been made available to the general public for fifteen (15) days prior to the date of adoption of this resolution; and WHEREAS, according to the final calculation, the City’s appropriations subject to limitation are approximately $96.73 million. NOW, THEREFORE, the Council of the City of Palo Alto does RESOLVE as follows: SECTION 1. The Council of the City of Palo Alto hereby finds that, for fiscal year 2013, the final calculation of the Appropriations Limit of the City of Palo Alto has been determined in accordance with the adjustment factors referred to above, the ATTACHMENT A 2 documentation used in the determination of the calculation has been made available to the general public for the period of fifteen days as required by law, and the City’s appropriations subject to limitation are under the Limit by approximately $28.28 million. SECTION 2. The Council hereby adopts the final calculation of the Appropriations Limit of the City for fiscal year 2013, a copy of which is attached hereto as Exhibit A. SECTION 3. The Council finds that the adoption of this resolution does not constitute a project under the California Environmental Quality Act, and, therefore, no environmental assessment is necessary. INTRODUCED AND PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: APPROVED: ___________________________ ___________________________ City Clerk Mayor APPROVED AS TO FORM: _______________________________ City Manager ___________________________ Senior Assistant City Attorney ______________________________ Director, Administrative Services Combined General Capital Debt Special Funds Fund Projects Service Revenue Total Budgeted Appropriations FY 2013 Proposed Budget ($ millions)157.35 122.20 10.97 4.15 20.03 Less: Debt Service Transactions 4.15 Capital Outlay 10.97 10.97 Non-Proceeds of Taxes 45.50 42.35 3.15 Net Proposed Appropriations Subject to Limit $96.73 $79.85 $0.00 $4.15 $16.88 FY 2013 Appropriations Limit 125.01 Under Limit By 28.28 Computation of Appropriation Limit: FY 2012 Appropriations Limit:$118,995,555 FY 2013 Santa Clara County Population Change (estimated)1.24% 2012-2013 Per Capita Income Change (estimated)3.77% (1.0124) x (1.0377) x $118,995,555 = $125,012,860 Historical Appropriations FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 Appropriations Subject to the Limit 78.64 72.00 78.94 89.00 96.73 Appropriations Limit 113.17 116.38 115.06 119.00 125.01 Under Limit By 34.53 44.38 36.12 30.00 28.28 Projected Appropriations FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 Estimated Appropriations Subject to Limit 100.06 103.50 107.07 110.75 114.56 Estimated Appropriations Limit 129.31 133.76 138.37 143.13 148.06 Under Limit By 29.25 30.26 31.30 32.38 33.49 APPROPRIATIONS LIMITATION COMPLIANCE CALCULATION FOR FY 2013 PROPOSED BUDGET ($ IN MILLIONS) The City of Palo Alto remains well within its appropriations limit in FY 2013. Future year limit trends can be made based on the average change in regional population and income growth. The appropriations subject to limitation includes proceeds of taxes from the General Fund, Special Revenue Funds, Debt Service Funds, and Capital Improvement Funds. The following is a summary of estimated limits and estimated appropriations subject to the limit. City of Palo Alto (ID # 2713) City Council Staff Report Report Type: Consent Calendar Meeting Date: 6/18/2012 June 18, 2012 Page 1 of 4 (ID # 2713) Summary Title: Adoption of a Resolution for Transportation Funds Title: Adoption of a Resolution Authorizing the City Manager to File an Application for 2012/2013 Transportation Development Act Funds in the Amount of $43,359 for Fabian Way Enhanced Bike Lane Improvements Project From: City Manager Lead Department: Planning and Community Environment Recommendation Staff recommends that Council adopt the attached Resolution (Attachment A) authorizing submittal of Transportation Development Act (TDA) grant application documents for fiscal year 2012-2013 requesting $43,359 for Fabian Way Enhanced Bike Lane Improvements Project in the City of Palo Alto. Background The Santa Clara Valley Transportation Authority (VTA) issued a call for bicycle and pedestrian projects on March 1, 2012 for the Fiscal Year 2012-2013 Transportation Development Act Article 3 funding program. The deadline to submit project applications to VTA was on April 13, 2012 (with which staff complied). A Resolution adopted by the City Council supporting the project submittals is due to VTA. VTA staff will review the project proposals for eligibility, completeness and compliance. The resulting countywide list of projects will be reviewed by the VTA Advisory Committees prior to adoption by the Board of Directors in June. The countywide list will be forwarded to the Metropolitan Transportation Commission and MTC will issue funding allocations in the fall. There are two components to the TDA Article 3 program in Santa Clara County: 1. Bicycle Expenditure Program June 18, 2012 Page 2 of 4 (ID # 2713) Per VTA Board policy, 25% of Santa Clara County’s TDA fund is dedicated for projects that are on the Valley Transportation Plan 2030 Countywide Bicycle Plan Bicycle Expenditure Program (BEP) list. There is $250,000 available for BEP projects this year. Palo Alto is not requesting funds under the Bicycle Expenditure Program for this fiscal year because the City does not have any shovel-ready bicycle projects for which design and environmental studies is complete. The City is in the process of completing preliminary design for the Adobe Creek/Highway 101 crossing making this a competitive project for TDA BEP funding next year. 2. Guarantee Funds The remaining 75% of this year’s TDA funds ($1,405, 422) will be assigned to the Guarantee Fund. The monies in the Guarantee Fund are distributed to local jurisdictions on a population-based apportionment formula. These monies are available to local jurisdictions exclusively for eligible projects of their choosing as per TDA guidelines. There is no competition amongst local jurisdiction to acquire these funds for eligible projects. Palo Alto’s total guaranteed amount for this fiscal year is $43,359. Discussion Staff proposes to request an allocation of $43,359 in TDA funds this year from the City’s Guarantee share for the Fabian Way Enhanced Bike Lane Improvements Project in the City of Palo Alto. This project consists of providing enhanced bike lanes on Fabian Way between East Meadow Drive and Charleston Road through restriping of the street. The restriping will include a lane reduction from 4-lanes to 3-lanes resulting in one travel lane per direction of Fabian Way, a dedicated two-way left turn lane for access to parcels along the corridor, widened bike lanes/parking lanes, and enhanced crosswalk treatments. Green bike lane treatments will be provided at key intersection conflict points. Palo Alto Bicycle Advisory Committee (PABAC) Review As required by the MTC grant application policies, the project mentioned above was reviewed by PABAC at the April meeting and the committee supports this project and funding for its implementation. Public Outreach The City has completed a concept plan line study for the improvements on Fabian Way between E Meadow Drive and Charleston Road. These plans were shared with Loral Space June 18, 2012 Page 3 of 4 (ID # 2713) Systems and the Jewish Community Center for preliminary input, both of which received positive response. The City will schedule community outreach meetings for this project in the Fall following approval of the TDA funding allocation. Staff conducted an environmental review for this project as per the California Environmental Quality Act (CEQA) and prepared an Initial Study and negative declaration, discussed below. TDA Grant Requirements The TDA grant funds are allocated on a three-year basis. The funds are claimed by the City on a reimbursement basis. MTC requires that City Council adopt a Resolution authorizing staff to submit applications requesting TDA funding. Since 2002, the MTC has attached findings to the resolution authorizing submittal of the TDA grant application. Staff has provided sufficient information in this staff report to support the required findings and is not aware of any issues that would preclude the Council from adopting the findings for this grant request. Resource Impact No local match is required for TDA Guarantee funds. However, because TDA funds are disbursed on a reimbursement basis, the City will have to spend the budgeted funds and then apply for reimbursement by TDA funds. The capital funding and the staff resources in the Planning and Transportation Division are available to implement this project in the coming years. Policy Implications The recommended actions in this report are consistent with Comprehensive Plan transportation policies, the Bicycle Transportation Plan and the Transportation Strategic Plan. Environmental Review In accordance with California Environmental Quality Act (CEQA), an Initial Study has been prepared for the project, and a Negative Declaration was issued May 25th, 2012 (Attachment D) and circulated for a 20 day public review period, which ended on June 13th. The Director of Planning and Community Environment has approved the Negative Declaration, and it has been provided to the Council for review prior to adoption of the attached resolution. Attachments: Attachment A: Resolution Authorizing the Filing of TDA application for Fabian Way Bike Lane Enhancements (PDF) June 18, 2012 Page 4 of 4 (ID # 2713) Attachment B: TDA Article 3 Project Application form (DOC) Attachment C: Memo from Santa Clara Valley Transportation Authority dated March 1, 2012 (PDF) Attachment D: Initial Study and Negative Declaration (PDF) Prepared By: Ruchika Aggarwal, Department Head: Curtis Williams, Director City Manager Approval: ____________________________________ James Keene, City Manager NOT YET APPROVED 120611 sh 8269034 Resolution No. ____ Resolution of the Council of the City of Palo Alto Authorizing the City Manager to File an Application for 2012/2013 Transportation Development Act Funds for Bicycle and Pedestrian Projects RECITALS A. Article 3 of the Transportation Development Act (TDA), Public Utilities Code (PUC) Section 99200 et seq., authorizes the submission of claims to a regional transportation planning agency for the funding of projects exclusively for the benefit and/or use of pedestrians and bicyclists; and B. The Metropolitan Transportation Commission (MTC), as the regional transportation planning agency for the San Francisco Bay region, has adopted MTC Resolution No. 875, Revised, entitled “Transportation Development Act, Article 3, Pedestrian/Bicycle Projects,” which delineates procedures and criteria for submission of requests for the allocation of “TDA Article 3” funding; and C. MTC Resolution No. 875, Revised requires that requests for the allocation of TDA Article 3 funding be submitted as part of a single, countywide coordinated claim from each county in the San Francisco Bay region; and D. The City of Palo Alto desires to submit a request to MTC for the allocation of TDA Article 3 funds to support the project described in Attachment B to this resolution, which is for the exclusive benefit and/or use of pedestrians and/or bicyclists. The Council of the City of Palo Alto RESOLVES as follows: SECTION 1. The City of Palo Alto declares it is eligible to request an allocation of TDA Article 3 funds pursuant to Section 99234 of the Public Utilities Code. SECTION 2. There is no pending or threatened litigation that might adversely affect the project described in Attachment B to this resolution, or that might impair the ability of the City of Palo Alto to carry out the project. SECTION 3. The City of Palo Alto attests to the accuracy of and approves the findings set forth in Attachment A to this resolution. SECTION 4. A certified copy of this resolution and its attachments, and any accompanying supporting materials shall be forwarded to the congestion management agency, countywide transportation planning agency, or county association of governments, as the case may be, of County of Santa Clara for submission to MTC as part of the countywide coordinated TDA Article 3 claim. NOT YET APPROVED 120611 sh 8269034 SECTION 5. A Negative Declaration for the proposed project was prepared and circulated for public review pursuant to the provisions of the California Environmental Quality Act (“CEQA”), and the Council considered it prior to adopting this resolution. INTRODUCED AND PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: __________________________ ______________________________ City Clerk Mayor APPROVED AS TO FORM: APPROVED: __________________________ ______________________________ Sr. Deputy City Attorney City Manager ______________________________ Director of Planning and Community Environment ______________________________ Director of Administrative Services NOT YET APPROVED 120611 sh 8269034 ATTACHMENT A The Council of the City of Palo Alto hereby makes the following findings: 1. That the City of Palo Alto is not legally impeded from submitting a request to the Metropolitan Transportation Commission for the allocation of Transportation Development Act (TDA) Article 3 funds, nor is the City of Palo Alto legally impeded from undertaking the project described in “Attachment B” of this resolution. 2. That the City of Palo Alto has committed adequate staffing resources to complete the project described in Attachment B. 3. A review of the project described in Attachment B has resulted in the consideration of all pertinent matters, including those related to environmental and right-of-way permits and clearances, attendant to the successful completion of the project. 4. Issues attendant to securing environmental and right-of-way permits and clearances for the project described in Attachment B will be reviewed in a manner and on a schedule that will not jeopardize the deadline for the use of the TDA funds being requested. 5. That the project described in Attachment B complies with the requirements of the California Environmental Quality Act (CEQA, Public Resources Code Sections 21000 et seq.); an Initial Study/Negative Declaration has been circulated for review pursuant to CEQA Guidelines section 15301(c) and approved by the Director of Planning and Community Environment. 6. That as portrayed in the budgetary description of the project in Attachment B, the sources of funding other than TDA are assured and adequate for completion of the project(s). No sources of funding other than this grant are required for completion of this project. 7. That the project described in Attachment B is for capital construction and/or design engineering; and/or for the maintenance of a Class I bikeway which is closed to motorized traffic; and/or for the purposes of restriping Class II bicycle lanes; and/or for the development or support of a bicycle safety education program; and/or for the development of a comprehensive bicycle and/or pedestrian facilities plan, and an allocation of TDA Article 3 funding for such a plan has not been received by the City of Palo Alto within the prior five fiscal years. 8. That the project described in Attachment B which is a bicycle project has been included in a detailed bicycle circulation element included in an adopted general plan, or included in an adopted comprehensive bikeway plan (such as outlined in Section 2377 of the California Bikeways Act, Streets and Highways Code section 2370 et seq.). NOT YET APPROVED 120611 sh 8269034 9. That any project described in Attachment B that is a “Class I Bikeway,” meets the mandatory minimum safety design criteria published in Chapter 1000 of the California Highway Design Manual. 10. That the project described in Attachment B is ready to commence implementation during the fiscal year of the requested allocation. 11. That the City of Palo Alto agrees to maintain, or provide for the maintenance of, the project(s) and facilities described in Attachment B, for the benefit of and use by the public. NOT YET APPROVED 120611 sh 8269034 ATTACHMENT B Short title description of the project: Fabian Way improvements: Fabian Way corridor is currently a Class II bikeway and is popular with cyclists as it provides a convenient connect to the Baylands, Mountain View and to the East Bay. The route connects businesses such as Loral Space Systems and community facilities such as the Kehilah Jewish High School and Jewish Community Center to the Highway 101/Adobe undercrossing. The proposed project would include enhancements to make this corridor more attractive and safe for cyclists and pedestrians. Such enhancements would include modifications to vehicular traffic lanes from two lanes to one in each direction and a center two-way left turn lane; widening bike lanes with green bike lane treatments at key intersection conflict points, and enhanced midblock crosswalks. There are five midblock crosswalks that are used extensively by many employees of Loral space systems located on both sides of the street; each of the crosswalks will be improved as part of the project. ATTACHMENT B Page 1 TDA Article 3 Project Application Form Fiscal Year of this Claim: 2012-2013 Applicant: City of Palo Alto Contact person: Ruchika Aggarwal Mailing Address: P.O. Box 10250 Palo Alto 94303 E-Mail Address: ruchika.aggarwal@cityofpaloalto.org Telephone: 650-617-3136 Secondary Contact (in event primary not available): Jaime O. Rodriguez E-Mail Address: jaime.rodriguez@cityofpaloalto.org Telephone: 650-329-2136 Short Title Description of Project: Fabian Way Enhanced Bike Lane Improvements Amount of claim: $43,359 Functional Description of Project: This project consists of providing enhanced bike lanes on Fabian Way between East Meadow Drive and Charleston Road through restriping of the street. The restriping will include a lane reduction from 4-lanes to 3-lanes resulting in one travel lane per direction of Fabian Way, a dedicated two-way left turn lane for access to parcels along the corridor, widened bike lanes/parking lanes, and enhanced crosswalk treatments. Green bike lane treatments will be provided at key intersection conflict points. Financial Plan: List the project elements for which TDA funding is being requested (e.g., planning, environmental, engineering, right-of-way, construction, inspection, contingency, audit). Use the table below to show the project budget. Include prior and proposed future funding of the project. If the project is a segment of a larger project, include prior and proposed funding sources for the other segments. Project Elements: The project would include a restriping of Fabian Way between East Meadow Drive and Charleston Road to provide enhanced bike lane facilities with green bike lane treatments and enhanced midblock crosswalks. Cost includes purchase of green bike lane material, construction, contingencies and inflation. Funding Source All Prior FYs Application FY Next FY Following FYs Totals TDA Article 3 $43,359 $43,359 list all other sources: 1. 2. 3. 4. Totals $43,359 Project Eligibility: YES? /NO? A. Has the project been approved by the claimant's governing body? (If "NO," provide the approximate date approval is anticipated). Approval is anticipated on May 14th. No B. Has this project previously received TDA Article 3 funding? If "YES," provide an explanation on a separate page. No C. For "bikeways," does the project meet Caltrans minimum safety design criteria pursuant to Chapter 1000 of the California Highway Design Manual? (Available on the internet via: http://www.dot.ca.gov). Yes D. Has the project been reviewed by a Bicycle Advisory Committee? (If "NO," provide an explanation). Yes E. Has the public availability of the environmental compliance documentation for the project (pursuant to CEQA) been evidenced by the dated stamping of the document by the county clerk or county recorder? (required only for projects that include construction). no F. Will the project be completed before the allocation expires? Enter the anticipated completion date of project (October 2013) yes G. Have provisions been made by the claimant to maintain the project or facility, or has the claimant arranged for such maintenance by another agency? (If an agency other than the Claimant is to maintain the facility provide its name: ) yes Short title description of the project: Fabian Way improvements: Fabian Way corridor is currently a Class II bikeway and is popular with cyclists as it provides a convenient connect to the Baylands, Mountain View and to the East Bay. The route connects businesses such as Loral Space Systems and community facilities such as the Kehilah Jewish High School and Jewish Community Center to the Highway 101/Adobe undercrossing. The proposed project would include enhancements to make this corridor more attractive and safe for cyclists and pedestrians. Such enhancements would include modifications to vehicular traffic lanes from two lanes to one in each direction and a center two-way left turn lane; widening bike lanes with green bike lane treatments at key intersection conflict points, and enhanced midblock crosswalks. There are five midblock crosswalks that are used extensively by many employees of Loral space systems located on both sides of the street; each of the crosswalks will be improved as part of the project. Page 1 of 5 MEMORANDUM TO: TDA Article 3 Bicycle and Pedestrian Program Grant Applicants Technical Advisory Committee Members FROM: Bill Hough, Transportation Planner III DATE: March 1, 2012 SUBJECT: Call for Projects, Transportation Development Act Article 3 FY 2012/13 Program TDA Article 3 Funds Available This memorandum serves as the General Call-for-Projects for the FY 2012/13 Transportation Development Act (TDA) Article 3 Program funding cycle. There are two components to the TDA Article 3 program: 1. Bicycle Expenditure Program The VTA Board of Directors took action on December 9, 2004 to dedicate 25% of Santa Clara County’s TDA Article 3 funds to projects on the countywide Bicycle Expenditure Program (BEP) list through 2030. On November 5, 2009, the Board committed $150,000 of the TDA3 BEP set-aside to County Expressway Pedestrian Projects. There is $250,000 available for BEP projects this year. Projects must be on the current Board-adopted BEP project list. BEP project sponsors must submit MTC’s TDA Article 3 Project Application Form and must include a transmittal letter that states when they expect the project begin construction. In the event that BEP applications are oversubscribed, preference will be given to projects that are ready for construction and/or have other funding sources that could be jeopardized if the project is not delivered in a timely manner. 2. Guarantee Funds Table 1 below shows each city and the County’s “Guarantee” share of MTC’s TDA Article 3 Fund Estimate. There is $1,405,422 available for “Guarantee” projects this year. The guarantee share is based on California Department of Finance (DOF) population projections and funds banked or rescinded from previous years, where applicable. An agency’s total applications cannot exceed its guarantee share listed in the following table: Page 2 of 5 Table 1 2012/13 TDA ARTICLE 3 ESTIMATE FOR SANTA CLARA COUNTY Agency Guarantee Amount (Includes banked and rescinded funds from prior years.) Campbell $28,268 Cupertino $39,222 Gilroy $57,870 Los Altos $19,479 Los Altos Hills $13,005 Los Gatos $34,535 Milpitas $45,050 Monte Sereno $2,246 Morgan Hill $44,835 Mountain View $86,152 Palo Alto $43,359 San Jose $640,126 Santa Clara $135,754 Saratoga $20,159 Sunnyvale $94,203 Santa Clara County $101,158 $1,405,422 Rescind/Reallocation Requests Agencies may only allocate up to their estimate in any given year. Sponsors may rescind prior year projects, but VTA cannot reallocate them until the next TDA funding cycle. Funds rescinded in 2012 will be added to the sponsor’s guarantee in 2013. It is the responsibility of the project sponsor to monitor project expiration deadlines and to apply for rescind/reallocation of funds in a timely manner. Failure to do so will result in the sponsor losing the funds. Banking Funds TDA Article 3 funds may be banked for up to two years plus one year to program funds. To bank TDA funds, project sponsors must submit a letter or email stating that funds will be banked. If banked funds are not programmed by the end of the 3rd Year, they will be redistributed to the countywide TDA Article 3 pool for the following fiscal year. If you are planning to bank funds, please send a letter or email to that effect to Bill Hough at the address below. A member agency must inform VTA in writing of its intent to either claim or bank its TDA3 guarantee funds; failure to do so means that the funds revert to the countywide pool in the next cycle. Page 3 of 5 Project Types and Guidelines Your TDA Article 3 project must be ready to implement within ONE year of the application cycle. Eligible Project Types The following project types are eligible for TDA Article 3 Funding: Design & construction of on and off-street bicycle facility projects – including but not limited to bicycle parking. Design & construction of on and off-street pedestrian facility projects Maintenance of Class I bikeways (unlimited) Maintenance of Class II bikeways. Countywide, the total funds allocated to Class II bikeway maintenance cannot exceed 20% of the total countywide TDA estimate. Call Bill Hough at (408) 321-5735 if you plan to exceed 20% of your agency’s guarantee amount. Bicycle Safety Education Programs (not more than 50% of the project’s budget and not more 5% of the countywide TDA Article 3 funds) Comprehensive Bicycle & Pedestrian Facilities Plans (not more than once per jurisdiction every 5 years) Projects identified in a recent (within 5 years) comprehensive local bicycle or pedestrian plan Annual TDA Article 3 Audits Other Eligibility & Procedural Issues Environmental clearance is required for construction projects only. If you are submitting an application for design, you are not required to submit a County stamped notice. Additional information on the TDA Article 3 procedures and criteria can be found in the MTC TDA Article 3 Rules and Procedures, which is available on the Metropolitan Transportation Commission website at: http://www.mtc.ca.gov/funding/sta-tda/res-0875.doc Bicycle Advisory Committee and Bicycle Plan Requirement Cities and counties may not receive TDA Article 3 funds for bicycle projects unless the jurisdiction has established a Bicycle Advisory Committee (BAC) and the project is included in an adopted plan as stipulated in the MTC TDA Article 3 Rules and Procedures. This requirement does not apply to pedestrian projects. VTA Bicycle Technical Guidelines The VTA Board of Directors approved the VTA Bicycle Technical Guidelines update on December 13, 2007. The purpose of the Guidelines is to provide a uniform set of optimum standards for the planning, design, and construction of bicycle facilities that are part of the countywide bicycle system. Bicycle projects funded by TDA Article 3 funds must comply with the Guidelines. For a copy of this document, please contact Michelle Page 4 of 5 DeRobertis at (408) 321-5716 or Michelle.DeRobertis@vta. org. It is also available on the VTA website at http://www.vta.org/schedules/bikeways_program.html Application Submittals MTC’s TDA Article 3 Project Application Form and resolution boilerplate is located at: http://www.mtc.ca.gov/funding/STA-TDA/TDA_Article_3_Claim_Forms.doc Project sponsors must use this form to submit applications. Late applications will not be accepted. Complete one application for each project. PLEASE NOTE: VTA should receive 2 copies of each project application. . 2012/13 TDA Article 3 Detailed New Project Submittal Requirements Number of Copies Item 1 per agency Cover letter that indicates whether application is for guarantee and/or BEP funding. The cover letter must include a statement that the project must be ready to implement within ONE year of the application cycle. 2 per agency Governing body resolution wording and Council Resolution supporting the project(s) (due on May 25, 2012). The sample is on the Metropolitan Transportation Commission website: http://www.mtc.ca.gov/funding/STA-TDA/ 2 per project MTC’s TDA Article 3 Application (See Application Form – available on the Metropolitan Transportation Commission website: http://www.mtc.ca.gov/funding/STA-TDA/) 2 per project A vicinity map showing the project’s general location in your jurisdiction 2 per project A detail map showing the project and phases where applicable 2 per project Documentation of environmental clearance (for applicable projects). The county clerk must stamp the environmental document. Completed project applications should be submitted to VTA by 4:00 p.m. on Friday, April 13, 2012. Please send applications to: Bill Hough, Transportation Planner III Santa Clara Valley Transportation Authority Programming & Grants 3331 North 1st St., Bldg. B2 San Jose, CA 95134-1906 Page 5 of 5 Evaluation Process, Programming and Drawing Programmed Funds VTA staff will review project applications. The resulting countywide program will be reviewed by the VTA advisory committees before adoption by the VTA Board of Directors at its June 2012 meeting. The VTA Board-adopted project priorities will be forwarded to MTC for review and adoption. Once MTC has adopted the program, MTC’s Finance Section will issue allocation instructions to your agency. Please read these instructions carefully, they will provide your agency with guidance on invoicing and annual audit and reporting requirements. All project invoicing goes directly to MTC. All work must be completed by June 30, 2015 and MTC needs to receive reimbursement requests by August 1, 2015. TDA Audit Information In accordance with MTC Resolution 875, all claimants that have received an allocation of TDA funds are required to submit an annual fiscal and compliance audit to MTC and to the Secretary of Business and Transportation Agency within 180 days after the close of the fiscal year. Your audits are due to MTC by December 31 of each year. Failure to submit the audit will prohibit MTC from making a new TDA allocation. If no TDA funds were expended during the fiscal year, the applicant should file a statement to that effect with MTC. Please contact MTC’s TDA program manager Cheryl Chi, at 510-817-5939 or cchi@mtc.ca.gov, for additional information on audit requirements. Fabian Way Enhanced Bike Lane Improvement Project Page 1 Initial Study Fabian Way Enhanced Bike Lane Improvement Project Initial Study May 23, 2012 Fabian Way Enhanced Bike Lane Improvement Project Page 2 Initial Study ENVIRONMENTAL CHECKLIST City of Palo Alto Department of Planning and Community Environment TABLE OF CONTENTS I. PROJECT DESCRIPTION .............................................................................................. 3 II. ENVIRONMENTAL CHECKLIST AND DISCUSSION OF IMPACTS ..................... 5 A. AESTHETICS ......................................................................................................... 6 B. AGRICULTURAL AND FOREST RESOURCES ................................................ 7 C. AIR QUALITY ........................................................................................................ 8 D. BIOLOGICAL RESOURCES ................................................................................. 9 E. CULTURAL RESOURCES .................................................................................. 10 F. GEOLOGY, SOILS AND SEISMICITY .............................................................. 11 G. GREENHOUSE GAS EMISSIONS ..................................................................... 12 H. HAZARDS AND HAZARDOUS MATERIALS ................................................. 14 I. HYDROLOGY AND WATER QUALITY .......................................................... 15 J. LAND USE AND PLANNING ............................................................................ 16 K. MINERAL RESOURCES ..................................................................................... 17 L. NOISE .................................................................................................................... 17 M. POPULATION AND HOUSING ......................................................................... 19 N. PUBLIC SERVICES ............................................................................................. 19 O. RECREATION ...................................................................................................... 20 P. TRANSPORTATION AND TRAFFIC ................................................................ 20 Q. UTILITIES AND SERVICE SYSTEMS .............................................................. 22 R. MANDATORY FINDINGS OF SIGNIFICANCE ............................................... 23 III. SOURCE REFERENCES .............................................................................................. 25 IV. DETERMINATION....................................................................................................... 26 Fabian Way Enhanced Bike Lane Improvement Project Page 3 Initial Study ENVIRONMENTAL CHECKLIST Department of Planning and Community Environment PROJECT DESCRIPTION 1. PROJECT TITLE Fabian Way Enhanced Bike Lane Improvement Project 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 Clare Campbell, Planner City of Palo Alto 650-617-3191 4. PROJECT SPONSOR’S NAME AND ADDRESS City of Palo Alto, Transportation Division Jaime Rodriquez, Chief Transportation Official 5. APPLICATION NUMBER - NA 6. PROJECT LOCATION The project is located in the city of Palo Alto, in the northern part of Santa Clara County, west of U.S. Highway 101 and east of State Route 82 (El Camino Real). The project area is limited to Fabian Way between East Meadow Drive and Charleston Road, as shown on Figure 1, Vicinity Map. Fabian Way Enhanced Bike Lane Improvement Project Page 4 Initial Study Figure 1: Vicinity Map 7. GENERAL PLAN DESIGNATION The project area has Light Industrial and Mixed Use land uses, as designated in the Palo Alto 1998 – 2010 Comprehensive Plan. The project will not result in a change of use and would not conflict with the existing land use designations. 8. ZONING The project area has multi-family residential zoning (PC-4917), mixed use zoning (PC-4918) and General Manufacturing (GM). There are businesses such as Loral Space Systems and community facilities such as the Kehilah Jewish High School and Jewish Community Center in this area. The project will not result in a change of use and would not conflict with the existing zoning. 9. PROJECT DESCRIPTION Fabian Way has existing bike lane facilitie and is identified in the Draft Bicycle & Pedestrian Transportation Plan as an Enhanced Bikeway to facilitate bicycle movements towards the existing Adobe Creek/Highway 101 Underpass and future overcrossing. Project Location Fabian Way Enhanced Bike Lane Improvement Project Page 5 Initial Study The project consists of providing enhanced bike lanes on Fabian Way between East Meadow Drive and Charleston Road through the restriping of the street. The restriping would include a lane reduction from 4-lanes to 3-lanes resulting in one remaining travel lane per direction on Fabian Way, a dedicated two-way left turn lane for access to parcels along the corridor, widened bike lanes/parking lanes, and enhanced crosswalk treatments. Green bike lane treatments would be provided at key intersection conflict points. 10. SURROUNDING LAND USES AND SETTING The project area is surrounded by industrial and residential uses, with a school use in the immediate area. 11. OTHER PUBLIC AGENCY APPROVALS REQUIRED Not applicable. 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: Fabian Way Enhanced Bike Lane Improvement Project Page 6 Initial Study 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. 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-Map L4, 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 Fabian Way Enhanced Bike Lane Improvement Project Page 7 Initial Study DISCUSSION: The proposed project is typical of bike lane enhancement projects with signage, crosswalk improvements, and pavement markings, including the new standard bike lane treatment with green colored paving. The overall aesthetic impact to the existing roadway is considered to have a less than significant impact to the area, but it is acknowledged that there is a change to the existing condition; these changes are not uncharacteristic of features of a typical streetscape. Mitigation Measures: None Required B. AGRICULTURAL AND FOREST 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 X b) Conflict with existing zoning for agricultural use, or a Williamson Act contract? 1, 2-MapL9 X c) Conflict with existing zoning for, or cause rezoning of, forest land (as defined in Public Resources Code section 12220(g)1) or timberland (as defined in Public Resources Code section 45262)? 1 X d) Result in the loss of forest land or conversion of forest land to non-forest use? 1 X e) Involve other changes in the existing environment which, due to their location or nature, could result in conversion of Farmland, to non-agricultural use or conversion of forest land to non-forest use? 1 X 1 PRC 12220(g): "Forest land" is land that can support 10-percent native tree cover of any species, including hardwoods, under natural conditions, and that allows for management of one or more forest resources, including timber, aesthetics, fish and wildlife, biodiversity, water quality, recreation, and other public benefits. 2 PRC 4526: "Timberland" means land, other than land owned by the federal government and land designated by the board as experimental forest land, which is available for, and capable of, growing a crop of trees of any commercial species used to produce lumber and other forest products, including Christmas trees. Commercial species shall be determined by the board on a district basis after consultation with the district committees and others. Fabian Way Enhanced Bike Lane Improvement Project Page 8 Initial Study DISCUSSION: The project area 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. The project area is within a fully developed urban area and has no impacts on forest or timberland. Mitigation Measures: None Required C. AIR 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) Conflict with or obstruct with implementation of the applicable air quality plan (1982 Bay Area Air Quality Plan & 2000 Clean Air Plan)? 1,5,6,9 X b) Violate any air quality standard or contribute substantially to an existing or projected air quality violation indicated by the following: 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); 1,5,6,9 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)? 1,5,6,9 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)? 1,5,6,9 X d) Expose sensitive receptors to substantial levels of toxic air contaminants? 1,5,6,9 X Fabian Way Enhanced Bike Lane Improvement Project Page 9 Initial Study Issues and Supporting Information Resources Would the project: Sources Potentially Significant Issues Potentially Significant Unless Mitigation Incorporated Less Than Significant Impact No Impact i. Probability of contracting cancer for the Maximally Exposed Individual (MEI) exceeds 10 in one million 1,6,9 X ii. Ground-level concentrations of non- carcinogenic TACs would result in a hazard index greater than one (1) for the MEI 1,6,9 X e) Create objectionable odors affecting a substantial number of people? 1,6,9 X f) Not implement all applicable construction emission control measures recommended in the Bay Area Air Quality Management District CEQA Guidelines? 1,6,9 X DISCUSSION: Based on the Bay Area Air Quality Management District’s (BAAQMD) thresholds, it is not anticipated that the project would affect any regional air quality plan or standards, or result in a cumulatively considerable net increase of any criteria pollutant. The extent of the effects on air quality will be temporary only, during the period of site preparation and construction. The City of Palo Alto uses the BAAQMD’s Basic Control Measures to reduce particulate emissions during project construction to a less than significant level. The project and related construction activities are anticipated to have a less than significant impact on air quality. Mitigation Measures: None Required 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 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 X Fabian Way Enhanced Bike Lane Improvement Project Page 10 Initial Study Issues and Supporting Information Resources Would the project: Sources Potentially Significant Issues Potentially Significant Unless Mitigation Incorporated Less Than Significant Impact No Impact 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? 1,8-MapN1, 5 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)? 1,2,3,4,5 X e) Conflict with any applicable Habitat Conservation Plan, Natural Community Conservation Plan, or other approved local, regional, or state habitat conservation plan? 1,5 X DISCUSSION: The project area is located within a fully developed urban setting. There are no sensitive plants or animal species identified in this area and the project does not include the removal of any existing vegetation. Mitigation Measures: None Required 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? 1,10 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, 10 X f) Eliminate important examples of major periods of California history or prehistory? 1 X DISCUSSION: Fabian Way Enhanced Bike Lane Improvement Project Page 11 Initial Study The proposed project involves minor construction activities within the public right-of-way that is located within a fully developed and previously disturbed area; the project requires little to no grading. Although the project area has been identified as having moderate sensitivity for archeological resources, the proposed project would not create any new impacts to the affected area. For all projects, if during grading and construction activities, any archaeological or human remains are encountered, construction shall cease and a qualified archaeologist shall visit the site to address the find. The Santa Clara County Medical Examiner’s office shall be notified to provide proper direction on how to proceed. If any Native American resources are encountered during construction, construction shall cease immediately until a Native American descendant, appointed by the Native American Heritage Commission of the State of California, is able to evaluate the site and make further recommendations and be involved in mitigation planning. Mitigation Measures: None Required 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: 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. 11 X ii) Strong seismic ground shaking? 2-MapN10 X iii) Seismic-related ground failure, including liquefaction? 2-MapN5 X iv) Landslides? 2-MapN5 X b) Result in substantial soil erosion or the loss of topsoil? 1 X c) Result in substantial siltation? 1 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-MapN5 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 property? 2-MapN5 X Fabian Way Enhanced Bike Lane Improvement Project Page 12 Initial Study 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 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? 1,5 X DISCUSSION: The proposed project includes improvements within the public right of way of a fully developed industrial and residential area. The project area has been identified as having violent ground shaking and is within an area with the potential of four feet of ground subsidence. The project scope is limited to improvements at or near the existing grade and is anticipated not to significantly impact the existing conditions. The proposed project would not create any new geology, soils and seismicity impacts. Generally, the City of Palo Alto would experience a range from weak to very violent shaking in the event of a major earthquake along the San Andreas or Hayward fault. Although hazards exist, development would not expose people or property to major geologic hazards that cannot be addressed through the use of standard engineering design and seismic safety techniques, as required by building codes. With proper engineering new development is not expected to result in any significant adverse short or long-term impacts related to geology, soils or seismicity. Mitigation Measures: None Required G. GREENHOUSE GAS EMISSIONS Issues and Supporting Information Resources Would the project: Sources Potentially Significant Issues Potentially Significant Unless Mitigation Incorporated Less Than Significant Impact No Impact a) Generate greenhouse gas emissions, either directly or indirectly, that may have a significant impact on the environment? 1,5,9 X b) Conflict with any applicable plan, policy or regulation of an agency adopted for the purpose of reducing the emissions of greenhouse gases? 1,5,9 X DISCUSSION: The San Francisco Bay Area Air Basin (SFBAAB) is currently designated as a nonattainment area for state and national ozone standards and national particulate matter ambient air quality standards. SFBAAB’s nonattainment status is attributed to the region’s development history. Past, present and future development projects contribute to the region’s adverse air quality impacts on a cumulative basis. By its very nature, air pollution is largely a cumulative impact. No single project is sufficient in size to, by itself, result in nonattainment of ambient air quality standards. Instead, a project’s individual emissions contribute to existing cumulatively significant adverse air quality impacts. If a Fabian Way Enhanced Bike Lane Improvement Project Page 13 Initial Study project’s contribution to the cumulative impact is considerable, then the project’s impact on air quality would be considered significant. The Bay Area Air Quality Management District’s (BAAQMD) approach to developing a Threshold of Significance for Green House Gas (GHG) emissions is to identify the emissions level for which a project would not be expected to substantially conflict with existing California legislation adopted to reduce statewide GHG emissions needed to move us towards climate stabilization. If a project would generate GHG emissions above the threshold level, it would be considered to contribute substantially to a cumulative impact, and would be considered significant. The Thresholds of Significance for operational-related GHG emissions are: • For land use development projects, the threshold is compliance with a qualified GHG reduction Strategy; or annual emissions less than 1,100 metric tons per year (MT/yr) of CO2e; or 4.6 MT CO2e/SP/yr (residents + employees). Land use development projects include residential, commercial, industrial, and public land uses and facilities. • For stationary-source projects, the threshold is 10,000 metric tons per year (MT/yr) of CO2e. Stationary-source projects include land uses that would accommodate processes and equipment that emit GHG emissions and would require an Air District permit to operate. If annual emissions of operational-related GHGs exceed these levels, the proposed project would result in a cumulatively considerable contribution of GHG emissions and a cumulatively significant impact to global climate change. The BAAQMD has established project level screening criteria to assist in the evaluation of impacts. If a project meets the screening criteria and is consistent with the methodology used to develop the screening criteria, then the project’s air quality impacts may be considered less than significant. Below are some screening level examples taken from the BAAQMD CEQA Air Quality Guidelines, 06/2010 (Table 3-1, Operational-Related Criteria Air Pollutant and Precursor Screening Level Sizes). Land Use Type Operational GHG Screening Size ** Single-family 56 du Apartment, low-rise 78 du Apartment, mid-rise 87 du Condo/townhouse, general 78 du City park 600 acres Day-care center 11,000 sf General office building 53,000 sf Medical office building 22,000 sf Office park 50,000 sf Quality restaurant 9,000 sf **If project size is => screening size, then it is considered significant. Based on the types of projects that would be considered to have a significant GHG impact, the proposed project, due to its limited scope, has been determined to not exceed the significance thresholds established by the BAAQMD, and therefore does not have significant impact for creating GHG emissions. Fabian Way Enhanced Bike Lane Improvement Project Page 14 Initial Study Mitigation Measures: None Required H. HAZARDS AND HAZARDOUS MATERIALS Note: Some of the thresholds can also be dealt with under a topic heading of Public Health and Safety if the primary issues are related to a subject other than hazardous material use. 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 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 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 X d) Construct a school on a property that is subject to hazards from hazardous materials contamination, emissions or accidental release? 1,5 X e) 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-MapN9 X f) 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 X g) 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 X h) Impair implementation of or physically interfere with an adopted emergency response plan or emergency evacuation plan? 1,2-MapN7 X i) 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? 1,2-MapN7 X j) 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 1,5 X Fabian Way Enhanced Bike Lane Improvement Project Page 15 Initial Study for the site? DISCUSSION: The project area is located within 2,500 feet from a toxic gas facility. The project scope is limited to improvements at or near the existing grade and is anticipated to have a less than significant impact with regards to hazardous conditions. The proposed project does not involve the use, creation or transportation of hazardous materials. Fabian Way is not designated as an evacuation route nor located within or near the wildland fire danger area. The proposed project would have less than significant to no impacts with regard to public safety, hazards and hazardous materials. Mitigation Measures: None Required I. 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 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? 1,5 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? 1,5 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? 1,5 X f) Otherwise substantially degrade water quality? 1,5 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? 2-MapN6 X h) Place within a 100-year flood hazard area structures which would impede or redirect 2-MapN6 X Fabian Way Enhanced Bike Lane Improvement Project Page 16 Initial Study flood flows? 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-MapN8 X j) Inundation by seiche, tsunami, or mudflow? 2-MapN6 X k) Result in stream bank instability? 1,5 X DISCUSSION: The project area is located within the 100-year flood hazard area. Since the project does not involve the construction of structures and is only impacting the roadway, the project is not anticipated to create any new hydrology and water quality impacts. All development is required to comply with building codes that address flood safety issues. Development projects are required to implement Best Management Practices (BMPs) for construction activities as specified by the California Storm Water Best Management Practices Handbook (CASQA, 2003) and/or the Manual of Standards for Erosion and Sediment Control Measures (ABAG, 1995). The BMPs include measures guiding the management and operation of construction sites to control and minimize the potential contribution of pollutants to storm runoff from these areas. These measures address procedures for controlling erosion and sedimentation and managing all aspects of the construction process to ensure control of potential water pollution sources. All development projects must comply with all City, State and Federal standards pertaining to storm water run-off and water quality. Mitigation Measures: None Required J. 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? 1,5,6 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? 1,2,3,4,5, 6 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 area? 1,5 X e) Be incompatible with adjacent land uses or with the general character of the surrounding area, 1,5 X Fabian Way Enhanced Bike Lane Improvement Project Page 17 Initial Study Issues and Supporting Information Resources Would the project: Sources Potentially Significant Issues Potentially Significant Unless Mitigation Incorporated Less Than Significant Impact No Impact including density and building height? f) Conflict with established residential, recreational, educational, religious, or scientific uses of an area? 1,5 X g) Convert prime farmland, unique farmland, or farmland of statewide importance (farmland) to non-agricultural use? 1,2,3 X DISCUSSION: The proposed project involves minor work in the public right-of-way and does not impact the existing land uses along Fabian Way. The improvements are intended to improve safety within the existing neighborhood and are not anticipated to create any land use impacts. Mitigation Measures: None Required K. 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 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 Required. L. 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 1,2,12 X Fabian Way Enhanced Bike Lane Improvement Project Page 18 Initial Study Issues and Supporting Information Resources Would the project: Sources Potentially Significant Issues Potentially Significant Unless Mitigation Incorporated Less Than Significant Impact No Impact levels in excess of standards established in the local general plan or noise ordinance, or applicable standards of other agencies? 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 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 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 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 X i) Cause an increase of 3.0 dB or more in an existing residential area where the Ldn currently exceeds 60 dB? 1 X j) Result in indoor noise levels for residential development to exceed an Ldn of 45 dB? 1 X 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 X l) Generate construction noise exceeding the daytime background Leq at sensitive receptors by 10 dBA or more? 1,12 X DISCUSSION: All development, including construction activities, must 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 temporary construction noise that complies with the Noise Ordinance would result in impacts that are expected to be less than significant. Mitigation Measures: None Required Fabian Way Enhanced Bike Lane Improvement Project Page 19 Initial Study M. 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 X b) Displace substantial numbers of existing housing, necessitating the construction of replacement housing elsewhere? 1 X c) Displace substantial numbers of people, necessitating the construction of replacement housing elsewhere? 1 X d) Create a substantial imbalance between employed residents and jobs? 1 X e) Cumulatively exceed regional or local population projections? 1 X DISCUSSION: The proposed project includes improvements within the public right of way of a fully developed industrial and residential neighborhood and does not encourage development and therefore will not create any new population and housing impacts. Mitigation Measures: None Required N. 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 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: a) Fire protection? 1 X b) Police protection? 1 X c) Schools? 1 X d) Parks? 1 X e) Other public facilities? 1 X Fabian Way Enhanced Bike Lane Improvement Project Page 20 Initial Study DISCUSSION: The proposed project includes improvements within the public right of way of a fully developed area and does not encourage growth and development and is not anticipated to generate new users as to create impacts to the existing public services for the City. Mitigation Measures: None Required O. 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 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 X DISCUSSION: The proposed project includes improvements within the public right of way of a fully developed area and does not encourage growth and development in the City and is not anticipated to generate new users as to create impacts to the existing City recreational facilities. Mitigation Measures: None Required P. 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) Exceed the capacity of the existing circulation system, based on an applicable measure of effectiveness (as designated in a general plan policy, ordinance, etc.), taking into account all relevant components of the circulation system, including but not limited to intersections, streets, highways and freeways, pedestrian and bicycle paths, and mass transit? 5,6 X b) Conflict with an applicable congestion management program, including but not limited to level of service standards and travel demand measures, or other standards 5,6 X Fabian Way Enhanced Bike Lane Improvement Project Page 21 Initial Study established by the county congestion management agency for 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? 5,6 X d) Substantially increase hazards due to a design feature (e.g., sharp curves or dangerous intersections) or incompatible uses (e.g., farm equipment)? 5,6 X e) Result in inadequate emergency access? 5,6 X f) Result in inadequate parking capacity? 5,6 X g) Conflict with adopted policies, plans, or programs supporting alternative transportation (e.g., pedestrian, transit & bicycle facilities)? 2,5,6 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? 5,6 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? 5,6 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? 5,6 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? 5,6 X l) Cause any change in traffic that would increase the Traffic Infusion on Residential Environment (TIRE) index by 0.1 or more? 5,6 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 intersections, and spillback queues on ramps. 5,6 X n) Impede the development or function of 5,6 X Fabian Way Enhanced Bike Lane Improvement Project Page 22 Initial Study planned pedestrian or bicycle facilities? o) Impede the operation of a transit system as a result of congestion? 5,6 X p) Create an operational safety hazard? 5,6 X DISCUSSION: The proposed project widens the existing bike lanes on Fabian Way between East Meadow Drive and Charleston Road through a reconfiguration of the existing roadway markings from 4-lanes to 3-lanes, including a new center two-way left turn lane. Existing on-street parking aisles will be preserved and widened. Bike lane facilities will be widened to provide buffer space between parking aisles and vehicle travel lanes. Four existing mid-block crosswalks along Fabian will be preserved and enhanced with new roadway markings and vibrant signage, new median island will be provided at mid-block crosswalk locations where possible to provide refuge locations for pedestrians. Existing overhead pedestrian flashing beacon systems will be preserved but in-pavement lighting systems will be removed and not replaced. At Fabian Way & East Meadow Dr and Fabian Way & Charleston Rd, new green bike lanes will be provided to guide bicyclists to the intersection approaches and to advise motorists of bicycle activity. The improvements are not anticipated to create new significant impacts to the existing transportation and traffic conditions. Mitigation: None Required Q. 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? 1,5 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? 1,5 X c) Require or result in the construction of new storm water drainage facilities or expansion of existing facilities, the construction of which could cause significant environmental effects? 1,5 X d) Have sufficient water supplies available to serve the project from existing entitlements and resources, or are new or expanded entitlements needed? 1,5 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? 1,5 X f) Be served by a landfill with sufficient 1,5 X Fabian Way Enhanced Bike Lane Improvement Project Page 23 Initial Study Issues and Supporting Information Resources Would the project: Sources Potentially Significant Issues Potentially Significant Unless Mitigation Incorporated Less Than Significant Impact No Impact permitted capacity to accommodate the project’s solid waste disposal needs? g) Comply with federal, state, and local statutes and regulations related to solid waste? 1,5 X h) Result in a substantial physical deterioration of a public facility due to increased use as a result of the project? 1,5 X DISCUSSION: The proposed project does not encourage growth and development and therefore no increase in the demand on existing utilities and service systems or impacts to these services are expected. Mitigation Measures: None Required R. 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 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? 1,2,3,4,6,10 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)? 1,6 X c) Does the project have environmental effects which will cause substantial adverse effects on human beings, either directly or indirectly? 1,5,6 X DISCUSSION: The main objective of this project is to improve safety for bicyclists and pedestrians; it does not cause an increase in traffic nor directly adds vehicle trips to the area. Fabian Way Enhanced Bike Lane Improvement Project Page 24 Initial Study As discussed in the Biological Resources section, this project does not impact sensitive wildlife or plant habitats. The project’s cumulative impacts are limited to the GHG emissions. A project of this minor scope is not anticipated to create cumulatively considerable impacts of any other nature. See the Greenhouse Gas Emissions section for further discussion. Fabian Way Enhanced Bike Lane Improvement Project Page 25 Initial Study SOURCE REFERENCES 1. Project Planner’s knowledge of the site and the proposed project 2. Palo Alto Comprehensive Plan, 1998-2010 3. Palo Alto Municipal Code, Title 18 – Zoning Ord inance 4. Palo Alto Tree Technical Manual, Municipal Code Chapter 8.10.030, June 2001 5. Project Plans 6. Project Transportation Engineer’s knowledge of the site and the proposed project 7. Not Used 8. Not Used 9. California Environmental Quality Act Air Quality Guidelines, June 2010 (BAAQMD) 10. Palo Alto Historic Resources Inventory 11. Alquist-Priolo Earthquake Fault Zoning Map 12. Palo Alto Municipal Code, Section 9.10-Noise Ordinance Fabian Way Enhanced Bike Lane Improvement Project Page 26 Initial Study 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. X 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. 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 City of Palo Alto (ID # 2943) City Council Staff Report Report Type: Action ItemsMeeting Date: 6/18/2012 June 18, 2012 Page 1 of 5 (ID # 2943) Summary Title: FY 2013 Budget Review Follow Up Items Title: Fiscal Year 2013 Proposed Budget Review Follow-Up Items Public Hearing – Approval of an Ordinance Adopting the Fiscal Year 2013 Budget, including the Fiscal Year 2013 Capital Improvement Program, and Changes to the Municipal Fee Schedule; Adoption of 10 Resolutions to: 1) Adopt a Dark Fiber Utility Rate Increase and Amend Utility Rate Schedules; 2) Amend Gas Utility Rate Schedules for a Rate Decrease and Amend Utility Rules and Regulations; 3) Adopt a Wastewater Collection Utility Rate Increase and Amend Utility Rate Schedules; 4) Adopt a Water Utility Rate Increase and Amending Utility Rate Schedules; 5) Amend Storm Drain Utility Rate Schedules for a Rate Increase; 6) Amend Refuse Utility Rate Schedules for a Rate Increase; 7) Amend the 2010-2011 Compensation Plan for Management and Professional and Council Appointees; 8) Amend the 2010-2011 Memorandum of Agreement for the Service Employees International Union (SEIU); 9) Amend the 2010-2014 Compensation Plan for the International Association of Fire Fighters (IAFF); and 10) Amend the 2010-2014 Compensation Plan for the Fire Chiefs’ Association (FCA) (Continued from June 11, 2012) From: City Manager Lead Department: Administrative Services Executive Summary The proposed Fiscal Year 2013 operating and capital budget was reviewed by the City Council on June 11, 2012. This report contains information the Council requested in regards to the City’s tree trimming and maintenance program, service level changes in the Community Services Department, and the Council Contingency balance for the remainder of Fiscal Year 2012. In addition to these follow up items requested during the budget review, during Council’s review of the Assessment for California Avenue Area Parking Bonds on June 11, 2012, Council also asked how many hourly parking spaces are available. This information is included in this staff report. June 18, 2012 Page 2 of 5 (ID # 2943) Attached to this report are the protest letters related to the Proposition 218 hearing on Utility rate changes. Recommendation As a continuation from the budget hearing on June 11, 2012 (staff report 2872), staff and the Finance Committee recommend that Council approve the following (the attachment and exhibit references below can be found in staff report 2872): A. Budget Amendment Ordinance (Attachment A), which includes: 1. Exhibit 1: the City Manager’s Fiscal Year 2013 Proposed Operating and Capital Budget, previously distributed in the April 30th Council Packet 2. Exhibit 2: Amendments to the City Manager’s Fiscal Year 2012 Proposed Operating and Capital Budget 3. Exhibit 3: Revised Position Changes and Position Allocation by Department 4. Exhibit 4: Amendments to the Fiscal Year 2013 Proposed Municipal Fee Schedule B. Resolution of the Council of the City of Palo Alto Adopting a Dark Fiber Rate Increase and Amending Utility Rate Schedules EDF-1 and EDF-2 (Attachment B) C. Resolution Amending Gas Utility Rate Schedules G-1, G-2, G-3, G-4, G-10, G-11, and G- 12, Repealing Utility Rate Schedule G-6 and Amending Utility Rules and Regulations 2 and 5 (Attachment C) D. Resolution of the Council of the City of Palo Alto Adopting a Wastewater Collection Rate Increase, Amending Utility Rate Schedules S-1 and S-2 and Adopting New Utility Rate Schedules S-6 and S-7 (Attachment D) E. Resolution of the Council of the City of Palo Alto Adopting a Water Rate Increase and Amending Utility Rate Schedules W-1, W-2, W-3, W-4, and W-7 (Attachment E) F. Resolution of the Council of the City of Palo Alto Amending Utility Rate Schedule D-1 (Storm and Surface Water Drainage) to Increase Storm Drain Rates by 2.9 Percent Per Month Per Equivalent Residential Unit for Fiscal Year 2013 (Attachment F) G. Resolution of the Council of the City of Palo Alto Amending the Utility Rate Schedule R-1 for a Refuse Rate Increase (Attachment G) H. Resolution Amending the 2010-2011 Compensation Plan for Management and Professional Adopted by Resolution No. 9156 to Add Two New Positions (Attachment H) I. Resolution Amending the 2010-2011 Memorandum of Agreement for SEIU Personnel, Adopted by Resolution No. 9088 to Add Two New Positions (Attachment I) J. Resolution Amending the 2010-2014 Compensation Plan for the International Association of Fire Fighters (IAFF) Adopted by Resolution No. 9204 to Properly Record the Top Step Salary for Two Existing Positions (Attachment J) K. Resolution Amending the 2010-2014 Compensation Plan for the Fire Chiefs’ Association (FCA) Adopted by Resolution No. 9234 to Reclassify One Existing Position (Attachment K) June 18, 2012 Page 3 of 5 (ID # 2943) Discussion Below are the follow up items requested by Council on June 11, 2012. Tree Trimming and Maintenance Program Prior to Fiscal Year 2012, the City’s Maintenance Program was split between the Public Works Department and the Planning and Community Environment Department. To consolidate the program, the position changes (add/drops and eliminations) that occurred over the past few years: Position 2010 2011 2012 2013 Urban Forester 0 0 1 1 Managing Arborist 1 1 0** 0 Planning Arborist 1 1 1*** 1 Project Manager 2 2 1 2**** Tree Maintenance Specialist 2 3* 3 2 Tree Trim/Line Clearer - Lead 1 1 1 1 Tree Trim/Line Clearer 8 7 7 7 *1 FTE Tree Trimmer/Line Clearer reclassed to Tree Maintenance Person **Managing Arborist reclassed to Urban Forester *** Planning Arborist moved from Planning and Community Environment to Public Works ****Tree Maintenance Person reclassed to Project Manager The Planning Arborist was moved from Planning and Community Environment to Public Works in the Fiscal Year 2012 budget process to complete the Urban Forestry workgroup. The Planning Arborist and the Managing Arborist in Public Works had worked closely together prior to the reorganization and work assignments were somewhat duplicative. Since they reported to different managers it created a challenge with coordination, communication and identifying priorities. The creation of the Urban Forester position was a reclass of the Managing Arborist position to a more senior level also as part of the Fiscal Year 2012 budget. The Planning Arborist now reports to the Urban Forester and has oversight and consults on all Private Development tree related matters along with being a resource for the Urban Forester for trees both private and City-owned. Additionally the Planning Arborist is now part of the Development Center Blueprint team and will have dotted line reporting to the Development Center Manager. June 18, 2012 Page 4 of 5 (ID # 2943) Having all Urban Forest staff under the direction and supervision of the Urban Forester has resulted in a highly coordinated effort to maintain and protect the City’s tree assets and create consistent relationships with our public partners such as CANOPY. The Fiscal Year 2013 proposed budget (p. 222, Note 1) contains a brief explanation of Public Work’s reason behind dropping a Tree Maintenance Person and adding a Project Manager. In Fiscal Year 2012, Public Works dropped one of two Project Manager positions. It became apparent during the year that due to the number of critical contracts along with oversight of four in-house tree crews that this could not be successfully accomplished with one position. The contracts include the annual Utility Line Clearing contract, the cyclical street tree trimming contract and also the stump grinding contract. In Fiscal Year 2012 Public Works hired temporary staff to supplement our permanent staff to ensure operations were not impacted. Once the Project Manager position is filled we will no longer use temporary staffing. With the vacancy of the Tree Maintenance Specialist, Public Works used the opportunity to re- evaluate assignments and priorities resulting in a request a reclass the Tree Maintenance Specialist to a Project Manager in the Fiscal Year 2013 proposed budget. The assignments for the Tree Maintenance Specialist will be absorbed by the two Project Managers, two remaining Tree Maintenance Specialists and the Planning Arborist. With the additional staffing adjustments in Fiscal Year 2013, along with hiring the new Urban Forester, Walter Passmore, it is anticipated that this new workgroup will provide a more seamless and effective service to the residents and private developers while also improving our collaboration with our Community partners. Number of Parking Spaces at the Ted Thompson Parking Garage Also known as Lot 3, there are 183 hourly parking spaces at the Ted Thompson Parking Garage. Community Services Department – Changes in Service Level and Delivery Customer Service at Lucie Stern Community Center The proposed budget includes freezing 0.75 FTE Program Assistant position. The position is currently vacant will be frozen through December 2012 to achieve cost savings. This position primarily assists with reserving picnic space in local parks, facility rentals for Lucie Stern and other community spaces available for rent, and some class registration. Currently the department only has online capacity for class registration and is exploring options for online software for other reservation services. Customers may alternatively register for classes and services at the nearby Art Center or Junior Museum and Zoo while this position remains vacant. The Junior Museum and Zoo is located across the main parking lot of the Lucie Stern Community Center. Art Center Reduction of Staff June 18, 2012 Page 5 of 5 (ID # 2943) A full-time Producer of Arts/Sciences is reduced from 1.0 FTE to 0.75 FTE. The Art Center Manager will provide more oversight and support of exhibitions, which may reduce her time available to manage the City's relationship with the Art Center Foundation and may require more hourly of exhibitions. This could require the Art Center to reduce the scope and frequency of its exhibition programs. Avoid Escalating Cost in Landscaping Contract Reduce the level and scope of service for landscaping contracts for City-owned properties. The goal is to prioritize maintenance of important gateway areas and neighborhood parks continuing the high level of maintenance currently provided, while reducing frequency of maintenance at less-visible facilities. This would be a cost-avoidance measure to avoid a $64,000 contract cost increase in Fiscal Year 2013 to cover previously negotiated annual increases and planned augmentation to scope of services. There will be some visible appearance changes to some City facilities, parks, streets, and medians. Council Contingency Balance As of June 13, 2012, the Fiscal Year 2012 Council Contingency Account balance is $154,489. Below is a summary of activity that occurred this fiscal year. Beginning Balance $250,000 HSRAP Admin funds, as directed during FY 2012 budget process (27,761) Palo Alto Gran Fondo, Echelon Challenge Relay, and Taste of Palo Alto event (staff report 1719) (40,000) High Speed Rail funding (staff report 2395) (125,000) CAO evaluator contract costs (5,750) Additional funds for Police Auditor (22,000) Midyear – replenish funding used for High Speed Rail 125,000 Ending Balance as of 6/13/12 $154,489 Attachments: Utility Rate Increase Protests (PDF) Prepared By: Christine Paras, Senior Financial Analyst Department Head: Lalo Perez, Chief Financial Officer City Manager Approval: ____________________________________ James Keene, City Manager ;1t··, 0'" '~ ';., Grider, Donna From: Sent: To: Subject: Attachments: Palo Alto City Mayor and Council: Basant Khaitan <bkhaitan@gmail.com> Saturday, May 19, 2012 1:22 PM Council, City; City Mgr; Clerk, City; Fong, Valerie; Auzenne, Tom The proposed Utility rate increases; Council meeting on June 18, 2012 Palo Alto Council cc to PA Officials 05172102.pdf You are requested to review the enclosed letter which, as required, is also being mailed to the Clerk's office. Without risking being repetitive, I urge you to especially scrutinize skyrocketing fixed charges for water and refuse:. Good governance practices al$o require that many new and extraordinary increases, if justified, should have a sunset. Barring any unavoidable circumstances, I will also attend the Council Meeting on June 18. Meanwhile, please let me know if I can provide any further clarification. Thank you. Sincerely, Basant Khaitan 2973 Alexis Drive, Palo Alto, CA 94304 1 I ]) 6 (\1\' J-Gr'~der J m ~ t:.- el..J'1 G ferl..... This letter is in protest of the proposed utility rate changes for the City of Palo Alto. With respect to refuse rate changes, I wonder what percent of households use an annual cleanup day and why not have those who use it pay for it rather than ammortize over the whole population. The proposed volumetric water charges seems to penalize low utilizers by raising the per ccf rate for the first 6 ccf by 26% and lowering the rate for high utilizers. --: . ~-:..t-. a p? P ('"'6 f-e..:;,:!-'-';j -rJ., <: I f'> c-r e t; ..) (' J , Robert H Feiner -/)" _ fl ~ SII2-JIL- APN 137-25-114 (..?<r:»rJ . L\ n 4. I\\\;P. tv\ €~A kV£ q'l7p~ i'V ::r=: :;:':&J --< I CD v ~3~ C,A) 0 C"'} -' c) " , 7: v) ' •. :,;;.:) , , -~, -rJ G'1 ,.-,. ~>" 1 ' .. -. . ; .. .-, --;:--c'-' " May 7, 2012 City Counsel Members City of Palo Alto 250 Hamilton Avenue Palo Alto, CA 94301 RE: Utility Rate Changes -Protest Dear City Council Members: RESIDENTIAL REFUSE RATES: I have read the proposed added charges of$9.90 for street sweeping, household hazardous waste and annual cleanup along with the decreased charges for my min-can $2.11 for an increase of $3.17. (I think I have figured this correctly. I have not been satisfied for years with the street sweeping Operation/operator and actually called in a complaint because of the nonuse of water and high rate of speed of the sweeper. Just stirred some dust/dirt around.) I appreciate the hazardous waste opportunity, and have never taken advantage of the annual clean up. I wonder how many do use this? I try to generate the least waste so feel the high waste user is getting the better bargain. WATER SERVICE CHARGES: Why do higher users get a smaller percentage rate increase? Wi General Residential-over 100% increase with W4 users will get less than a 50% increase. WASTE WATER INCREASES: I currently pay $27.91 with a proposed increase of $1.40. Comparing this to Commercial (per cef) and Restaurant use, it does not seem equitable to me. Averages taken January through March? And then spread out for the year? And finally, the aging VOLUMENTRIC WATER charges: Need more information on this other than the one paragraph. I am protesting these rate increases and hope you will go back to the drawing board. Sincerely, Anne C. Anderson 4044 Amaranta Avenue Palo Alto, CA 94306 #30032259 · May 14, 2012 City Council Members City of Palo Alto 250 Hamilton Avenue Palo Alto, CA 94301 Re: Utility Rate Changes Dear City Council Members: '.,' L~p ALTO. C/\ ttih S Of FleE - Please consider these comments prior to taklng any action on the proposed rate changes at your June 18,2012 meeting. Residential Refuse Rates: It appears that adding charges for street sweeping, household hazardous waste and annual clean up day, combined with the decrease on single can collection represents a net increase of $7.89. In other words, this essentially represents a 50% increase in the "expanded" Refuse Rate category. The doubling of the overall rate, especially for those of us who have worked so hard to cut back on the amount of waste that we generate, is discriminatory and unfair. Please note that for those who continue to throwaway vast amounts of waste (example 6 32-gallon cans still pay the $203.52, plus the new Fixed Rate Components of $9.90. This means that a high waste generator sees less than a 5% increase in their overall bill. A flat rate increase gives a huge benefit to apartment houses and other high waste generators. Volumetric Water Charges: The numbers provided in the May 1,2012 Notice, do not provide sufficient information to understand the rationale for the increases and decreases listed. It is unclear the reason for any decrease in the Non-Residential Irrigation charge. If Palo Alto is spending money on Hetch-Hetchy and "replacing aging water mains," it is unclear as to the reason for the proposed rate changes. Water Service Charges: Again, the question that must be answered: Why do higher users receive a smaller percentage rate increase? A Wl, General Residential, receives over a 100% rate increase, and yet some W 4 users will receive less an 50% increase. In addition, the W7, Non-residential Irrigation, class for an 8" pipe receives less of an increase than the Wl, and the 2" gets a decrease. Where is the equity? Wastewater Rates: Forget the rate increases, what is the reason that Commercial and Restaurant categories pay nowhere near the current rate that residential users pay? It is also interesting that single family households are not only paying more already, but also are being asked to pay a flat fee that is nearly twice the Commercial increase and close to three times the Restaurant increase. Wondering why the 99% are protesting these days-take a look at your proposed rate changes. Please reconsider your rate increases as outlined in your May 1st Notice. Sincerely, I~ Hedy McAdams 1440 Bryant Street Palo Alto, CA 94301 • ~~~T fjLJ/~/';>" {/ p~ y-~ :tt -< (3 7 -~;;).. -0-3 c:; YOt)5 c:. Aw\ PAI'"\,., l)fL, 'J<!\\o A Hv LA. 9 q Solo Richard C. Placone CiTY OF \ I . CllY P~!-9 AL.JB. CA 601 Chimalus Drive CLEhK S OFFICE 12 11AY30 AM I/:03 Palo Alto, California 94306 Voice: (650) 493-7217 E-mail: rcplacone@sbcgobalnet May 22,2012 City Clerk's Office 250 Hamilton Avenue Palo Alto, California 94301 CC City Council Packet This letter is written to comment on the proposed rate increases and service changes for the Utility Department. I will comment on two items in the proposal sent to residents May 1,2012. 1. Proposed new charge of $6.66 per month for street sweeping. I am opposed to this increase because this is a service that properly belongs in the General Fund Budget, I assume under the direction of the Public Works Department. This is just one other service performed by that General Fund department that is being or has been transferred to the Utility Department billing system for purposes of collecting additional revenue which benefits the General Fund. I find this a dangerous, and disingenuous method of financing legitimate city government expenses. Street Cleaning is a benefit to everyone who lives in, works in, has a business in, or even passes through, Palo Alto. Therefore, to allocate the expense of this necessary city service to utility users only is unfair. There can be no end to this kind of expense transfer to a revenue center of which the users MUST have in order to survive in the modem world -water, power, sewage treatment and so on. Council is taking advantage of this fact to increase revenues to the General Fund, rather then learning to live within the General Fund revenue available from ordinary tax revenues. The city already siphons millions of dollars from the Utility Department "profits" to fund General Fund services. In doing so, residents have no direct say in the way council members use the utility revenues as a convenient cash cow. It would be one thing if these funds so transferred were used to fund identifiable and essential priorities in our aging and crumbling infrastructure, reduced public safety programs and the like. Instead, while the overall budget faces annual and increasing deficits, council continues to allocate millions of dollars for "nice to have" but entirely unnecessary projects. The art center plaza, the bike bridge over Highway 101, even the art center renovation, are examples of such unprioritized expenditures. Finally, where will this transfer of costs to the utility users end? Why not just charge 50% of the cost of running the Public Works Department to the Utility Department and increase the utility rates there to cover these costs. Think what the council could do with the millions of dollars thus freed up in the General Fund. I will add here, that as far as Chimalus Drive is concerned, we have street sweeping every Monday, I think. The service seems unreliable. The actual cleaning is not very good. I keep my own frontage far cleaner than any amount of street sweeping does. The city doesn't even have a posted schedule advising residents to keeps their cars off the street Sunday nights so the street would at least get a "clean sweep". Trust me, there is ample off street space for people to move their cars one night a week. I've looked. 2. Annual Clean Up Day In the 50 years I have lived at this address, I have used the annual clean up service twice that I can recall. In the earlier years, I hauled stuff to the dump or paid to have this done in the case of major projects. I really appreciate the service, but I think it is grossly unfair to charge everyone a monthly fee for a service they may never use. I talked to several neighbors and others who have never used the service, and by observation·ofChimalus Drive, it is rare that you see material staked on the street side for a free pickup. I agree this service should be paid for, and I would be willing to pay a fee at the time the service is used, and by that I mean a substantial fee related to the actual costs of the pickup. If I have to hire a service to haul furniture or other household junk to some remote dump, believe me I am going to have to pay $50 or even more. So I suggest a fee based on the size of the load -for example, half a pick up truck $10; full pickup truck $20, major hauling, $30. I leave it to the service to come up with a reasonable sliding scale. People I've talked to think such a plan would be reasonable. I want to end this letter on a positive note: In general I think the Utility Department does a good job. Since an unfortunate incident I hade with a utility worker two years ago, about which I lodged a strong complaint with Mrs Fong, the service in that regard has been vastly improved. The next time I had to call on a utility worker, the change in attitude was remarkable, and I so informed Mrs. F ong. Also, while I do not like to see the water rates going up, I support this increase for two reasons: a) we have the best water in the nation and I'm willing to pay for it; b) since the increase is going to pay 'for the Hetch Hetchy upgrades, these are costs we are just going to have to grin and bear it. Please consider my comments re the street sweeping and the annual clean up seriously. Thank you. Parcel Number: 137-08-054-00 Utility Account: 30012674 C:\Users\Owner\Documents\MyFiles\RICHARDPLACONE\UfILITYRATES2012.wpd City Clerk City of Palo Alto, 250 Hamilton Ave. Palo Alto, CA 94301 May 12,2012 I am writing to you in protest of the Utility Rate Change, in specific I am protesting the Refuse, Water and Wastewater rate changes you proposed in your letter on May 1,2012. Regards. Gary Hall 200 Colorado Ave Palo Alto, CA 94301 -< Ch ;::v:> .,....~-.., j ::::.~ U} <,~ .. ' c.')~ ... _ -rr! .... " .. .. .,.,"..,.,.,. (...) ;:;:""' t...G mSi .. r:;;·· I JOHN PAUL HANNA A PROFESSIONAL CORPORATION DAVID M. VAN ATTA A PROFESSIONAL CORPORATION WILLIAM R. GARRETT A PROFESSIONAL CORPORATION May 3, 2012 City Clerk 250 Hamilton Avenue Palo Alto, CA 94301 HANNA & VAN ATTA G!1.Y OF PA~O ALTO. Cf CI1 Y CLE RK'S fHFF/CE i ATTORNEYS AT LAW A PARTNERSHIP OF PROFESSIONAL CORPORATIONS '·2. 'III Y -8 525 UNIVERSITY AVENUE, SUITE 600 nH AM 8: 46 PALO ALTO, CALIFORNIA 94301-1921 TELEPHONE www.hanvan.com (650) 321-5700 FACSIMILE (650) 321-5639 Email: jhanna@hanvan.com Re: Utility Rate Change Protest Dear City Clerk: The undersigned protests the proposed increase in utility rates for refuse and water. One of the alleged advantages of a City owned and operated water system and waste disposal system is that the rates charged by the City to its residents will be or should be lower that would be the case if the utilities were supplied by a public utility company or someone other than the City. I have a number of reasons for the protest: • I am not convinced that the rates charged by Palo Alto are in fact lower than the rates in surrounding communities. Having owned at one time or another property adjoining communities, my experience has been that Palo Alto's rates are no lower and in some cases actually are higher than comparable rates in nearby communities. • I am not convinced that the utilities department is a model of efficiency, or, for that matter, that it operates as least as efficiently and as effectively as we have a right to expect. I know of a number of cases, including my own, where the City Utilities Department mistakenly sent out bills for huge amounts of water that could not possibly be consumed in anywhere close to the amount alleged, and when challenged, the City refused to acknowledge that there could have been any error, arid proposed as a remedy that the customer pay to have the meter removed and checked for accuracy arid then reinstalled. On one occasion I was billed for over 100,000 gallons of water for one 30-day period. The matter was never resolved. • It is logical to assume that one of the reasons for the increase in rate has to do with the increases in the City's budget due to the overly generous retirement benefit contracts that the City has agreed to over the years in its negotiations with unions, which retirement contracts are now causing not only Palo Alto but other cities to run large deficits. T:\WPWIN60\LETTERS\JPH\City Clerk [OS 03 12].doc '\ / City Clerk Re: Utility Rate Change Protest May 3, 2012 Page 2 • In the past few years there have been many allegations that the money collected by the Utilities Department has been used partially to fund the general operations of the City. I have yet to see a categorical denial of those allegations, supported by reliable data. Perhaps if the revenue derived from utility charges had in the past been used to create reserves to fund capital improvements to replace aging infrastructure, it would not be necessary now to raise rates. I hope that other citizens will join in protesting the proposed rate increases. Very truly yours, 2~~~ John Paul Hanna 51 Crescent Drive Palo Alto, CA 94306 JPH:mdlh T:\WPWIN60\LETIERS\JPH\City Clerk [05 03 12].doc I I Palo Alto, CA May 4, 2012 City Clerk 250 Hamilton Avenue Palo Alto, CA 94301 Gentlemen, ('I' Y (\r p li I ," \.Ir ALO AlT'O, CA ell Y CLERK'S OPF/C E 12 ~1AY -8 AM 8: 53 Proposed Utility Rate ChangeslResidential Refuse and Water Following review of the City's letter of May 1, we are writing from 2640 Elmdale Place in Palo Alto, Parcel #127-02-032-00. We object to all the proposed rate increases or new charges,e:xqept for some Street Sweeping fee. Belbw, we state our'reasoris and concerns ' , . The second primary objective of your service study reads: "assure the rates chargedto edch customer are proportional to the cost of providing services to that customer." We believe that objective is not being met because charges are apparently at a single, fixed, weekly or monthly rate, irrespective of the actual number of carts put out for collection or their fill level. The rates depends apparently only on the size and number of garbage (refuse) carts; the two other types of carts (recyclables and yard trimmings) are not charged separately. In our case, we have one 20-gal. cart for garbage, one 64-gal. cart for recyclables and three 64- gal. carts for yard trimmings. Occasionally, we only put out for collection the 20-gal garbage cart, but most weeks we also put out the recyclables cart. As for the yard trimmings carts, two or three times per month we put out 1 or 2 partially filled carts; all 3 carts are only put out, filled, 3-4 times per year. We do not understand the chart "Variable Rate Component;" we find it obscure (notably the footnote "These rates include ... ") and incomplete (no listing for four 64-gal. carts). Therefore, we need to ask how much more than currently we W9u1d to pay for refuse collection per year, according to the City's proposals. With regard to other aspects of the proposed :rate schedul~s, we note the following: 1) Refu~e would costus an additional $63.36 per year, if we are correct in our guesses about the meaning oftheobscure'schedule. We would derive no benefits from neither the Household Hazardous Waste nor the Annual Clean-Up Day program and, therefore, we object to the $38.88 we would be charged per year for those services. We would reluctantly accept the new charge of$6.66 per month for weekly Street Sweeping (an additional, annual cost to us of $79.92). 2) We pay for minimum 6 ccf of water even when we use less. The proposed increase of 94 cents for the minimum volume would raise our annual cost by $61.10, based on an actual consumption of6,500 ccf(equal to 48,623 gallons). We object to that increase. 3) The proposed 3/4"-meter-based, monthly rate increase of$8.28 would cost us $99.36 per year over current charges. We object to that increase. As long-retired, +40-year residents of Palo Alto, at this address, my wife and I are seniors on a fixed income. The proposed rate increases would add hundrds of dollars to our annual budget (how many hundreds depend on the meaning of the obscure refuse rate scedule). We feel that long-term Palo Altans like us should be recognized by the City Council and Administration and offered discounted utility service rates. Thank you for your attention and consideration. We await the City's response to our question as well as possible other comments and clarifications. Sincerely, if~~~ 2640 Elmdale Place PaloAJtQ, CA 94J03.3728 650/856 .. 6130 leifschaumann@yahoo.com City Clerk 25 Hamilton Avenue Palo Alto, CA, 94301 May 3, 2012 Re: Proposed Utility rate increases Al Johnson 340 Fl \!ermftj ttvre', Palo Alto, CA, 94306 Folks, the rate increases proposed are way out of bounds, and let me list them in the order of my protestations. 1) RESIDENTIALR), TI~&-ffhe current rate is $4.62 and you propose to raise it to $9.90. That is a r~ise of 114%! 2) RESIDENTIAL WATER SERVICE CHARGES: The current charge for a %" line is $10.00 and you propose to raise it to $18.28. That is a raise of82%! 3) RESIDENTIAL VOLUMETRIC WATER CHARGES: For the 18t 6ccf the charge increases from $3.60 to $4.54. That is a raise of26%! Folks, I realize that costs go up with increased fuel prices, but this rate increase is beyond belief! Where do you come up with these numbers? Sincerely, Al Johnson 340 El Verano May 3, 2012 City Council Members City of Palo Alto 250 Hamilton Avenue Palo Alto, CA 94301 Re: Utility Rate Changes Dear City Council Members: (}I'TY 8F PA.LO ALT©.,CA CITY CLER K'S OFfleE 12 HAY -8 AM 8: 31+ Please consider these comments prior to taking any action on the proposed rate changes at your June 18,2012 meeting. RESIDENTIAL REFUSE RATES: It appears that adding charges for street sweeping, household hazardous waste and annual clean up day, combined with the decrease on single can collection represents a net increase of $7.89. In other words, this essentially represents a 50% increase in the "expanded" Refuse Rate category. The doubling of the overall rate, especially for those of us who have worked so hard to cut back on the amount of waste that we generate, is discriminatory and unfair. Please note that for those who continue to throwaway vast amounts of waste (example 6 32-gallon cans still pay the $203.52, plus the new Fixed Rate Components of $9.90. This means that a high waste generator sees less than a 5% increase in their overall bill. A flat rate increase gives a huge benefit to apartment houses and other high waste generators. VOLUMETRIC WATER CHARGES: The numbers provided in the May 1, 2012 Notice, do not provide sufficient information to understand the rationale for the increases and decreases listed. Itis unclear the reason for any decrease in the Non-Residential Irrigation charge. If Palo Alto is spending money on Hetch-Hetchy and "replacing aging water mains," it is unclear as to the reason for the proposed rate changes. WATER SERVICE CHARGES: Again, the question that must be answered: Why do higher users receive a smaller percentage rate increase? A Wl, General Residential, receives over a 100% rate increase, and yet some W4 users will receive less an 50% increase. In addition, the W7, Non- residential Irrigation, class for an 8" pipe receives less of an increase than the Wl, and the 2" gets a decrease. Where is the equity? WASTEWATER RATES: Forget the rate increases, what is the reason that Commercial and Restaurant categories pay nowhere near the current rate that residential users pay? It is also interesting that single family households are not only paying more already, but also are being asked to pay a flat fee that is nearly twice the Commercial increase and close to three times the Restaurant increase. Wondering why the 99% are protesting these days-take a look at your proposed rate changes. Please reconsider your rate increases as outlined in your May 1st Notice. Sincerely, Nancy Suddjian 703 Ensign Way Palo Alto, CA 94303 May 6, 2012 To: City of Palo Alto -250 Hamilton Ave Palo Alto, CA 94301 Re: Notice of Utility Rate Changes Hello, This letter is to protest against all of the proposed utility rate changes: • Refuse • Water • Wastevvater The protest is on behalf of Parcel #00335038: 1121 Greenvvood Ave. PaloAlto, CA 94303 Jessica Weng N :l: ~'ll' -< N 1.0 J:a ::r S? N ......, C~ -< '::It -." l~l l) ;;0) Ar" "r--<:.O~~ o~ 'lC ~r (=)':- !"T1' ... -,- • 1-----4+---=----~-----,---.-.---'. . t .~ ~ 1j . 1!i:i5!1a&b ~~----- I----++-! _____ £&h) CkVIo ~ ~,....::::...' ....:...p / ___ _ 12£rl.t~g f IJ , .AA.llT ~ "'j eM. '1 \JJ I' i IT e i/\ ~ nl fl ~ r \0 '\ it ,... 15 ;fA 'f ~d d It 7~ J 5.1 7 S 3 # "'I' {( vv eJrld Pf ~( e ~ (f)' ~ f'> ;;:::: ~'-- N F.;~; ~- Th~ '" v<-~ f J<{~5 $K,'oIIVler 6S()'-~()'f -~ s 7 6 6/6/2012 City Clerk City of Palo Alto 250 Hamilton Ave. Palo Alto, CA 94301 J. ROBERT T AYLOR ATTORNEY AT Re: Utility rate change protest Dear City Clerk: The undersigned protest the proposed increases in utility rates for refuse collection and water. We are residents at 480 Marlowe Street, Palo Alto, Ca. The proposed increase appears to pay for general services such as street sweeping and hazardous waste service and are of a general nature. I believe this matter should be put before a vote of the citizens rather than arbitrarily added to our utility bills. Please follow the appropriate legal process to assess such fees. Sincerely, l'~~v(k---~'Robert Taylor lJ (650) 322-4506 FAX 322-4677 541-B COWPER STREET, PALO ALTO, CA 94301 I JoAnn Mandinach 1699 Middlefield Road Palo Alto, CA 94301 05/01112 City Clerk 250 Hamilton Road Palo Alto, CA 94301 Re: Written Protest to Refuse, Water and Waste Water Increases eLI'Y OF PALO ALTO, CA CITY CLERK'S tJFFICE r2 HAY -7 AM 8: 3' I am writing to protest the never-ending annual increases to our utility rates (refuse, water, waste water, gas, electricity, usage fees, etc.) in the strongest possible terms and to remind you that the Utility Department should exist to provide cost-effective reliable service -nothing more, nothing less. It is highly offensive to get never-ending COSTLY mailings urging us to conserve energy since the more we conserve, the higher the rates go because we've conserved TOO MUCH and thus don't have provide enough garbage to honor the city's commitments. It is both ludicrous and counter-productive; many people I know have stopped recycling in protest. I urge you to follow discussions on Palo Alto Online and elsewhere to see how disgusted people are. Remember for every written protest you get, there are many more who have given up trying to get you to stop raising rates to subsidize the general fund. ENOUGH, we say. The community is well aware we're paying more than surrounding communities. Enough. Refuse: We are paying more for less AND now WE have to haul our own refuse to the curb, a service the city formerly provided. As a two-person household, we NEVER use all three refuse cans weekly yet I'm charged for all three each week .. I only need to recycle MONTHLY, hence I should get a 75% discount since I could never fill the recycling bin weekly. WHY is there no option of shutting off service when we're on vacation or when we have no refuse? At my suggestion to the City Council, the Utility Department is supposed to be looking into this. Why they never thought of this themselves is beyond me since we have shut-off service for newspapers, mail, gardeners, etc. As a way of cutting rates, consider offering us: twice-monthly service rebates for vacation periods and/or when we have no refuse I am also attaching correspondence with the City Council and various members of the Utility Dept. regarding a $400 utility bill for February of this year when our house was dark and empty for half the month. Months later, I am still waiting for the promised return visit to check the puddles in front of our house that never drain even though we're paying for our own personal storm sewers. If someone shows up, we might know whether the problem is with the water lines or the waste water, Consider the absurdity of living in one of the most expensive real estate and not flushing after each use! Ridiculous. General: Providing cost-effective service should be the main objective although saving us money wasn't even a department objective. ENOUGH with the COSTLY games and apps about comparing usage with your neighbors. Conservation shouldn't cost us MORE. Most sincerely, <11)C-. Jo Ann Mandinach May 6, 2012 To: City of Palo Alto -250 Hamilton Ave Palo Alto, CA 94301 Re: Notice of Utility Rate Changes Hello, This letter is to protest against all of the proposed utility rate changes: • Refuse • Water • Wastewater The protest is on behalf of Parcel #00337043: 921 Newell Rd. Palo Alto, CA 94303 II:. ' o. !~-~ siaomei Weng -f\.) ~ -< f\.) \.0 l:a. .::lI' ?? f\.) ........ ~:; -<"' 0 ° r. -r') f"Tl Cll ;u .1;.- ~r cA w 0);;-'1r: 2]3 o· me-) ..,.., August 22, 2011 City of Palo Alto City Clerk 250 Hamilton Avenue Palo Alto, CA 94301 •• BERG & BERG ENTERPRISES, INC. 1 0050 Randley Dr:ve {~I ~:-T 'y r:~ !i ' _,~~ .l.! i -I'-I _ .. '. . . ~ ',,' ,l..,.'. . ' h L. '.) i·', L I U . L;:, Cupertino, CA 95014-2188 Ci I Y CL EEK'S OFFICt PI, (408) 725-0700 Fax (408) 725-1,6-}6.. I mcraw(ord@missionwest.com .... MA) 23 M111 =00 RE: Notice of Public Hearing for Utility Rate Change, Monday, September 19,2011 967 Oregon Expressway, Palo Alto, CA To Whom It May Concern: We protest the refuse and water rate change as proposed. The City is increasing the rates out of proportion to the cost of inflation and are not doing an adequate job of controlling their labor and out of proportion pension costs. If you have any questions, please ntact me. :~ r Email: mcrawford@missionwest.com Ph. 408-725-7633 10050 Bandley Drive, Cupertino, CA 95014 -Tel: 408-725-0700 -Fax: 408-725-1626 Palo Alto City Council Members, C,I r '( :Jf f'A \.. 6) A \..11°, C A ~!TY CLERt\,S OFfiCE 12 MAY -8 AM 8: 37 • May 3, 2012 I write to protest the proposed increase in monthly residl! ... ~ ...... --,water & wastewater service rates. As a Palo Alto home owner for over 40 years, I feel the council needs to revisit the budget numbers. My home address is 404 Oxford Ave, 94306 To increase these rates in addition to our gas & electric rates is too great of burden to put on families & those of us who are retired. Plus It dampens our enthusiasm for conservation, knowing that by reducing our refuse & water use, our monthly bills actually increase. .>',' In addition, street sweeping is a joke in my neighborhood, which is two blocks from California Avenue. My curbside has become a parking lot all day long as employees working in the commercial district park their cars from 8 a.m. in the morning to 6.p.m in the evening. Street sweeping is a NON-service in our area. We sweep our own gutters as the street sweeper is unable to do so. So count me a NO on the increase residential utility rates mentioned. There HAS to be a better alternative . . . 1 Marilyn Mayo, 404 Oxford Ave Shirley Nathan 66 Roosevelt Circle Palo Alto, CA 94306 e-maU': shirldn@pacbell.net May 31,2012 Donna J. Grider, MMC, City Clerk 250 Hamilton Avenue Palo Alto, CA 94301 RE: UTILITY RATE HIKES I urge the City Council to do the right thing and vote NO on all proposed utility rate hikes. One of the attractions of living in Palo Alto was the low utility costs and user friendly service. We are now one of the highest in the area. The increase in water rates is the most unfair, seeing usage has gone down. Thanking you, Sincerely, .~Ai~ Shirley Nathan City Clerk City of Palo Alto 250 Hamilton Ave. Palo Alto, CA 94301 Palo Alto,Iune 9,2012 Re: Utility rate change protest Dear City Clerk: The undersigned protest the proposed increases in utility rates for refuse collection and water. We are residents at 774 Seneca Street, Palo Alto, Ca. The proposed increase appears to pay for general services such as street sweeping and hazardous waste service and are of a general nature. We believe this matter should be put before a vote of the citizens rather than arbitrarily added to our utility bills. Please follow the appropriate legal process to assess such fees. Kurt and Patricia Mueller-Vollmer 12 JIJN 13 Mlli: 04 To: City Clerk, 250 Hamilton Avenue, Palo Alto, CA 94301 From: Brian Rossi Re: Protest of Utility Rate Changes Address: 4221 Suzanne Drive, Palo Alto, CA 94306 Utilities Account Number: 30030206 I hereby protest all three of the proposed rate changes. I lost my job this year and can't afford such huge increases! Inflation is 2%Jyear, not the numbers I show below! Refuse: $23.52 from $20.52 (15.4% increase) Water: $27.35 from 13.00 (110% increase) + $27.24 from $21.60, (26% increase) Wastewater: $29.31 from $27.91 (5% increase) These increases are outrageous! Brian Rossi ~. 'fjj '~f,) lJo m-2- / -----===-----~- MayS; 2012 City Clerk 250 Hamilton Avenue Palo Alto, CA 94301 Dear City Council, I am writing to protest the following utility rate changes: • Refuse • Water • Wastewater e I My parcel number is 127-{)5-036-O0. My City of Palo Alto Utilities account number is 30022571. Gordon Kotik 934 Van Auken Circle Palo Alto, CA 94303 May 15, 2012 From: Jose P. Joseph 3276 Waverley St. Palo Alto, CA 94306 To: The City Council 250 Hamilton Ave. Palo Alto, CA 9430~ Dear City Council, 12 Mil Y 2 I Ail 8: 013 I object to the increase in both the refuse and water rate increases. I understand that the city should balance expenses with revenue. Instead of just increasing the rate by double digits every year, the city can also balance by cutting expenses. In addition, if expenses are matched to revenue for each service, the principle should be applied across all utilities such as electric and gas as well, and the rate should be cut for those services. Currently, they are higher than neighboring cities where the service is provided by for-profit entity, PG&E. C1fy L:! L.£7C/G) .. Z ·512 /1/1-11 (.L Ti?'IV 121/J;,~ PilLe C ll.?:rc"'· _LII1_Lf!.L£d'c'/. ,./ 70 .W/itJ.&4.Ir /.(dllx. .C4!:~A.!O/:;:l!"A/. :.. .J: .... tD8.;:T2;C.T.Zt2. # ~ '--... eiE.'7/7~,,"",,2'£ UuL Lr-y'.L"Oe~C.!-Il2N'4£U>'", Wli4r . rl/lS' 6'tPT7/1~~?<7y(JJr/JL9J.adj?471' JA/70 ..... / )1):ze;· J-/A//JA/C'j /lLI74'/!.£/ S' 'f /i");./.J:x.ce.B~7liA;TW/ib'£S' .. #.x.JP /?~/\~.2/(JA./ •. /-uA/i)p'P/1/o7cT cYj"/Y £'" /VI p LOY,c :z:.~5-J.,,~7d /S' /J/lI:-S"S~W/IJ' £::./2.tiJ:) TJ;;?J ./ 0 V ~7l7 H£ y,E.I9t2~9 " /J.J/ t P 7CiCy,ly CodA. "L;/ '-",S. Crll .. t'/'I/tv_ /j.J'1tJ .. "Tllt;''''OI:'l'W#AlL),J' I!JF 1/;l:j£ v'L/A-1£t?/2£L JJ,V/Q;/i.lj'l .. //ow' 7/7/,;;'-C/ly Ci1' t=-P/l£tJ/lL 77:") WI.L /~ /C1/l/Slr i/ l/ I-J.ly 1e.IlZli"5"! ~ '7;; X ,.f.;.-s/,/.;.-rc:. ... :J~r /,l~/L //74:-" C' fly /2 :::S~) 0 .£..1\/ / ·.:s ~7 /1# r W/ ~L '7/?/~4-C-/7 j?£ @ E /l LJ.OF 7/~,uLJf. J?;C~ () v3 L..L/VI S' ~ Now tV,.rS·PI C/18,D./:7". _I /cfl.Jc ;? r;,ItP:8.;..J_..t;.: . .c,:,:L 'ill_ /itJ-: tl!E . '7)1£ .... tIZZ .~./i'y JiJIJZ}.{ - J _______ _ _________ . ___ ._ ... __ iLJ?Q~~ __ t5~&C!e __ S ____ L?d~a~-Z _ .. _ -/J/:;;/Jd6!~~ _ -:/8i?~-.... 60 .... £~-. (Grider. Donna From: Sent: To: Subject: Attachments: Palo Alto City Mayor and Council: • Basant Khaitan <bkhaitan@gmail.com> Saturday, May 19, 2012 1:22 PM Council, City; City Mgr; Clerk, City; Fong, Valerie; Auzenne, Tom The proposed Utility rate increases; Council meeting on June 18, 2012 Palo Alto Council cc to PA Officials 05172102.pdf You are requested to review the enclosed letter which, as required, is also being mailed to the Clerk's office. Without risking being repetitive, I urge you to especially scrutinize skyrocketing fixed charges for water and refuse. Good governance practices also require that many newand extraordinary increases, if justified,should have a sunset. Barring any unavoidable circumstances, I will also attend the Council Meeting on June 18. Meanwhile, please let me know if I can provide any further clarification. Thank you. Sincerely, Basant Khaitan 2973 Alexis Drive, Palo Alto, CA 94304 1 flf/-e ,,-/,:e:n ~ ]) 6 (\It.S. [,y.', a er ),In ~ L • C, ,J, c./erIL / This letter is in protest of the proposed utility rate changes for the City of Palo Alto. With respect to refuse rate changes, I wonder what percent of households use an annual cleanup day and why not have those who use it pay for it rather than ammortize over the whole population. The proposed volumetric water charges seems to penalize low utilizers by raising the per ccf rate for the first 6 ccf by 2?% and lowering the rate for high utilizers . .-; f"...y" J a",,", P ,-0(',.5/"'''; f '" <: I i"'> t.,('~ C' t; ~ ( J Robert H Feiner /?~v1;J .~~/ . S /I.>..JIL- APN 137-25-114 f?G' . E L\ 114. I\\~ tv\. €~A f><V q'l~Vi N (-) ~:~~~ j---I ~--'. co \ ::~:;~, (I) (., ..., §~::r ... :~c; 0:...... 101 ~ .. : .", .. ' co,;:: :::=i....;~~ -<"-( ~;~ r-q "t:; :::::J :c.}> ~r"'" vi C:) CT):;'> '1;-: ::!8 C)~ , fTlC") ~.Jo. May 7,2012 City Counsel Members City of Palo Alto 250 Hamilton Avenue Palo Alto, CA 94301 RE: Utility Rate Changes -Protest Dear City Council Members: RESIDENTIAL REFUSE RATES: I have read the proposed added charges of $9.90 for street sweeping, household hazardous waste and annual cleanup along with the decreased charges for my min-can $2.11 for an increase of$3.17. (I think I have figured this correctly. I have not been satisfied for years with the street sweeping Operation/operator and actually called in a complaint because of the nonuse of water and high rate of speed of the sweeper. Just stirred some dust/dirt around.) I appreciate the hazardous waste opportunity, and have never taken advantage of the annual clean up. I wonder how many do use this? I try to generate the least waste so feel the high waste user is getting the better bargain. WATER SERVICE CHARGES: Why do higher users get a smaller percentage rate increase? WI General Residential -over 100% increase with W4 users will get less than a 50% increase. WASTE WATER INCREASES: I currently pay $27.91 with a proposed increase of $1.40. Comparing this to Commercial (per cd) and Restaurant use, it does not seem equitable to me. Averages taken January through March? And then spread out for the year? ' And finally, the aging VO LUMENTRI C WATER charges: Need more information on this other than the one paragraph. I am protesting these rate increases and hope you will go back to the drawing board. Sincerely, Anne C. Anderson 4044 Amaranta Avenue Palo Alto, CA 94306 #30032259 C"IT' ' . L ~,X OF p~r 0 . GIT Y CL Ehk's ~UO.CA . ... .~ROTES~ ~~~INST THE WATER RATE CHANGf2 HAY 14 p,/:ICE To: TheClty of Palo Alto CouncIl 3 II From: Tony Svensson Re: Notice of Utility Rate Changes Date: 8 May 2012 CC: Jay Thorwaldson Keith Peters College Terrace Green Team Next Door College Terrace Thanks for the update! Most of your proposed changes appear quite reasonable so I won't go into those. However, the following does not make sense: The $0.94 increase per ccf for the first 6 ccfwhile there is a $0.28 decrease for anything over 6 ccf. Many of us have voluntarily invested tens of thousands of dollars in garden redesign, drip systems, plant selections, new appliances, low-flow shower heads, personal water use habits, etc. to reduce the impact on the environment and residential water use. It appears plausible that those residences that use above 6 ccf per month either have not made these investments or live on properties large enough to well afford an increase. In light of the city's environh1.entally friendly policies and initiatives, the proposed water rate changes are, at best, misguided thinking. This is my formal protest. Please provide an explanation and then vote down your proposed water rate changes. Sincerely, Tony Tony Svensson 2264 Bowdoin Street Palo Alto, CA 94306 494-1406 May 14, 2012 City Council Members City of Palo Alto 250 Hamilton Avenue Palo Alto, CA 94301 Re: Utility Rate Changes • Dear City Council Members: • cp Y OF PALO ALrG, CA C/1 Y CLERK'S O(FI€'E 12 HAY 17 AM 10: 2' Please consider these comments prior to taking any action on the proposed rate changes at your June 18, 2012 meeting. Residential Refuse Rates: It appears that adding charges for street sweeping, household hazardous waste and annual clean up day, combined with the decrease on single can collection represents a net increase of $7.89. In other words, this essentially represents a 50% increase in the "expanded" Refuse Rate category. The doubling of the overall rate, especially for those of us who have worked so hard to cut back on the amount of waste that we generate, is discriminatory and unfair. Please note that for those who continue to throwaway vast amounts of waste (example 6 32-gallon cans still pay the $203.52, plus the new Fixed Rate Components of $9.90. This means that a high waste generator sees less than a 5% increase in their overall bill. A flat rate increase gives a huge benefit to apartment houses and other high waste generators. Volumetric Water Charges: The numbers provided in the May 1,2012 Notice, do not provide sufficient information to understand the rationale for the increases and decreases listed. It is unclear the reason for any decrease in the Non-Residential Irrigation charge. If Palo Alto is spending money on Hetch-Hetchy and "replacing aging water mains," it is unclear as to the reason for the proposed rate changes. Water Service Charges: Again, the question that must be answered: Why do higher users receive a smaller percentage rate increase? A Wl, General Residential, receives over a 100% rate increase, and yet some W4 users will receive less an 50% increase. In addition, the W7, Non-residential Irrigation, class for an 8" pipe receives less of an increase than the Wl, and the 2" gets a decrease. Where is the equity? Wastewater Rates: Forget the rate increases, what is the reason that Commercial and Restaurant categories pay nowhere near the current rate that residential users pay? It is also interesting that single family households are not only paying more already, but also are being asked to pay a flat fee that is nearly twice the Commercial increase and close to three times the Restaurant increase. Wondering why the 99% are protesting these days-take a look at your proposed rate changes. Please reconsider your rate increases as outlined in your May 1st Notice. Sincerely, Hedy McAdams 1440 Bryant Street Palo Alto, CA 94301 • 12 M9" 10 f," -nil r 1 II' I I:) UYle:., e~V\I\ '''I I • a ~ ~8<?"-:e(:JCt:r 0/ t:;./~/d- {/ POl>(~ '=ft~, I ~ 7,-~~-0-3 Cf Li Oz:Y5 C l\ V\~ Pt~'l,.'\ /')'''-, ." ...... ). f )/,!\\o AHa CI\ L1 Lf "SoLo [PM' Q,.~ .• '" • Prof. Hartmut F.-W. Sadrozinski, Ph.D. 62 Churchill Ave .. Palo Alto, CA 94306 USA Protest against water rate changes announced May 1, 2012 To: City Clerk 250 Hamilton Ave Palo Alto, CA 94301 I am protesting the proposed residential water rates announced by the City of Palo Alto on May 1, 2012 as discriminatory and counterproductive to the paradigm of conserving resources. The proposed water rates are much more punitive to households which are conserving water. Example: the monthly rates for a household using 6 ccf (%" meter) are proposed to increase by 44%, while a water guzzling household using 30 ccf will see. an increase of only 3.5%! There can't be any justification for such inverted logic. If instead, the current ccf rate of $3.60 for the first 6 ccf would be kept constant, and the over 6 ccf rate would be raised to a modest $8, and the service charge would be raised from $10 to $12 for %" meter, the monthly rate would be increased by 6% for the conserving household (at 6 ccf) and by 8.6% for the water guzzler with 30 ccf. Which signal does the City want to send to the water consumers? In all of this, one should also consider that any infrastructure cost will be driven more by the large-scale users instead of by the households conserving water. Since the City is raising rates partially because of the conservation efforts of its citizens, the payroll in the water department should be examined, since one would expect that less water consumed would mean less work. Besides reducing the payroll by layoffs and attrition, the City should look at the example of the State of California and the University of California, who haJLe been reacting to shrinking budgets and sometimes increased workload ~ furloughs, which were heavily tilted towards senior personnel, sparing much:tef the lower income employees. . ~ Sincerely \\JtA ~~ Hartmut Sadrozinski May 15, 2012 -·. City Clerk City of Palo Alto, 250 Hamilton Ave. Palo Alto, CA 94301 May 12, 2012 I am writing to you in protest of the Utility Rate Change, in specific I am protesting the Refuse, Water and Wastewater rate changes you proposed in your letter on May 1,2012. Regards. ~~ Gary Holl 200 Colorado Ave Palo Alto, CA 94301 --< JOHN PAUL HANNA A PROFESSIONAL CORPORATION DAVIDM. VAN ATTA A PROFESSIONAL CORPORATION WILLIAM R. GARRETT A PROFESSIONAL CORPORATION May 3, 2012 City Clerk 250 Hamilton Avenue Palo Alto, CA 94301 • • HANNA & VAN ATTA C;·!l,\y' 1"1 t/~!;;: i~.·L.JO .. C/\ \>, I ,-,-U'(i'\ S Of-FICE ATTORNEYS AT LAW A PARTNERSHIP OF PROFESSIONAL CORPORATIONS I? f'j,ij\l -8 525 UNIVERSITY AVENUE, SUITE 600 -fl! A; I 8= 46 PALO ALTO, CALIFORNIA 94301-1921 TELEPHONE www.hanvan.com (650) 321-5700 FACSIMILE (650) 321-5639 Email: jhanna@hanvan.com Re: Utility Rate Change Protest Dear City Clerk: The undersigned protests the proposed increase in utility rates for refuse and water. One of the alleged advantages of a City owned and operated water system and waste disposal system is that the rates charged by the City to its residents will be or should be lower that would be the case if the utilities were supplied by a public utility company or someone other than the City. I have a number of reasons for the protest: • I am not convinced that the rates charged by Palo Alto are in fact lower than the rates in surrounding communities. Having owned at one time or another property adjoining communities, my experience has been that Palo Alto's rates are no lower and in some cases actually are higher than comparable rates in nearby communities. • I am not convinced that the utilities department is a model of efficiency, or, for that matter, that it operates as least as efficiently and as effectively as we have a right to expect. I know of a number of cases, including my own, where the City Utilities Department mistakenly sent out bills for huge amounts of water that could not possibly be consumed in anywhere close to the amount alleged, and when challenged, the City refused to acknowledge that there could have been any error, and proposed as a remedy that the customer pay to have the meter removed and checked for accuracy and then reinstalled. On one occasion I was billed for over 100,000 gallons of water for one 30-day period. The matter was never resolved. • It is logical to assume that one of the reasons for the increase in rate has to do with the increases in the City's budget due to the overly generous retirement benefit contracts that the City has agreed to over the years in its negotiations with unions, which retirement contracts are now causing not only Palo Alto but other cities to run large deficits. T:\WPWIN60\LETTERS\JPH\City Clerk [05 03 12].doc • City Clerk Re: Utility Rate Change Protest May 3, 2012 Page 2 • Inthe past few years there have been many allegations that the money collected by the Utilities Department has been used partially to fund the general operations ofthe City. I have yet to see a categorical denial of those allegations, supported by reliable data. Perhaps if the revenue derived from utility charges had in the past been used to create reserves to fund capital improvements to replace agIng infrastructure, it would not be necessary now to raise rates. I hope that other citizens will join in protesting the proposed rate increases. Very truly yours, ~.I~ John Paul Hanna 51 Crescent Drive Palo Alto, CA 94306 JPH:mdlh T:\WPWlN60\LETTERS\JPH\City Clerk [05 03 12].doc • BrianMa 518 Driscoll PI Palo Alto, CA 94306 Parcel #137-37-009 Utility account #30011914 CHY OF PA LO ALTO,;C,A tHY CLERK'S @fFICE 12 MAY I 5 AM 9: 45 5111/2012 I am protesting the proposed increase in water service charges. I have a 1:' meter, and my fixed water service rate will increase from $13.00 to $27.35, a 110% increase. This increase in percentage terms is larger than the increases for all other residential meter sizes. (37.4% for 5/8",82.8% for %",85.3% for 1 Yz", 79.7% for 2", 43.4% for 3") Why is the 1" size being penalized so heavily compared to the others? Second, the increase is too large all at once across all meter sizes. This increase is in addition to the other rate increases for volumetric water, wastewater, garbage collection, etc ... , and is too much for residents to absorb all at once. Third, why should larger meters be penalized so heavily? I think costs should be passed on to heavy users in the form of volumetric water rate increases rather than unfairly charging owners with larger meters but who do not use much water. What is the true incremental cost of having a I" meter compared to a 5/8" meter if the total amount of water used by both is the same? Is it really $13.61 per month? ($27.35 vs. $13.74) Sincerely, B~~ Palo Alto, CA May 4, 2012 City Clerk 250 Hamilton Avenue Palo Alto, CA 94301 Gentlemen, • , 2 I'I,~ Y -A II" 8' 5 3 .1 J NJ I " • Proposed Utility Rate Changes/Residential Refuse and Water Following review of the City's letter of May 1, we are writing from 2640 Elmdale Place in Palo Alto, Parcel #127-02-032-00. We object to all the proposed rate increases or new charges, except for some Street Sweeping fee. Below, we state our reasons and concerns The second primary objective of your service study reads: "assure the rates charged to each customer are proportional to the cost of providing services to that customer." We believe that objective is not being met because charges are apparently at a single, fixed, weekly or monthly rate, irrespective of the actual number of carts put out for collection or their fill level. The rates depends apparently only on the size and number of garbage (refuse) carts; the two other types of carts (recyclables and yard trimmings) are not charged separately. In our case, we have one 20-gal. cart for garbage, one 64-gal. cart for recyclables and three 64- gal. carts for yard trimmings. Occasionally, we only put out for collection the 20-gal garbage cart, but most weeks we also put out the recyclables cart. As for the yard trimmings carts, two or three times per month we put out 1 or 2 partially filled carts; all 3 carts are only put out, filled, 3-4 times per year. We do not understand the chart "Variable Rate Component;" we find it obscure (notably the footnote "These rates include ... ") and incomplete (no listing for four 64-gal. carts). Therefore, we need to ask how much more than currently we would to pay for refuse collection per year, according to the City's proposals. With regard to other aspects of the proposed rate schedules, we note the following: 1) Refuse would cost us an additional $63.36 per year, if we are correct in our guesses about the meaning of the obscure schedule. We would derive no benefits from neither the Household Hazardous Waste nor the Annual Clean-Up Day program and, therefore, we object to the $38.88 we would be charged per year for those services. We would reluctantly accept the new charge of$6.66 per month for weekly Street Sweeping (an additional, annual cost to us of $79.92). 2) We pay for minimum 6 ccf of water even when we use less. The proposed increase of94 cents for the minimum volume would raise our annual cost by $61.10, based on an actual consumption of 6,500 ccf (equal to 48,623 gallons). We object to that increase. 3) The proposed 3/4"-meter-based, monthly rate increase of$8.28 would cost us $99.36 per year over current charges. We object to that increase. As long-retired, +40-year residents of Palo Alto, at this address, my wife and I are seniors on a fixed income. The proposed rate increases would add hundrds of dollars to our annual budget (how many hundreds depend on the meaning of the obscure refuse rate scedule). We feel that long-term Palo Altans like us should be recognized by the City Council and Administration and offered discounted utility service rates. Thank you for your attention and consideration. We await the City's response to our question as well as possible other comments and clarifications. Sincerely, If 0 ,~"" c> ,. , i " 'I, cC"tJ1,v~111~ L~· Schaumann . . . :' . 2640 Elmdale Place Palo Alto, CA 94~03 .. 3728 650/856-6130 leifschaumann@yahoo.com City Clerk 25 Hamilton Avenue Palo Alto, CA, 94301 May 3,2012 Re: Proposed Utility rate increases Al Johnson ;we~!EtfVeranoAve. Palo Alto, CA, 94306 Folks, the rate increases proposed are way out of bounds, and let me list them in the order of my protestations. 1) RESIDENTIAL REFUSE RATES: The current rate is $4.62 and you propose to raise it to $9.90. That is a raise of 114%! 2) RESIDENTlAIYW.ATER SERVICE CHARGES: The current charge for a %" line is $10.00 and you propose to raise it to $18.28. That is a raise of82%! 3) RESIDENTIAL VOLUMETRIC WATER CHARGES: For the 1 st 6ccf the charge increases from $3.60 to $4.54. That is a raise of 26%! Folks, I realize that costs go up with increased fuel prices, but this rate increase is beyond beliefl Where do you come up with these numbers? Sincerely, Al Johnson 340 EI Verano May 3, 2012 City Council Members City of Palo Alto 250 Hamilton Avenue Palo Alto, CA 94301 Re: Utility Rate Changes Dear City Council Members: Please consider these comments prior to taking any action on the proposed rate changes at your June 18, 2012 meeting. RESIDENTIAL REFUSE RATES: It appears that adding charges for street sweeping, household hazardous waste and annual clean up day, combined with the decrease on single can collection represents a net increase of $7.89. In other words, this essentially represents a 50% increase in the "expanded" Refuse Rate categmy. The doubling of the overall rate, especially for those of us who have worked so hard to cut back on the amount of waste that we generate, is discriminatory and unfair. Please note that for those who continue to throwaway vast amounts of waste (example 6 32-gallon cans still pay the $203.52, plus the new Fixed Rate Components of $9.90. This means that a high waste generator sees less than a 5% increase in their overall bill. A flat rate increase gives a huge benefit to apartment houses and other high waste generators. VOLUMETRIC WATER CHARGES: The numbers provided in the May 1, 2012 Notice, do not provide sufficient information to understand the rationale for the increases and decreases listed. It is unclear the reason for any decrease in the Non-Residential Irrigation charge. If Palo Alto is spending money on Hetch-Hetchy and "replacing aging water mains," it is unclear as to the reason for the proposed rate changes. WATER SERVICE CHARGES: Again, the question that must be answered: Why do higher users receive a smaller percentage rate increase? A Wl, General Residential, receives over a 100% rate increase, and yet some W4 users will receive less an 50% increase. In addition, the W7, Non- residential Irrigation, class for an 8" pipe receives less of an increase than the Wi, and the 2" gets a decrease. Where is the equity? WASTEWATER RATES: Forget the rate increases, what is the reason that Commercial and Restaurant categories pay nowhere near the current rate that residential users pay? It is also interesting that single family households are not only paying more already, but also are being asked to pay a flat fee that is nearly twice the Commercial increase and close to three times the Restaurant increase. Wondering why the 99% are protesting these days-take a look at your proposed rate changes. Please reconsider your rate increases as outlined in your May 1 st Notice. Sincerely, I }J~~~-.- Nancy Suddjian 703 Ensign Way Palo Alto, CA 94303 May 6, 2012 To: City of Palo Alto -250 Hamilton Ave Palo Alto, CA 94301 Re: Notice of Utility Rate Changes Hello, This letter is to protest against all of the proposed utility rate changes: • Refuse • Water • Wastewater The protest is on behalf of Parcel #00335038: 1121 Greenwood Ave. Palo Alto, CA 94303 Jessica Weng N :!t r~ -"'< N I.D ~"':EP ::it 6 N -..I G:> .... ~--'-' ... ~ ..... -< ~-< ,,"-,-. C") ~ ..• -~'l r .... - ;;"1 , --' ~t> ;:,;,: r··· -C./:: ''--' -, 0 ~. =q~~ ~.' '-.'..' .,..1 1.-:-:' ; " • sf . J ::;...-, . . //Y ... I .iIj;. vJ.(fe.~ ~hreS'-TO J r;li. R. ~ it C"'CI\V\~ e Oe~'-Gi'f'1 Gle"lt) VJ~ \ {\} £ A I'tT \~ :J 1M 'fW ,. I IT e i/\ ~ '" Tl ~r T"c <\ \I o F v,: l" 't I'~\C. <--Ill ot IAJe ~ >-15 ;fA 'f ~d d It 7~ I 5 ,I 7 ~ 3 /\A "'-f' (( vVd",J PI ~( (! jhOlV\ ~71 J C4.. yt.Af' s $. kjV\ V\ e r 65 0 '-~()'( -«1 s 7 6 ,-, J. ROBERT TAYLOR ATTORNEY AT L A W " L:lfY 8.F f)A LD ALT@, IJA CITY CL ERK'S OFFICE 6/6/2012 City Clerk City of Palo Alto 250 Hamilton Ave. Palo Alto, CA 94301 Re: Utility rate change protest Dear City Clerk: 12 JUN '3 AM ": 05 The undersigned protest the proposed increases in utility rates for refuse collection and water. We are residents at 480 Marlowe Street, Palo Alto, Ca. The proposed increase appears to pay for general services such as street sweeping and hazardous waste service and are of a general nature. I believe this matter should be put before a vote of the citizens rather than arbitrarily added to our utility bills. Please follow the appropriate legal process to assess such fees. Sincerely, ~ (650) 322-4506 FAX 322-4677 541-B COWPER STREET, PALO ALTO, CA 94301 / JoAnn Mandinach 1699 Middlefield Road Palo Alto, CA 94301 05/01112 City Clerk 250 Hamilton Road Palo Alto, CA 94301 Re: Written Protest to Refuse, Water and Waste Water Increases t, DALTO, CAl F<1rS OFFiCE: 12 MA Y -7AH 8: 3' I am writing to protest the never-ending annual increases to our utility rates (refuse, water, waste water, gas, electricity, usage fees, etc.) in the strongest possible terms and to remind you that the Utility Department should exist to provide cost-effective reliable service -nothing more, nothing less. It is highly offensive to get never-ending COSTLYmailings urging us to conserve energy since the more we conserve, the higher the rates go because we've conserved TOO MUCH and thus don't have provide enough garbage to honor the city's commitments. It is both ludicrous and counter-productive; many people I know have stopped recycling in protest. I urge you to follow discussions on Palo Alto Online and elsewhere to see how disgusted people are. Remember for every written protest you get, there are many more who have given up trying to get you to stop raising rates to subsidize the general fund. ENOUGH, we say. The community is well aware we're paying more than surrounding communities. Enough. Refuse: We are paying more for less AND now WE have to haul our own refuse to the curb, a service the city formerly provided. As a two-person household, we NEVER use all three refuse cans weekly yet I'm charged for all three each week .. I only need to recycle MONTHLY, hence I should get a 75% discount since I could never fill the recycling bin weekly. WHY is there no option of shutting off service when we're on vacation or when we have no refuse? At my suggestion to the City Council, the Utility Department is supposed to be looking into tlus. Why they never thought of this themselves is beyond me since we have shut-off service for newspapers, mail, gardeners, etc. As a way of cutting rates, consider offering us: twice-monthly service rebates for vacation periods andlor when we have no refuse , Water & Waste Water: I am also attaching correspondence with the City Council and various members of the Utility Dept. regarding a $400 utility bill for February of this year when our house was dark and empty for half the month. Months later, I am still waiting for the promised return visit to check the puddles in front of our house that never drain even though we're paying for our own personal storm sewers. If soineone shows up, we might know whether the problem is with the water lines or the waste water, Consider the absurdity of living in one of the most expensive real estate and not flushing after each use! Ridiculous. General: Providing cost-effective service should be the main objective although saving us money wasn't even a department objective. ENOUGH with the COSTLY games and apps about comparing usage with your neighbors. Conservation shouldn't cost us MORE. Most sincerely, Jo Ann Mandinach May 6, 2012 To: City of Palo Alto -250 Hamilton Ave Palo Alto, CA 94301 Re: Notice of Utility Rate Changes Hello, This letter is to protest against all of the proposed utility rate changes: • Refuse • Water • Wastevvater The protest is on behalf of Parcel #00337043: 921 Nevvell Rd. Palo Alto, CA 94303 o;/#-;U1~~ U~-~~.~ Itsiaomei Weng OJ -I"\.) C5 .. :=:S~ -.(--': i=.::-:~; Pj .:::r) =:".~ r'e Cl_)': ~i·J.r-: :2]6 ,..-, nl'~~ .;,~,:" August 22, 2011 City of Palo Alto City Clerk 250 Hamilton Avenue Palo Alto, CA 94301 ~RG & BERG ENTERPRISES. It 10050 Bandley Drive G!t( &f PA LO ALTO, CA Cupertino, CA 95014-2188 Gi l Y CLERK'S OFFICE Ph (408) 725-0700 Fax (408) 725-1,6.26. mcraw(ord@missionwest.com Z MA Y 23 AM": 0 0 RE: Notice of Public Hearing for Utility Rate Change, Monday, September 19,2011 967 Oregon Expressway, Palo Alto, CA To Whom It May Concern: We protest the refuse and water rate change as proposed. The City is increasing the rates out of proportion to the cost of inflation and are not doing an adequate job of controlling their labor and out of proportion pension costs. Myron Email: mcrawford@missionwest.com Ph. 408-725-7633 10050 Bandley Ddve, Cupertino, CA 95014 -Tel: 408-725-0700 -Fax: 408-725-1626 CiTY F ;:',i\LO ;\lJ(J,C/; CITY LEHWS OFFICE May 3,2012 Palo Alto City Council Members, I write to protest the proposed increase in monthly residential refuse. water & wastewater service rates. As a Palo Alto home owner for over 40 years, I feel the council needs to revisit the budget numbers. My home address is 404 Oxford Ave, 94306 To increase these rates in addition to our gas & electric rates is too great of burden to put on families & those of us who are retired. Plus It dampens our enthusiasm for conservation, knowing that by reducing our refuse & water use, our monthly bills actually increase. In addition, street sweeping is a joke in my neighborhood, which is two blocks from California Avenue. My curbside has become a parking lot all day long as employees working in the commercial district park their cars from 8 a.m. in the morning to 6.p.m in the evening. Street sweeping is a NON-service in our area. We sweep our own gutters as the street sweeper is unable to do so. So count me a NO on the increase residential utility rates mentioned. There HAS to be a better alternative. Marilyn Mayo, 404 Oxford Ave Shirley Nathan 66 Roosevelt Circle Palo Alto, CA94306 e-mail: shirldn@pacbelLnet May 31, 2012 Donna J. Grider, MMC, City Clerk 250 Hamilton Avenue Palo Alto, CA 94301 RE: UTILITY RATE HIKES ~1 '{ L oJ ;:~\ LT 0, ,C /\ CITY CLEiH{'S OFFICE 12 JUN -t~ PH f: 5' I urge the City Council to do the right thing and vote NO on all propo$ed utility rate hikes. One ofthe attractions of living in Palo Alto was the low utility costs and user friendly service. We are now one of the highest in the area. The increase in water rates is the most unfair, seeing usage has gone down. Thanking you, Sincerely, ~!V~ Shirley Nathan Andrew Martin 940 Scott Street Palo Alto, CA 94301 May 4, 2012 AnN: Palo Alto City Council RE: Protest of proposed Water Service charges APN: 120-17-082 Dear Sirs and Madams: CITY OF PALO ALTO, Cf\ CllY CLERK'S OFFICE 12 MAY -8 AM 8: 52 I am writing to protest the use of 'Meter Size' as a mechanism to set a base monthly charge for water service in single-family residential units. Due to new fire codes, our home was FORCED to upgrade from 5/8/1 to 1.0/1 water service even though our actual water usage will decrease dramatically due to greener design and decreased density. In essence, the proposed rates are asking me to pay a higher fee, in perpetuity, then my neighbors with standard 5/8/1 service for using the same or even less water. Single- family homes that have been forced to upgrade as a result of the fire code should not charged a second time based on meter size when this meter size doesn't reflect their usage. The rational disconnect between meter size and billing can be illustrated in a second example: when we obtained our bill from the City of Palo Alto for upgrading our service to meet fire code, they added a $4,400 'Cap Fee' for the change in water meter size. 1.000030 I 70012352 .1 cap fee change 5/8" to 1" water meter 40013894 4,400.00 The idea behind this capacity fee was to charge businesses that use a lot of water for the water infrastructure improvements. Apparently I was the first one to point out to the water department that this fee was really unjust to a single-family home owner already paying a large sum for the service upgrade and fire suppression system. I do not think the fire department and the water department ever met to review the ramifications of fees like this in light of the new fire code. It is absurd that as a reward for spending thousands, or even tens of thousands of dollars to build a home which meets these new fire codes, I am being asked to burden both a one-time Cap fee and perpetual meter size fee from the city for water capacity I will most likely never use. Please devise a fair way to meet the budget without differentiating me from my neighbors by lumping me into the same category as a Laundromat or some other high-water utilizing customer for meeting current code. Sincerely, 650-380-3405 City Clerk City of Palo Alto 250 Hamilton Ave. Palo Alto, CA 94301 Palo Alto,June 9,2012 Re: Utility rate change protest Dear City Clerk: The undersigned protest the proposed increases in utility rates for refuse collection an~: We are residents at 774 ~_o Alto, Ca. The proposed increase appears to pay for general services such as street sweeping and hazardous waste service and are of a general nature. We believe tltis matter should be put before a vote of the citizens rather than arbitrarily added to our utility bills. Please follow the appropriate legal process to assess such fees. Sincerely, ~w1J1~.~V~ fYi~~' ~ -Va (JlnAr Kurt and Patricia Mueller-Vollmer • • To: City Clerk, 250 Hamilton Avenue, Palo Alto, CA 94301 From: Brian Rossi Re: Protest of Utility Rate Changes Address: 4221 Suzanne Drive, Palo Alto, CA 94306 Utilities Account Number: 30030206 I hereby protest all three of the proposed rate changes. I lost my job this year and can't afford such huge increases! Inflation is 2%/year, not the numbers I show below! Refuse: $23.52 from $20.52 (15.4% increase) Water: $27.35 from 13.00 (110% increase) + $27.24 from $21.60, (26% increase) Wastewater: $29.31 from $27.91 (5% increase) These increases are outrageous! Brian Rossi \ . May 5,2012 City Clerk 250 Hamilton Avenue Palo Alto, CA 94301 Dear City Council, I am writing to protest the following utility rate changes: -Refuse -Water -Wastewater My parcel number is 127-05-036-00. My City of Palo Alto Utilities account number is 30022571. Sinc:rety" 1I )...... Y;Lv9A "- Gordon Kotik 934 Van Auken Circle Palo Alto, CA 94303 May 15, 2012 From: Jose P. Joseph 3276 Waverley St. Palo Alto, CA 94306 To: The City Council 250 Hamilton Ave. Palo Alto, CA 9430f Dear City Council, CI1"'r OF PALO I~LTO· C/\ CIT Y CLERK'S OFF(C E J 2 MAY 2, AM 8: 09 I object to the increase in both the refuse and water rate increases. I understand that the city should balance expenses with revenue. Instead of just increasing the rate by double digits every year, the city can also balance by cutting expenses. In addition, if expenses are matched to revenue for each service, the principle should be applied across all utilities such as electric and gas as well, and the rate should be cut for those services. Currently, they are higher than neighboring cities where the service is provided by for-profit entity, PG&E. i'/J'2Y 2 A ; ,.ff "Cl) C'/f y L! 1-1;71::/'--; 25.0 /(/l/f1/.L ~l\l Ilf<i PI; ,I., C> ll'?'fiz~_(ltl. £Z. LLdo/ _ l~,W/iC!#lIr!!'ldIlY~AlC~l1"'A/; .. " ,Icp8...:[2;~CL '7i3 ... /? ,L~();:=:7JlA'.JY£ li·r;LI.-r¥'I'-'06!~_C/-lIlLV4J;-QY ..Wd,£L -I-I/t·,J1 h't!T 7//4/ ?~ry er P/l~O /747C1 JJ1,/'7Q--Z&7e. h/ll/JAlG""II1? l7e'.l£';S' '1/7£ ,J:~C&8 ~ tjj Air W'..4 £''£5' ,19/..//) P~]\/)f'I/t'!A} , /-l.J/i/£)V' Pd /l) '7(:) ,C'/(Zy 4M P /.,,[ /~:z.·,s,,'R/S' /V//:.--;51'S~WIl01 c;e Ii#'} T.(;;u ./ (!it '~72, 7 it~-y"t::..I}IL Si /. ,01f2~ '']-0 Cl>ly C"c:u//\/'CY /L<S t;YIV?jILlt; /)./tc ItJli~ Ol:rJ1#.-1/~J'ttJE7/1~-VL/M£ti'L2ivl- '..111// ~/Vf·S'J" ~"SVJ/ 'I/~~~ L'/;/Y ,(C!=~ /?/l£tJ/l?Tt" WI h k/c1 /-l/S'£ 41 l;./-. I iy /e/i 7li'""!J-I~ . '7/iX4:.-S/ ~-rc ~ :.J~T·-A,<&/L /I'-I~-' C" Ily /~#~Si J 0 .i2/\/7 s ~ 7/1 /i' r W/ k l- .. 77j/44-0./1)2.,£ t!I F /l L.J.. OF U,til,if J:J~cv5'4~/vr [f~. f!(~W~'?:S·)//C/l$L~-:-., I_/l;,·~7-?~1i r;.Itl>a~-C-''T . to ·e /I L J-(l)F '7#.t-' L./ 72 ~ / ry. lailll?' ----- .... . .. :J.Q.4!~-PII.~~/.lYQz..?:.. { ............. mn .. . .. J:;;:.I.£~.W~:t4.Sf:1~I2-,:'X.~ ... Wi2~....... . .. '.. ...e/?~Q ... L2~ .. Zi2 ;/:. Cll.fl.~~~.-.. . I .1.2~S.>'~.LS&Oe ... s . .t?&/40~Z .............. . /lt0Mr8A-l:!~ :-l3.cS6Q·.fljl. . • May 7,2012 City Counsel Members City of Palo Alto 250 Hamilton Avenue Palo Alto, CA 94301 RE: Utility Rate Changes -Protest Dear City Council Members: • RESIDENTIAL REFUSE RATES: I have read the proposed added charges of$9.90 for street sweeping, household hazardous waste and annual cleanup along with the decreased charges for my min-can $2.11 for an increase of$3.17. (I think I have figured this correctly. I have not been satisfied for years with the street sweeping Operation/ operator and actually called in a complaint because of the nonuse of water and high rate of speed of the sweeper. Just stirred some dust/dirt around.) I appreciate the hazardous waste opportunity, and have never taken advantage of the annual clean up. I wonder how many do use this? I try to generate the least waste so feel the high waste user is getting the better bargain. WATER SERVICE CHARGES: Why do higher users get a smaller percentage rate increase? W1 General Residential-over 100% increase with W4 users will get less than a 50% increase. WASTE WATER INCREASES: I currently pay $27.91 with a proposed increase of $1.40. Comparing this to Commercial (per cd) and Restaurant use, it does not seem equitable to me. Averages taken Jam~ary through March? And then spread out for the year? And finally, the aging VOLUMENTRIC WATER charges: Need more information on this other than the one paragraph. I am protesting these rate increases and hope you will go back to the drawing board. Sincerely, Anne C. Anderson 4044 Amaranta Avenue Palo Alto, CA 94306 #30032259 May 14, 2012 City Council Members City of Palo Alto 250 Hamilton Avenue Palo Alto, CA 94301 Re: Utility Rate Changes Dear City Council Members: (;I/~~~._ L.OA,l.Ie, CA L.j 1 Y LLtHK'S OfFICE' 12 Mil Y f 7 ArflO: 25 Please consider these comments prior to taking any action on the proposed rate changes at your June 18, 2012 meeting. Residential Refuse Rates: It appears that adding charges for street sweeping, household hazardous waste and annual clean up day, combined with the decrease on single can collection represents a net increase of $7.89. In other words, this essentially represents a 50% increase in the "expanded" Refuse Rate category. The doubling of the overall rate, especially for those of us who have worked so hard to cut back on the amount of waste that we generate, is discriminatory and unfair. Please note that for those who continue to throwaway vast amounts of waste (example 6 32-gallon cans still pay the $203.52, plus the new Fixed Rate Components of $9,90. This means that a high waste generator sees less than a 5% increase in their overall bill. A flat rate increase gives a huge benefit to apartment houses and other high I waste generators. Volumetric Water Charges: The numbers provided in the May 1, 2012 Notice, do not provide sufficient information to understand the rationale for the increases and decreases . listed. It is unclear the reason for any decrease in the Non-Residential Irrigation charge. If Palo Alto is spending money on Hetch-Hetchy and "replacing aging water mains," it is unclear as to the reason for the proposed rate changes. Water Service Charges: Again, the question that must be answered: Why do higher users receive a smaller percentage rate increase? A Wi, General Residential, receives over a 100% rate increase, and yet some W4 users will receive less an 50% increase. In addition, the W7, Non-residential Irrigation, class for an 8" pipe receives lessof an increase than the Wl, and the 2" gets a decrease. Where is the equity? Wastewater Rates: Forget the rate increases, what is the reason that Commercial and Restaurant categories pay nowhere near the current rate that residential users pay? It is also interesting that single family households are not only paying more already, but also are being asked to pay a flat fee that is nearly twice the Commercial increase and close to three times the Restaurant increase. Wondering why the 99% are protesting these days-take a look at your proposed rate changes. Please reconsider your rate increases as outlined in your May 1st Notice. Sincerely, Hedy McAdams 1440 Bryant Street Palo Alto, CA 94301 • c;.ITY OF PA LO AlTD C'A (..I-I Y CLER K'S fiPFt'gE U11'U-eYV\ 12 MAY rO AM II: 's ~ 0~cJr f!t.,4/~/~ pO\ r~ ::ft~. (~7 -~'::J--o-3Cf 4oB'::> LA VV\ p~~ ~'\ j,)!2.-, 'VA\O AH-o LA q LJ ~LP City Clerk City of Palo Alto, 250 Hamilton Ave. Palo Alto, CA 94301 May 12,2012 I am writing to you in protest of the Utility Rate Change, in specific I am protesting the Refuse, Water and WaStewater rate changes you proposed in your letter on May 1,2012. Regards. GaryHoll 2D~€olorado,Ave Palo Alto, CA 94301 -.. May 3, 2012 City Council Members City of Palo Alto 250 Hamilton Avenue Palo Alto, CA 94301 Re: Utility Rate Changes Dear City Council Members: • • G~:I·l'Y OF P/J.,.LD ;\LJ:"Ot:CA CiTY CLG<ffS OFfiCE 12 HAY -8 AM 8: 34 Please consider these comments prior to taking any action on the proposed rate changes at your June 18, 20~2 meeting. RESIDENTIAL REFUSE RATES: It appears that adding charges for street sweeping, household hazardous waste and annual clean up day, combined with the decrease on single can collection represents a net increase of $7.89. In other words, this essentially represents a 50% increase in the "expanded" Refuse Rate category. The doubling of the overall rate, especially for those of us who have worked so hard to cut back on the amount of waste that we generate, is discriminatory and unfair. Please note that for those who continue to throwaway vast amounts of waste (example 6 32-gallon cans still pay the $203.52, plus the new Fixed Rate Components of $9.90. This means that a high waste generator sees less than a 5% increase in their overall bill. A flat rate increase gives a huge benefit to apartment houses and ot4er high waste generators. VOLUMETRIC WATER CHARGES: The numbers provided in the May 1, 2012 Notice, do not provide sufficient information to understand the rationale for the increases and decreases listed. It is unclear the reason for any decrease in the Non-Residential Irrigation charge. HPalo Alto is spending money on Hetch-Hetchy and "replacing aging water mains," it is unclear as to the reason for the proposed rate changes. WATER SERVICE CHARGES: Again, the question that must be answered: Why do higher users receive a smaller percentage rate increase? A Wl, General Residential, receives over a 100% rate increase, and yet some W 4 users will receive less an 50% increase. In addition, the W7, N on- residential Irrigation, class for an 8" pipe receives less of an increase than the Wl, and the 2" gets a decrease. Where is the equity? WASTEWATER RATES: Forget the rate increases,what is the reason that Commercial and Restaurant categories pay nowhere near the current rate that residential users pay? It is also interesting that single family households are not only paying more already, but also are being asked to pay a flat fee that is nearly twice the Commercial increase and close to three times the Restaurant increase. Wondering why the 99% are protesting these days-take a look at your proposed rate changes. Please reconsider your rate increases as outlined in your May 1st Notice. Sincerely, Nancy Suddjian 703 Ensign Way Palo Alto, CA 94303 May 6, 2012 To: City of Palo Alto -250 Hamilton Ave Palo Alto, CA 94301 Re: Notice of Utility Rate Changes Hello, This letter is to protest against all of the proposed utility rate changes: • Refuse • Water • Wastevvater The protest is on behalf of Parcel #00335038: 1121 Greenvvood Ave. Palo Alto, CA 94303 Jessica Weng N ::r: ):<i!'AI .... < 1"" I..D ~ ~ a N -.,J Co ..... -.. ""--.... :~,-' ..... ,d .... < ~ ... , C) -. r-roC] ..... -"'" (/') c:, 0)"'" -nC ""1 c; c-) rt1~ -;,> __ .,~._ .... ..,.>."~,~,._ •. 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Vl e (" 65 () -~() 'f -"1 S 7 b ---.! .. ,. -<.~,( r:2 S::; r-r-; ;:t:) / JoAnn Mandinach 1699 Middlefield Road Palo Alto, CA 94301 05/01712 City Clerk 250 Hamilton Road Palo Alto, CA 94301 Re: Written Protest to Refuse, Water and Waste Water Increases 12 riA Y -7 AM 8: 36) I am writing to protest the never-ending annual increases to our utility rates (refuse, water, waste water, gas, electricity, usage fees, etc.) in the strongest possible terms and to remind you that the Utility Department should exist to provide cost-effective reliable service -nothing more, nothing less. It is highly offensive to get never-ending COSTLY mailings urging us to conserve energy since the more we conserve, the higher the rates go because we've conserved TOO MUCH and thus don't have provide enough garbage to honor the city's commitments. It is both ludicrous and counter-productive; many people I know have stopped recycling in protest. I urge you to follow discussions on Palo Alto Online and elsewhere to see how disgusted people are. Remember for every written protest you get, there are many more who have given up trying to get you to stop raising rates to subsidize the general fund. ENOUGH, we say. The community is well aware we're paying more than surrounding communities. Enough. Refuse: We are paying more for less AND now WE have to haul our own refuse to the curb, a service the city formerly provided. As a two-person household, we NEVER use all three refuse cans weekly yet I'm charged for all three each week.. I only need to recycle MONTHLY, hence I should get a 75% discOlmt since I could never fill the recycling bin weekly. WHY is there no option of shutting off service when we're on vacation or when we have no refuse? At my suggestion to the City Council, the Utility Department is supposed to be looking into this. Why they never thought of this themselves is beyond me since we have shut-off service for newspapers, mail, gardeners, etc. As a way of cutting rates, consider offering us: twice-monthly service rebates for vacation periods and/or when we have no refuse Water & Waste Water: I am also attaching correspondence with the City Council and various members of the Utility Dept. regarding a $400 utility bill for February of this year when our house was dark and empty for half the month. Months later, I am still waiting for the promised return visit to check the puddles in front of our house that never drain even though we're paying for our own personal storm sewers. If someone shows up, we might know-whether the problem is with the water lines or the waste water, Consider the absurdity of living in one of the most expensive real estate and not flushing after each use! Ridiculous. General: Providing cost-effective service should be the main objective although saving us money wasn't even a department objective. ENOUGH with the COSTLY games and apps about comparing usage with your neighbors. Conservation shouldn't cost us MORE. Most sincerely, Jo Ann Mandinach • May 6, 2012 To: City of Palo Alto -250 Hamilton Ave Palo Alto, CA 94301 Re: Notice of Utility Rate Changes Hello, This letter is to protest against all of the proposed utility rate changes: • Refuse • Water • Wastewater The protest is on behalf of Parcel #00337043: 921 Newell Rd. Palo Alto, CA 94303 .!/r~A"r!~ i~,<---...,.,._,--,"'-·'----,7 /"\ ~~iaomei Weng ,.J -f\.) ::JI: h..,. -< I'\.) 1..0 -;,..:.:", ,._( ;;:? !~;;- ... ,-0-(f) ' ... Palo Alto City Council Members, CiT'( OF i>/\LD ,\lJ'(J,CJ\ CITY CLERlrS OFFICE 12 t1flY -8 A~1 8: 31 May 3,2012 I write to protest the proposed increase in monthly residential refuse. water & wastewater service rates. As a Palo Alto home owner for over 40 years, I feel the council needs to revisit the budget numbers. My home address is 404 Oxford Ave, 94306 To increase these rates in addition to our gas & electric rates is too great of burden to put on families & those of us who are retired. Plus It dampens our enthusiasm for conservation, knowing that by reducing our refuse & water use, our monthly bills actually increase. In addition, street sweeping is a joke in my neighborhood, which is two blocks from California Avenue. My curbside has become a parking lot all day long as employees working in the commercial district park their cars from 8 a.m. in the morning to 6.p.m in the evening. Street sweeping is a NON-service in our area. We sweep our own gutters as the street sweeper is unable to do so. So count me a NO on the increase residential utility rates mentioned. There HAS to be a better alternative. Marilyn Mayo, 404 Oxford Ave Shirley Nathan 66 Roosevelt Circle (lalo Alto, CA 94306 e-mail: shirldn@pacbell.net May 31,2012 Donna J. Grider, MMC, City Clerk 250 Hamilton Avenue Palo Alto, CA 94301 RE: UTILITY RATE HIKES G!J Y Of P,c,LQ ALTO. C/\ €l Il Y CLE HW S OFFIGE I urge the City Council to do the right thing and vote NO on all proposed utility rate hikes. One of the attractions of living in Palo Alto was the low utility costs and user friendly service. We are now one of the highest in the area. The increase in water rates is the most unfair, seeing usage has gone down. Thanking you, Sincerely, ~!V~ Shirley Nathan To: City Clerk, 250 Hamilton Avenue, Palo Alto, CA 94301 From: Brian Rossi Re: Protest of Utility Rate Changes Address: 4221 Suzanne Drive, Palo Alto, CA 94306 Utilities Account Number: 30030206 I hereby protest all three ofthe proposed rate changes. I lost my job this year and can't afford such huge increases! Inflation is 2%/year, not the numbers I show below! Refuse: $23.52 from $20.52 (15.4% increase) Water: $27.35 from 13.00 (110% increase) + $27.24 from $21.60, (26% increase) Wastewater: $29.31 from $27.91 (5% increase) These increases areoutrageous! Brian Rossi -5/' ~ l~o \"'t.- ~. '01 '~~ !~ m~ May 5;. 2012 City Clerk 250 Hamilton Avenue Palo Alto, CA 94301 Dear City Council, • I am writing to protest the following utility rate changes: -Refuse -Water -wastewater O/'T1" OF p , ' C/'Ty GL rARb~ ... ALTO, C .. 'l c. 1\ <> OFFICE' 12 HAY -9 A .. lf . n 8:57 My parcel number is 127"()5-0.36--()0~ My City of Palo Alto UtiUtiesaccount number is 3(')022571. Sincerely, l\ L ~9/\'-- Gordon Kotik 934 Van Auken Circle PaJoAltO, CA94303 I . ! ; ~--- .. .' ( .. :~ C~iT Y 8F F'A L 0 ~LJO . .c}\ CiTY OL EHK'S O'PFIGE J 2 MAY 24 AM 10: 53 ___ A/fP Y 20 j 201 c.., ~-------, r----C / f y' L! L.£lC/t. ) 2. .6 0 II 11 M/ .L To IV illl£ ~_1?/lirJ2 11 1., Ti7 C! 11 9' ¥..:J 0/ , '" -----'---~-----,----------i---ZC; WlitJ#l II /ldI9Y 'L!LJAI(J.J;~AI:.. 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